Exhibit 10.3
14th April 2009
Howard Watson
[ADDRESS INTENTIONALLY OMITTED]
WITHOUT PREJUDICE
Dear Howard,
Compromise Agreement
I refer to our discussions concerning the
termination of your employment with Virgin Media Limited
(“the Company”). The purpose of this Agreement is
to set out the terms which the Company is prepared to offer you and
which are as follows:
1
Your employment
with the Company will terminate on 8 May 2009 (“the
Termination Date”).
2
You will until
the Termination Date faithfully and diligently perform your duties
under this Agreement and your Contract of Employment as well as
such other reasonable duties or directions given by the
Company. If you breach in any material respect any of the
terms of this Agreement or your Contract of Employment or if you
are guilty of any serious misconduct or any other conduct which
affects or is likely to affect prejudicially the interests of the
Company, the Company may terminate this Agreement with immediate
effect and without making and/or incurring any liability for the
payments referred to in this Agreement.
3
Subject to
paragraph 2 above, on the next available payroll run after the
Termination Date the Company will pay into the bank account into
which your salary is normally paid all outstanding payments owed to
you in respect of your basic salary and other contractual benefits
up to and including the Termination Date (less tax, national
insurance and any employee pension contributions).
Subject to the Company’s
receipt of this Agreement signed by you and your independent
advisor by the Termination Date, you will also be paid the
following payments less any tax and national insurance and pension
contributions:
3.1
a sum in lieu of
(at the date of this Agreement) eight days of accrued, but untaken,
holiday pro rata to the Termination Date;
3.2
a sum in lieu of
28 days holiday which would have accrued during your notice period
(£35,538, thirty five thousand, five hundred and thirty eight
pounds);
3.3
a payment of
£330,000 (three hundred and thirty thousand pounds)
representing the salary that would have been paid to you during
your notice period;
3.4
a payment of
£13,858.00 (thirteen thousand eight hundred and fifty eight
pounds) in respect of car allowance payments together with health
and dental care benefits that would have been applicable during
your notice period;
3.5
a payment of
£3,000 (three thousand pounds) in lieu of your fuel
allowance during your notice period;
3.6
Subject to the
rules of the pension scheme, to its registered status not
being prejudiced and to such limits on (and other provisions
relating to) contributions and benefits (and/ or the tax relief
thereon) as apply from time to time in accordance with, as the
Scheme may be, the Scheme’s own rules or the prevailing
practice of HM Revenue & Customs or the provisions of the
Finance Act 1984, the Company will procure that a payment of
£15,750 (fifteen thousand seven hundred and fifty pounds) is
made to the trustees or managers of the pension scheme, to augment
your benefits from it, in lieu of the Company’s contributions
which would have otherwise been made on or after the Termination
Date in respect of your membership of it. At the Termination
Date, you will receive £39,750 (thirty nine thousand seven
hundred and fifty pounds) (being the Company’s pension
contributions in excess of the salary cap) paid in cash, to the
extent that you have not already elected by notice in writing that
the whole or part of that amount shall be paid by the Company into
the scheme. Any payment into the Scheme by the Company
hereunder is conditional upon and subject to you making payment to
the scheme of £10,500 (ten thousand five hundred pounds) in
respect of the pension contributions you would otherwise have made
during the notice period.
3.7
All payments
under paragraphs 3.1 — 3.6 above will be paid into the bank
account into which your salary is normally paid on the next
available payroll run and after your Form P45 has been
issued.
4
The Company
further agrees to pay you and you agree to accept the sum of
£279,231 (two hundred and seventy nine thousand, two hundred
and thirty one pounds) by way of compensation for the termination
of your employment. The first £30,000 of this payment
will be paid without deduction of tax or national insurance but the
Company will deduct tax at your normal rate from the balance of any
payment over £30,000. This payment will be made subject
to the Company’s receipt of this Agreement signed by you and
your independent adviser by the Termination Date. Other than
the tax and national insurance referred to above, you will
indemnify the Company in respect of any further tax or employee
national insurance (together with interest and/or any penalties for
which the Company has to account to the Inland Revenue)
payable in respect of this payment.
5
All your options
which have vested, but are unexercised at or on the Termination
Date will be exercisable (in relation to your Virgin Media options)
for a period of three months (and in relation to your
‘Telewest’ options) for a period of 60 days from the
Termination Date (the “Exercise Period”), provided that
you have not been terminated for cause. All your unvested stock
options or any vested stock options that have not been exercised
will lapse and be forfeited, in respect of the former on the
Termination Date and in respect of the latter on the expiry of the
Exercise Period. The terms of your stock options will
continue in full force and effect.
6
In accordance
with the terms of your Restricted Stock Unit Agreement, you will
not receive any payment or award in respect of your Restricted
Stock Unit Agreements dated 16 May 2007 (2007/2009 LTIP) or 14
April 2008 (2008/2010 LTIP).
7
You authorise the
Company to deduct any sums due to the Company from you from the
monies payable under this Agreement.
8
The Company will
arrange for outplacement counselling services to be available to
you from the Termination Date by the Company’s authorised
provider of such services up to a maximum value of £10,000
(ten thousand pounds). The Company will arrange for it to be
billed directly for those services.
9
You will not be
eligible for any payment in respect of the 2009 Group Bonus
Scheme.
10
You agree that
you will remain bound by the restrictive covenants set out in
Clause 28 of your Executive Service Agreement dated 27
February 2008 and that these covenants will remain in full
force and effect following the Termination Date.
11
You shall not,
and the Company shall use reasonable endeavours to ensure that its
employees and officers shall not, make any adverse or derogatory
comment about each other or do anything which shall, or may, bring
the Company, its directors or employees, or yourself into
disrepute.
12
You should submit
your final expenses claim, if any, made up to the Termination Date
within 14 days of the Termination Date. You will be
reimbursed for all expenses reasonably incurred by you in the
proper performance of your duties in accordance with normal Company
guidelines.
13
You confirm that
you will return by the Termination Date to the Company: all books,
documents, papers, credit cards, keys, computers, mobile telephones
and all other property in whatever form belonging to or relating to
the business of the Company or any Group Company or any of their
suppliers or agents. You further confirm you will immediately
delete on the Termination Date from the hard disk of any personal
computer used by you (except computers in the Company’s
ownership, possession or control) all documents and information
belonging to, obtained from, or prepared for the Company or any
Group Company or any of their or any of their suppliers or
agents.
14
The Company will
provide a reference in the form attached to this Agreement at
Appendix A and will deal with any related enquiry in a manner which
is consistent with the terms of the reference provided that nothing
in this
Agreement will
fetter the Company’s obligation to give full disclosure as
required by law or statutory or regulatory authority. The
Company reserves the right to amend and/or add to the reference in
order to meet such obligation and/or as a result of information
which comes to light after the date of this Agreement.
15
You shall not,
except as may be required by law, divulge to any person whatsoever
or otherwise make use of any trade secret or any confidential
information concerning the business or finances of the Company or
any Group Company or any of their dealings, transactions or affairs
or any such confidential information concerning their suppliers,
agents, or customers except insofar as any trade secret or
confidential information may have come into the public domain
(otherwise than as a resul
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