Exhibit 10.1
EMPLOYMENT
AGREEMENT
THIS AGREEMENT (the “ Agreement
”) is made as of December 18, 2007 , by and between Virgin Media Inc., a
Delaware corporation (the “ Company ”), and
Mr. Charles K. Gallagher (the “ Executive
”).
WHEREAS, the Company wishes to employ the
Executive as Senior Vice President – Finance reporting
directly to the Chief Financial Officer, effective as of
December 19, 2007 (the “ Effective Date ”),
and
WHEREAS, the Executive wishes to accept such
employment and to render services to the Company on the terms and
conditions set forth herein.
NOW, THEREFORE, in
consideration of the mutual covenants contained herein, and other
good and valuable consideration, receipt and sufficiency of which
is hereby acknowledged, the parties hereto agree as
follows:
1.
Effectiveness . This Agreement shall be effective as
of the Effective Date.
2.
Employment Term .
(a)
The term of the Executive’s employment pursuant to this
Agreement (the “ Employment Term ”) shall commence as of the Effective
Date and shall end on June 30, 2008, unless the Employment
Term terminates earlier pursuant to Section 6 of this
Agreement (the “ Initial Term ”) or unless the
Employment Term is extended pursuant to Section 2(b)
. The Employment Term may be extended by the Company for an
additional six months (the “ Second Term ”) on
sixty days’ notice to the Executive prior to the expiration
date of the Initial Term.
(b)
Title; Duties . During the Employment Term, the
Executive shall serve as Senior Vice President - Finance reporting
directly to the Chief Financial Officer, and shall perform such
duties, services and responsibilities as are reasonably requested
from time to time by the Chief Financial Officer and normal and
customary for this position, including without limitation, leading
the Company’s OpEx reduction program; assisting the 2008
budget process; special projects regarding operational finance; and
other finance duties as requested by the Chief Executive Officer or
the Chief Financial Officer from time to time. During the
Employment Term, the Executive shall be based in the United
Kingdom, but shall undertake such overseas travel as is necessary
for the proper performance of his duties hereunder.
During the Employment Term, the Executive shall
devote substantially all of his time to the performance of the
Executive’s duties hereunder. During the Employment
Term, the Executive will not, without the prior written approval of
the Chief Executive Officer of the Company, engage in any other
business activity which interferes in any material respect with the
performance of the Executive’s duties hereunder or which is
in violation of written policies established from time to time by
the Company. Nothing contained in this Agreement shall
preclude the Executive from devoting a reasonable amount of time
and attention during the Employment Term to (i) serving, with
the prior approval of the Chief Executive Officer of the Company,
as a director, trustee or member of a committee of any
not-for-profit organization; (ii) serving on the board of
directors of no more than one for-profit company, subject, however,
to the Executive giving prior notification to the Chief Executive
Officer of the Company and obtaining the consent of the Chief
Executive Officer of the Company as to the identity of the company;
(iii) engaging in charitable and community activities;
(iv) serving as a director of the Company; and
(v) managing personal and family investments and affairs, so
long as any
activities of the Executive which are within
the scope of clauses (i) to (v) of this
Section 2(b) do not interfere in any material
respect with the performance of the Executive’s duties
hereunder.
3.
Monetary Remuneration .
(a)
Salary . During the Employment Term, in consideration
of the performance by the Executive of the Executive’s
obligations hereunder to the Company and its parents, subsidiaries,
affiliates and joint ventures (collectively, the “ Company
Affiliated Group ”) in any capacity (including any
services as an officer, director, employee, member of any Board
committee or management committee or otherwise), the Company shall
pay to the Executive an annual salary of £250,000 from the
Effective Date until the expiration date (the “ Base
Salary ”). The Base Salary shall be payable in
accordance with the normal payroll practices of the Company in
effect from time to time for senior management generally;
provided , that the Executive may elect to receive all or
any portion of the Base Salary in U.S. dollars, subject to the
Company’s Exchange Rate Policy in effect from time to time.
If the Executive provides services to members of the Company
Affiliated Group other than the Company, no additional compensation
shall be paid by any such member to the Executive, and any
compensation for such services (if any) shall be paid to the
Company.
(b)
Cash Bonus/Other.
(i) The
Executive shall be eligible to earn a cash bonus in the discretion
of the Chief Executive Officer (in conjunction with the Board or
any Committee thereof) of
£87,500 at the expiration of the Initial Term if the Executive
meets the performance conditions set by the Chief Executive Officer
(in conjuction with the Board or any Committee thereof) for the
Initial Term (the “ Initial Term Performance
Conditions ”). If the contract is extended for
the
Second Term, the
Executive shall be eligible to earn a cash bonus in the discretion
of the Chief Executive Officer (in conjuction with the Board or any
Committee thereof) of £87,500 at the expiration of the Second
Term if the Executive meets the performance conditions set by the
Chief Executive Officer (in conjuction with the Board or any
Committee thereof) for the Second Term (the “ Second Term
Performance Conditions ”) The Executive may
elect to receive all or any portion of the cash bonus, if any, in
U.S. dollars, subject to the Company’s Exchange Rate Policy
in effect from time to time.
(ii) During the
Employment Term, the Executive shall be eligible to receive options
to purchase common stock of the Company described in Appendix
A at such exercise prices, schedules as to exercisability and
other terms and conditions as may be determined in the sole
discretion of the Board or its Compensation Committee under the
Virgin Media Inc. 2006 Stock Incentive Plan.
4.
Benefits .
(a)
General . During the Employment Term, the Executive shall be
entitled to participate in those employee benefit plans, programs,
policies and arrangements (including fringe benefit and executive
perquisite programs and policies) set forth on Appendix B in
accordance with the terms thereof as they may be in effect from
time to time.
(b)
Reimbursement of Expenses . During the Employment
Term, the Company shall reimburse the Executive for all reasonable
business expenses incurred by the Executive in carrying out the
Executive’s duties, services and responsibilities under this
Agreement, so long as the Executive complies with the general
procedures of the Company for
submission of expense reports, receipts or
similar documentation of such expenses applicable to senior
management generally.
5.
Annual Leave . For each whole and partial calendar
year during the Employment Term, the Executive shall be entitled to
25 days of paid vacation (prorated from the Effective Date and for
any partial calendar year), to be credited and taken in accordance
with the Company’s policy as in effect from time to
time.
6.
Termination .
(a)
Termination of Employment. The Company may terminate the
employment of the Executive in a Termination Without Cause upon 30
days’ written notice to the Executive. The Company may
(at its discretion) at any time following the giving of such notice
(but not exceeding the length of the notice given) cease to provide
work for the Executive in which event during such notice period the
other provisions of this Agreement shall continue to have full
force and effect but the Executive shall not be entitled to access
to any premises of the Company or any member of the Company
Affiliated Group. In addition, the employment of the
Executive shall automatically terminate as of the date on which the
Executive dies or is Disabled. For the purposes of this
Agreement, the Executive shall be “Disabled” as
of any date if, as of such date, the Executive has been unable, due
to physical or mental incapacity, to substantially perform the
Executive’s duties, services and responsibilities hereunder
either for a period of at least 180 consecutive days or for at
least 270 days in any consecutive 365-day period, whichever may be
applicable. Upon termination of the Executive’s
employment during the Employment Term because the Executive dies or
is Disabled, the Company shall cause the Executive (or the
Executive’s estate, if applicable) to be provided with death
or disability benefits (as applicable)
pursuant to the plans, programs, policies and
arrangements of the Company Affiliated Group as are then in effect
with respect to senior managers. In addition, upon any
termination of the Executive’s employment under Sections
6(a), (b), (c) and (d) during the Employment Term,
the Company shall cause the Executive to be paid any earned but
unpaid portion of the Base Salary. Immediately following
termination of the Executive’s employment for any reason, the
Employment Term shall terminate.
(b)
Termination Without Cause; Constructive Termination Without
Cause. Upon a Termination Without Cause or a
Constructive Termination Without Cause, the Company shall, as soon
as practicable following the Executive’s execution and
delivery to the Company of the general release of claims set forth
in Section 6(g) and, following the expiration of
any applicable revocation period, cause the Executive to be paid a
lump-sum cash severance payment equal to the amount of Base Salary
to paid to the Executive through to the remainder of the Initial
Term or, if at the time of termination the Employment Term has been
extended pursuant to Section 2(b) , through to the
remainder of the Second Term.
(c)
Termination upon Non-Renewal of the Employment Term. Unless
extended pursuant to Section 2(b) , the Employment Term
and the Executive’s employment with the Company shall end on
June 30, 2008.
(d)
Termination for Cause; Resignation. Upon a
termination of the Executive’s employment during the
Employment Term by the Company for Cause, or upon termination by
the Executive with sixty days’ written notice given to the
Company (other than a Constructive Termination Without Cause), the
Executive shall be entitled to earned but unpaid
Base Salary and benefits through the date of
termination, and the Executive shall not be entitled to any other
payments or benefits.
(e)
UK Benefits. The severance payments described
above shall be in lieu and inclusive of any salary and other
benefits which would be payable to the Executive in respect of any
statutory notice period in the UK.
For
purposes of this Agreement:
(i)
A “Constructive Termination Without Cause” means
a termination of the Executive’s employment during the
Employment Term by the Executive following the occurrence of any of
the following events without the Executive’s prior consent:
(A) any material adverse diminution in the Executive’s
responsibilities or authorities; or (B) assignment to the
Executive of duties that are inconsistent, in a material respect,
with the scope of duties and responsibilities generally relevant or
associated with his position. The Executive shall give the Company
10 days’ notice of the Executive’s intention to
terminate the Executive’s employment and claim that a
Constructive Termination Without Cause (as defined in (A) or
(B) above) has occurred, and such notice shall describe the
facts and circumstances in support of such claim in reasonable
detail. The Company shall have 10 days thereafter to cure
such facts and circumstances if possible.
(ii)
A “Termination Without Cause” means a
termination of the Executive’s employment during the
Employment Term by the Company other than for Cause.
(iii)
“Cause” means (x) the Executive is
convicted of, or pleads guilty or nolo contendere to, a
felony or to any crime involving fraud, embezzlement or breach of
trust; (y) the willful or continued failure of the Executive
to perform the Executive’s duties hereunder (other than as a
result of physical or mental illness); or (z) in carrying out
the Executive’s duties hereunder, the Executive has engaged
in conduct that constitutes gross neglect or willful misconduct,
unless the Executive believed in good faith that such conduct was
in, or not opposed to, the best interests of the Company and each
member of the Company Affiliated Group. The Company shall
give the Executive 10 days’ notice of the Company’s
intention to terminate the Executive’s employment and claim
that facts and circumstances constituting Cause exist, and such
notice shall describe the facts and circumstances in support of
such claim. The Executive shall have 10 days thereafter to
cure such facts and circumstances if possible. If the Chief
Executive Officer reasonably concludes that the Executive has not
cured such facts or circumstances within such time, Cause shall not
be deemed to have been established unless and until the Executive
has received a hearing before the Chief Executive Officer (if
promptly requested by the Executive) and the Chief Executive
Officer within 10 days of the date of such hearing (if so
requested) reasonably confirms the existence of Cause and the
termination of the Executive therefore.
(f)
Effect of Section 409A of the Internal Revenue Code.
If the Executive is a “specified employee” on
the date of termination of the Executive’s employment for
purposes of Section 409A of the Internal Revenue Code of 1986,
as amended, and the regulations there under, notwithstanding any
provision of the Agreement relating to the timing of payments to
the Executive hereunder, if Section 409A would cause the
imposition of the additional tax under Section 409A if paid as
provided in Section 6 of the Agreement, then as much of the
severance
payment as may be paid without the imposition
of the additional tax shall be paid in a lump sum as aforesaid, and
any remaining portion of the severance payment shall be paid upon
the day following the six-month anniversary of the date of
termination. For purposes of this Agreement, “Specified
Employee” shall mean a “specified employee”
within the meaning of Code section 409A(a)(2)(B)(i), as determined
by the Company’s Compensation Committee.
(g)
Release; Full Satisfaction . Notwithstanding any other
provision of this Agreement, no notice or severance pay shall
become payable under this Agreement unless and until the Executive
executes a general release of claims in form and manner reasonably
satisfactory to the Company and substantially similar to
Appendix C , and such release has become irrevocable (it
being the intention of the parties that the Executive provide the
Company with a complete release of any and all claims as a
condition to the receipt of the severance pay under this
Agreement); provided , that the Executive shall not be
required to release any indemnification rights, continuing rights
to benefits under the Company’s employee benefit plans, or
rights to future payments or benefits under this Agreement.
The payment of severance pay to be provided to the Executive
pursuant to this Section upon termination of the
Executive’s employment shall constitute the exclusive payment
in the nature of severance or termination pay or salary
continuation which shall be due to the Executive upon a termination
of employment and shall be in lieu of any other such payments under
any plan, program, policy or other arrangement which has heretofore
been or shall hereafter be established by any member of the Company
Affiliated Group and shall be in respect of any such claims or
payments due or arising from any benefits, rights or entitlements
in any jurisdiction.
(h)
Resignation. Upon termination of the Executive’s
employment for any reason, the Executive shall be deemed to have
resigned from all positions with any member of the Company
Affiliated Group, as applicable.
(i)
Cooperation Following Termination . Following termination of
the Executive’s employment for any reason, the Executive
agrees to reasonably cooperate with the Company upon the reasonable
request of the Chief Executive Officer or Chief Financial Officer
of the Company and to be reasonably available to the Company with
respect to matters arising out of the Executive’s services to
any member of the Company Affiliated Group. The Company shall
reimburse or, at the Executive’s request, advance the Executive for expenses
reasonably incurred in connection with such matters.
7.
Executive’s Representation . The Executive
represents to the Company that the Executive’s execution and
performance of this Agreement does not violate any agreement or
obligation (whether or not written) that the Executive has with or
to any person or entity including any prior employer.
8.
Executive’s Covenants .
(a)
Confidentiality . The Executive agrees and understands
that the Executive has been, and in the Executive’s position
with the Company the Executive will be, exposed to and receive
information relating to the confidential affairs of the Company
Affiliated Group, including without limitation technical
information, business and marketing plans, strategies, customer (or
potential customer) information, other information concerning the
products, promotions, development, financing, pricing, technology,
inventions, expansion plans, business policies and practices of the
Company Affiliated Group, whether or not reduced to tangible
form,
and
other forms of information considered by the Company Affiliated
Group to be confidential and in the nature of trade secrets.
The Executive will not knowingly disclose such information, either
directly or indirectly, to any person or entity outside the Company
Affiliated Group without the prior written consent of the Company;
provided , however, that (i) the Executive shall have
no obligation under this Section 8(a) with
respect to any information that is or becomes publicly known other
than as a result of the Executive’s breach of the
Executive’s obligations hereunder and (ii) the Executive
may (x) disclose such information to the extent he determines
that so doing is reasonable or appropriate in the performance of
the Executive’s duties or, (y) after giving prior notice
to the Company to the extent practicable, under the circumstances,
disclose such information to the extent required by applicable laws
or governmental regulations or by judicial or regulatory
process. The Executive shall comply with the Company’s
data protection policies. Upon termination of the
Executive’s employment, the Executive shall promptly supply
to the Company all property, keys, notes, memoranda, writings,
lists, files, reports, customer lists, correspondence, tapes,
disks, cards, surveys, maps, logs, machines, technical data and any
other tangible product or document which has been produced by,
received by or otherwise submitted to the Executive in the course
of or otherwise in connection with the Executive’s services
to the Company Affiliated Group during or prior to the Employment
Term.
(b)
Non-Competition and Non-Solicitation . During the period
commencing upon the Effective Date and ending on the six month
anniversary of the termination of the Executive’s emplo
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