Exhibit 10.1
MASTER EMPLOYMENT
AGREEMENT
(as amended April 22,
2005)
This Master Employment Agreement
(this “ Agreement ”) has been made and entered
into as of this lst day of August, 2004 by and between Hungarian
Telephone and Cable Corp., a corporation organized under the laws
of the State of Delaware, United States of America (the
(“Company”) and William. McGann (“
Employee ”) and amended as of the 22nd day of April
2005, for the purpose carrying out the original intentions of the
Company and Employee.
RECITALS:
A. The Employee and Company are
parties to an employment agreement dated as of August 1,
2002.
B. The Company desires to retain
Employee as its Finance Director. Employee desires to work for the
Company as its Finance Director.
C. The parties desire to terminate
the existing employment agreement and enter a new employment
agreement and set forth herein in this new employment agreement the
terms and conditions under which Employee shall serve in the
above-stated capacity of Finance Director.
NOW, THEREFORE, in consideration of
the respective covenants and agreements of the parties set forth
herein, it is agreed as follows:
1. Employment and Duties .
The Company agrees to employ Employee and Employee accepts the
employment, subject to the terms and conditions herein, to serve as
Finance Director of the Company. Employee’s duties and
responsibilities shall include the duties and responsibilities as
set forth by the Company, in all cases consistent with
Employee’s position. Employee shall perform faithfully the
duties assigned to him to the best of his ability.
2. Place of Employment .
Employee shall be employed at the Company’s subsidiary
offices located in Budapest, Hungary.
3. Term. The term of
employment under this Agreement shall commence on July 1, 2004 and
continue for an indefinite term, unless terminated in accordance
with the terms of this Agreement.
4. Salary. Employee will
receive a total monthly salary based on an annualized rate of Two
Hundred and Four Thousand Euro (204,000 Euro) to be allocated as
agreed between the Employee and CEO, which will be reviewed on an
annual basis, and may be adjusted based upon the performance of the
employee.
5. Performance Bonus.
Employee shall be eligible to receive a bonus if the Company, in
its sole discretion, decides to reward Employee for his
performance. Any such bonus shall be paid at the Company’s
discretion in either (i) cash, (ii) the Company’s stock,
(iii) options to purchase the Company’s stock, (iv) any
combination of cash, stock or options, or (v) such other form of
consideration as the Company shall determine.
6. Stock Options . Provided
Employee has maintained continuous service with the Company through
the first business day of each calendar year, the Company shall
annually grant to Employee on the first business day of each
calendar year, options from the Company’s 2004 Long-Term
Incentive Plan (the Plan) to purchase at least 35,000 shares of the
Company’s common stock at an exercise price equal to the
market price of the Company’s common stock on the date of
grant as determined by the Plan. Such options shall have a ten-year
exercise period.
7. Housing Allowance.
Employee will receive a monthly housing allowance (the “
Housing Allowance ”) of Three Thousand Euro (3,000
Euro).
8. Employee Taxes. Employee
shall be solely responsible for any and all of Employee’s (i)
income and (ii) social security, medicare or any other
miscellaneous taxes applicable to any salary, bonus, option grant,
stock grant, allowance, severance benefit, or any other type of
compensation or benefit received by Employee pursuant to this
Agreement which is subject to taxation and payable to any
governmental taxing authority including, but not limited to, any
governmental taxing authority in the Republic of Hungary or the
United States of America.
9. Health Insurance and Access
Charges. Upon request from Employee, the Company will provide
Employee, his spouse and his minor dependants with medical and
dental health insurance coverage provided such persons meet any
coverage requirements that the Company’s insurance carrier
may require. The Company undertakes to pay the special 11% Health
Care Access charge in Hungary for the Employee on all compensation
for which it applies to.
10. Vacation. Employee will
be entitled to twenty-five (25) days paid vacation per contract
year.
11. Automobile. The Company
will provide Employee with an automobile for employee’s use
during the employment period. The Company will ensure that the
vehicle is properly maintained and insured at all times. Employee
will be responsible for fuel costs for private use.
12. Mobile Telephone . The
Company will provide Employee with a mobile telephone during the
employment period. Employee will reimburse the Company for all
personal telephone calls.
13. Work Permits. With the
Company’s assistance, Employee shall obtain and keep current
any Hungarian work permits, residency permits or other similar
licenses as may be required by Hungarian law as a result of
Employee’s employment by the Company.
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14. Confidential Information
.
(a) Nondisclosure. Employee
expressly covenants and agrees that he will not during the term of
this Agreement or at any time after the termination hereof,
irrespective of the time, manner, or cause of termination, reveal,
divulge, disclose, or communicate to any person, firm, or
corporation, other than authorized officers, directors, and
employees of the Company, in any manner whatsoever, any
“confidential information” (as hereinafter defined) of
the Company that would be inconsistent with the position held by
Employee or the duties being performed by Employee at the direction
of the Company.
(b) Return of Confidential
Information and Other Property. Upon termination of this
Agreement, Employee will surrender to the Company all confidential
information including, without limitation, all lists, charts,
schedules, reports, financial statements, books and records, and
all copies thereof, of the Company and all other property belonging
to the Company whatsoever. As used herein, “confidential
information” means information disclosed to or known by
Employee as a consequence of or through his employment for the
Company, not generally known in the business in which the Company
is or may become engaged, about the Company, its business, products
and processes.
(c) Breach of Confidentiality
Provision . Employee agrees that a substantial violation on his
part of this confidentiality covenant will cause such damage to the
Company shall be entitled as a matter of right, to an injunction
out of any court of competent jurisdiction, restraining any further
violation of said covenant by Employee, his employer, employees,
partners, or agents. Such right to injunction shall be cumulative
and in addition to whatever other remedies the Company may have,
including, specifically, recovery of liquidated and additional
damages. Employee expressly acknowledges and agrees that the
respective covenants and agreements shall be construed in such a
manner as to be enforceable under applicable laws if a more limited
scope of time is determined by a court or competent jurisdiction to
be required.
15. Termination .
(a) Reasons for Termination.
The employment of Employee with the Company shall terminate
automatically upon Employee’s death and may be terminated by
written notice.
(i) by the Company, upon
Employee’s disability which renders him unable to perform his
usual and customary duties for a period of 180 consecutive
days;
(ii) by the Company without
“cause” upon six (6) months notice (cause is
hereinafter defined);
(iii) by the Company with
“cause” without notice;
(iv) by Employee upon three (3)
months notice;
(v) by Employee for “Good
Reason” upon one month notice. “Good Reason”
means (1) a diminution in Employee’s responsibilities,
duties, titles,
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reporting lines, etc.; or (2) a
reduction in Employee’s salary, bonus opportunity or a
material reduction in Employee’s other benefits; or (3)
requiring Employee to be based at a location more than 25 miles
from Budapest, Hungary; or (4) the Company’s failure to pay
Employee any material amount that is due to Employee under this
Agreement, which failure is not corrected within 20 business after
Employee notifies the Company in writing thereof.
For purposes of this Agreement,
“cause” shall mean (i) a failure by Employee to
substantially perform Employee’s reasonable and legal duties
and as defined by goals established by the Company and agreed to by
Employee, other than a failure resulting from Employee’s
complete or partial incapacity due to physical or mental illness or
impairment, (ii) a “wilful” act by Employee that
constitutes gross misconduct and that is injurious to the Company,
(iii) a “wilful” breach by Employee of a material
provision of this Agree
