Exhibit 10.5
THIRD AMENDED &
RESTATED
EMPLOYMENT
AGREEMENT
THIS THIRD AMENDED & RESTATED
EMPLOYMENT AGREEMENT (the “ Agreement ”) is made
as of September 15, 2009 (the “ Effective Date
”), by and between Virgin Media Inc., a Delaware corporation
(the “ Company ”), and Bryan H. Hall (the
“ Executive ”).
WHEREAS, on 3 March 2006, NTL
Incorporated and Telewest Global, Inc. effected a merger
transaction (the “ Merger ”), structured as a
reverse acquisition, whereby Telewest Global, Inc. acquired NTL
Incorporated and both companies changed their names so that
Telewest Global, Inc. became “NTL Incorporated” and
former NTL Incorporated became “NTL Holdings Inc.”
(“ Old NTL ”) and thereafter the Company was
renamed “Virgin Media Inc.”;
WHEREAS, as a result of the Merger,
Old NTL became a wholly owned subsidiary of the Company and shares
of Old NTL were converted into shares of the Company, so that one
share of common stock of Old NTL became two and a half shares of
the common stock of the Company after giving effect to the
Merger;
WHEREAS, the Executive has been
employed as the Secretary and General Counsel of Old NTL since June
15, 2004 and as Secretary and General Counsel of the Company since
the closing of the Merger on 3 March 2006, pursuant to the terms of
an Employment Agreement dated as of 28 May 2004, as extended by the
Amended & Restated Employment Agreement dated as of December 8,
2006, the Second Amended & Restated Employment Agreement dated
as of August 4, 2008 and the letter agreement dated July 28, 2009
(such extensions, the “ Extension ” and the
Employment Agreement as so extended, the “ Original
Agreement ”);
WHEREAS, the Company and the
Executive each desire to amend and restate the Original Agreement
in its entirety to extend the Employment Term, to provide for
certain stock option grants to the Executive and to provide for his
continued employment with the Company;
WHEREAS the parties intend that (i)
the Executive will reside in the United Kingdom and perform duties
on behalf of the consolidated enterprise as its General Counsel
while present in the United Kingdom, particularly with regard to
the U.K. business, and (ii) he will travel to the United States
where he will perform duties on behalf of the Company as its
General Counsel, in each case upon the terms and conditions of this
Agreement; 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 for other good and
valuable consideration, the receipt and sufficiency of which are
acknowledged, the parties agree as follows:
1.
Amendment . The Original Agreement is hereby
amended and restated in its entirety by this Agreement. The parties
previously agreed to assign the terms of the Original Agreement, as
amended and restated in the Extension, to the Company from Old NTL
and accordingly the term “Company” refers to Virgin
Media Inc. (f/k/a NTL Incorporated), the ultimate parent
entity. In connection with such assignment, the parties
previously agreed that (i) all rights of Old NTL under the Original
Agreement are now rights of the Company under this Agreement and
shall be enforceable against the Executive solely by the Company,
(ii) all rights of the Executive under the Original Agreement shall
be enforceable by the Executive solely against the Company, (iii)
all obligations of Old NTL under the Original Agreement are now
obligations of the Company under this Agreement and shall be
enforceable by the Executive solely against the Company and (iv)
all obligations of the Executive under the Original Agreement shall
be enforceable against the Executive solely by the
Company. The Executive previously released and waived
Old NTL from any and all claims he may have had against it as of
the date of the Extension and acknowledged that, from and after the
date thereof, such claims shall be asserted solely against the
Company. 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 January1, 2011,
unless the Employment Term terminates earlier pursuant to
Section 7 of this Agreement. The Employment
Term may be extended by mutual agreement of the Company and the
Executive.
(b)
Title; Duties . During the Employment Term, the
Executive shall serve the Company as its General Counsel and, in
such capacity, shall perform such duties, services and
responsibilities as are commensurate with such
position. In his capacity as General Counsel, the
Executive shall report to the Chief Executive Officer of the
Company and shall perform such duties, services and
responsibilities as are reasonably requested from time to time by
the Chief Executive Officer and the Board of Directors of the
Company (the “ Board ”) and normal and customary
for this position. 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 and 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 (A) continuing legal
education, including, without limitation, any and all continuing
legal education efforts as may be required to remain in good
standing with the bar of the State of New York (which may include
attendance at seminars and other similar events) and (B) (i)
serving, with the prior approval of the Board, as a non-executive
director, trustee or member of a committee of any for-profit
organizations; (ii) engaging in charitable and community activities
(including pro bono legal services); and (iii) managing personal
and family investments and affairs, so long as any activities of
the Executive which are within the scope of clauses (A) and (B)
(i), (ii) and (iii) 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)
Base 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, associated and affiliated companies 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 cause to be
paid to the Executive an annual salary of (x) £300,000 in
respect of the period prior to September 12, 2006; (y)
£320,000 in respect of the period on and following September
12, 2006; and (z) £375,000 in respect of the period on and
following July 1, 2008, subject to any increase through “pay
review” or otherwise for calendar year 2009 or 2010 as may be
offered by the Company in its sole discretion (the “ Base
Salary ”); and, provided further, that in the event
salary raises or other compensation increases are proposed for
Group Executive Committee members, the Company will consider such
raises or increases for the Executive. The Base Salary
shall be payable in accordance with normal payroll practices 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 or other cash payments in U.S.
dollars, subject to the Company’s Exchange Rate Policy in
effect from time to time. The Executive shall receive no additional
compensation for services that he provides to the Company
Affiliated Group other than as set forth in this Agreement or as
may otherwise be agreed in writing.
(b)
Annual Bonus/Other.
(i) (x) During each
fiscal year of the Company that the Employment Term is in effect,
the Executive shall be eligible to earn a bonus, paid in U.S.
dollars, in the sole discretion of the Board pursuant to the terms
of the Company’s Executive Bonus Scheme, in cash, shares
(restricted or otherwise) of the Company, or options or phantom
options over such shares or a mixture thereof at the discretion of
the Company’s Compensation Committee, in the expected range
of 0% to 150% (75% on-target) (prorated for any partial fiscal
year) (the “ Annual Bonus ”); provided, that,
for purposes of determining the percentage of Base Salary as to
which the Annual Bonus is measured, the Base Salary shall be
determined as if the Executive had elected to be paid entirely in
U.S. dollars; and provided, further, that the Executive may elect
prior to the payment of the Annual Bonus to convert all or any
portion of the Annual Bonus into U.K. pounds sterling at the
exchange rate offered under the Company’s Exchange Rate
Policy as in effect from time to time. The Executive shall be
entitled to the Annual Bonus for the calendar year of 2010 if any
bonus would otherwise have been paid to him had he been employed in
the 2011 calendar year, subject to prorating and to being paid at
the same time that the Annual Bonus is made to participants
generally. In addition, if the Executive remains
employed through December 31, 2010, he shall be entitled to any
LTIP restricted stock unit payment with respect to the 2008-2010
LTIP and, if permitted under the Company’s policy, the
2009-2011 LTIP, but not the 2010-2012 LTIP; in the case of the
2009-2011 LTIP, subject to prorating and to being paid at the same
time that the LTIP payment is made to participants
generally.
(y) If
the Company’s Compensation Committee determines that the
Executive’s gross negligence, fraud or other misconduct has
contributed to the any member of the Company Affiliated Group
having to restate all or a portion of its financial statements, the
Company’s Compensation Committee may if it determines in its
sole judgment that it is in the Company Affiliated Group 's
interest to do so, require reimbursement by the Executive of any
payment made under any bonus scheme where: (1) the payment under
that bonus scheme was predicated upon achieving certain financial
results that were subsequently the subject of a restatement of
financial statements of any member of the Company Affiliated Group
filed with the Securities and Exchange Commission and/or the
satisfaction of financial results or other performance metric
criteria which the Company’s Compensation Committee
subsequently determined were materially inaccurate; (2) the
Company’s Compensation Committee determines that the
Executive’s gross negligence, fraud or other misconduct
contributed to the need for the restatement and/or inaccuracy; and
(3) a lower bonus payment or award would have been made to the
Executive based upon the restated financial results or accurate
financial results or performance metric criteria. In any
such case the Company’s Compensation Committee may, to the
extent permitted by applicable law, recover from the Executive,
whether or not he remains in employment with the Company Affiliated
Group, the amount by which the Executive’s bonus payment or
award for the relevant period exceeded the lower payment or award,
if any, that would have been made based on the restated financial
results or accurate financial results or performance metric
criteria. The Executive agrees that he will upon demand
by any member of the Company Affiliated Group repay to the Company
Affiliated Group the sum so demanded within 21 days of receiving
the demand for payment and whether or not he remains the employee
of the Company Affiliated Group together with interest whichever is
the greater of 5% or 1% above the Bank of England minimum lending
rate from time to time from the date of the bonus payment or award
to the date of actual repayment.”
(c)
Expatriate Package . During the Employment Term
and for any period during which the Executive is required by the
Company to live in the United Kingdom, the Executive and his family
shall have the right to receive the benefits of the Company’s
standard expatriate benefits package (as applied to comparable
United States expatriate employees of the Company), but in any
event such benefits will be consistent with the terms set forth in
Appendix A . Tax equalization shall be consistent
with existing Company Tax Equalization Policy, attached as
Appendix B and incorporated herein by reference.
4.
Equity-Based Compensation .
During the Employment Term, the
Executive shall be eligible to receive options to purchase common
stock of the Company in addition to being entitled to the options
described in Appendix C at such exercise prices, schedules
as to exercisability and other terms and conditions as determined
in the sole discretion of the Board or its Compensation Committee
under the Virgin Media Inc. 2006 Stock Incentive Plan or any
successor plan.
5.
Benefits .
(a)
General. During the Employment Term,
the Executive shall be entitled to participate in all of the
employee benefit plans, programs, policies and arrangements
(including fringe benefit and executive perquisite programs and
policies) made available by the Company Affiliate Group to, or for
the benefit of, its executive officers in accordance with the terms
thereof as they may be in effect from time to time, in so far as
such benefits are capable of being provided in the United
Kingdom.
(b)
Reimbursement of Expenses . During the Employment
Term, the Company shall cause the Executive to be reimbursed for
all reasonable business expenses incurred by the Executive in
carrying out the Executive’s duties, services and
responsibilities under this Agreement, and reasonable expenses
incurred in connection with maintaining admission to practice in
the State of New York, so long as the Executive complies with the
general procedures of the Company Affiliated Group for submission
of expense reports, receipts or similar documentation of such
expenses applicable to senior management generally.
6.
Vacations . For each whole and partial calendar
year during the Employment Term, the Executive shall be entitled in
addition to public and statutory holidays to 28 days of paid
vacation (prorated for any partial calendar year), to be credited
and taken in accordance with the Company’s policy as in
effect from time to time for its similarly situated
executives.
7.
Termination; Severance .
(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 executive
officers. In addition, upon any termination of the
Executive’s employment during the Employment Term, the
Company shall cause the Executive to be paid any earned but unpaid
portion of the Base Salary and other than in connection with a
termination pursuant to Section 7(d) , to be paid, in
accordance with the Company’s bonus policy then in effect,
the Annual Bonus (if any) on or about March 2010 with respect to
the 2009 fiscal year or on or about March 2011 with respect to the
2010 fiscal year, as applicable. The Company’s bonus policy
may affect the timing of any payment, the proration factor and may
provide for non payment of the bonus. 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 (x) a Termination Without Cause or (y)
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 7(g) and, following the expiration of any
applicable revocation period, cause the Executive to be paid a
lump-sum severance payment of cash equal to the product of the Base
Salary times 2 except that in connection with a
Constructive Termination Without Cause occurring in connection with
a Change in Control (as defined under clause (F) of the definition
of Constructive Termination Without Cause), it shall be Base Salary
times 3.
(c)
Termination upon Non-Renewal of the Employment Term
. Unless the parties hereto agree otherwise, the
Employment Term and the Executive’s employment with the
Company shall end on January 1, 2011. In connection with
such termination of employment, the Company shall, as soon as
practicable following the Executive’s execution and delivery
to the Company of the general release set forth in Section
7(g) and following the expiration of any applicable revocation
period, cause the Executive to be paid a lump-sum severance payment
of cash equal to the Base Salary then in effect. In
addition, in connection with a termination of employment pursuant
to this Section 7(c) , the Company shall cause the Executive
to be paid the Annual Bonus for the Company’s 2010 fiscal
year, the 2008–2010 LTIP and the 2009-2011 LTIP (pro-rated if
permitted under the Company’s policy), determined based on
actual satisfaction of any applicable performance goals during such
fiscal year, with such bonus to be paid when paid to the other
participants in the scheme and without application of any mandatory
deferral provisions or continued employment
requirements.
(d)
Upon a termination of the Executive’s employment during the
Employment Term by the Company for Cause, or upon termination by
the Executive with 30 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)
Upon any termination of the Executive’s employment during the
Employment Term other than by the Company for Cause, the Company
shall pay for the continued medical benefits for the Executive and
his family under (and in accordance with the terms of) COBRA for a
period of twelve (12) months following such termination; for the
avoidance of doubt this provision applies upon a termination
pursuant to Section 7(c) hereof. The Executive
shall pay for the remaining COBRA entitlement period.
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) failure by the Company to continue the Executive as the General
Counsel (excluding a promotion); (B) any material diminution in the
Executive’s working conditions or authority, responsibilities
or authorities; (C) assignment to the Executive of duties that are
inconsistent, in a material respect, with the scope of duties and
responsibilities associated with his position as set forth herein;
(D) any materially adverse change in the reporting structure
applicable to the Executive (but not including a change in the
person filling the position to which the Executive reports); (E)
the failure of the Company to maintain commercially reasonable
directors’ and officers’ liability insurance; or (F) a
Change in Control occurs and the Executive is terminated in a
Termination Without Cause during the period commencing on the date
of the Change in Control and ending on the first anniversary
thereof. For purposes of this Agreement, a “
Change in Control ” is defined in Appendix D ,
and incorporated by reference. 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),
(B), (C), (D), (E) or (F) 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 or by reason of the Executive being
Disabled.
(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 Board 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 Board (if
promptly requested by the Executive) and a majority of the Board
within 10 days of the date of such hearing (if so requested)
reasonably confirms the existence of Cause and the termination of
the Executive therefor.
(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 7 of the Agreement, then such 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)
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