SERVICE AGREEMENT

 

 

CONTENTS

 

Clause		Page
1	DEFINITIONS AND INTERPRETATION	1
2	TERM OF EMPLOYMENT	2
3	DUTIES	2
4	HOURS OF WORK	3
5	GRATUITIES	3
6	CODES OF CONDUCT	3
7	REMUNERATION	4
8	PENSION SCHEME	5
9	OTHER BENEFITS	5
10	COMPANY CAR/CAR ALLOWANCE	6
11	EXPENSES	7
12	ANNUAL LEAVE	7
13	ILLNESS	7
14	RESTRICTIONS DURING EMPLOYMENT	8
15	INTELLECTUAL PROPERTY	8
16	CONFIDENTIALITY	9
17	DATA PROTECTION	10
18	DEDUCTIONS FROM SALARY	10
19	HEALTH AND SALARY	11
20	ENTITLEMENT TO WORK IN THE UK	11
21	MONITORING	11
22	TERMINATION OF EMPLOYMENT	11
23	SUSPENSION	13
24	TERMINATION AND RETURN OF COMPANY PROPERTY	14
25	RECONSTRUCTION OR AMALGAMATION	14
26	RESTRICTIONS	15
27	SEVERABILITY	18
28	THIRD PARTIES	18
29	NOTICES	18
30	STATUTORY INFORMATION	19
31	MISCELLANEOUS	19
32	CHANGES TO TERMS AND CONDITIONS	19
SCHEDULE 1 Statement of Particulars Pursuant To The Employment Rights Act 1996		20
SCHEDULE 2		21

 

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THIS DEED is made on 31 July 2009 BETWEEN:

 

(1)            Virgin Media Limited whose registered office is at 160 Great Portland Street, London, W1W 5QA (the “ Company ”); and

 

(2)            Robert Gale (the “ Executive ”).

 

RECITAL

 

The Company shall employ the Executive and the Executive shall serve the Company as Executive Director Control and Tax and Vice President, Controller and Principal Accounting Officer for Virgin Media Inc. on the following terms and subject to the following conditions (the “Agreement” ):

 

NOW THIS DEED WITNESSES:

 

1               DEFINITIONS AND INTERPRETATION

 

1.1            In this Agreement unless the context otherwise requires the following expressions shall have the following meanings:

 

“ Compensation Committee ”

 

the Compensation Committee of Virgin Media Inc.;

 

“Garden Leave”

 

any period during which the Company has exercised its rights under clause 23.2; and

 

“Group”

 

the Company, its holding company (as defined in Section 736 of the Companies Act 1985) (including, without limitation, Virgin Media Inc.) and its group undertakings (as defined in Sections 258 and 259 of the Companies Act 1985) from time to time and “Group Company” means any one of them.

 

1.2            Any reference to a statutory provision shall be deemed to include a reference to any statutory modification or re-enactment of it.

 

1.3            The headings in this Agreement are for convenience only and shall not affect its construction or interpretation.

 

1.4            References in this Agreement to a person include a body corporate and an incorporated association of persons and references to a company include any body corporate.

 

1.5            Where appropriate, references to the Executive include his personal representatives.

 

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2               TERM OF EMPLOYMENT

 

2.1            The employment of the Executive shall be deemed to have commenced on 5 th  January 1998 and (subject to termination as provided below) shall be for an indefinite period terminable by the Company giving to the Executive 12 months notice in writing or the Executive giving to the Company six months notice in writing . With effect from the date of this Agreement, all previous employment agreements shall cease to have effect.

 

2.2            Notwithstanding clause 2.1 above the employment of the Executive shall automatically terminate on the day when the Executive reaches age 65.

 

2.3            The Executive represents and warrants that he is not bound by or subject to any contract, court order, agreement, arrangement or undertaking which in any way restricts or prohibits him from entering into this Agreement or performing his duties under it and undertakes to indemnify the Company against any claims, costs, damages, liabilities or expenses which the Company may incur as a result of any claim that he is in breach of any such obligations.

 

3               DUTIES

 

3.1            The Executive shall during his employment under this Agreement:

 

3.1.1         perform the duties and exercise the powers which the Chief Financial Officer may from time to time properly assign to him in his capacity as Executive Director Control and Tax in connection with the conduct and management of the business of any Group Company (including serving on the board of such Group Company or on any other executive body or any committee of such a company);

 

3.1.2         do all in his power to promote, develop and protect the business of  any Group company and at all times and in all respects conform to and comply with the proper and reasonable directions and regulations of the Group;

 

3.1.3         devote the whole of his working time and attention to the duties assigned to him;

 

3.1.4         faithfully and diligently serve the Group;

 

3.1.5         act in the best interests of the Group;

 

3.1.6         comply with his fiduciary duties;

 

3.1.7         not enter into any arrangement on behalf of the Group which is outside its normal course of business or his normal duties or which contains unusual or onerous terms; and

 

3.1.8         report the wrongdoing (including acts of misconduct, dishonesty, breaches of contract, fiduciary duty, company rules or the rules of the relevant regulatory

 

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bodies) whether committed, contemplated or discussed by any other director or member of staff of any Group Company of which the Executive was aware to the General Counsel and/or Chief People Officer immediately, irrespective of whether this may involve some degree of self incrimination.

 

3.2            The Executive shall give such information regarding the affairs of the Group as senior management shall require, and in any event, report regularly and keep senior management informed.

 

3.3            The Executive’s normal place of work will be Bartley Wood Business Park, Bartley Way, Hook. The Executive agrees that he may however work in any place within the United Kingdom, which the Company may reasonably require and he may be required to travel abroad when required by the Group for the proper performance of his duties.

 

4               HOURS OF WORK

 

4.1            The Executive will comply with the Group’s normal hours of work and will also work such additional hours as are reasonably necessary to perform his duties.  He will not receive any further remuneration for any hours worked in addition to the normal working hours.

 

4.2            The Executive agrees that the performance of his duties pursuant to this Agreement may require him to work more than 48 hours per week and consents to opt out of that part of the Working Time Regulations 1998 which limits the working week to a maximum of 48 hours averaged over 17 weeks.  The Executive may withdraw this consent to work more than 48 hours per week by giving not less than three months’ notice to the General Counsel or Chief People Officer.

 

5               GRATUITIES

 

5.1            The Executive shall not directly or indirectly accept any commission, rebate, discount or gratuity in cash or in kind from any person who has or is having or is likely to have a business relationship with any Group Company unless the gratuity is of minimal value and only made on an occasional basis.

 

5.2            Notwithstanding clause 5.1 above, the Executive shall register any such gratuity on the Gifts and Hospitality Register, whether or not any such gift or hospitality is accepted.  Details of the Gifts and Hospitality Register are available from the People Team or via the Group Risk and the People Team intranet sites.

 

6               CODES OF CONDUCT

 

6.1            The Executive shall comply (and procure that his spouse and minor children shall comply) with all applicable rules and regulations of the NASDAQ Exchange and the laws of the United States of America applicable to any Group Company, including without limitation the regulations of the U.S. Securities and Exchange Commission, and any other codes, rules or regulations of any other relevant regulatory authority in the UK, USA or any other relevant jurisdiction from time to time in relation to the holding or trading of shares, debentures or other securities.

 

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6.2            The Executive shall comply with any Codes of Conduct of the Group (including but not limited to the Group’s Code of Conduct together with the Code of Ethics for Principle Executive and Senior Officers of Virgin Media Inc. and the Group’s Insider Trading Policy) from time to time in force and any other relevant regulatory authority.  The Company may require from time to time questionnaires or other forms to be completed by the Executive in connection with these Codes of Conduct and other policies; the Executive agrees to complete these forms in a timely fashion.

 

6.3            The Executive shall sign the Group’s Certificate of Compliance in relation to any such codes; a copy of the Certificate is appended to this Agreement under Schedule2.  In the event that the Company requires further certifications, the Executive agrees to comply in a timely fashion.

 

7               REMUNERATION

 

7.1            The Company shall pay to the Executive a salary at the rate of one hundred and eighty-seven thousand and two hundred pounds (£187,200) gross per year subject to deductions for income tax and national insurance contributions and inclusive of any fees payable to him by reason of his holding any Office in any Group Company.

 

7.2            The Executive’s salary shall accrue from day to day and be payable by equal monthly instalments in arrears on or about the last working day of each month.

 

7.3            The Executive’s salary shall be reviewed once in every year.  The undertaking of a salary review does not confer a contractual right (whether express or implied) to any increase in salary and the Executive acknowledges that any salary increase is at the discretion of the Company.

 

7.4            The Executive is eligible to participate in such bonus scheme as the Group may from time to time nominate subject to the rules of such scheme as amended from time to time.  The payment of any bonus together with any amount payable is at the Group’s absolute discretion and may from time to time be determined by the Group. A bonus if awarded may be in cash, shares (restricted or otherwise) of Virgin Media Inc. or options or phantom options over such shares or a mixture thereof at the discretion of the Compensation Committee.  Any bonus payment will not be part of the contractual remuneration or fixed salary hereunder.  Details of the bonus scheme will be communicated to the Executive separately.

 

7.5            The entitlement to and payment of any bonus is conditional upon the Executive being employed and not having given notice on the last calendar day of the month in which the bonus is paid (currently March).  The Executive acknowledges that the termination of the Executive’s employment whether lawful or unlawful prior to the last calendar day of the relevant bonus period shall not in any circumstance give rise to a claim by the Executive for compensation in lieu of such bonus or compensation to cover the loss of opportunity to earn such bonus. In the event that the Company improves this policy for senior executives, it will consider application of that policy to the Executive.

 

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7.6            If the Compensation Committee determines that the Executive’s gross negligence, fraud or other misconduct has contributed to the Group having to restate all or a portion of its financial statements the Compensation Committee may if it determines in its sole judgment that it is in the 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 Group financial statements filed with the U.S. Securities and Exchange Commission and/or the satisfaction of financial results or other performance metric criteria which the Compensation Committee subsequently determined were materially inaccurate; (2) the 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 Compensation Committee may, to the extent permitted by applicable law, recover from the Executive, whether or not he remains in employment with the Group, the amount by which the Executive’s bonus payment/award for the relevant period exceeded the lower payment/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 the Group repay to the Group the sum so demanded within 21 days of receiving the demand for payment and whether or not he remains the employee of the 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.

 

8               PENSION SCHEME

 

8.1            The Executive will be eligible to become a member of the Company’s group pension plan (“ Pension Plan ”), to which the Company contributes in accordance with rules of the Pension Plan and any prevailing Company limits, as amended from time to time, and subject to the approval of the Compensation Committee if applicable.  The Executive will be contracted into the State Second Pension (S2P) unless the Executive opts to contract-out or contracting-out is a requirement of the Executive’s plan.   The Executive’s contributions will be deducted from monthly salary payments and passed on to the Pension Plan provider.   At any time the Company may elect to suspend or terminate operation of the Pension Plan and replace them with another arrangement(s). An outline description of the terms of the Pension Plan, are set out in a member’s guide.  A copy of this document is available from the People Team or may be available on the Group intranet site.

 

9               OTHER BENEFITS

 

9.1            The Executive may participate in the following schemes:

 

 

9.1.1         a private medical expenses scheme providing such cover for the Executive and his spouse/partner and children as defined in the rules of the scheme as the

 

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payment of salary pursuant to clause 7 .  Full details are contained in the Perk Car Policy which is available on the Group intranet site.  The Company reserves the right to review and amend these policies at any time.  It is a condition of the Executive’s employment that the Executive retains a current full driving licence (valid in the UK) and complies with the rules of the prevailing Perk Car Policy.  If the Executive fails to comply with these rules or is disqualified from driving for any period, the Company reserves the right to dismiss the Executive immediately without compensation in accordance with the Company’s Disciplinary Policy and Procedures.

 

11             EXPENSES

 

The Company shall reimburse or procure that the Executive is reimbursed all expenses properly incurred in accordance with the Company’s Travel and Expenses policy in force from time to time and available on the Group intranet site or from the People Team.

 

12             ANNUAL LEAVE

 

12.1          The Executive is entitled to 28 days holiday with pay every calendar year in addition to bank and other public holidays.  The Company’s holiday year runs from 1 January to 31 December.

 

12.2          The Company may refuse to allow the Executive to take holiday in circumstances where it would be inconvenient to the business (including bank or public holidays).  The Company reserves the right to refuse holiday (including holiday that has previously been approved) up to and including the day before the holiday is due to be taken.  In such circumstances the Company will however attempt to give as much notice as reasonably possible.

 

12.3          If either party serves notice to terminate the employment the Company may require the Executive to take any accrued but unused holiday entitlement during the notice period (whether or not the Company has exercised its rights under clause 23.2).

 

12.4          In all other respects unless detailed above, the Executive is subject to the terms of the Company’s annual leave policy which is available on the Group intranet site or from the People Team.

 

13             ILLNESS

 

13.1          If the Executive is absent from work due to sickness or injury, the Executive may be eligible for Company sick pay, which is payable at the Company’s absolute discretion.  Subject to this discretion and provided the Executive complies with the Sickness Absence Policy requirements, the Executive will be paid according to the Executive’s normal basic salary rate.  Further details are set out in the Company’s Sickness Absence Policy which is available on the Group intranet site or can be obtained from the People Team.

 

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13.2          If the Executive is incapable of performing his duties by reason of injury sustained wholly or partly as a result of negligence, nuisance or breach of any statutory duty on the part of a third party and the Executive recovers an amount by way of compensation for loss of earnings from that third party, he shall immediately pay that part of such amount to the Company which relates to loss of earnings for the period during which he was paid by the Company but unable to perform his duties under the Agreement.

 

13.3          The Company shall be entitled to require the Executive to undergo examinations from time to time by a medical adviser appointed or approved by the Company and the Executive authorises the medical adviser and/or will provide such consents as are necessary to disclose to the Company the results of such examinations.

 

14             RESTRICTIONS DURING EMPLOYMENT

 

14.1          The Executive shall not during his employment with the Company and warrants to the Company that as at the date of this agreement he is not (save as a representative of the Company or with the prior wri