Exhibit 10.1
COMPROMISE
AGREEMENT AND RELEASE
This COMPROMISE
AGREEMENT AND RELEASE (the “ Agreement ”), dated
as of August 21, 2007 (the “ Separation Date ”),
by and between Stephen Burch (“ Burch ”) and
Virgin Media Inc., a Delaware corporation (the “
Company ”).
WHEREAS, prior to
the Separation Date, Burch was employed by the Company as its
President and Chief Executive Officer pursuant to an Employment
Agreement, dated as of December 15, 2005 (the “ Employment
Agreement ”), and also served as a member of its Board of
Directors (the “ Board ”);
WHEREAS, in the
Employment Agreement, the Company agreed to grant to Burch a total
of 1,125,000 shares of restricted common stock, $.01 par value per
share, of the Company (the “ Restricted Stock
”);
WHEREAS, 250,000
shares of Restricted Stock have vested prior to the Separation Date
(the “ Vested Shares ”), and 875,000 shares of
Restricted Stock remain unvested or ungranted as of the Separation
Date (the “ Unvested Shares ”);
WHEREAS, the
Restricted Stock is governed by the terms of certain Restricted
Stock Agreements between Burch and the Company (the “
Restricted Stock Agreements ”); and
WHEREAS, on the
Separation Date, Burch has elected to resign his services to the
Company and all of its subsidiaries and affiliates in all
capacities.
NOW, THEREFORE, in
consideration of the mutual covenants and agreements contained
herein, and for the monetary and other consideration set forth
below (including, without limitation, the treatment of the
Restricted Stock as provided herein), the parties hereto agree as
follows:
1.
Resignation from All Positions . Burch hereby
acknowledges and confirms that his employment with the Company and
any and all appointments he holds with the Company and any of its
subsidiaries and affiliates, whether as an officer, employee,
director, consultant, agent, or otherwise and including, without
limitation, as a member of the Board, ceased on the Separation
Date. Burch understands and agrees that from and after the
Separation Date he is no longer authorized to speak on behalf of,
or incur any expenses, obligations or liabilities on behalf of, the
Company or any of its subsidiaries or affiliates. Burch
hereby confirms that his resignation is not due to a
“disagreement with the registrant” as such phrase is
used in Form 8-K promulgated by the Securities and Exchange
Commission.
2.
Services to the Company Following the Separation Date
.
(a)
This Section 2 expressly modifies Section 7(g) of the Employment
Agreement which is attached as Appendix B.
(b)
Burch agrees that, from and after the Separation Date until the
six-month anniversary of the Separation Date (the “
Services Period ”), Burch shall make himself available
to provide services to the Company, regarding the businesses and
affairs of the Company and its
affiliates (other than
litigation involving the Company, which is addressed in Section
2(c) hereof) (the “ Services ”) on such dates
and at such times as the Company may reasonably request. The
number of days that Burch shall make himself available to the
Company to provide Services during the Services Period shall not
exceed twenty. The Services shall be commensurate with
Burch’s status as a former Chief Executive Officer of the
Company. Burch shall receive no compensation for the Services
other than as provided herein. The parties understand and
agree that Burch shall perform the Services as an independent
contractor and not as an employee.
(c)
From and after the Separation Date, Section 7(g) of the Employment
Agreement shall apply solely with respect to litigation involving
the Company.
3.
Restriction on Services to Certain Other Persons; Modification
of Section 9(b) of the Employment Agreement .
(a)
This Section 3(a) expressly modifies the definition of “Core
Business” contained in Section 9(b)(i) of the Employment
Agreement. From and after the Separation Date, the
“Core Business” shall consist solely of (w) owning or
operating broadband or mobile communications networks for
telephone, mobile telephone, cable television or internet services,
(x) providing mobile telephone or fixed line telephone services,
(y) providing television or internet services or (z) owning,
operating or providing any content-generation services or
television channels, in the case of each of (w) through (z),
principally in the United Kingdom or Ireland. For avoidance
of doubt, subject to Section 3(c), nothing in this Agreement or the
Employment Agreement shall prohibit or limit Burch’s ability
to provide services to any entity that competes with the Core
Business, so long as (A) such entity has more than one discrete and
readily distinguishable business unit, (B) Burch’s duties do
not include management or supervision of the business unit
that competes with the Core Business, including, without
limitation, serving in a capacity where any person responsible
for the Core Business reports to Burch and (C) if more than
25% of the revenue of such entity is derived from operations in the
United Kingdom or Ireland, Burch notifies the Company of such
employment prior to commencement of his employment with such
entity. Subject to Section 3(c), nothing in this Agreement or
the Employment Agreement shall prohibit or limit Burch’s
ability to provide services to any entity that engages in the Core
Business solely in countries other than the United Kingdom or
Ireland.
(b)
For avoidance of doubt, no provision of this Agreement shall be
construed to enlarge or diminish the obligations of Burch under
Section 9 of the Employment Agreement, other than Section 9(b)(i)
thereof.
(c)
In order to assure equality of information of all potential
counterparties in connection with any possible transaction relating
to the strategic review previously announced by the Company,
including the possible occurrence of a “Change in
Control” (as defined in the Employment Agreement), Burch and
the Company agree that, from and after the Separation Date until
the earlier of (x) the first anniversary of the Separation Date and
(y) the consummation of a Change in Control:
(i)
Burch shall not, directly or indirectly, initiate communication
regarding the Company or a potential business transaction involving
the Company (any
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such communication, a
“ Prohibited Communications ”) with any person;
provided , however , that this subsection shall not
restrict any communication by Burch relating to his employment by a
person who is not an “Adverse Party” (as defined below)
so long as such communication is reasonably appropriate for
purposes of securing such employment. For purposes of this
agreement, “ Adverse Party ” shall mean those
persons or entities identified to Burch by the Company as potential
counterparties to a Change of Control transaction, those persons or
entities actually known to Burch to be potential counterparties to
a Change of Control transaction, and those persons or entities
publicly reported to be potential counterparties to a Change of
Control transaction and for each of these three categories, their
legal, financial or other advisers. In the event that any
Adverse Party initiates a Prohibited Communication with Burch,
Burch shall immediately refer such person or entity to the General
Counsel of the Company, and any further communications between such
Adverse Party and Burch shall occur only upon such terms and
conditions as the Company, in its sole discretion,
determines.
(ii)
Burch shall not provide services in any capacity to any Adverse
Party, unless (A) Burch’s services to such Adverse Party are
completely unrelated to the Company or a potential business
transaction with the Company, (B) Burch’s services to such
Adverse Party are subject to the establishment of screening
procedures reasonably satisfactory to the Company and designed to
ensure that Burch has no Prohibited Communications and is in no way
engaged with such Adverse Party’s activities relating to the
Company, and (C) the Adverse Party agrees to enter into or amend
any nondisclosure or other, similar agreement with the Company to
safeguard against no Prohibited Communication between such Adverse
Party and Burch. In the event that Burch commences to provide
services to a person or entity which is not an Adverse Party at the
time such services commence but which subsequently becomes an
Adverse Party, Burch shall, at the reasonable request of the
Company, demonstrate that (I) Burch has had no Prohibited
Communications with such person or entity during the entire period
that he has provided services to such person or entity, and (II)
the screening procedures required by subsection (ii) of this
Section 3(c) have been in effect from the time that Burch knew or
reasonably should have known that such person or entity has become
an Adverse Party.
(d)
Since June 7, 2007, Burch has not communicated with any Adverse
Party.
4.
Nondisparagement . From and after the Separation Date,
neither Burch nor the Company shall make any statement that
criticizes, ridicules, disparages or is otherwise derogatory of the
other party. In addition, Burch shall not make any statement
that criticizes, ridicules, disparages or is otherwise derogatory
of any of the Company’s current or former subsidiaries,
affiliates, employees, officers, directors or stockholders.
For such purpose, statements by the Company shall mean (i)
statements by the Company or any of its subsidiaries by press
release or other formally released announcement and (ii) oral or
written statements by the executive officers or directors of the
Company or any of its subsidiaries, but shall not mean oral or
written statements by any other person.
5.
Severance Payment .
(a)
So long as Burch executes and delivers this Agreement to the
Company
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and does not revoke
this Agreement within the time period provided in Section 7(g)
hereof, Burch shall be paid a severance payment of $1,500,000 (the
“ Severance Payment ”), to be paid within five
days following the date on which the revocation period applicable
to this Agreement has lapsed. For avoidance of doubt, the
payment of the Severance Payment shall in no event be conditioned
on any act or omission to act by Burch (including any such act or
omission to act that could constitute a breach of this Agreement or
the Employment Agreement), other than the revocation of this
Agreement by Burch.
(b)
For the avoidance of doubt, following the Separation Date, Burch
shall receive all the benefits available to Burch under the
Company’s applicable expatriate policy as a former employees
of the Company, including, without limitation, tax equalization,
relocation to the United States and continued medical benefits.
Burch hereby acknowledges and agrees that he shall relocate to the
United States on or before December 31, 2007.
(c)
Without duplication of any medical benefits to be provided under
the applicable expatriate policy, the Company shall cause Burch and
his spouse and dependents to be provided with medical coverage for
six months following the Separation Date at the same cost to him as
was in effect at the Separation Date
(d)
Following the Separation Date, the Company will take steps as may
be necessary to assume responsibility for all costs associated with
the leases on any automobiles Burch has used in connection
with his services to the Company. In all events, Burch shall
be entitled to continue to use all such automobiles until such time
as Burch relocates to the United States.
6.
Retention of 250,000 Shares of Restricted Stock . The
parties agree that the Employment Agreement and the Restricted
Stock Agreements are modified as follows:
(a)
As of the Separation Date, Burch shall:
(i)
retain all 250,000 Vested
Shares of Restricted Stock;
(ii)
forfeit 625,000 of the
Unvested Shares and all rights thereto (whether grante
