(Jeff Clarke; President and Chief Executive Officer)
EMPLOYMENT AGREEMENT (the “Agreement”) dated September 26, 2006 by and between TDS Investor (Bermuda) Ltd. (the “Company”) and Jeff Clarke (the “Executive”).
The Company desires to employ Executive and to enter into an agreement embodying the terms of such employment;
Executive desires to accept such employment and enter into such an agreement;
In consideration of the premises and mutual covenants herein and for other good and valuable consideration, the parties agree as follows:
1. Term of Employment. Subject to the provisions of Section 8 of this Agreement, Executive shall continue to be employed by the Company for a period commencing on the date of this Agreement and ending on September 26, 2009 (the “Employment Term”) on the terms and subject to the conditions set forth in this Agreement; provided, however, that commencing with September 26, 2009 and on each September 26 thereafter (each an “Extension Date”), the Employment Term shall be automatically extended for an additional one-year period, unless the Company or Executive provides the other party hereto 120 days prior written notice before the next Extension Date that the Employment Term shall not be so extended.
(a) During the Employment Term, Executive shall serve as the Company’s President and Chief Executive Officer. In such position, Executive shall have such duties and authority as shall be determined from time to time by the Board of Directors of the Company (the “Board”). If requested, Executive shall also serve as a member of the Board without additional compensation.
(b) During the Employment Term, Executive will devote Executive’s full business time and best efforts to the performance of Executive’s duties hereunder and will not engage in any other business, profession or occupation for compensation or otherwise which would conflict or interfere with the rendition of such services either directly or indirectly, without the prior written consent of the Board; provided that nothing herein shall preclude Executive, subject to the prior approval of the Board, from accepting appointment to or continuing to serve on any board of directors or trustees of any business corporation or any charitable organization; provided in each case, and in the aggregate, that such activities do not conflict or interfere with the performance of Executive’s duties hereunder or conflict with Section 9.
3. Base Salary. During the Employment Term, the Company shall pay Executive a base salary at the annual rate of $1,000,000, payable in regular installments in accordance with the Company’s usual payment practices. Executive shall be entitled to such increases in Executive’s base salary, if any, as may be determined from time to time in the sole
discretion of the Board. Executive’s annual base salary, as in effect from time to time, is hereinafter referred to as the “Base Salary.”
4. Annual Bonus. With respect to each full fiscal year during the Employment Term, Executive shall be eligible to earn an annual bonus award (an “Annual Bonus”) of up to one hundred and fifty percent (150%) of Executive’s Base Salary (the “Target”) based upon the achievement of an annual EBITDA target established by the Board within the first three months of each fiscal year during the Employment Term. As the Annual Bonus award is subject to the attainment of performance criteria, it may be paid, to the extent earned or not earned, at below target levels, and above target levels (with a maximum of 350% of the above referenced target level). The Annual Bonus, if any, shall be paid to Executive within two and one-half (2.5) months after the end of the applicable fiscal year. Notwithstanding the foregoing, Executive’s Annual Bonus for fiscal year 2006 shall be at least Target.
5. Restricted Cash Award. Executive is hereby awarded a restricted cash award of $2,100,000 (the “Restricted Cash Award”). Subject to the provisions of Section 8 hereof, 20% of the Restricted Cash Award granted in this Section 5 shall vest on each of March 31, 2007, June 30, 2007, September 30, 2007, December 31, 2007 and March 31, 2008 and automatically become payable (with interest accruing at 4.75% per annum from the date of this Agreement) within 30 days of such vesting. The Restricted Cash Award represents an unfunded, unsecured promise to pay the amount subject to such award.
6. Employee Benefits. During the Employment Term, Executive shall be entitled to participate in the Company’s employee benefit plans (other than annual bonus and incentive plans) as in effect from time to time (collectively “Employee Benefits”), on the same basis as those benefits are generally made available to other senior executives of the Company.
7. Business Expenses. During the Employment Term, reasonable business expenses incurred by Executive in the performance of Executive’s duties hereunder shall be reimbursed by the Company in accordance with Company policies.
8. Termination. The Employment Term and Executive’s employment hereunder may be terminated by either party at any time and for any reason; provided that Executive will be required to give the Company at least 30 days advance written notice of any resignation of Executive’s employment. Notwithstanding any other provision of this Agreement, the provisions of this Section 8 shall exclusively govern Executive’s rights upon termination of employment with the Company and its affiliates.
(a) By the Company For Cause or By Executive Other Than as a Result of a Constructive Termination.
(i) The Employment Term and Executive’s employment hereunder may be terminated by the Company for Cause (as defined below) and shall terminate automatically upon Executive’s resignation other than as a result of a Constructive Termination (as defined in Section 8(c)); provided that Executive will be required to give the Company at least 30 days advance written notice of a resignation other than as a result of a Constructive Termination.
(ii) For purposes of this Agreement, “Cause” means (A) Executive’s willful failure to substantially perform his duties as an employee of the Company or any subsidiary (other than any such failure resulting from incapacity due to physical or mental illness), (B) any act of fraud, misappropriation, dishonesty, embezzlement or similar conduct against the Company or any subsidiary, (C) Executive’s conviction of or plea of “no contest” to a felony or any crime involving moral turpitude (which conviction, due to the passage of time or otherwise, is not subject to further appeal), (D) Executive’s gross negligence in the performance of his duties, (E) Executive purposefully or knowingly makes (or has been found to have made) a false certification to the Company pertaining to its financial statements, (F) by reason of any court or administrative order, arbitration award or other ruling, Executive’s ability to fully perform his duties as President and Chief Executive Officer or as a member of the Board is materially impaired or (G) Executive’s breach of the provisions of Sections 9 or 10 of this Agreement (excluding a breach of Section 10(a) by a statement made by Executive in good faith in Executive’s employment capacity). In the event that the Company asserts that grounds exist for Termination for Cause, unless such grounds are egregious and have caused the Company plain material harm, the Company shall so notify Executive and within no less than 5 days, nor more than 15 days, afford Executive a hearing before the Board or, if the Company is publicly traded, a committee consisting of the independent directors of the Board, at the Board’s option, regarding any disputed facts. The Board or the committee of the Board, as the case may be, shall make a determination regarding the existence of Cause upon completion of any such hearing; provided, however, that any determination that Cause exists shall require an affirmative resolution of the Board of Directors of the Company or the designated committee of the Board acted upon in accordance with applicable Company By-laws and, if the Company is publicly traded, concurred in by at least a majority of the independent directors (if any) of the Board. Notwithstanding the foregoing, the Company shall be entitled to immediately and unilaterally restrict or suspend Executive’s duties pending determination of the existence of Cause.
(iii) If Executive’s employment is terminated by the Company for Cause, or if Executive resigns other than as a result of a Constructive Termination, Executive shall be entitled to receive:
(A) the Base Salary through the date of termination;
(B) any Annual Bonus earned, but unpaid, as of the date of termination for the immediately preceding fiscal year, paid in accordance with Section 4 (except to the extent payment is otherwise deferred pursuant to any applicable deferred compensation arrangement with the Company);
(C) reimbursement, within 60 days following submission by Executive to the Company of appropriate supporting documentation) for any unreimbursed business expenses properly incurred by Executive in accordance with Company policy prior to the date of Executive’s termination; provided claims for such reimbursement (accompanied by appropriate supporting documentation) are