Exhibit 10.38

 

DATED 27 February 2008

 

VIRGIN MEDIA LIMITED

 

and

 

John Howard Watson

 

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SERVICE AGREEMENT

 

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Virgin Media Limited

160 Great Portland Street

London

W1W 5QA

 

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CONTENTS

 

Clause

 

Page

 

 

 

1

DEFINITIONS AND INTERPRETATION

1

 

 

 

2

TERM OF EMPLOYMENT

2

 

 

 

3

DUTIES

2

 

 

 

4

HOURS OF WORK

4

 

 

 

5

GRATUITIES

4

 

 

 

6

CODES OF CONDUCT

4

 

 

 

7

REMUNERATION

5

 

 

 

8

PENSION SCHEME

5

 

 

 

9

OTHER BENEFITS

6

 

 

 

10

SHARE OPTIONS

7

 

 

 

11

COMPANY CAR ALLOWANCE

7

 

 

 

12

FUEL

7

 

 

 

13

EXPENSES

8

 

 

 

14

ANNUAL LEAVE

8

 

 

 

15

ILLNESS

8

 

 

 

16

RESTRICTIONS DURING EMPLOYMENT

9

 

 

 

17

INTELLECTUAL PROPERTY

9

 

 

 

18

CONFIDENTIALITY

10

 

 

 

19

DATA PROTECTION

11

 

 

 

20

DEDUCTIONS FROM SALARY

11

 

 

 

21

HEALTH AND SAFETY

12

 

 

 

22

ENTITLEMENT TO WORK IN THE UK

12

 

 

 

23

MONITORING

12

 

 

 

24

TERMINATION OF EMPLOYMENT

12

 

 

 

25

SUSPENSION AND GARDEN LEAVE

14

 

 

 

26

TERMINATION AND RETURN OF COMPANY PROPERTY

15

 

 

 

27

RECONSTRUCTION OR AMALGAMATION

15

 

 

 

28

RESTRICTIONS AFTER EMPLOYMENT

15

 

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29

SEVERABILITY

18

 

 

 

30

THIRD PARTIES

19

 

 

 

31

NOTICES

19

 

 

 

32

STATUTORY INFORMATION

19

 

 

 

33

MISCELLANEOUS

19

 

 

 

34

CHANGES TO TERMS AND CONDITIONS

20

 

 

 

SCHEDULE 1

 

 

 

 

 

Statement Of Particulars Pursuant To The Employment Rights Act 1996

21

 

 

 

SCHEDULE 2

 

 

 

 

 

Certificate of Compliance

22

 

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THIS DEED is made on 27 February 2008

 

BETWEEN:

 

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

 

(2)           Howard Watson of Shires, Marden Park Farm, Woldingham, Surrey, CR3
7JB (the “Executive”).

 

recital

 

The Company shall employ the Executive and the Executive shall serve the Company
as Chief Technology Officer / Chief Information Officer (or similar title) of
the Company 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:

 

“Garden Leave”

 

any period during which the Company has exercised its rights under clause 25.2;

 

“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 and includes, without
limitation, Virgin Media Limited; and.

 

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.

 

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

 

2              TERM OF EMPLOYMENT

 

2.1           The employment of the Executive shall be deemed to have commenced
on 1st June 1993 and (subject to termination as provided below) shall be for an
indefinite period terminable by either party giving to the other 12 months
notice in writing. The Company giving to the Executive 12 months notice in
writing or by Executive giving to the Company 12 months notice in writing.

 

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

 

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.

 

3              DUTIES

 

3.1           The Executive shall during him employment under this Agreement:

 

3.1.1        perform the duties and exercise the powers which the Chief
Executive Officer  may from time to time properly assign to him in his capacity
as Chief Technology Officer/Chief Information Officer or in connection with the
conduct and management of the business of the Group (including serving on any 
executive body or any committee of  any Group Company); as the Chief Technology
Officer/Chief Information Officer, the Executive will report to either the Chief
Executive Officer or the Chief Operating Officer;

 

3.1.2        do all in his power to promote, develop and protect the business of
the Group 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        Unless with the written consent of the Company, not enter into any
arrangement on behalf of any Group Company which is outside its normal course of
business or his normal duties or which contains unusual or onerous terms; and

 

3.1.7        report the wrongdoing (for example acts of misconduct, dishonesty,
breaches of contract, fiduciary duty, company rules or the rules of the relevant
regulatory bodies) whether committed, contemplated or discussed by any other

 

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director or member of staff of any Group Company of which the Executive was
aware to the General Counsel and Chief Executive 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 it shall require, and in any event, report regularly and keep the
senior management informed.

 

3.3           The Executive’s normal place of work will be Hook, Hampshire. 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.

 

3.4           The Executive:

 

3.4.1        shall hold such offices as a director, secretary, or officer (an
“Office”) of any Group Company as the Company and the Executive may from time to
time agree;

 

3.4.2        (if the Company so requests) shall immediately resign without claim
for compensation from any Office held in any Group Company and the Executive
hereby irrevocably appoints the Company to be his attorney to execute and do any
such instrument or thing and generally to use his name for the purpose of giving
the Company or its nominee the full benefit of this clause;

 

3.4.3        shall not do anything (other than anything done with the agreement
or knowledge of the Company) that would cause him to be disqualified from
holding any Office;

 

3.4.4        shall not (without the prior written approval of the General
Counsel or Chief Executive Officer) resign from any Office which he holds in any
Group Company or any trusteeship which he holds as a result of his appointment,
unless in the reasonable opinion of the Executive his continuation in Office
would have any adverse consequence for the Executive.

 

3.4.5        shall hold any Office in Group Company subject to the articles of
association or by-laws of the relevant Group Company as amended from time to
time; and

 

3.4.6        acknowledges that the termination of any Office which he holds in
any Group Company shall not terminate his employment which shall continue on the
basis that the Executive is an employee only.

 

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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 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 Human Resources Managing
Director.

 

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 Human Resources or via the Group Risk intranet site.

 

6              CODES OF CONDUCT

 

6.1           Subject to the terms of clause 16, 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.

 

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  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 Schedule 2.

 

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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
three hundred and thirty thousand pounds (£330,000) gross per year subject to
deductions for income tax and national insurance contributions and inclusive of
any fees payable to him by reason of him 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;
normally the 1st July of each 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. 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           Entitlement to any bonus is conditional upon the Executive being
employed 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.

 

8              PENSION SCHEME

 

8.1           The Executive will be eligible to become a member of the Company’s
group pension plan (the “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. The Executive is entitled to either become a member
of the Pension Plan or remain a member of any other pension Plan of the Group of
which he has become a member, subject to the plan's rules and prevailing Company
limits, as amended from time to time. 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 or any  

 

5

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other pension Plan of the Group 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 Human Resources or may be
available on the Group intranet site.

 

9              OTHER BENEFITS

 

9.1           The Executive may participate in the following schemes (each
referred to below as an “insurance scheme”):

 

9.1.1        a private medical expenses insurance scheme providing such cover
for the Executive and his spouse/partner and children as defined in the rules of
the scheme as the Company may from time to time notify to the Executive. This
benefit will be subject to deduction of tax in line with Inland Revenue
requirements;

 

9.1.2        a private dental insurance scheme providing such cover for the
Executive and his spouse/partner as the Company may from time to time notify to
the Executive. This benefit will be subject to the deduction of tax in line with
Her Majesty’s Revenue and Customs requirements;

 

9.1.3        a salary continuance or long-term disability insurance scheme
providing such cover for the Executive as the Company may from time to time
notify to him;

 

9.1.4        a life insurance scheme under which a lump sum benefit shall be
payable on the Executive’s death while this Agreement continues; the benefit of
which shall be paid to such dependants of the Executive or other beneficiary as
the trustees of the scheme select at their discretion, after considering any
beneficiaries identified by the Executive in any expression of the Executive’s
wishes delivered to the trustees before his death. The benefit is equal to 4
times the Executive’s annual gross earnings at his death but annual gross
earnings for this purpose shall not exceed the relevant limit prescribed by the
Company from time to time. The Executive is required to complete all necessary
paperwork to ensure eligibility to full benefit under the scheme. The Company
accepts no liability should full payment not be made on the basis that the
Executive has failed to complete the requisite paperwork. The Executive may be
required to undergo examinations by a medical examiner appointed or approved by
the Company in connection with the operation of the scheme; and/or

 

9.1.5        a personal accident insurance scheme providing such cover for the
Executive as the Company may from time to time notify to him.

 

9.2           Benefits under any insurance scheme shall be subject to the rules
of the scheme(s) and the terms of any applicable insurance policy and are
conditional upon the Executive complying with and satisfying any applicable
requirements of the insurers. Copies of these rules and policies and particulars
of the requirements shall be provided to the Executive on request. The Company
shall not have any liability to pay any benefit to

 

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the Executive under any insurance scheme unless it receives payment of the
benefit from the insurer under the scheme. The Company reserves the right to
amend or withdraw any insurance scheme at its discretion from time to time.

 

9.3           Any insurance scheme which is provided for the Executive is also
subject to the Company’s right to alter the cover provided or any term of the
scheme or to cease to provide (without replacement) the scheme at any time.

 

9.4           The provision of any insurance scheme does not in any way prevent
the Company from lawfully terminating this Agreement in accordance with the
provisions of this Agreement even if to do so would deprive the Executive of
membership of or cover under any such scheme.

 

10            SHARE OPTIONS

 

The Executive shall be eligible to participate in the Virgin Media Inc. 2006
Stock Incentive Plan for the time being in force subject to the rules applicable
to such scheme as amended or varied from time to time at the Company’s
discretion. The Executive shall not be entitled to any compensation for the loss
of this benefit or the loss of opportunity to benefit on termination of this
Agreement, whether the Agreement is lawfully terminated or not. Details of the
Virgin Media Inc. 2006 Stock Incentive Plan shall be communicated to the
Executive separately.

 

11            COMPANY CAR ALLOWANCE

 

The Company shall provide the Executive with a non-pensionable car allowance of
£1,041.66 gross per month payable monthly in arrears, together with payment of
salary pursuant to clause 7. Full details are contained in the Perk Car Policy
and Fuel 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 and Fuel 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.

 

12            FUEL

 

The Executive will be allocated a fuel card pursuant to the Fuel Policy in force
from time to time which should be used for the purchase of fuel for all
reasonable fuel expenses (both business and private) for the nominated funded
car. Reasonable private fuel is as considered by the Group. The total amount of
fuel charged to the fuel card will be declared to the Inland Revenue on the
Executive’s P11D. This will be subject to income tax and national insurance. The
Executive should arrange to declare his business mileage to the Inland Revenue
in order to gain tax relief, which is a direct arrangement between the Executive
and the Inland Revenue. The Company recommends that the Executive consults an
independent tax expert for advice.

 

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Further details are contained in the Fuel Policy which is available on the Group
intranet site.

 

13            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 Human Resources.

 

14            ANNUAL LEAVE

 

14.1         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.

 

14.2         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.

 

14.3         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 25.2).

 

14.4         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 Human Resources.

 

15            ILLNESS

 

15.1         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 Human Resources.

 

15.2         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.

 

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15.3         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.

 

16            RESTRICTIONS DURING EMPLOYMENT

 

16.1         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 written approval of the
General Counsel or Chief Executive Officer) whether directly or indirectly, paid
or unpaid, be engaged or concerned in the conduct of, be or become an employee,
agent, partner, consultant or director of or assist or have any financial
interest in any other actual or prospective business or profession which is
similar to or in competition with the business carried on by any Group Company
or which may reasonably be thought by the Company to interfere, conflict or
compete with the proper performance of the Executive's obligations to the
Company. The Executive may not hold any office as a director or chairman of
another company without the prior written consent of the Company. In any event,
the Executive may not be the chairman of a FTSE 100 company or be a
non-executive director of more than one such company.

 

16.2         The Executive shall be permitted to hold shares or securities of a
company any of whose shares or securities are quoted or dealt in on any
recognised investment exchange provided that any such holding shall not exceed
one per cent of the issued share capital of the company concerned and is held by
way of bona fide investment only (“Investment”).

 

16.3         The Executive shall disclose to the Company any matters relating to
his spouse or civil partner (or anyone living as such), their children,
stepchildren, parents or any trust or firm whose affairs or actions he controls
which, if they applied to the Executive, would contravene clauses 16.1 or 16.2
to the extent that he has actual knowledge of such matters.

 

17            INTELLECTUAL PROPERTY

 

17.1         “Intellectual Property Rights” means any patents, trade marks,
service marks, design rights, registered designs, applications for any of the
foregoing, copyright, database rights, know-how and other similar rights or
obligations whether registrable or not in any country.

 

17.2         The parties agree that any Intellectual Property Rights in any
material or invention that the Executive creates (or participates in creating)
in the course of business (“Company IPR”) shall vest in the Company.

 

17.3         The Executive hereby assigns to the Company with full title
guarantee and, when appropriate, by way of future assignment, all his rights in
the Company IPR for the  full term thereof throughout the world. The Executive
must complete whatever documents or take whatever action the Company may request
from time to time, both

 

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during and after the termination of the Executive’s employment, to obtain any
applicable registrations and to confirm that all Company IPR vests in the
Company.

 

17.4         The Executive waives all moral rights (whether arising under
Chapter IV of the Copyright, Designs and Patents Act 1988 or otherwise, to the
extent permissible under law) in works to which clause 17.2 applies.

 

17.5         The Executive hereby irrevocably appoints the Company to be his
attorney in his name and on his behalf to execute and do any such instrument or
thing and generally to use his name for the purpose of giving to the Company or
its nominee the full benefit of this clause.

 

18            CONFIDENTIALITY

 

18.1         Without prejudice to his common law duties, the Executive shall not
(save in the proper course of his duties, as required by law or as authorised by
the Company) use or communicate to any person (and shall prevent the use or
communication of) any trade or business secrets or confidential information of
or relating to any Group Company (including but not limited to details of actual
or potential customers, employees, consultants, suppliers, designs, products,
product applications, trade arrangements, terms of business, customer
requirements, operating systems, sales information, marketing information or
strategies, manufacturing processes, software, disputes, commission or bonus
arrangements, pricing and fee arrangements and structures, business plans,
financial information, inventions, research and development activities, personal
or sensitive personal data and anything marked or treated as confidential) which
he creates, develops, receives or obtains while in the service of any Group
Company. This restriction shall continue to apply after the termination of the
Executive's employment howsoever arising without limit in time.

 

18.2         Reference to confidential information in this clause 18 shall not
include information which is in the public domain at the time of its disclosure
or which comes into the public domain after its disclosure otherwise than by
reason of a breach of this agreement, information which was already demonstrably
known to the receiving party at the date of disclosure and had not been received
in confidence from the Company or information which is required to be disclosed
as a matter of law. It shall include information in the public domain for so
long as the Executive is in a position to use such information more readily than
others who have not worked for the Company.

 

18.3         During his employment the Executive shall not make (other than for
the benefit of the Company) any record (whether on paper, computer memory, disc
or otherwise) relating to any matter within the scope of the business of the
Company or any Group Company or their customers and suppliers or concerning its
or their dealings or affairs or (either during his employment or afterwards) use
such records (or allow them to be used) other than for the benefit of the
Company or the relevant Group Company. All such records (and any copies of them)
shall belong to the Company or the relevant Group Company and shall be handed
over to the Managing Director – People team by the Executive on the termination
of his employment or at any time during his employment at the request of the
Board.

 

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18.4         The Executive shall not during his employment either directly or
indirectly publish any opinion, fact or material on any matter within the scope
of the business of the Company or any Group Company (whether confidential or
not) which might reasonably be expected to have a material adverse effect on the
Company (or any Group Company) without the prior written approval of the General
Counsel or Chief Executive Officer.

 

18.5         Nothing in this clause shall prevent the Executive from disclosing
information which he is entitled to disclose under the Public Interest
Disclosure Act 1998 provided that the disclosure is made in the appropriate way
to an appropriate person having regard to the provisions of the Act and he has
first fully complied with the Company's procedures relating to such disclosures.

 

19            DATA PROTECTION

 

19.1         In accordance with the Data Protection Act 1998, the Group will
hold and process the information it collects relating to the Executive in the
course of the Executive’s employment for the purposes of employee
administration, statistical and record keeping purposes. This may include
information relating to the Executive’s physical or mental health. Some of the
Executive’s information may be processed outside the European Economic Area.
Such information will be treated confidentially and will only be available to
authorised persons.

 

19.2         When dealing with data relating to the Company’s business, the
Executive is required to comply with the Company’s Data Protection Policy as in
effect from time to time, which can be obtained from the Group Compliance
Officer.

 

20            DEDUCTIONS FROM SALARY

 

The Company reserves the right at any time during the Executive’s employment, or
on termination of this Agreement to deduct from salary any overpayment made
and/or monies owed to the Company by the Executive. This includes but is not
limited to:

 

·      any excess holiday;

 

·      outstanding loans;

 

·      advances;

 

·      recoverable relocation costs;

 

·      monies owed to the Company in connection with any Company car, including
parking fines and any related administration costs for which the Executive is
responsible and which are incurred in a vehicle provided by the Company, (either
company vehicle or hire car) whilst in the Executive’s control, private fuel
reimbursement in accordance with the prevailing Perk Car Policy and Fuel Policy;
and

 

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·      the cost of repairing any damage or loss to property provided by the
Company.

 

This clause will not apply to any sums or benefits due to the Executive by
virtue of the Executive’s membership of the Company Pension Plan.

 

21            HEALTH AND SAFETY

 

The Company is committed to ensuring, so far as reasonably practicable, that the
workplace of every employee is safe, does not pose a risk to health and does not
cause damage to the environment. The Executive is therefore required to
familiarise himself with the responsibilities as outlined in the current
Company’s Health and Safety Policy, Environment Policy, Safety Standards booklet
(NT PO90) and Safety Information Sheets. The current version is available on the
Group intranet site or can be obtained from the Health and Safety Group.

 

22            ENTITLEMENT TO WORK IN THE UK

 

The Executive’s employment is conditional upon the Executive being legally
entitled to live and work in the UK. If the Executive’s status changes and the
Executive is no longer entitled to live or work in the UK, the Executive’s
employment will be terminated without notice or payment in lieu of notice.

 

23            MONITORING

 

The Executive acknowledges that the Company may monitor messages sent and
received via email, SMS, the Internet and voicemail systems to ensure that the
Executive is complying with the Company’s policy for use by its employees of
these systems.

 

24            TERMINATION OF EMPLOYMENT

 

24.1         The Company may at any time and in its absolute discretion (whether
or not any notice of termination has been given by the Company or the Executive
under clause 2 above) terminate the Executive’s employment with immediate effect
and make a payment in lieu of notice. This payment shall comprise the
Executive’s basic salary (at the rate payable when this option is exercised)
together with the following benefits to the extent that they would have been
paid during the notice period:

 

·      car allowance

 

·      company pension contributions (subject to the Executive making his 
contribution)

 

·      any holiday which would have accrued during the notice period

 

·      fuel allowance (to be determined at the Company’s discretion)

 

·      premium equivalent to private medical and dental insurance paid by the
Company

 

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and shall be subject to deductions for income tax and national insurance
contributions as appropriate (the “Payment in Lieu”). The Executive will not,
under any circumstances, have any right to payment in lieu unless the Company
has exercised its option to pay in lieu of notice.

 

24.2         The employment of the Executive may be terminated by the Company
without notice or Payment in Lieu if the Executive:

 

24.2.1         is guilty of any serious misconduct (including but not limited to
any such act set out within the Company’s disciplinary policy from time to time
or in any code of conduct) or any other conduct which affects or is likely to
affect prejudicially the interests of any Group Company to which he is required
to render services under this Agreement;

 

24.2.2         fails or neglects efficiently and diligently to discharge his
duties or commits any serious or repeated breach or non-observance by the
Executive of any of the provisions contained in this Agreement;

 

24.2.3         has an interim receiving order made against him, becomes bankrupt
or makes any composition or enters into any deed of arrangement with his
creditors;

 

24.2.4         is convicted or charged with any arrestable criminal offence
(other than an offence under road traffic legislation in the United Kingdom or
elsewhere for which a fine or non-custodial penalty is imposed);

 

24.2.5         shall become of unsound mind or become a patient under the Mental
Health Act 1983 (in which circumstances a Payment in Lieu will be made);

 

24.2.6         is convicted of an offence under the Criminal Justice Act 1993 in
relation to insider dealings or under any other present or future statutory
enactment or regulations relating to insider dealings;

 

24.2.7         is in violation of the rules and regulations of the U.S.
Securities and Exchange Commission or relevant U.S. securities laws, or the
rules and regulations of the NASDAQ Exchange or any other exchange on any Group
Company's securities may be listed;

 

24.2.8         is no longer legally entitled to live and/or work in the UK;

 

24.2.9         is disqualified from holding office in another company by reasons
of an order of a court of competent jurisdiction;

 

24.2.10       commits an act of gross misconduct (in the course of his duties or
otherwise) which (in the reasonable opinion of the Company) does actually or
might reasonably be expected to bring himself or any Group Company into
disrepute; and/or

 

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24.2.11    acts in a way which is in the reasonable opinion of the Company
materially adverse to the interests of the Company.

 

24.3         Any delay by the Company in exercising such right to terminate
shall not constitute a waiver thereof.

 

25            SUSPENSION AND GARDEN LEAVE

 

25.1         The Company may suspend the Executive on full pay to allow the
Company to investigate any complaint made against the Executive in relation to
his employment with the Company.

 

25.2         Provided that the Executive continues to enjoy his full contractual
benefits and receive his pay in accordance with this Agreement, the Company may
in its absolute discretion do all or any of the following during the notice
period or any part of the notice period, after the Executive or the Company has
given notice of termination to the other, without breaching this Agreement or
incurring any liability or giving rise to any claim against it:

 

25.2.1      exclude the Executive from the premises of the Group;

 

25.2.2      require the Executive to carry out only specified duties (consistent
with his status, role and experience) or to carry out no duties;

 

25.2.3      announce to any or all of its employees, suppliers, customers and
business partners that the Executive has been given notice of termination or has
resigned (as the case may be);

 

25.2.4      prohibit the Executive from communicating in any way with any or all
of the suppliers, customers, business partners, employees, agents or
representatives of the Group until his employment has terminated except to the
extent he is authorised to do so by his manager in writing if appropriate.

 

25.2.5      require the Executive to resign his directorship of any Group
Company; and/or

 

25.2.6      require the Executive to comply with any other reasonable conditions
imposed by the Company.

 

The Executive will continue to be bound by all obligations (whether express or
implied) owed to the Company under the terms of the Agreement or as an employee
of the Company.

 

25.3         The Executive will not, without the prior written consent of the
General Counsel or Chief Executive Officer, be employed or provide services to
any other person, firm or organisation whether paid or unpaid save as previously
permitted during the notice period.

 

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26            TERMINATION AND RETURN OF COMPANY PROPERTY

 

26.1         Upon the termination of this Agreement by whatever means the
Executive shall:

 

26.1.1      immediately resign from his office as a director of the Company and
from such offices held by him in any Group Company without claim for
compensation; and

 

26.1.2      immediately deliver to the Company all credit cards, motor-cars,
fuel card, keys, computer media and other property, in whatever form, of or
relating to the business of any  Group Company which may be in his possession or
under his power or control.

 

26.2         If the Executive fails to comply with clause 26.1.1 above the
Company is hereby irrevocably authorised to appoint some person in his name and
on his behalf to sign and complete any documents or do any thing necessary to
give effect to this clause.

 

26.3         The Executive shall not, without the consent of the Company at any
time after the termination of this Agreement represent himself still to be
connected with the any Group Company.

 

27            RECONSTRUCTION OR AMALGAMATION

 

If the employment of the Executive under this Agreement is terminated by reason
of the liquidation of the Company for the purpose of reconstruction or
amalgamation and the Executive is offered employment with any concern or
undertaking resulting from the reconstruction or amalgamation on terms and
conditions not less favourable than the terms of this Agreement then the
Executive shall have no claim against the any Group Company in respect of the
termination of his employment under this Agreement.

 

28            RESTRICTIONS AFTER EMPLOYMENT

 

28.1         Definitions

 

In this clause the following words shall have the following meanings:

 

“Area”

 

the area constituting the market of any Relevant Group Company for the Services
and the Products in the period of 12 months prior to the Termination Date and
with which area the Executive was materially concerned at any time during the
said period of 12 months;

 

“Customer”

 

any Person to whom any Relevant Group Company supplied  the Services  and the
Products for business use during the 12 months preceding the Termination Date
and

 

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with whom at any time during such period the Executive was materially concerned
or had personal contact in the course of his employment;

 

“Key Employee”

 

any person who immediately prior to the Termination Date was an employee or
consultant of any Relevant Group Company occupying a senior or managerial
position who was likely to be:

 

(i)            in possession of confidential information belonging to the any
Relevant Group Company; or

 

(ii)           able to influence the customer relationships or trade connections
of any Relevant Group Company

 

with whom the Executive worked closely at any time during the period of 12
months prior to the Termination Date;

 

“Person”

 

 includes any company, firm, organisation or other entity;

 

“Prospective Customer”

 

any Person with any Relevant Group Company had negotiations or discussions
regarding the possible supply of the Services and or the Products for business
use during the 12 months immediately preceding the Termination Date and with
whom at any time during such period the Executive was materially concerned or
had personal contact in the course of his employment;

 

“Products”

 

products which are competitive with those supplied by any Relevant Group Company
in the 12 months prior to the Termination Date and with the supply of which the
Executive was materially concerned at any time during the said 12 month period;

 

“Relevant Group Company”

 

any Group Company (and, if applicable, its predecessors in business) for which
the Executive performed services or in which he held office at any time during
the 12 months prior to the Termination Date;

 

“Services”

 

services which are competitive with those supplied by the any Relevant Group
Company in the 12  months prior to the Termination Date and with the supply of
which the Executive was materially concerned at any time during the said 12
month period;

 

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“Supplier”

 

any Person who was a supplier of services or goods any Relevant Group Company in
connection with business use for the operation of the business (as opposed to
the administrative support of such operation) in the 12 months prior to the
Termination Date and with which the Executive was materially concerned or had
personal contact at any time during the said 12 month period; and

 

“Termination Date”

 

the date on which the employment terminates.

 

28.2         The Executive covenants to the Company (for itself and as trustee
for each Group Company) that:

 

28.2.1      Non-competition

 

the Executive shall not for a period of 12  months from the Termination Date in
the Area and in competition with any Relevant Group Company directly or
indirectly be engaged, interested or concerned:

 

(a)           in any business which provides the Products and the Services; and

 

(b)           with the supply of the Products and the Services to any Customer
or Prospective Customer.

 

For this purpose, the Executive is concerned in a business if:

 

(i)            he carries it on as principal or agent; or

 

(ii)           he is a partner, director, employee, secondee, consultant or
agent in, of or to any Person who carries on the business; or

 

(iii)          subject to clause 16 above, he has any direct or indirect
financial interest (as shareholder or otherwise) in any Person who carries on
the business.

 

28.2.2      Non-solicitation

 

the Executive shall not for a period of 12 months from the Termination Date and
in competition with any Relevant Group Company directly or indirectly:

 

(a)           canvass or solicit business from, endeavour to entice away any
Customer or Prospective Customer in respect of the supply of the Products and
the Services;

 

(b)           seek to do business or deal with any Customer or Prospective
Customer in the Area in respect of the supply of the Products and the Services;

 

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(c)           canvass or solicit business from, make an approach to or endeavour
to entice away any Supplier of any Relevant Group Company;

 

(d)           accept employment with or act as consultant for any Customer or
Prospective Customer.

 

28.2.3      Non-poaching

 

the Executive shall not for a period of 12 months after the Termination Date
solicit the employment or engagement of any Key Employee in a business which is
in competition with any Relevant Group Company (whether or not such person would
breach their contract of employment or engagement by reason of their leaving the
service of the business in which they work).

 

28.3         The restrictions in this clause are considered by the parties to be
reasonable and the validity of each sub-clause shall not be affected if any of
the others is invalid.  If any of the restrictions are void but would be valid
if some part of the restriction were deleted, the restriction in question shall
apply with such modification as may be necessary to make it valid.

 

28.4         The Executive acknowledges that the provisions of this clause are
no more extensive than is reasonable to protect the Relevant Group Company.

 

28.5         If the Executive is suspended from work under the provisions of
clause 25.1 or sent on Garden Leave under clause 25.2, the Company may, at its
sole discretion, agree that the period of time during which the non-competition
restriction contained in clause 28.2.1 is enforceable, starts to run from the
date of the suspension or date when the Executive was sent on Garden Leave, and
not from the Termination Date.

 

28.6         The Executive acknowledges that each and every restriction
contained within this clause is intended by the parties to apply after the
Termination Date whether termination is lawful or otherwise.  The restrictions,
which are acknowledged to be ancillary in nature, will apply even where the
termination results from a breach of a provision within this Agreement.

 

28.7         The Executive will (at the request and cost of the Company) enter
into a direct agreement with any Group Company under which he will accept
restrictions corresponding to the restrictions contained in this clause (or such
as will be appropriate in the circumstances) in relation to such Group Company.

 

29            SEVERABILITY

 

If any of the provisions of this Agreement become invalid or unenforceable for
any reason by virtue of applicable law the remaining provisions shall continue
in full force and effect and the Company and the Executive hereby undertake to
use all reasonable endeavours to replace any legally invalid or unenforceable
provision with a provision which will promise to the parties (as far as
practicable) the same commercial results as were intended or contemplated by the
original provision.

 

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30            THIRD PARTIES

 

30.1         Any Group Company shall have the right to enforce the provisions of
this Agreement pursuant to the Contracts (Rights of Third Parties) Act 1999.

 

30.2         Save as provided in clause 30.1 above, a person who is not party to
this Agreement shall  have no right under the Contracts (Rights of Third
Parties) Act 1999 to enforce any provision of this Agreement.

 

31            NOTICES

 

31.1         Any notice required or permitted to be given under this Agreement
shall be given in writing delivered personally or sent by first class post
pre-paid recorded delivery (air mail if overseas) or overnight courier or by
facsimile to the party due to receive such notice, in the case of the Company,
to: Virgin Media Limited, Media House, Bartley Wood Business Park, Hook,
Hampshire, RG27 9UP and marked for the attention of the Human Resources Director
and, in the case of the Executive, his address as set out in this Agreement (or
such address as he may have notified to the Company in accordance with this
clause or such address as may be included in the Group’s payroll system).

 

31.2         Any notice delivered personally or by overnight courier shall be
deemed to be received when delivered to the address provided in this Agreement
and any notice sent by pre-paid recorded delivery post shall be deemed (in the
absence of evidence of earlier receipt) to be received 2 days after posting and
in proving the time of despatch it shall be sufficient to show that the envelope
containing such notice was properly addressed, stamped and posted.  A notice
sent by facsimile shall be deemed to have been received on receipt by the sender
of confirmation in the transmission report that the facsimile had been sent.

 

32            STATUTORY INFORMATION

 

Schedule 1 to this Agreement sets out information required to be given to the
Executive by the Employment Rights Act 1996.

 

33            MISCELLANEOUS

 

33.1         This Agreement is governed by and shall be construed in accordance
with the laws of England and Wales.

 

33.2         The parties to this Agreement submit to the exclusive jurisdiction
of the English courts.

 

33.3         This Agreement contains the entire understanding between the
parties and supersedes all previous agreements and arrangements (if any)
relating to the employment of the Executive by the Company (which shall be
deemed to have been terminated by mutual consent).

 

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33.4         This Agreement may be executed by counterparts, which together
shall constitute one agreement.  Either party may enter into this Agreement, by
executing a counterpart and this Agreement shall not take effect until it has
been executed by both parties.  Delivery of an executed counterpart of a
signature page by facsimile shall take effect as delivery of an executed
counterpart of this Agreement provided that the relevant party shall give the
other the original of such page as soon as reasonably practicable thereafter.

 

34            CHANGES TO TERMS AND CONDITIONS

 

The Company reserves the right to amend the Executive’s terms set out within
this Agreement and policies from time to time.  The Executive will be given not
less than four weeks notice of any such change.  The Executive will be deemed to
have accepted these changes should the Company have received no objection before
the end of the four week period.

 

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SCHEDULE 1

 

Statement of Particulars Pursuant to the Employment Rights Act 1996

 

1              The Executive’s period of continuous employment commenced on 1st
June 1993. A period of employment with a previous employer does count as part of
the Executive’s continuous employment with the Company.

 

2              The Executive will be contracted into SERPS unless the Executive
opts to contract out.

 

3              The Company’s policies and procedures on disciplinary and
grievance matters are available on the Company’s intranet and/or from HR
(insofar as they are not varied by this Agreement).  The policies constitute
Company guidelines and do not form any part of the Service Agreement.  Any
grievance which the Executive wishes to exercise should be raised in writing
with the Chief Executive Officer unless the grievance involves the Chief
Executive Officer in which case the grievance should be raised in writing in the
first instance with the Group Human Resources Managing Director.  Any
disciplinary action taken by the Company will be dealt with by the Chief
Executive Officer or such other person as may be directed by the Group Human
Resources Managing Director.  The Company reserves the right to substitute
persons at a senior level within the Company to conduct any aspect of the
disciplinary or grievance procedure should it be appropriate.  If the Executive
is dissatisfied with any disciplinary decision or any decision to dismiss him,
he can within five (5) working days of that decision appeal to the Company
(unless the Executive is notified in any separate communication of the person to
whom he may appeal) whose decision shall be final and binding.

 

4              The Executive may be required to work overseas for periods when
reasonably required.  In such circumstances, the terms of the International
Assignment Policy will apply which is available from the Company upon request.

 

5              The Company is not a party to any collective agreement which
affects the Executive’s employment.

 

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SCHEDULE 2

 

Certificate of Compliance

 

I have read and understand the Code of Conduct and have complied and will
continue to comply with it (together with any other Codes or policies that may
apply to my role from time to time).  I have not acted in any way contrary to
the best interests of the Company.  Any exceptions to the Code of Conduct (and
any other policies) and disclosures required by the Code and such policies are
set forth below:

 

I will promptly report the details of any future non-compliance with the
above-mentioned Code (and any associated policies) to my immediate manager so
that its extent and significance can be considered.

 

 

Dated:

February 27, 2008

 

 

 

 

 

Signed:

/s/ John Howard Watson

 

 

 

 

 

 

 

 

 

 

Mr John Howard Watson

 

 

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IN WITNESS whereof this Agreement has been executed as a deed and delivered on
the date first above written.

 

Executed as a Deed by Virgin Media Limited:

 

 

 

 

 

/s/ Robert Mackenzie

Director

 

 

 

 

/s/ Gillian James

Director/Company Secretary

 

Signed as a Deed by John Howard Watson in
the presence of:

 

 

 

 

/s/ John Howard Watson

 

John Howard Watson

The
Executive

 

 

 

 

 

Witness signature:

/s/ Lucy Otter

 

 

 

 

Name: Dr. Lucy Otter

 

 

 

Address:

 

 

 

 

 

Occupation: HR Professional

 

 

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