Document:

Exhibit
10.1

 

EMPLOYMENT AGREEMENT

 

THIS AGREEMENT (the
“Agreement”) is made as of the 6th day of September, 2004, by and between NTL
Incorporated, a Delaware corporation (the “Company”), and Jacques Kerrest (the “Executive”).

 

WHEREAS, the Company wishes to employ the Executive as
Chief Financial Officer of the Company, effective not later than
September 20th, 2004 (the “Effective Date”);

 

WHEREAS the
parties intend that (i) the Executive will reside in the United Kingdom and
perform duties on behalf of the consolidated enterprise as its Chief Financial
Officer while present in the United Kingdom, particularly with regard to the UK
business, and (ii) he will travel to the United States where he will perform
duties on behalf of the Company as its Chief Financial Officer, in each case
upon the terms and conditions of this Agreement; and

 

WHEREAS, the Executive wishes to
accept such employment and to render services to the Company on the terms and
conditions set forth herein.

 

NOW, THEREFORE, in consideration
of the mutual covenants contained herein, the parties hereto agree as follows:

 

1.                                      Effectiveness.  This Agreement shall become effective as of
the Effective Date.

 

1

 

2.                                      Employment
Term.

 

(a)                                  The
term of the Executive’s employment pursuant to this  Agreement (the “Employment Term”) shall commence as of the
Effective Date and shall end on December 31, 2006, unless the Employment Term
terminates earlier pursuant to Section 7 of this Agreement. The Employment Term
may be extended by mutual agreement of the Company and the Executive.

 

(b)                                  Title; Duties. During
the Employment Term, the Executive shall serve the Company as its Chief
Financial Officer and, in such capacity, shall perform such duties, services
and responsibilities as are commensurate with such position. In his capacity
as, Chief Financial Officer, the Executive shall report to the Chief Executive
Officer of the Company. During the Employment Term, the Executive shall be
based in the United Kingdom but shall undertake such overseas travel as is
necessary for the proper performance of his duties hereunder. During the
Employment Term, the Executive shall devote substantially all of his work time
to the performance of the Executive’s duties hereunder and will not, without
the prior written approval of the Chief Executive Officer of the Company,
engage in any other business activity which interferes in any material respect
with the performance of the Executive’s duties hereunder or which is in  violation
of written policies established from time to time by the Company.

 

2

 

3.                                      Monetary
Remuneration.

 

(a)                                  Base
Salary. During the Employment Term, in consideration of the performance
by the Executive of the Executive’s obligations hereunder to the Company and
its parents, subsidiaries, associated and affiliated companies and joint
ventures (collectively, the “Company Affiliated Group”) in any capacity
(including any services as an officer, director, employee, member of any Board
committee or management committee or otherwise), the Company shall cause to be
paid to the Executive an annual salary of £300,000 (the “Base Salary”), which
shall accrue on a daily basis. The Base Salary shall be payable in accordance
with normal payroll practices in effect from
time to time for senior management generally: provided that the
Executive may designate at one time each year a percentage of cash
compensation, not yet paid, to be paid in U.S. Dollars, with the exchange rate
set on the date that such designation is made by reference to the noon buying
rate as quoted by the Federal Reserve Bank of New York. The Executive shall
receive no additional compensation for services that he provides to the Company
Affiliated Group other than as set forth herein.

 

(b)                                  Annual
Bonus. During each fiscal year of the Company that the Employment Term
is in effect, the Executive shall be eligible to earn a bonus in the sole
discretion of the Board of (at target) 75%, but subject to a maximum of 150%,
of Base Salary (prorated for any partial fiscal year) (the “Annual Bonus”) For
Fiscal year 2004 the Annual Bonus entitlement will be on a pro rata basis from
the Effective Date to 31 December 2004. In addition, the

 

3

 

Company shall
cause the Executive to participate in the NTL Group Long Term Incentive Plan.

 

(c)                                  Expatriate
Package. During the Employment Term and for any period during which the
Executive is required by the Company to live in the United Kingdom, the
Executive and his family shall have the right to receive the benefits of the
Company’s standard expatriate benefits package (as applied to comparable United
States expatriate employees of the Company), but in any event such benefits
will be consistent with the terms set forth in Appendix A hereto. Tax
equalization shall be consistent with existing Company Tax Equalization Policy,
attached as Appendix B hereto, and incorporated by reference.

 

4.                                      Equity-Based
Compensation.

 

During the Employment
Term, the Executive shall be eligible to receive options to purchase common
stock of the Company in addition to the options described in Appendix C at such
exercise prices, schedules as to exercisabillty and other terms and conditions
as determined in the sole discretion of the Board or its Compensation Committee
under the Amended and Restated NTL 2004 Stock Incentive Plan or successor plan.

 

5.                                      Benefits.

 

(a)                                  During
the Employment Term, the Executive shall be entitled to participate in all of
the employee benefit plans, programs, policies and arrangements (including
fringe benefit and executive perquisite programs and

 

4

 

policies) made
available by the Company Affiliate Group to, or for the benefit of, its
executive officers in accordance with the terms thereof as they may be in
effect from time to time, in so far as such benefits are capable of being
provided in the United Kingdom.

 

(b)                                  Reimbursement
of Expenses. During the Employment Term, the Company shall cause the Executive
to be reimbursed for all reasonable business expenses incurred by the Executive
in carrying out the Executive’s duties, services and responsibilities under
this Agreement. So long as the Executive complies with the general procedures
of the Company Affiliated Group for submission of expense reports, receipts or
similar documentation of such expenses applicable to senior management
generally.

 

6.                                      Vacations.   For
each whole and partial calendar year during the Employment Term, the Executive
shall be entitled in addition to public and Statutory holidays to 25 days of
paid vacation (prorated for any partial calendar year, except that for calendar
year 2004, the vacation entitlement shall be 8 days), to be credited and taken
in accordance with the Company’s policy as in effect from time to time for its
similarly situated executives.

 

7.                                      Termination;
Severance.

 

(a)                                  Termination
of Employment. The Company may terminate the employment of the
Executive in a Termination Without Cause upon

 

5

 

30 days’ written notice
to the Executive. The Company may (at its discretion) at any time following the
giving of such notice (but not exceeding the length of the notice given) cease
to provide work for the Executive in which event during such notice period the
other provisions of this Agreement shall continue to have full force and effect
but the Executive shall not be entitled to access to any premises of the
Company or any member of the Company Affiliated Group. In addition, the
employment of the Executive shall automatically terminate as of the date on
which the Executive dies or is Disabled. For the purposes of this Agreement,
the Executive shall be “Disabled” as of any date if, as of such date, the
Executive has been unable, due to physical or mental incapacity, to
substantially perform the Executive’s duties, services and responsibilities
hereunder either for a period of at least 180 consecutive days or for at least
270 days in any consecutive 365-day period, whichever may be applicable. Upon
termination of the Executive’s employment during the Employment Term because
the Executive dies or is Disabled, the Company shall cause the Executive (or
the Executive’s estate, if applicable) to be provided with death or disability
benefits (as applicable) pursuant to the plans, programs, policies and
arrangements of the Company Affiliated Group as are then in effect with respect
to executive officers. In addition, upon any termination of the Executive’s
employment during the Employment Term, the Company shall cause the Executive to
be paid any earned but unpaid portion of the Base Salary and Annual Cash Bonus.
Immediately following termination of the

 

6

 

Executive’s employment
for any reason, the Employment Term shall terminate.

 

(b)                                  Termination
Without Cause; Constructive Termination Without Cause. Upon a
Termination Without Cause or a Constructive Termination Without Cause, the
Company shall, as soon as practicable following the Executive’s execution and
delivery to the Company of the general release of claims set forth in Section
7(f) and, following the expiration of any applicable revocation period, cause
the Executive to be paid a lump-sum severance payment of cash equal to the
product of the Base Salary times 3.

 

(c)                                  Termination
upon Non-Renewal of the Employment Term. Unless the parties hereto
agree otherwise, the Employment Term and the Executive’s employment with the
Company shall end on December 31, 2006. In connection with such termination of
employment, the Company shall, as soon as practicable following the Executive’s
execution and delivery to the Company of the general release set forth in
Section 7(f) and following the expiration of any applicable revocation period,
cause the Executive to be paid a lump-sum severance payment of cash equal to
one-half of the Base Salary. In the event that the Executive has not obtained
subsequent employment (as a common-law employee, as an independent contractor
or in any other capacity) by the end of the six-month period following the date
of termination pursuant to this Section 7(c), then, during each of the six
calendar months after such six-month period, the Company shall cause the
Executive to be paid additional severance pay equal to one-twelfth of the

 

7

 

Base Salary; provided,
that the right to additional severance pay pursuant to this sentence shall
terminate as to any unpaid portion of such severance pay when the Executive
first  obtains any such subsequent
employment. In addition, in connection with a termination of employment
pursuant to this Section 7(c), the Company shall cause the Executive to be paid
a full annual bonus for the Company’s 2006 fiscal year, determined based on
actual satisfaction of any applicable performance goals during such fiscal
year, with such bonus to be paid promptly after the determination of the amount
thereof and without application of any mandatory deferral provisions or
continued employment requirements.

 

(d)                                  Termination
for Cause  Upon a termination of the Executive’s employment during the
Employment Term by the Company for Cause, or upon termination by the Executive
with 30 days’ written notice given to the Company (other than a Constructive
Termination Without Cause), the Executive shall be entitled to earned but
unpaid Base Salary and benefits through the date of termination, and the
Executive shall not be entitled to any other payments or benefits, in the
nature of severance or termination.

 

Definitions

 

For purposes of this
Agreement:

 

(i)                                     A
“Constructive Termination Without Cause” means a termination of the
Executive’s employment during the Employment Term by the

 

8

 

Executive
following the occurrence of any of the following events without the Executive’s
prior consent: (A) failure by the Company to continue the Executive as the
Chief Financial Officer (excluding a promotion); (B) any material diminution in
the Executive’s working conditions or authority, responsibilities or
authorities; (C) assignment to the Executive of duties that are inconsistent,
in a material respect, with the scope of duties and responsibilities associated
with his position as set forth herein; (D) any materially adverse change in the
reporting structure applicable to the Executive (but not including a change in
the person filling the position to which the Executive reports); (E) the
failure of the Company to maintain commercially reasonable directors’ and
officers’ liability insurance; or (F) a Change in Control occurs and the
Executive is terminated in a Termination Without Cause during the period
commencing on the date of the Change in Control and ending on the first
anniversary thereof. For purposes of this Agreement, a “Change in Control” is
defined in Appendix D attached hereto, and incorporated by reference. The
Executive shall give the Company 10 days’ notice of the Executive’s intention
to terminate the Executive’s employment and claim that a Constructive
Termination Without Cause (as defined in (A), (B), (C), (D), (E) or (F) above)
has occurred, and such notice shall describe the facts and circumstances in
support of such claim in reasonable detail. The Company shall have 10 days
thereafter to cure such facts and circumstances if possible.

 

(ii)                                  A
“Termination Without Cause” means a termination

 

9

 

of the Executive’s
employment during the Employment Term by the Company other than for Cause.

 

(iii) “Cause” means (x) the Executive is convicted of, or pleads
guilty or nolo contendere to, a felony or to any crime involving fraud,
embezzlement or breach of trust; (y) the willful or continued failure of the
Executive to perform the Executive’s duties hereunder (other than as a result
of physical or mental illness); or (z) in carrying out the Executive’s duties
hereunder, the Executive has engaged in conduct that constitutes gross neglect
or willful misconduct, unless the Executive believed in good faith that such
conduct was in, or not opposed to, the best interests of the Company and each
member of the Company Affiliated Group. The Company shall give the Executive 10
days’ notice of the Company’s intention to terminate the Executive’s employment
and claim that facts and circumstances constituting Cause exist, and such
notice shall describe the facts and circumstances in support of such claim. The
Executive shall have 10 days thereafter to cure such facts and circumstances if
possible. If the Board reasonably concludes that the Executive has not cured
such facts or circumstances within such time, Cause shall not be deemed to have
been established unless and until the Executive has received a hearing before
the Board (if promptly requested by the Executive) and a majority of the Board
within 10 days of the date of such hearing (if so requested) reasonably
confirms the existence of Cause and the termination of the Executive therefore;

 

(e)                                  Release; Full Satisfaction.  Notwithstanding
any other

 

10

 

provision of this
Agreement, no severance pay shall become payable under this Agreement unless
and until the Executive and the Company execute the general release of claims
in form attached as Appendix E, including where relevant a release of any
statutory claims, and such release has become irrevocable; provided, that the
Executive shall not be required to release any indemnification rights, rights
to benefits, and any accrued rights under this Agreement. The payments to be
provided to the Executive pursuant to this Section 7 upon termination of the
Executive’s employment shall constitute the exclusive payments in the nature of
severance or termination pay or salary continuation which shall be due to the
Executive upon a termination of employment and shall be in lieu of any other
such payments under any severance or termination plan, program, policy or other
arrangement which has heretofore been or shall hereafter be established by any
member of the Company Affiliated Group.

 

(f)                                    Resignation.
Upon termination of the Executive’s employment for any reason, the
Executive shall be deemed to have resigned from all positions with any member
of the Company Affiliated Group, as applicable.

 

(g)                                 Cooperation
Following Termination. Following Termination of the Executive’s employment
for any reason, the Executive agrees to reasonably cooperate with the Company
upon the reasonable request of the Board and to be reasonably available to the
Company with respect to matters arising out of the Executive’s services to any
member of the Company Affiliated

 

11

 

Group. The Company
shall cause the Executive to be reimbursed for, or, at the Executive’s request,
cause the Executive to be advanced, expenses reasonably incurred in connection
with such matters.

 

8.                                      Executive’s
Representation. The Executive represents to the Company that the
Executive’s execution and performance of this Agreement does not violate any
agreement or obligation (whether or not written) that the Executive has with or
to any person or entity including, without limitation, any prior employer.

 

9.                                      Executive’s
Covenants.

 

(a)                                  Confidentiality.
The Executive agrees and understands that The Executive has been, and in the
Executive’s position with the Company the Executive will be, exposed to and
receive information relating to the confidential affairs of the Company
Affiliated Group, including, without limitation, technical information,
business and marketing plans, strategies, customer (or potential customer)
information, other information concerning the products, promotions,
development, financing, pricing, technology, inventions, expansion plans,
business policies and practices of the Company Affiliated Group, whether or not
reduced to tangible form, and other forms of information considered by the
Company Affiliated Group to be confidential and in the nature of trade secrets.
The Executive will not knowingly disclose such information, either directly or
indirectly, to any person or entity outside the Company Affiliated Group
without

 

12

 

the prior written consent of the Company; provided,
however, that (i) the Executive shall have no obligation under this Section
9(a) with respect to any information that is or becomes publicly known other
than as a result of the Executive’s breach of the Executive’s obligations
hereunder and (ii) the Executive may (x) disclose such information to the
extent he determines that so doing is reasonable or appropriate in the
performance of the Executive’s duties or, (y) after giving prior notice to the
Company to the extent practicable, under the circumstances, disclose such
information to the extent required by applicable laws or governmental
regulations or by judicial or regulatory process. Upon termination of the
Executive’s employment, the Executive shall promptly supply to the Company all
property, keys, notes, memoranda, writings, lists, files, reports, customer
lists, correspondence, tapes, disks, cards, surveys, maps, logs, machines,
technical data and any other tangible product or document which has been
produced by, received by or otherwise submitted to the Executive in the course
of or otherwise in connection with the Executive’s services to the Company
Affiliated Group during or prior to the Employment Term.

 

(b)                                  Non-Competition
and Non-Solicitation. During the period commencing
upon the Effective Date and ending on the 18-month anniversary of the
termination of the Executive’s employment with the Company, the Executive shall
not, as an employee, employer, stockholder, officer, director, partner,
associate, consultant or other independent contractor, advisor, proprietor,
lender, or

 

13

 

in any other manner or capacity (other than with respect to the
Executive’s services to the Company Affiliated Group), directly or indirectly;

 

(i)                                     perform
services for, or otherwise have any involvement with, any business unit of a
person, where such business unit competes directly or indirectly with any
member of the Company Affiliated Group by owning or operating (x) broadband
communications networks for telephone, cable television or internet services or
(y) transmission networks for television and radio broadcasting, in each case
principally in the United Kingdom or Ireland (the “Core Business”); provided,
however, that this Agreement shall not prohibit the Executive from owning up to
1% of any class of equity securities of one or more publicly traded companies;

 

(ii)                                  hire any individual who is, or within the 12 months
prior to the Executive’s termination was, an employee of any member of
the Company Affiliated Group whose base salary at the time of hire exceeded
£65,000 per year and with whom the Executive had direct contact (other than on
a de minimis basis); or

 

(iii)                               solicit,
in competition with any member of the Company Affiliated Group in the Core
Businesses, any business, or order of business from any person that the
Executive knows was a current or prospective customer of any member of the
Company Affiliated Group during the Executive’s employment and with whom the
Executive had contact;

 

14

 

(c)                                  Proprietary
Rights. The Executive assigns all of the Executive’s interest in any
and all inventions, discoveries, improvements and patentable or copyrightable
works initiated, conceived or made by the Executive, either alone or in
conjunction with others, during the Employment Term and related to the business
or activities of any member of the Company Affiliated Group to the Company or
its nominee. Whenever requested to do so by the Company, the Executive shall
execute any and all applications, assignments or other instruments that the
Company shall in good faith deem necessary to apply for and obtain trademarks,
patents or copyrights of the United States or any foreign country or otherwise
protect the interest of any member of the Company Affiliated Group therein.
These obligations shall continue beyond the conclusion of the Employment Term
with respect to inventions, discoveries, improvements or copyrightable works
initiated, conceived or made by the Executive during the Employment Term.

 

(d)                                  Acknowledgment.
The Executive expressly recognizes and agrees that the restraints imposed
by this Section 9 are reasonable as to time and geographic scope and are not
oppressive. The Executive further expressly recognizes and agrees that the
restraints imposed by this Section 9  represent a reasonable and
necessary restriction for the protection of the legitimate interests of the
Company Affiliated Group, that the failure by the Executive to observe and
comply with the covenants and agreements in this Section 9 will cause
irreparable

 

15

 

harm to the Company Affiliated Group, that it is and will continue to
be difficult to ascertain the harm and damages to the Company Affiliated Group
that such a failure by the Executive would cause, that the consideration
received by the Executive for entering into these covenants and agreements is
fair, that the covenants and agreements and their enforcement will not deprive
the Executive of an ability to earn a reasonable living, and that the Executive
has acquired knowledge and skills in this field that will allow the Executive
to obtain employment without violating these covenants and agreements. The
Executive further expressly acknowledges that the Executive has received an
opportunity to consult independent counsel before executing this Agreement.

 

10.                               Indemnification.

 

(a)                                  To
the extent permitted by applicable law, the Company shall indemnify the
Executive against, and save and hold the Executive harmless from, any damages,
liabilities, losses, judgments, penalties, fines, amounts paid or to be paid in
settlement, costs and reasonable expenses (including, without limitation,
attorneys’ fees and expenses), resulting from, arising out of or in connection
with any threatened, pending or completed claim, action, proceeding or
investigation (whether civil or criminal) against or affecting the Executive by
reason of the Executive’s service from and after the Effective Date as an
officer, director or employee of, or consultant to, any member of the Company
Affiliated Group, or in any capacity at the request of any member of the
Company Affiliated

 

16

 

Group, or an officer,
director or employee thereof, in or with regard to any other entity, employee
benefit plan or enterprise (other than arising out of the Executive’s acts of
misappropriation of funds or actual fraud). In the event the Company does not
compromise or assume the defense of any indemnifiable identifiable claim or
action against the Executive, the Company shall promptly cause the Executive to
be paid to the extent permitted by applicable law all costs and expenses
incurred or to be incurred by the Executive in defending or responding to any
claim or investigation in advance of the final disposition thereof; provided,
however, that if it is ultimately determined by a final judgment of a court of
competent jurisdiction (from whose decision no appeals may be taken, or the
time for appeal having lapsed) that the Executive was not entitled to indemnity
hereunder, then the Executive shall repay forthwith all amounts so advanced. The
Company may not agree to any settlement or compromise of any claim against the
Executive, other than a settlement or compromise solely for monetary damages
for which the Company shall be solely responsible, without the prior written
consent of the Executive, which consent shall not be unreasonably withheld. This
right to indemnification shall be in addition to, and not in lieu of, any other
right to indemnification to which the Executive shall be entitled pursuant to
the Company’s Certificate of Incorporation or By-laws or otherwise.

 

(b)                                  Directors’ and Officers’ Insurance. The

 

17

 

Company shall use
its best efforts to maintain commercially reasonable directors’ and officers’
liability insurance during the Employment Term which will cover the Executive.

 

1.1.                            Miscellaneous.

 

(a)                                  Non-Waiver
of Rights. The failure to enforce at any time the provisions of this
Agreement or to require at any time performance by the other party of any of
the provisions hereof shall in no way be construed to be a waiver of such
provisions or to affect either the validity of this Agreement or any part
hereof, or the right of either party to enforce each and every provision in
accordance with its terms. No waiver by either party hereto at any tune of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar conditions or provisions at that time or at
any prior or subsequent time.

 

(b)                                  Notices.
All notices required or permitted hereunder will be given in writing, by
personal delivery, by confirmed facsimile transmission (with a copy sent by
express delivery) or by express next-day delivery via express mail or any
reputable courier service, in each case addressed as follows (or to such other
address as may be designated):

 

	
   

  	
  If to the Company:

  	
  NTL House, Bartley Wood
  Business Park,

  
	
   

  	
   

  	
  Hook, Hampshire RG27
  9UP

  
	
   

  	
   

  	
  Attention: Carolyn
  Walker, Group HR Director

  
	
   

  	
   

  	
  Fax: +44 1256 752 454

  

 

18

 

	
   

  	
  If to the Executive:

  	
  Jacques Kerrest

  
	
   

  	
   

  	
  7436 Old Maple Square

  
	
   

  	
   

  	
  McLean, Virginia 22102

  
	
   

  	
   

  	
  Fax: 1 703 749 0277

  

 

 

Notices that are
delivered personally, by confirmed facsimile transmission, or by courier as aforesaid,
shall be effective on the date of delivery.

 

(c)                                  Binding
Effect Assignment. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective heirs, executors, personal
representatives, estates, successors (whether direct or indirect, by purchase,
merger, consolidation, reorganization or otherwise) and assigns.
Notwithstanding the provisions of the immediately preceding sentence, the
Executive shall not assign all or any portion of this Agreement without the
prior written consent of the Company.

 

(d)                                  Entire
Agreement. This Agreement constitutes the complete understanding
between the parties with respect to the Executive’s employment and supersedes
any other prior oral or written agreements, arrangements or understandings
between the Executive and any member of the Company Affiliated Group. Without
limiting the generality of this Section 12(d), effective as of the Effective
Date, this Agreement supersedes any existing employment, retention, severance and
change-incontrol agreements or similar arrangements or

 

19

 

understandings (collectively, the “Prior Agreements”) between the
Executive and the Company and any member of the Company Affiliated Group, and
any and all claims under or in respect of the Prior Agreements that the
Executive may have or assert on or following the Effective Date shall be
governed by and completely satisfied and discharged in accordance with the
terms and conditions of this Agreement. No agreements or representations, oral
or otherwise, express or implied, with respect to the subject matter hereof
have been made by either party that are not set forth expressly in this
Agreement.

 

(e)                                  Severability.
If any provision of this Agreement, or any application thereof to any
circumstances, is invalid, in whole or in part, such provision or application
shall to that extent be severable and shall not affect other provisions or
applications of this Agreement.

 

(f)                                    Governing
Law, Etc. This Agreement shall be governed by and construed in
accordance with the internal laws of England and Wales, without reference to
the principles of conflict of laws. Both parties irrevocably submit to the
exclusive jurisdiction of the courts of England and Wales.

 

(d)                                  Modifications. Neither this
Agreement nor any Provision hereof may be modified, altered, amended or waived
except by an instrument in writing duly signed by the party to be charged.

 

(e)                                  Number and Headings. Whenever any
words used

 

20

 

herein are in the
singular form, they shall be construed as though they were also used in the
plural form in all cases where they would so  apply. The
headings contained herein are solely for purposes of reference, are not part of
this Agreement and shall not in any way affect the meaning or interpretation of
this Agreement.

 

(f)                                    Counterparts.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original but all of which together shall constitute one and
the same instrument.

 

(Signature page follows)

 

21

 

IN WITNESS WHEREOF, the Company
has caused this Agreement to be executed and the Executive has executed this
Agreement as of the day and year first above written, in each case effective as
of the Effective Date.

 

	
   

  	
  NTL INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Simon Duffy

  	
   

  
	
   

  	
  By: Simon Duffy

  
	
   

  	
  Title: Chief Executive
  Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Jacques Kerrest

  	
   

  
	
   

  	
  Jacques Kerrest

  

 

22

 

Appendix A

 

DRAFT   NTL: ASSIGNMENT
COMPENSATION SUMMARY SHEET

 

	
   

  	
  (i) Personal / Assignment Information

  
	
   

  
	
  Assignee Name:

  	
   

  	
  Jacques Kerrest

  	
   

  
	
  Home Country:

  	
  United States of America

  	
  Host Country:

  	
  United Kingdom

  
	
  Length of Assignment:

  	
   

  	
  To 31st December 2006

  
	
  Annual Leave Entitlement:

  	
   

  	
  5 weeks

  
	
  Accompanied Assignment:

  	
   

  	
  Partner:

  	
  ý

  	
  (tick if accompanying)

  
	
   

  	
   

  	
  Dependant(s):

  	
  n/a

  	
  (total accompanying assignee)

  
	
  Assignment Remuneration Details

  	
   

  	
   

  	
   

  
	
  Assignment Base Salary (Gross):

  	
   

  	
  £300,000

  
	
  Tax Equalized:

  	
   

  	
  Yes

  
	
  Home for Tax Equalisation Purposes:

  	
   

  	
  As per NTL policy

  
							

 

	
   

  	
   

  	
  Tick if

  Applies

  	
   

  	
  Maximum Spend (£)

  
	
  Ernst & Young LIP Tax Services

  	
   

  	
  ý

  	
   

  	
  As Agreed with Ernst &
  Young

  
	
  Pre-Assignment Visit - Hotel Accommodation

  	
   

  	
  ý

  	
   

  	
  As per NTL policy

  
	
  Pre-Assignment Visit - Daily Per Diem

  	
   

  	
  ý

  	
   

  	
  As per NTL policy

  
	
  Relocation Allowance

  	
   

  	
  ý

  	
   

  	
  £5,000

  
	
  Temporary Accommodation

  	
   

  	
  ý

  	
   

  	
  As per NTL policy

  
	
  Housing

  	
   

  	
  ý

  	
   

  	
  £1,850 per week

  
	
  Furniture Hire

  	
   

  	
  ý

  	
   

  	
  As per NTL policy

  
	
  Company Car Cash Allowance

  	
   

  	
  ý

  	
   

  	
  £10,620 per annum

  
	
  Home Leave

  	
   

  	
  ý

  	
   

  	
  As per NTL policy

  

 

	
  Other Details

  	
   

  
	
   

  	
   

  
	
  Pension

  	
  As per NTL policy (Company payment to US NTL Inc.
  401(k) plan of 2/3rds of Executive’s actual contribution to a maximum of 6%
  of base salary).

  
	
   

  	
   

  
	
  Social Security

  	
  Home

  
	
   

  	
   

  
	
  Healthcare

  	
  Cigna International Plan for self, spouse and daughter
  Juliana

  
	
   

  	
   

  
	
  Disability Insurance

  	
  UNUM Group Plan (for self)

  
	
   

  	
   

  
	
  Vision Plan

  	
  As per NTL policy

  

 

NOTE:
THIS DOCUMENT ONLY PROVIDES A SUMMARY, REFERENCE MUST BE

MADE TO THE NTL EXPATRIATE POLICY AND THE NTL TAX EQUALISATION POLICY

FOR CONDITIONS ATTACHING TO ALL ITEMS DESCRIBED ABOVE

 

23

 

Appendix
B

 

NTL INCORPORATED

US TAX & SOCIAL SECURITY
EQUALISATION POLICY

Effective 1st January
2004

 

A.        Objective

 

A US tax &
social security equalisation policy has been established for employees on
assignment from the USA, as an employee’s actual tax liability will be
different from what it would have been had the employee not left the USA.  This policy only applies to employees who are
entitled to tax equalisation under the terms of their Contract of Employment
and/or Terms of Assignment Letter/Assignment Compensation Summary Sheet.

 

Throughout
this policy the masculine gender has been used for simplification and is to be
read in the feminine gender whenever appropriate.

 

The objective
of this policy is to ensure that the employee pays approximately no more or no
less tax/social security on income and benefits than he would have paid had
that employee remained living and working in the USA.

 

By equalising
income tax/social security costs for its employees, NTL Inc. intends that each
employee shall fully comply with the tax filing and payment requirements
imposed by the fiscal authorities in the host country and the USA. Assistance
will be provided to the employee by Ernst & Young LLP in order to meet
their Tax Return filing requirements. (Also refer to Section 3.5 of the “Expatriate
Policy”)

 

NTL Inc.
reserves the right to amend this Tax Equalisation Policy as necessary.

 

B.         Reporting Obligations

 

NTL Inc. requires that
all employees be familiar and comply fully with all applicable national and
local laws. In connection with tax/social security matters, the following
guidelines ensure that NTL Inc. and its employees will meet those requirements.

 

•                               NTL
Inc. regards timely compliance with worldwide income tax/social security
requirements as a mandatory obligation of each employee.

 

•                               An
employee must conduct himself at all times so as to avoid charges of fiscal
evasion or abuse, or of violation of local law, which could jeopardise in any
way his standing personally or as a representative of NTL Inc.

 

•                               An
employee is expected to exercise care and attention in minimising his liability
for worldwide income taxes/social security contributions in accordance with
appropriate principles of fiscal planning. An employee must co-operate with NTL
Inc. to ensure that his home and host country Tax Returns are filed in such a
manner as to produce the lowest possible tax permitted by law.

 

Each employee is required
to report taxable income and pay income taxes to the taxing authorities which
have jurisdiction during the period of his assignment. The income tax/social
security contributions to be paid by each employee will be governed by the
fiscal laws and regulations under which the authorities operate.

 

24

 

Failure to Comply:

 

Upon notification by Ernst & Young LLP to NTL Inc. of an
employee’s failure to comply with all the above requirements, the employee will
be given by written notice one month to comply.

 

If after that time the employee continues to be non
compliant a penalty hypothetical tax rate of 50% will be imposed on all income
specified under Section D(1) below.

 

If after three months from the date of the above written
notice the employee is still non-compliant, entitlement to tax equalisation
will cease immediately together with eligibility for assistance under Section C
below and Section 2.2 of the “Expatriate Policy”.  This will result in the employee being
personally responsible for payment of all tax and social security liabilities
on worldwide income, as well as the preparation and filing of all Tax Returns.

 

C.                           Tax Return Preparation Assistance

 

It is
the responsibility of each employee to ensure that the proper Tax Returns are
filed when due. NTL Inc. has engaged Ernst & Young LLP to assist employees
in meeting this obligation. The fee for such services will be borne directly by
NTL Inc.

 

Tax Returns prepared by
Ernst & Young LLP will be kept confidential by them. However, in completing
annual tax equalisation reconciliation calculations, limited essential
information will be extracted from the actual home/host country Tax Returns to
facilitate operation of this Tax Equalisation Policy.

 

D.            Implementation of Tax Equalisation

 

NTL Inc. will continue to
withhold actual US Social Security contributions from the compensation relating
to the assignment period, subject to any statutory limits and the terms of this
Tax Equalisation Policy

 

Under this Tax
Equalisation Policy, each employee will have a total income tax and social
security liability approximating to his liability had he not been assigned
outside the USA.  This position is
achieved by calculating a preliminary hypothetical tax/social security
liability and reducing the employee’s compensation by that amount.

 

In order to ensure that
the preliminary hypothetical tax retained during a year is as near as
possible to an employee’s final hypothetical tax obligation to NTL Inc.,
an estimate of the employee’s personal income and allowable itemised deductions
will need to be provided to Ernst & Young LLP at the commencement of the
assignment and in January of each subsequent year of assignment.

 

Having reduced
compensation by a retained hypothetical US income tax, NTL Inc. will assume
responsibility for paying the employee’s actual worldwide income tax and social
security liabilities, if any.

 

25

 

After the
close of the year, and after an employee’s US Federal (and State, if required)
Tax Return has been filed, Ernst & Young LLP will prepare a year-end
reconciliation. The “preliminary hypothetical US tax” will be adjusted, to
reflect actual income and deductions in place of estimated amounts used at the
beginning of the year. This reconciliation will be the basis of a final
settlement between NTL Inc. and the employee of that year’s income tax
reimbursement.

 

1.                Hypothetical US tax (retained
from pay)

 

Hypothetical tax
represents an estimate of the employee’s US Federal and State tax obligations
on his projected taxable income. The Federal hypothetical tax will be
calculated using actual filing status, current dependency exemptions and tax
rates for the taxable year.

 

NTL Inc.
policy is to calculate hypothetical State tax based upon a fixed rate of 6% of
hypothetical “adjusted gross income”. 
The fixed State tax rate will be reviewed every three years but there
will be no mid assignment rate changes.

 

In summary,
income to be included in the hypothetical tax calculations is as follows:-

 

•                                base
salary (net after deduction of employee 401k contributions and employee pre-tax
medical contributions)

•                                bonus

•                                all
income from stock based incentives

•                                group
term life

•                                personal
passive (investment) income

 

(See section
2(a) below for further definitions)

 

If married, passive
income of the employee’s spouse will also be included. Subject to
the specific exception below, spousal salary and/or other earned
income from employment performed outside the USA, however, is specifically
excluded from the hypothetical calculation. Rationale: A spouse is eligible to
make an election under the IRS Code Sec.911 for a foreign earned income
exclusion in their own right. This, plus credit for foreign taxes paid on
foreign source wages, should result in no incremental US tax being due on such
income. The spouse remains personally liable for all foreign income tax and
social security contributions due.

 

In arriving at
hypothetical taxable income, deductions will be available for:

 

•                               actual
amounts claimed on Federal Tax Return to arrive at “adjusted gross income”.

 

•                               actual
itemised deductions per Federal Tax Return, excluding any itemised deductions
funded by NTL.

 

26

 

•                               actual
mortgage interest and real estate taxes paid per Federal Income Tax Return
Schedule A, form 1040 as filed with the IRS.

 

•                               a
deduction will be given for hypothetical State taxes payable to NTL.

 

The hypothetical US
income tax retained from pay may be changed by NTL Inc. during the course of a
year whenever there is a change in:

 

•                      the
employee’s compensation; or

•                      401(k)
contribution; or

•                      other
NTL Inc. income/related deductions; or

•                      a
change in filing status or number of dependants.

 

Also, upon
prompt notification to Ernst & Young LLP and verification of US itemised
deductions and deductible losses and adjustments such as US rental losses, etc.
NTL Inc. may reduce the retained hypothetical tax to give the employee the
appropriate reduction in retained hypothetical tax. Conversely, NTL Inc. may
increase the retained hypothetical tax in order to collect the additional
hypothetical US income tax on net personal income such as dividends, interest,
capital gains etc.

 

The hypothetical US
income tax retained from pay is not a withholding tax and should not be
confused with the amount of US income tax withholding to which the employee may
have been subject prior to their assignment. The two amounts are calculated in
different ways and will often be different in amount. The
hypothetical US income tax is simply a negative item in the employee’s
compensation package which, because it approximates to his tax obligation for
the year on NTL Inc. income, provides the employee with approximately the same
net level of spendable income as if they had remained in the home location.

 

Spousal
Income - Exception

 

In the
event that both spouses are employed by NTL Inc. and on foreign assignment, the
hypothetical tax liability will be based on the inclusion of all income (as
above) and calculated on the basis of the married filing joint tax rates. The
hypothetical taxes payable by each spouse will be in proportion to their
respective gross income (as defined above), but net of 401k contributions
and/or other NTL Inc. income/related deductions.

 

2.                Final Hypothetical US Tax
(for tax reimbursement purposes)

 

As stated above, after
the close of the year, the “preliminary hypothetical US tax” will be adjusted
to a “final hypothetical US tax” based on actual amounts. This hypothetical US
tax then becomes the “final” tax burden which an employee must bear for the
year.

 

Because the USA taxes its
citizens and green-card holders on worldwide income, the final hypothetical US
tax will be based not only on NTL Inc. base salary and bonus, etc as defined in
Section 1 above, but also on the

 

27

 

employee’s taxable net
personal income or loss, adjustments to income, and in most circumstances on
his actual itemised deductions as well. In the absence of a reduction in the
preliminary hypothetical US tax as discussed above, the NTL Inc. employee with
losses, alimony or itemised deductions will likely receive a cash reimbursement
from NTL Inc. after the end of the year. On the other hand, an NTL
Inc. employee with net personal income will be obliged to make a cash payment
to NTL Inc. after the end of the year equal to the additional hypothetical tax
on such income. Such employees
are thereby on notice that they must have sufficient cash to pay this
hypothetical tax on personal income, or make arrangements for NTL Inc. to
retain it through payroll. Any additional hypothetical tax due to NTL/from NTL
must be settled by either the employee or NTL as appropriate within 30 days of
receipt of the finalised tax equalisation settlement from Ernst & Young LLP.

 

The final hypothetical US
tax will be based on the following items:

 

(a)  NTL Inc. Income

 

•                                Base
salary, less 401(k) contributions and any other pre-tax employee contributions.
(For this purpose, in the case of an employee who works a part-year on assignment
for NTL Inc. and who works a part-year for NTL Inc. in the US base salary will
be the sum of the two part-year base salaries).

 

•                                Cash
bonuses and any other cash incentive compensation.

 

•                                Income
from all NTL Inc. stock based incentives, including, but not limited to,
non-qualifying stock options (NQSO) and Incentive Stock Options (ISO)

 

•                                Imputed
income from group term life insurance and any other employee benefit considered
taxable in the US which the employee would have received independent of his assignment.

 

•                                Assignment
related allowances and reimbursements including the one month relocation
allowance (See Expatriate Policy) are excluded from all calculations of
hypothetical tax to ensure that NTL Inc. bears the full cost of any tax
imposed on these items.

 

(b)  Net Personal Income

 

“Net personal income” is
the positive amount, which results from subtracting “personal losses” from “personal
income”. NTL Inc. reserves the right to “cap” the amount of net personal income
which it will tax equalise under this policy, and also to limit its
reimbursement of host country taxes thereon when such taxes could have been
avoided by following the tax advice of Ernst & Young LLP.

 

“Personal income”
encompasses income earned or received from sources other than NTL Inc. It
includes, but is not limited to, amounts

 

28

 

from the following
sources which are taxable on an employee’s actual US Tax Return:

 

•                               Dividends.

 

•                               Interest.

 

•                               State
income tax refunds.

 

•                               Net
capital gain, including the taxable gain from the sale of an employee’s US
principal residence and gain from the sale of any residence owned by the
employee in the country of assignment or any other country outside the USA

 

•                               Net
rental income (but excluding NTL Inc. funded expenses).

 

•                               Net
partnership income.

 

(See “The Expatriate
Policy” Sections 3.10 & 5.2 for general rules for house sales)

 

“Personal Income” also
includes:

 

•                               Any
salaries or compensation received by the employee prior to, or subsequent to,
the International Assignment, while self-employed or employed by a corporation
unrelated to NTL Inc..

 

•                               Any
salaries, compensation or self-employment income received by the employee’s
spouse prior to, or subsequent to, the International Assignment.

 

During the period of the
employee’s assignment, to the extent that an employee’s spouse has a job in the
host country, or is self-employed there, the spouse will be fully responsible
for any income and social taxes imposed on the spouse’s income. In this
circumstance, the year-end US tax equalisation calculation will not
reflect a final hypothetical US income tax on such income; and in calculating
the actual US income tax if any, attributable to the spouse’s income, the
spouse will receive the full benefit of the spouse’s “earned income exclusion”
and the appropriate “foreign tax credit” available under US tax law.

 

“Personal losses”
encompass losses funded exclusively by the employee. This category includes,
but is not limited to:

 

•                                Net
capital loss deductible on the actual US income Tax Return.

 

•                                Net
rental loss deductible on the actual US income Tax Return (but excluding any
NTL Inc. funded expenses).

 

29

 

•                                Net
partnership loss deductible on the actual US income Tax Return.

 

(c)  Net Personal Loss

 

“Net Personal Loss is the
negative amount which results from subtracting “personal losses” from “personal
income”.

 

(d)  Deductions

 

The following deductions which
are not funded by NTL Inc. will be allowed in arriving at an employee’s
hypothetical taxable income for purposes of computing his final hypothetical US
income tax:

 

•                  Adjustments
to gross income claimed on the employee’s actual US income Tax Return for the
taxable year, such as alimony and deductible IRA contributions; plus

 

•                  the
amount of actual itemised deductions deductible on an employee’s US income Tax
Return for the taxable year plus the amount of the final hypothetical State
income tax for the year.

 

An employee’s actual itemised deductions will be
reduced by those expenses which were reimbursed (directly or in the form of an
allowance) by NTL Inc.

 

The phase out of itemised deductions for high income
tax payers will be recalculated based upon the hypothetical stay at home income
included in the final annual tax equalisation settlement

 

(e)  Tax Rates & Filing Status

 

In computing the final
hypothetical US income tax, the tax rates and filing status to be used are
those used on the actual US Federal 
income Tax Return and the fixed State tax rate (See Section 1 above) for
the year.

 

3.                Reimbursement of Actual
Worldwide Income Taxes & Social Security

 

Having reduced
an employee’s compensation by a retained hypothetical US income tax which is
later adjusted to a final hypothetical US tax, NTL Inc. will reimburse the
actual amount of worldwide income taxes paid by an employee as well as local
social taxes paid, if any.

 

30

 

Whenever an employee must
pay a local income or social tax, NTL Inc. will at that time pay the amount of
such tax to or on behalf of the employee. This includes local income and social
taxes in the form of:-

 

•                               Withholding
taxes which NTL Inc. is required to pay over to the assignment country
government.

 

•                               Estimated
tax filings made during the year.

 

•                               Payment
of the balance due with the assignment country income Tax Return or upon final
assessment for the tax year.

 

In all cases, the
employee’s cash flow will not be reduced by tax payments to the assignment
country government.

 

Verification of the
actual amount of local taxes paid by each employee will be provided by Ernst
& Young LLP, which will communicate the amount thereof to NTL Inc.. An
amount equal to any local tax refunds must be paid or turned over to NTL Inc.
by the employee, since NTL Inc. (and not the employee) will have funded all
local taxes.

 

4.                Year-End US Tax Equalisation

 

After an employee’s US
Tax Return has been filed, Ernst & Young LLP will prepare a tax
reconciliation calculation.

 

NTL Inc. will provide to
Ernst & Young LLP the salary and other information (retained hypothetical
tax, etc.) necessary to complete this form. Ernst & Young LLP will send the
year-end US Tax reconciliation to NTL Inc. and the employee. Both parties will
review and approve the calculations provided by Ernst & Young LLP.

 

The year-end US Tax
reconciliation will reconcile the preliminary hypothetical US income tax with
the final hypothetical US income tax for the year. It will also disclose the
actual US income tax for the year (if any) which, under this policy, is fully
reimbursable by NTL Inc.. The reconciliation will then indicate the net
reimbursement owed to/by the employee, and NTL Inc. Reimbursement will be made
promptly, within 30 days of Ernst & Young LLP issuing the calculation.

 

NTL Inc.
will reimburse the employee for all interest and penalties relating to NTL Inc.
income except when the assessment of the interest and penalties results
from the negligence or fault of the employee; e.g., a delay in submitting data
booklets or tax questionnaires to Ernst & Young LLP which in turn prevents
the timely filing of a return. (Also see Section B above)

 

NTL Inc. will also
reimburse interest imposed on any balance due resulting from an extended due
date for filing US Tax Returns granted to US taxpayers residing overseas.

 

31

 

5.                Credits Allowed against US tax
for Host Country Taxes Paid

 

Any tax credits for host
country taxes (referred to as “foreign tax credits”) paid or reimbursed by
NTL Inc. which reduce an employee’s US income tax liability prior to,
during or subsequent to his assignment, will be for the benefit of NTL
Inc..  This repayment is to be made
within 14 days of receipt from the IRS.

 

It also includes tax
credits (reimbursed by NTL Inc.) which are carried back or carried forward,
regardless of whether the income in the carryback or carry forward year is
related to the International Assignment. 
In such instances, an employee must pay the amount of his tax refund
received from the Internal Revenue Service, plus interest, to NTL Inc..  This payment is to be made within 14 days
of receipt of the refund.

 

6.                Net Operating Losses

 

Any net operating losses
resulting from exclusions available to US citizens working abroad will be
considered to be for the benefit of NTL Inc., because the tax benefit of these
personal losses will have been fully realised by the employee in the
hypothetical tax calculation.  This
includes a net operating loss which is carried back or carried forward
regardless of whether the income in the carryback or carry forward year is
related to the International Assignment. 
In such instances, an employee must pay the amount of his tax refund
received from the Internal Revenue Service and applicable State tax authority,
plus interest, to NTL Inc..  This
payment is to be made within 14 days of receipt of the refund.

 

7.                Subsequent Adjustments

 

Assignment country
government or US Internal Revenue Service or State government examinations of
employee Tax Returns are not uncommon. 
When they occur, the year-end US or local tax equalisation for that year
will be recomputed, if necessary, with adjustments made as appropriate.

 

NTL will pay or reimburse
reasonable fees, subject to prior approval, incurred by Ernst & Young LLP
for dealing with US IRS or foreign tax notices, audits and examinations.

 

8.                “Tax on Tax”

 

Whenever NTL Inc.
reimburses local or US income taxes (either currently, or in the following
year), such reimbursements themselves constitute taxable income for US income
tax purposes and, generally, for assignment country tax purposes as well.  Under this Tax Equalisation Policy any “final”
tax paid with respect to income tax reimbursements will be fully reimbursed by
NTL Inc. and grossed up as appropriate.

 

32

 

For repatriated employees
receiving tax reimbursements during the year subsequent to termination of their
International Assignment, the payment may be grossed up to include any final
tax due on the reimbursement in order to keep the employee whole.

 

9.                Short-term loans/advances

 

Even though compensation
is reduced by the US hypothetical tax, it may be necessary for NTL Inc. to
withhold actual US or local taxes as applicable, and to remit these taxes to
the proper US and local taxing authorities. 
In order to ease the employee’s cash flow burden, the employee in such
cases will receive a loan or tax advance equal to the host and/or US taxes
withheld, with the approval of NTL Inc. 
The total loan or tax advanced will be settled in the following year at
the time the Year-End US Tax Equalisation or local tax reconciliation is
prepared.]

 

10.              Annual
settlement with employee

 

When the Year-End US Tax
Equalisation calculations result in a balance due to the employee, the amount
will first be applied against any outstanding loans or tax advances for the
same year.  The remainder will be paid by
NTL Inc. to the employee.

 

If loans for a particular
year exceed the amount of the tax equalisation balance due, the employee must
repay such excess loans to NTL Inc. within 14 days of receiving the applicable
refund of taxes from the US or host country taxing authorities.  NTL Inc. reserves the right to recapture all
unpaid tax loans by reducing the employee’s base salary.

 

11.              Treatment of
new, returning, terminated and retired employees

 

For an employee who is
hired, transferred, terminated or who returns home during the year, the
Year-End US Tax Equalisation will be adjusted in order to compare:

 

•                               Hypothetical
US income tax retained from compensation (described above) during the portion
of the year spent on International Assignment,

 

•                               Final
hypothetical US income tax (described above) on the entire year’s
income, and

 

•                               Actual
US income tax liability on Form 1040 for the entire year.

 

Where the employee was
employed by an employer other than NTL Inc. or any affiliate during the year,
compensation from the employee’s previous or subsequent employer will be
treated as personal income and will therefore be subject to US hypothetical tax
and will be fully tax equalised.

 

33

 

Where the employee spent
part of the year (either pre-assignment or post assignment) in the US he will
be fully responsible for applicable State income taxes assessed during such
part-year periods, except to the extent that such State income taxes are
increased by a NTL Inc. allowance on which NTL Inc. assumes responsibility for
paying actual taxes.

 

12.              Treatment of
employees who are married to participants in tax equalisation policies of other
employers

 

For an employee whose
spouse is employed in the host country by entities other than NTL Inc. and is
covered by a tax equalisation policy of another employer, the manner in which
the final hypothetical tax and reimbursable US and local taxes are calculated
will be determined on a case-by-case basis. 
This approach will ensure that an NTL Inc. employee receives the
protection to which he is entitled under the NTL Inc. US Tax & Social
Security Equalisation Policy by eliminating any distorted results which could
occur if the standard calculations were performed.

 

34

 

Appendix C

 

NTL Incorporated Equity-Based Compensation

 

Options to purchase common stock of NTL Incorporated

 

The Executive will be granted 200,000 options at an exercise price
equal to the fair market value on the Effective Date.

 

Vesting period = five years

 

The options granted will vest 20% on each anniversary of the Effective
Date.

 

Other terms: The options will be subject to the Company’s standard form
of stock option agreement.

 

35

 

Appendix
D

 

A “Change in Control” shall be deemed to occur if the event set forth
in any one of the following paragraphs shall have occurred:

 

(i)                                     Any
Person is or becomes the Beneficial Owner, directly or indirectly, of
securities of the Company (not including in the securities beneficially owned
by such Person any securities acquired directly from the Company) representing
30% or more of the combined voting power of the Company’s then outstanding
securities, excluding any Person who becomes such a Beneficial Owner in
connection with a transaction described in clause (a) of Paragraph (iii) below;
or

 

(ii)                                  the
following individuals cease for any reason to constitute a majority of the
number of directors then serving: individuals who, on the date the Plan is
adopted by the Board of Directors of the Company (“Board”), constitute the
Board and any new director (other than a director whose initial assumption of
office is in connection with an actual or threatened election contest,
including, without limitation, a consent solicitation, relating to the election
of directors of the Company) whose appointment or election by the Board or
nomination for election by the Company’s stockholders was approved or
recommended by a vote of at least a majority of the directors then still in
office who either were directors on the date hereof or whose appointment,
election or nomination for election was previously so approved or recommended;
or

 

(iii)                               there
is consummated a merger or consolidation of the Company or any direct or
indirect subsidiary of the Company with any other corporation, other than (a) a
merger or consolidation which would result in the voting securities of the Company
outstanding immediately prior to such merger or consolidation

 

36

 

continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity or any parent thereof)
at least 50% of the combined voting power of the securities of the Company or
such surviving entity or any parent thereof outstanding immediately after such
merger or consolidation, or (b) a merger or consolidation effected to implement
a recapitalization of the Company (or similar transaction) in which no Person
is or becomes the Beneficial Owner, directory or indirectly, of securities of
the Company (not including in the securities beneficially owned by such Person
any securities acquired directly from the Company) representing 30% or more of
the combined voting power of the Company’s then outstanding securities; or

 

(iv)                              the
stockholders of the Company approve a plan of complete liquidation or
dissolution of the Company or there is consummated an agreement for the sale or
disposition by the Company of all or substantially all of the Company’s assets,
other than a sale or disposition by the Company of all substantially all of the
Company’s assets to an entity, at least 50% of the combined voting power of the
voting securities of which are owned by the stockholders of the Company
immediately prior to such sale.

 

Notwithstanding the foregoing, a “Change in Control” shall not be
deemed to have occurred by virtue of the consummation of any transaction or
series of integrated transactions immediately following which the record
holders of the common stock of the Company immediately prior to such
transaction or series of transactions continue to have substantially the same
proportionate ownership in an entity which owns all or substantially all of the
assets of the Company immediately following such transaction or series of
transactions.

 

 

37

 

For purposes of this Appendix D:

 

“Affiliate” shall have the meaning set
forth in Rule 12b-2 under Section 12 of the Securities Exchange Act
of 1934.

 

“Person” shall have the meaning given in Section 3(a)(9) of the
Securities Exchange Act of 1934, as modified and used in Sections 13(d) and 14(d)
thereof, except that such terms shall not include (i) the Company or any of its
Affiliates, (ii) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its subsidiaries, (iii) an
underwriter temporarily holding securities pursuant to an offering of such
securities, or (iv) a corporation owned, directly or indirectly, by
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company.

 

“Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under
the Securities Exchange Act of 1934, except that a Person shall not be deemed
to be the Beneficial Owner of any securities which are properly filed on a Form
13-G.

 

38

 

Appendix
E

 

RELEASE
AGREEMENT

 

In consideration of the severance payments and benefits provided for or
referred to in the Employment Agreement, dated as of August 14, 2004, to which
the undersigned is a party (the “Benefits”), and the release from the
undersigned set forth herein, NTL Incorporated (the “Company”) and the
undersigned agree to the terms of this Release Agreement.

 

1.               The
undersigned acknowledges and agrees that the Company is under no obligation to
offer the undersigned the Benefits, unless the undersigned consents to the
terms of this Release Agreement. The undersigned further acknowledges that he
is under no obligation to consent to the terms of this Release Agreement and
that the undersigned has entered into this agreement freely and voluntarily.

 

2.               The
undersigned voluntarily, knowingly and willingly releases and forever
discharges the Company and its Affiliates, together with their respective officers,
directors, partners, shareholders, employees, agents, and the officers, directors,
partners, shareholders, employees, agents of the foregoing, as well as each of
their predecessors, successors and assigns (collectively, “Releases”), from any
and all charges, complaints, claims, promises, agreements, controversies, causes
of action and demands of any nature whatsoever that the undersigned or his executors,
administrators, successors or assigns ever had, now has or hereafter can, shall
or may have against Releases by reason of any matter, cause or thing whatsoever
arising prior to the time of signing of this Release Agreement by the undersigned.
The release being provided by the undersigned in this Release Agreement
includes, but is not limited to, any rights or claims relating in any way to
the undersigned’s employment relationship with the Company, or the termination
thereof, or under any statute, including the federal Age Discrimination in
Employment Act of 1967, Title VII of the Civil Rights Act of 1964, the Civil Rights
Act of 1990, the Americans with Disabilities Act of 1990, the Employee Retirement
Income Security Act of 1974, the Family and Medical Leave Act of 1993, each as
amended, and any other federal, state or local law or judicial decision (U.S.
and non-U.S.).

 

3.               The
undersigned acknowledges and agrees that he shall not, directly or indirectly,
seek or further be entitled to any personal recovery in any lawsuit or other
claim against the Company or any other Release based on any event arising out
of the matters released in paragraph 2.

 

39

 

4.               Nothing
herein shall be deemed to release (i) any of the undersigned’s rights to the
Benefits, (ii) any of the benefits that the undersigned has accrued prior to
the date this Release Agreement is executed by the undersigned under the
Company’s employee benefit plans and arrangements, or any agreement in effect
with respect to the employment of the undersigned or (iii) any claim for
indemnification as provided under Section 10 of the Employment Agreement.

 

5.               In
consideration of the undersigned’s release set forth in paragraph 2, the
Company knowingly and willingly releases and forever discharges the undersigned
from any and all charges, complaints, claims, promises, agreements,
controversies, causes of action and demands of any nature whatsoever that the
Company now has or hereafter can, shall or may have against him by reason of
any matter, cause or thing whatsoever arising prior to the time of signing of
this Release Agreement by the Company, provided, however, that nothing herein
is intended to release any claim the Company may have against the undersigned
for any illegal conduct or conduct constituting gross negligence or willful
misconduct in connection with his employment with the Company.

 

6.               The
undersigned acknowledges that the Company has advised him to consult with an
attorney of his choice prior to signing this Release Agreement.  The undersigned represents that, to the extent
he desires, he has had the opportunity to review this Release Agreement with an
attorney of his choice.

 

7.               The
undersigned acknowledges that he has been offered the opportunity to consider
the terms of this Release Agreement for a period of at least twenty-one days,
although he may sign it sooner should he desire. The undersigned further shall
have seven additional days from the date of signing this Release Agreement to
revoke his consent hereto by notifying, in writing, the Secretary of the
Company. This Release Agreement will not become effective until seven days after
the date on which the undersigned has signed it without revocation.

 

	
   

  	
   

  	
   

  
	
   

  	
  Jacques Kerrest

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NTL Incorporated

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

40Exhibit 10.2

 

NTL
INCORPORATED

909 Third
Avenue

New York, New York 10022

 

6 September 2004

 

Mr. Scott Schubert

Flat 9

William Street House

William Street

London SW1X 9HH

 

Re:  Extension & Amendment of Employment
Agreement dated as of 4

March 2003
(the “Agreement”)

 

Dear Scott:

 

As we have discussed, now that NTL incorporated (the “Company”) has emerged from its Chapter 11 reorganization and
has successfully completed its $1.4 billion equity offering and multibillion
bond and credit agreement financings, it is entering into a new phase of its
existence. The Company will therefore have new initiatives and projects which
will require reshaping the management team. 
In addition, the employment term under your existing agreement expires
on 31 Dec 2004 and we have
discussed together your own plans and the Company’s plans on a going forward
basis.

 

This letter confirms our agreement concerning the
renewal of your Employment Term under the existing Agreement. (Terms not
otherwise defined in this Letter are used as defined in the Agreement.)

 

1                  Amendment of Agreement.  Subject to the agreements set forth in this
Letter which amend and supplement the Agreement, the Agreement shall remain in
full force and effect until the end of the Extension Period (defined below)
unless otherwise terminated in accordance with its terms.

 

2.               Extension.  The Employment Term of the Agreement is hereby
extended from 31 Dec 2004 until 30 April 2005 (the “Extension Period”). The
parties may agree to extend this Extension Period beyond such date on mutually
satisfactory terms provided that the Company provides at least two months prior
notice of its intention to request renewal. No notice of non-renewal is
required prior to expiration of the Extension Period under Section 2a of the
Agreement.

 

3.               Duties: Title. (A) As we have discussed,
the Company will appoint a new Chief Financial Officer with an effective date
of employment as of 20 Sept

 

 

2004. 
Prior to this date you will continue to be the Company’s Chief Financial
Officer.

 

(B) From and after this date, you will
instead act as the Company’s Executive Vice President –  Corporate Development. The duties for
this position will be working with the Company’s Chairman of the Board, Chief
Executive Officer, Chief Financial Officer, General Counsel and other members
of the Company’s management in
developing the Company’s business, including evaluating and implementing any
corporate development plans for the Company such as M&A activity,
divestitures, joint ventures, etc. and such other similar duties as may be
requested from time to time by the Company’s Chairman, CEO or Board of
Directors. (Both parties agree that references to title and duties in the
Agreement shall refer to the foregoing title and duties from and after 20 Sept
2004.)

 

(C) From and after 20 Sept 2004 you may
serve on the board of directors of up to two for-profit companies, subject
however to prior notification to be provided to the President of the Company
and provided that such endeavours do not interfere with the conduct of your
duties and that the identity of such companies is subject to the reasonable
consent of the Company. Any and all travel expenses and other expenses
associated with such positions shall be borne by such other companies.

 

4.               Base Salary; Benefits.  Your Base Salary will remain in effect through
the Extension Period. You will continue to be eligible for all bonuses as per
the Agreement and all benefits including ex-patriate benefits through the
Extension Period (on a pro rata basis as may be appropriate). In addition, you
will be a participant in the Company’s Long Term Incentive Plan (“LTIP”) and in
the event that the Extension Period has not been extended to the date the LTIP
payment is made you will receive those payments pro rated through the end of
the Extension Period (as may have been further extended); provided that (i) you
have not been Terminated for Cause; (ii) you have not resigned from your
position and (iii) you are not in breach of the Agreement. (Actual amounts
paid, if any, will of course be subject to the terms of the LTIP.) Vacation
days for the calendar year will be determined on a pro rata basis.

 

5.               Options.  Your options which are subject to vesting in
April of 2005 will vest on the relevant dates (even if the Company has effected
a Termination without Cause), provided that (i) you have not been Terminated
for Cause; (ii) you have not resigned from your position and (iii) you are not
in breach of the Agreement. The terms of the options will continue in full
force and effect.

 

6.               Exchange Rates.  As per the terms of the Agreement, you will be
entitled to designate at one time during each calendar year (commencing on or
after 1 January 2005) a percentage of cash compensation not yet paid to be paid
in US Dollars, with the exchange rate set on the date such designation is made
as provided by Section 3a of the Agreement. The foregoing designation right
applies with respect to years occurring after

 

 

termination of the Employment Term in which
any cash payments will be made.

 

7.               Non-Renewal.  In the event that the Employment Term shall
end on 30 April 2005 (having not been extended again) and you are not, on the
date of expiration, a party to a new employment agreement with the Company,
then upon execution and delivery of the general release as provided for by the
terms of Section 7c of the Agreement, the Company shall pay to you a lump-sum
severance payment of cash equal to the product of the Base Salary times 2 (as
provided by Section 7c).  This Letter constitutes
a renewal of the Employment Term and in the event that there is no further
renewal of the Employment Term, such failure to renew shall not constitute a
“non-renewal” under the terms of the Agreement for any reason except as
provided in this clause 7.

 

8.               Miscellaneous.  This Letter shall be governed by and
construed in accordance with the internal laws of the State of Delaware,
without reference to the principles of conflicts of laws. This Letter shall be
subject to all other terms of the Agreement (such as address for notices,
jurisdiction, etc.). The parties agree that the Agreement shall remain in full
force and effect except as modified by the terms hereof.

 

******

 

Please acknowledge your agreement with the foregoing
by executing a copy of this Letter in the space provided below.

 

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NTL INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ S.P. Duffy

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:  S.P.
  Duffy

  
	
   

  	
   

  
	
   

  	
  Title:  CEO

  
	
   

  	
   

  
	
   

  	
  AGREED & ACCEPTED

  
	
   

  	
   

  
	
   

  	
  /s/ Scott Schubert

  	
   

  
	
   

  	
   

  
	
   

  	
  Scott Schubert

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