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EXHIBIT 10.10
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") is made as of the
day of January, 1997, by and between Xxxxxx Xxxxxxxx, a UK citizen ("Employee"),
and Poland Communications, Inc., a New York corporation ("PCI" or the
"Company").
WITNESSETH:
WHEREAS, Employee desires to serve as Chief Operating Officer of the
Company, and the Company desires to employ Employee as Chief Operating Officer,
and Employee and the Company desire to embody in this Agreement the terms and
conditions under which Employee shall be employed;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Employee and the Company,
intending to be legally bound hereby, AGREE AS FOLLOWS:
1. DEFINITIONS
For the purposes of this agreement, the following definitions shall apply:
a. "Affiliate" of the Company shall mean any other Person controlling,
controlled by, or under common control with the Company.
b. "Associated Company" of the Company shall mean any Affiliate of the
Company or any Subsidiary.
c. The "Business" means: (i) providing cable television services anywhere
in Poland; (ii) providing programming in a city in Poland where the Company or
any Associated Company provides programming; and (iii) providing local-loop
telephony in a city in Poland where the Company or any Associated Company
provides telephony.
d. The "Company" shall mean Poland Communications, Inc., a New York
corporation.
e. "Dollars" and "$" each mean the lawful currency of the United States of
America.
f. "Effective Date" shall mean the date first above written.
g. "Employee" shall mean Xxxxxx Xxxxxxxx.
h. "Initial Public Offering" means the closing of an underwritten public
offering of shares of common stock of PCI to be listed on the New York Stock
Exchange or the American Stock Exchange, or to be quoted on the National
Association of Securities Dealers Automated Quotation System or the National
Market System of the National Association of Securities Dealers pursuant to an
effective registration statement under the Securities Act of 1933, as amended,
covering the offer and sale of at least twenty percent (20%) of the common stock
of PCI outstanding immediately after such closing.
i. "Person" shall mean a natural person, a juridical person of any kind, a
partnership, a corporation, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization or other entity, or a governmental
entity or any department, agency or political subdivision thereof.
j. "Subsidiary" shall mean each Person, in which the Company, at the time
as of which such determination is being made, owns, directly or indirectly, any
of the outstanding voting securities or equity interests.
2. EMPLOYMENT, DUTIES AND RESPONSIBILITIES
a. Performance of Job Duties. Employee shall serve as the Chief Operating
Officer of the Company and shall perform such services and duties with respect
to the Company and Associated Companies as may be
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assigned to him, in such locations as the Company may direct, subject to the
general supervision of the Chief Executive Officer and the Board of Directors of
the Company. Employee shall have general supervision over the Sales and
Marketing Departments of the Company and the General Managers of the Company's
operating Subsidiaries in Poland. Employee shall devote all of his skill, time,
attention, and best efforts to furthering the Company's businesses, affairs,
interests and welfare.
b. Appointment to Management Board or Supervisory Board. The parties
contemplate that Employee will be appointed to the Management Board or
Supervisory Board of one or more Associated Companies with respect to certain
duties and responsibilities to be carried out in Poland. The compensation
arrangements in connection with such appointment(s) shall be the subject of a
separate agreement between Employee and each such Associated Company.
c. Compliance with Laws. Employee agrees to comply with all federal,
state, local, and foreign laws, and to comply with all of the Company's rules,
regulations, and policies in force during his employment, as well as with all
the rules, regulations and policies prescribed for all Associated Companies for
whom or with respect to the business of which he performs services during the
term of this Agreement.
d. Location. Employee shall live and work in Warsaw, Poland (his principal
place of employment) but shall travel to the United Kingdom, the United States,
the Netherlands or such other location(s) as necessary to fulfill his duties as
described in Section 2(a).
3. TERM OF AGREEMENT
This Agreement shall go into effect as of the Effective Date and shall
terminate on the fifth anniversary of the Effective Date, unless terminated
earlier as provided in Section 8.
4. COMPENSATION
As compensation and consideration for the performance by Employee of his
obligations under this Agreement, Employee shall be entitled to the following:
a. Base Salary. During the term of this Agreement, the Company shall pay
to Employee a base annual salary (the "Base Salary") totaling Thirteen Thousand
Dollars (U.S. $13,000) per month, less any compensation paid to Employee
pursuant to any separate agreement entered into as contemplated by Section 2(b)
above. This Base Salary may be increased by the Company in its sole discretion.
The Base Salary shall be paid in installments payable every second week.
b. Eligibility for Initial Bonus. The Company shall pay Employee a
guaranteed bonus of Sixty Thousand Dollars ($60,000) thirty (30) days after the
first anniversary of the Effective Date regardless of whether Employee is
employed by the Company on that date.
c. Eligibility for Annual Bonus. On the second anniversary and each
subsequent anniversary of this Agreement, Employee shall be eligible for the
award of an annual bonus of up to Sixty Thousand Dollars ($60,000). The
performance criteria for such annual bonus shall be determined on a yearly basis
by agreement between Employee and the Company.
d. Eligibility for Bonus upon Initial Public Offering. PCI shall pay
Employee a bonus of One Hundred Seventy Five Thousand Dollars ($175,000) if an
Initial Public Offering is successfully concluded before this Agreement is
terminated.
e. Stock Options and Repurchase.
(1) Employee shall be granted a non-transferable option to purchase
three hundred and eighty-five (385) shares of the Company's common stock,
$0.01 par value per share, upon the terms and conditions of a stock option
agreement substantially in the form of Exhibit A, at a price of Three
Thousand Seven Hundred and Eight Dollars and Eight Cents ($3,708.08) per
share. The option to purchase seventy-seven (77) of these shares will vest
each year on the anniversary date of the Effective Date beginning with the
first anniversary of the Effective Date; provided that no portion of such
option shall vest after the
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date (the "Cut-Off Date") that is the earlier of (i) the date that this
Agreement is terminated and (ii) the date on which the Company sends
Employee a notice referred to in Section 8(b); and provided further that
all unvested options shall vest on the date of an Initial Public Offering.
(2) No option granted to Employee pursuant to this Section 4(e) may be
exercised later than the tenth anniversary of the Effective Date.
(3) If this Agreement is terminated pursuant to any of Sections 8(a),
8(b), or 8(c), Employee shall have only sixty (60) days after the date of
termination to exercise the option granted under this Section 4(e) with
respect to that portion of the option that has vested as of the Cut-Off
Date, and Employee shall have no right to exercise the option with respect
to that portion of the option that has not then vested.
(4) If this Agreement is terminated pursuant to Section 8(a) or 8(b),
the Company shall be entitled (but not obligated) to repurchase the option
and, if the option has been exercised in whole or part, the common stock
issued as a result of such exercise, at a price as set forth on Exhibit B
to this Agreement. The Company may exercise its repurchase rights only
within 60 days following the date of termination, except that with respect
to shares of common stock issued on or after the Cut-Off Date, the Company
may exercise its repurchase rights only within 60 days following such
issuance.
(5) If this Agreement is terminated pursuant to Section 8(c), the
Company shall be entitled to repurchase the option and, if exercised in
whole or part, the common stock issued as a result of such exercise, at the
greater of (i) 85% of the fair market value thereof (determined in
accordance with Section 4(e)(6)), and (ii) the price as set forth on
Exhibit B to this Agreement. The Company may exercise its repurchase rights
only within 60 days following the date of termination, except that with
respect to shares of common stock issued on or after the Cut-Off Date, the
Company may exercise its repurchase rights only within 60 days following
such issuance.
(6) For purposes of determining the fair market value of the option
and/or the common stock issued as a result of such exercise, if Employee
and the Company cannot agree on a fair market value within thirty (30) days
after the Company proposes a value to Employee, the Company shall appoint
an appraiser reasonably acceptable to Employee, and the appraiser's
valuation shall be final and binding on both parties. The appraiser's costs
and fees shall be shared equally between Employee and the Company provided
however that Employee's share of such costs shall not exceed $50,000.
(7) For as long as Employee is an employee of the Company or an
Associated Company, Employee shall be prohibited from transferring any
shares of the Company's common stock that he acquires through whole or
partial exercise of the option granted by this Section 4(e) to any Person
other than the Company. At any time when Employee is not such an employee,
the Company shall have a right of first refusal with respect to any or all
shares of the Company's common stock that Employee acquires through whole
or partial exercise of the option granted by this Section 4(e), and
Employee shall not transfer any such shares to a third party without first
offering to the Company the opportunity, exercisable for at least 15 days,
to purchase such shares at the same or better price and terms as may be
offered to Employee by such third party.
(8) If Employee ceases to be an employee of the Company or any
Associated Company at any time on or after the third anniversary of the
Effective Date, the Company may within sixty (60) days of the date Employee
ceases to be an employee of the Company or Associated Company require
Employee to sell to it any or all shares that Employee has acquired through
whole or partial exercise of the option granted by this Section 4(e) at a
price equal to 90% of the fair market value thereof (determined in
accordance with Section 4(e)(6)).
(9) The provisions of this Section 4(e) shall survive termination of
this Agreement.
f. Allowances. The Company shall provide Employee with allowances for an
apartment, a car, personal/family travel and education, each as set forth on
Exhibit C.
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g. Expenses. The Company shall reimburse Employee for reasonable
out-of-pocket expenses incurred by Employee in connection with the business of
the Company and in performance of his duties under this Agreement, upon his
presentation to the Company of an itemized accounting of such expenses with
reasonable supporting data, subject, however, to the Company's policies relating
to business-related expenses as in effect from time to time.
h. Additional Employee Benefits and Perquisites. In addition to the
foregoing, Employee shall receive certain benefits and perquisites of current
Company employees, as may be reasonably determined from time to time by the
Company, including but not limited to:
(1) Benefits. During the term of this Agreement, Employee and his
spouse and children shall be eligible to participate in such life
insurance, disability, health, dental, and major medical insurance benefits
as set forth on Exhibit D.
(2) Vacation. Employee shall be entitled to twenty-six (26) days of
paid vacation during each calendar year. Employee shall also be entitled to
all paid holidays given by the Company to its executives.
i. Deduction and Withholding. All compensation and other benefits to or on
behalf of Employee pursuant to this Agreement shall be subject to such
deductions and withholding as may be agreed to by Employee or required by
applicable law.
5. CONFIDENTIALITY
a. Confidentiality. Employee acknowledges that during the course of his
employment with the Company he will, from time to time, be invested with
confidential information (including without limitation) trade secrets relating
to, inter alia, the business practices, technology, products, business plans,
marketing, financial information and plans, and research activities of the
Company, Associated Companies, and customers and suppliers of the foregoing.
Employee hereby agrees to keep all such information confidential, regardless
whether documents containing such information are marked as confidential, if he
has been told, or should reasonably know or expect, that such information is
confidential. Employee also agrees that he will not, except as required in the
conduct of Company business, or as authorized in writing by the Company,
publish, disclose or make use of any such information or knowledge unless and
until such information or knowledge shall have ceased to be secret or
confidential without his fault.
b. Exclusive Property. Employee confirms that all confidential information
is the exclusive property of the Company. All business records, papers and other
documents kept or made by Employee relating to the business of the Company or an
Associated Company shall be and remain the property of the Company or the
Associated Company. Upon the termination of his employment with the Company or
upon the request of the Company at any time, Employee shall promptly deliver to
the Company, and shall retain no copies of, any written materials, records and
documents made by Employee or coming into his possession concerning the business
or affairs of the Company or an Associated Company other than personal notes or
correspondence of Employee not containing proprietary information relating to
such business or affairs.
c. Inventions, Rights to Improvements. Employee hereby sells, transfers
and assigns to the Company any right, title and interest in any and all
inventions, improvements, discoveries, and ideas (whether or not patentable or
copyrightable) (collectively the "Inventions") which Employee may make or
conceive while acting in his capacity as an employee of the Company during the
term of this Agreement, and which relate to or are applicable to any phase of
the Company's and the Associated Companies' businesses. Employee hereby agrees
to communicate promptly and disclose to the Company all information, details and
data pertaining to the aforementioned Inventions and to execute any documents
and do any act reasonably necessary to perform Employee's duties under this
Section 5(c). Employee also affirms that if any such Inventions shall be deemed
confidential by the Company, he will not disclose any such Inventions without
prior written authorization from a majority of the members of the Company's
Board of Directors.
d. Survival of Section. The provisions of this Section 5 shall survive the
termination of this Agreement for any reason whatsoever.
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6. EXCLUSIVITY/NON-COMPETITION
a. Exclusivity/No Competing Employment. For the term of this Agreement and
a period of one (1) year following the later of (i) expiration or earlier
termination of this Agreement or (ii) the date Employee is no longer employed by
the Company or any Associated Company (the "Restricted Period"), Employee shall
not directly or indirectly compete with the Company or any Associated Company,
and he shall not directly or indirectly own an interest in, manage, operate,
join, control, perform services for, lend money to, render financial or other
assistance to, participate in, or be connected with, as an officer, employee,
partner, stockholder, consultant or otherwise, any individual, partnership,
firm, corporation or other business organization or entity that at such time is
engaged in the Business.
b. No Interference. During the Restricted Period, Employee shall not,
whether for his own account or for the account of any other individual,
partnership, firm, corporation or other business organization, intentionally
solicit, endeavor to entice away from the Company or an Associated Company, or
otherwise interfere with the relationship of the Company or an Associated
Company with any person who is employed by the Company or an Associated Company,
or any person or entity who is, or was within the twelve-month period
immediately preceding, a customer or client of the Company or an Associated
Company.
c. Stock Ownership. Nothing in this Agreement shall prohibit Employee from
acquiring or holding any securities of any company listed on a national
securities exchange or quoted on the automated quotation system of the National
Association of Securities Dealers, Inc., provided that at any time during the
Restricted Period Employee and members of his immediate family do not own more
than five percent (5%) of any voting securities of any company engaged in the
Business.
d. Territorial Scope. The prohibitions in Sections 6(a) and 6(b) shall
apply to Poland and any other place where the Company or any subsidiary is doing
business on the first day of the Restricted Period excluding the UK P Belgium.
e. Survival of Section. The provisions of this Section 6 shall survive the
termination of this Agreement for any reason whatsoever.
7. REMEDIES
a. Arbitration. The Parties agree, expressly renouncing any other forum
for the resolution of disputes, that except as provided in Section 7(b), any
disputes arising out of, relating to, or arising in connection with this
Agreement or arising out of, relating to, or arising in connection with
Employee's employment, shall be finally settled by arbitration in accordance
with the Rules of Conciliation and Arbitration of the International Chamber of
Commerce (except insofar as those rules are modified by the terms of this
Section 7). The arbitration will be held in London, England; and it shall be
held as promptly as possible at such time as the arbitration tribunal may
determine. The arbitration will be held in the English language. The
arbitrator(s) shall state the reasons upon which the award is based. Judgment
upon the arbitration award may be entered in any court of competent jurisdiction
(including without limitation the courts of the United States, any country where
the Company or any Associated Company is engaged in business, and the respective
political subdivisions of each of the foregoing), or application may be made to
any such court for a judicial acceptance of the award and an order of
enforcement, as the case may be. If any Party employs an attorney or commences
legal or arbitral proceedings to enforce the provisions of this Agreement, the
prevailing Party shall be entitled (unless the relevant tribunal decides
otherwise) to recover from the other, reasonable costs incurred in connection
with such enforcement, including but not limited to, attorney's fees and costs
of investigation and litigation/arbitration. Except as otherwise specifically
provided in this Section 7, no Party shall institute any action or proceeding
against any other Party in any court with respect to any dispute which is or
could be the subject of a claim or proceeding pursuant to this Section 7.
b. Equitable Remedies. Employee hereby acknowledges that breaches of
Sections 5 or 6 of this Agreement may result in material irreparable injury to
the Company for which there is no adequate remedy at law, that it will not be
possible to measure damages for such breaches, and that in the event of such a
breach or threat thereof the Company shall be entitled (notwithstanding the
provisions of Section 7(a)) to seek and
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obtain a temporary restraining order, a preliminary injunction, a permanent
injunction or other equitable relief restraining Employee from engaging in
activities prohibited by this Agreement. Employee further acknowledges that in
the event of such a breach or threat thereof the Company shall be entitled to
obtain such other or further relief as may be required to specifically enforce
any of the covenants of this Agreement. Employee hereby agrees and consents that
such injunctive or other relief may be sought in any court of competent
jurisdiction, including, without limitation, any court in the nation, state
and/or political subdivision thereof in which such violation may occur, at the
election of the Company. Employee agrees to and hereby does submit to in
personam jurisdiction before each and every such court for that purpose.
c. Suspension of Payments. Employee hereby acknowledges that should an
alleged breach by Employee of Sections 5 or 6 of this Agreement occur, the
Company is entitled to suspend any payments due to Employee during litigation of
any action it may bring against Employee for injunctive and/or monetary relief.
d. Remedies not Exclusive. The remedies of this Section shall be
cumulative and not exclusive, and shall be in addition to any other remedy which
the Company may have.
e. Survival of Remedies. This Section 7 shall survive the termination of
this Agreement for any reason whatsoever.
8. TERMINATION OF EMPLOYMENT
This Agreement and Employee's employment hereunder may be terminated
without any breach of this Agreement under the following conditions:
a. Termination by Employer. Employee may terminate this Agreement, with or
without cause, by sending written notice thereof at least six (6) months in
advance of the date of his proposed termination.
b. Termination by the Company for Cause. The Company may terminate the
Agreement and Employee's employment for Cause prior to the expiration of this
Agreement as provided in this Section 8(b). If the Cause is susceptible of
remedy by Employee, then the Company shall first deliver to Employee written
notice of such Cause; and if Employee has not remedied the Cause within thirty
(30) days after receipt of that notice, the Company may terminate this agreement
forthwith thereafter by written notice effective immediately. If the Cause is
not susceptible of remedy by Employee, then the Company may terminate this
agreement forthwith by written notice effective immediately. If the Company
terminates Employee's employment for Cause, Employee shall not be entitled to
any compensation or benefits after the effective date of his termination. For
purposes of this Section 8(b) "Cause" shall mean (1) dishonesty or fraud
resulting in damage to the business of the Company or any of its Associated
Companies; (2) embezzlement or theft of assets of the Company or any of its
Associated Companies; (3) competing with the Company or aiding a competitor of
the Company or any of its Associated Companies to the detriment of the Company
or any of its Associated Companies; (4) a substantial breach of this Agreement;
(5) conduct of an illegal or criminal nature under the laws of the United
States, the United Kingdom, Poland, or any political subdivision thereof (except
for minor traffic offenses); (6) conduct or activities that, as determined by
the Company in the reasonable exercise of its prudent business judgment, is
injurious to the reputation or affairs of the Company or any Associated Company;
(7) violation, as determined by the Company in the reasonable exercise of its
discretion, of any applicable policies and procedures set forth in the Chase
Enterprises Personnel Policy Manual or any successor document; or (8) any other
willful misconduct by Employee which, as determined by the Company in the
reasonable exercise of its discretion, is materially injurious to the Company,
monetarily or otherwise.
c. Termination by the Company without Cause. Notwithstanding the
provisions of Section 8(b) above, the Company may terminate this Agreement and
Employee's employment upon six (6) months' written notice without cause.
d. Later Employment With Successor in Interest of Company. Employee shall
not be deemed to have been terminated under this Agreement if he is offered
employment on substantially the same or better terms by any Associated Company,
provided however that with respect to the location of Employee's principal place
of employment with any such Associated Company, a location on the European
continent shall be considered
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the "same or better terms" and a location outside the European continent will
not be so considered; by any successor in interest or assign of the Company; or
by any purchaser of substantially all of the Company's assets.
e. Death. Notwithstanding anything to the contrary herein contained,
Employee's employment and this Agreement shall terminate upon his death or his
inability due to disability to perform the essential functions of his position
for a continuous period of sixty (60) days; provided, however, that the
provisions of Section 4(e) regarding vesting and exercise of the option and
regarding transferability and rights of first refusal with respect to stock
obtained through exercise of the option shall survive termination of this
Agreement and be binding upon the executors, administrators, heirs and
successors of Employee.
f. Delivery of Material. Employee agrees that upon the termination of this
Agreement he will deliver to the Company all documents, papers, materials and
other property of the Company relating to its affairs which may then be in his
possession or under his control.
9. NOTICES
a. All notices required to be given under the terms of this Agreement or
which any of the Parties may desire to give hereunder shall be in writing and
delivered personally or sent by express delivery, by facsimile, or by registered
or certified mail with proof of receipt, postage and expenses prepaid and with
return receipt requested, addressed as follows:
If to the Company:
Poland Communications, Inc.
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
X.X.X.
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, III, Chief Executive Officer
Xxxxxx Xxxxx, General Counsel
With a copy to:
Xxxx X. Xxxx
Xxxxx & XxXxxxxx
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxx, X.X. 00000
X.X.X.
Facsimile: (000) 000-0000
If to Employee:
Xxxxxx Xxxxxxxx
Facsimile:
b. Notice given in accordance with this Section 9 shall be deemed to have
been given when delivered personally, or when received if sent via express
delivery, facsimile, or registered or certified mail, postage prepaid and return
receipt requested.
c. Any party may change its address for notices by communicating its new
address in writing to the other party.
10. MISCELLANEOUS
a. Agreement is Non-Assignable. This Agreement is a personal service
contract and shall not be assignable by Employee or by the Company, except that
the Company may assign this Agreement to an
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Associated Company or any Person that succeeds to the Company's rights and
liabilities by merger, sale of assets as a going concern, or consolidation with
the Company.
b. Binding Effect. All rights and obligations and agreements of the
parties under this Agreement shall be binding upon and enforceable against, and
inure to the benefit of the parties and their personal representatives, heirs,
legatees and devises, and any Person succeeding by operation of law to their
rights under this Agreement, except that such personal representatives, heirs,
legatees, devises and other persons shall have no obligation to perform
Employee's duties described in Section 2 hereof.
c. Further Assurances. Employee and the Company, as the case may be, shall
execute and deliver such further instruments and do such further acts and things
as may be required to carry out the terms or conditions of this Agreement or as
may be consistent with the intent and purpose of this Agreement.
d. Rights of Third Parties. Nothing in this Agreement, expressed or
implied, is intended to confer upon any person other than the parties hereto any
rights or remedies under or by reason of this Agreement (except that any option
which has vested in Employee as of the date of his death, as well as any accrued
but unpaid compensation as of the date of his death, shall pass to his estate on
death, subject to the limitations on exercise of the option contained in this
Agreement).
e. Effect of Waiver. A waiver of, or failure to exercise, any rights
provided for in this Agreement, in any respect, shall not be deemed a waiver of
any further or future rights hereunder. Except for rights which must be
exercised within a specified time period under this Agreement, no rights herein
shall be considered as waived, whether intentionally or not, unless waived in a
writing signed by the party to be charged with the waiver.
f. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York applicable to contracts made
and performed in that jurisdiction, without regard to the principles of
conflicts of laws.
g. Amendments. This Agreement may not be changed or amended orally, but
only by an agreement in writing signed by all parties hereto.
h. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be an original, and such counterparts shall together
constitute but one and the same instrument.
i. Severability. If a court of competent jurisdiction declares that any
term or provision of this Agreement is invalid or unenforceable, then:
(1) the remaining terms and provisions hereof shall be unimpaired, and
(2) the invalid or unenforceable term or provision shall be deemed
replaced by a term or provision that is valid and enforceable and that
comes closest to expressing the intention of the invalid or unenforceable
term or provision.
j. No Conflicts. Employee represents and warrants that he is not prevented
by any other employment agreement, arrangement, contract, understanding, court
order or otherwise, which in any way directly or indirectly conflicts, is
inconsistent with, or restricts or prohibits him from fully performing the
duties of the Employment, in accordance with the terms and conditions of this
Agreement.
k. Entire Agreement. This Agreement supersedes all prior agreements, oral
or written, between the parties hereto with respect to the employment of
Employee by the Company. This Agreement contains the entire agreement of the
parties with respect to the employment of Employee by the Company, and the
parties shall not be bound by any terms, conditions, statements, covenants,
representations or warranties, oral or written, not herein contained.
l. Employee Acknowledgment. EMPLOYEE REPRESENTS THAT HE HAS HAD AMPLE
OPPORTUNITY TO REVIEW THIS AGREEMENT AND EMPLOYEE ACKNOWLEDGES THAT HE
UNDERSTANDS THAT IT CONTAINS IMPORTANT CONDITIONS OF THE EMPLOYMENT
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AND THAT IT EXPLAINS POSSIBLE CONSEQUENCES, BOTH FINANCIAL AND LEGAL, IF
EMPLOYEE BREACHES THE AGREEMENT.
IN WITNESS WHEREOF, the parties have executed this Executive Employment
Agreement effective as of the date first above written.
Poland Communications, Inc., a
New York corporation
By: /s/ XXXXXX X. XXXXXX
------------------------------------
Xxxxxx X. Xxxxxx, III
Chief Executive Officer
Employee
/s/ XXXXXX XXXXXXXX
--------------------------------------
Xxxxxx Xxxxxxxx
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EXHIBIT A
FORM OF STOCK OPTION AGREEMENT
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EXHIBIT B
DATE OF TERMINATION OF AGREEMENT PER SHARE PER OPTION
----------------------------------------------------------------------- --------- ----------
On or After First But Before Second Anniversary........................ 3,904.16 196.08
On or After Second But Before Third Anniversary........................ 4,100.24 392.16
On or After Third But Before Fourth Anniversary........................ 4,296.32 588.24
On or After Fourth But Before Fifth Anniversary........................ 4,492.39 784.31
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EXHIBIT C
Apartment Allowance: An amount not to exceed $5,000 per month.
Car Allowance: An amount not to exceed $1,300 per month.
Personal/Family Travel Allowance: Round-trip business class airfare between
Poland and the U.K. for Employee and his spouse and children, two times per
annum.
Educational Allowance for Employee's children: Not to exceed an aggregate
of $30,000 per annum.
Each of the above shall be payable monthly in advance during the term of
this agreement.
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EXHIBIT D
Life Insurance policy of $750,000 value.
Pension of $7,800 per annum.
Health Care: Company shall pay the cost of access to a medical clinic of
high standard (ABC medicover type or similar) and international medical
insurance coverage.
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STOCK OPTION AGREEMENT BETWEEN
XXXXXX XXXXXXXX AND POLAND COMMUNICATIONS, INC.
This STOCK OPTION AGREEMENT ("Option Agreement") is made effective as of
January , 1997 (the "Effective Date"), by and between Xxxxxx Xxxxxxxx
("Xxxxxxxx") and Poland Communications, Inc., a New York corporation ("PCI" or
the "Company").
1. Grant of Option and Option Period.
a. The Company hereby grants Xxxxxxxx an option (the "Option") to purchase
three hundred and eighty-five (385) shares (the "Shares") of the Company's
common stock (the "Common Stock"), with a par value of $0.01 per share, pursuant
to the terms and conditions set forth in this Option Agreement. The exercise
price for the Option (the "Exercise Price") shall be Three Thousand Seven
Hundred and Eight Dollars and Eight Cents ($3,708.08) per share.
b. The option to purchase seventy-seven (77) of these Shares will vest each
year on the anniversary date of the Effective Date beginning with the first
anniversary of the Effective Date, provided, however, that all unvested options
shall vest on the date of an Initial Public Offering (as hereinafter defined),
and provided further that no portion of such option shall vest after the date
(the "Cut-Off Date") that is earlier of (i) the date that the Executive
Employment Agreement (as described in Section 14 of this Agreement) is
terminated and (ii) the date on which the Company sends Xxxxxxxx a notice
referred to in Section 8(b) of the Executive Employment Agreement. For purposes
of this Agreement, "Initial Public Offering" means the closing of an
underwritten public offering of shares of common stock of PCI to be listed on
the New York Stock Exchange, the London Stock Exchange, the Warsaw Stock
Exchange or the American Stock Exchange, or to be quoted on the National
Association of Securities Dealers Automated Quotation System or the National
Market System of the National Association of Securities Dealers pursuant to an
effective registration statement under the Securities Act of 1933, as amended,
covering the offer and sale of at least twenty percent (20%) of the common stock
of PCI outstanding immediately after such closing.
c. If Xxxxxxxx'x employment with the Company is terminated for any reason,
Xxxxxxxx shall have only sixty (60) days after the Cut-Off Date to exercise that
portion of the Option that has vested as of the Cut-Off Date, and Xxxxxxxx shall
have no right to exercise any portion of the Option that has not then vested.
d. Notwithstanding any other provision of this Option Agreement, the Option
shall expire and be of no further force or effect with respect to any Shares on
the earlier to occur of (i) the tenth anniversary of the Effective Date, or (ii)
sixty days after the date that Xxxxxxxx ceases to be an employee of the Company
for any reason whatsoever (including but not limited to Xxxxxxxx'x death,
disability, voluntary termination or involuntary termination).
e. Each exercise of the Option shall reduce, by an equal number, the total
number of shares of Company Common Stock that may thereafter be purchased by
Xxxxxxxx under the Option.
2. Manner of Exercise. Subject to the conditions and restrictions contained in
Section 3 below, the Option shall be exercised by delivering written notice of
exercise to the Secretary of the Company. Such notice shall be irrevocable and
must be accompanied by payment in cash, banker's draft or such other form of
consideration as the Company may approve, and a signed Subscription Agreement
satisfactory in form and substance to the Company.
3. Non-transferability. Neither this Option nor any interest therein may be
sold, pledged, assigned, hypothecated, transferred or disposed of in any manner
(other than by will or by the laws of descent and distribution during the option
period described in Section 1). This Option is not assignable by operation of
law or subject to execution, attachment or similar process. During Xxxxxxxx'x
lifetime, the Option can only be exercised by Xxxxxxxx. Any attempted sale,
pledge, assignment, hypothecation or other transfer of the Option or any
interest therein contrary to the provisions hereof, or the levy of any
execution, attachment or similar process upon the Option or any interest therein
shall be null and void and without force or effect. No transfer of the Option by
will or by the laws of descent and distribution shall be effective to bind the
Company unless the Company shall have been furnished written notice thereof and
an authenticated copy of the will and/or
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such other evidence as the Company may deem necessary to establish the validity
of the transfer and the acceptance by the transferee or transferees of the terms
and conditions of the Option. The terms of the Option transferred by will or by
the laws of descent and distribution shall be binding upon the executors,
administrators, heirs and successors of Xxxxxxxx.
4. Adjustment in the Event of Change in Stock. In the event of any change
in the outstanding Common Stock of the Company due to stock dividends,
recapitalizations, reorganizations, mergers, consolidations, split-ups, or
exchange of shares, the number and kind of the Shares and/or the purchase price
per Share will be appropriately adjusted, upwards or downwards, consistent with
such change. The reasonable determination of the Company regarding any
adjustment will be final and conclusive. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of the Shares.
5. Restrictions on Transfer of the Shares.
a. For as long as Xxxxxxxx is an employee of the Company or any Associated
Company (as that term is used in the Executive Employment Agreement that is
described in Section 14 of this Agreement), Xxxxxxxx shall not transfer any
Shares to any person or entity other than PCI.
b. After Xxxxxxxx is no longer an employee of the Company or any Associated
Company Xxxxxxxx shall not sell, encumber, pledge, transfer, hypothecate, assign
or otherwise dispose of any of the Shares until Xxxxxxxx shall have first
offered to sell such Shares to the Company (the "Offer") in accordance with the
following provisions.
c. The Offer made pursuant to Subsection (b) above shall be in writing, and
shall state that Xxxxxxxx offers to sell to the Company a specified number of
the Shares owned by Xxxxxxxx. For every Offer of the Shares pursuant to
Subsection (b) above, the Company shall have a period of fifteen (15) days from
the time of receiving the Offer to accept it; such acceptance shall be in
writing and shall be sent to Xxxxxxxx.
d. The purchase price of any of the Shares sold pursuant to the provisions
of Subsection (b) above shall be equal to the price offered to Xxxxxxxx for such
shares by a bona fide third party purchaser, as evidenced by a written offer to
purchase executed by such third party. The purchase price shall be paid to
Xxxxxxxx in cash within fifteen (15) days of the Company's acceptance of the
Offer. If any of the Shares which are offered for purchase pursuant to the
provisions of Subsection (c) above are not accepted for purchase by the Company
within the time limitations described in Subsection (c), Xxxxxxxx may transfer
such shares to such bona fide third party purchaser in accordance with the terms
of such purchaser's offer to purchase referred to in this Subsection (d).
e. As a condition to the transfer of any of the Shares issued pursuant to
this Option Agreement, the Company may require an opinion of counsel,
satisfactory to the Company, to the effect that such transfer will not be in
violation of the Securities Act of 1933, as amended (such Act, or any similar
Federal statute then in effect, being hereinafter referred to as the "Act"), or
any other applicable securities laws, rules or regulations, or that such
transfer has been registered under Federal and all other applicable securities
laws.
f. Unless and until the Company has received a legal opinion regarding
saleability of the Shares that is satisfactory to the Company, all certificates
evidencing any of the Shares, whether upon initial issuance or any transfer
thereof, shall bear the following legends:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY
OTHER SECURITIES LAWS, AND THEREFORE CANNOT BE SOLD, TRANSFERRED,
PLEDGED, HYPOTHECATED OR ASSIGNED UNLESS THEY ARE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND UNDER ALL OTHER APPLICABLE
SECURITIES LAWS, OR UNLESS AN EXEMPTION THEREFROM IS AVAILABLE.
THIS CERTIFICATE IS TRANSFERABLE ONLY UPON COMPLIANCE WITH THE
PROVISIONS OF THAT CERTAIN STOCK OPTION AGREEMENT, EFFECTIVE AS OF
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JANUARY , 1997, BETWEEN XXXXXX XXXXXXXX AND POLAND COMMUNICATIONS,
INC., A COPY OF WHICH IS ON FILE IN THE OFFICE OF THE SECRETARY OF
POLAND COMMUNICATIONS, INC.
6. No Stock Rights. Xxxxxxxx shall not be entitled to vote, be deemed the
holder of any Shares, have the right to receive dividends with respect to any
Shares, or otherwise have any of the rights of a stockholder of the Company with
respect to any Shares, unless and until Xxxxxxxx has exercised the Option with
respect to such Shares in accordance with the terms and conditions of this
Option Agreement.
7. Reservation and Issuance of Shares.
a. The Company will at all times have authorized, and reserve and keep
available, free from preemptive rights, for the purpose of enabling it to
satisfy any obligation to issue the number of shares of Common Stock deliverable
upon exercise of the Option.
b. The Company covenants that all Shares will, upon issuance in accordance
with the terms of this Agreement, be duly authorized, fully paid and
non-assessable.
8. Representations and Warranties of Xxxxxxxx.
In order to induce the Company to accept this Option Agreement, Xxxxxxxx
hereby represents and warrants to the Company as follows:
x. Xxxxxxxx has received no solicitation or general advertisement
concerning the Company, but rather has become knowledgeable regarding the
business of the Company through personal interaction with employees of the
Company;
x. Xxxxxxxx confirms that no representations or warranties have been made
to Xxxxxxxx regarding the Company and that Xxxxxxxx has not relied upon any
representation or warranty in making or confirming this Option Agreement.
x. Xxxxxxxx has the ability to bear the economic investment, and can afford
a complete loss of his investment, with respect to the Option and to the Shares.
x. Xxxxxxxx, either by himself or together with his purchaser
representative, has sufficient knowledge and experience in financial and
business matters so as to be capable of evaluating the merits and risks of his
investment in the Option and in the Shares.
x. Xxxxxxxx is accepting the Option, and will be purchasing the Shares, for
investment purposes, for Xxxxxxxx'x own account and not with a view to, or for
sale in connection with, the distribution thereof.
x. Xxxxxxxx is familiar with the nature of, and the risks attending,
investments in securities such as the Option and the Shares, and he has
determined that the acceptance of the Option and the purchase of the Shares is
and will be consistent with his investment objectives.
x. Xxxxxxxx has been advised and understands that an investment in the
Option and in the Shares is speculative and involves a high degree of risk.
x. Xxxxxxxx has no reason to anticipate any change in his personal
circumstances, financial or otherwise, which may cause or require sale or
distribution by him of all or any part of the Option or the Shares.
x. Xxxxxxxx confirms that he has been given an opportunity to make any
inquiries of the Company and its representatives that he desires to make.
x. Xxxxxxxx is at least twenty-one (21) years of age.
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x. Xxxxxxxx is aware of and understands the following:
i. The business of the Company and the risks inherent in that
business;
ii. That no federal or state agency has made a finding or
determination as to the advisability or fairness of an investment in the
Option or in the Shares or any recommendation or endorsement of the Option
or of the Shares;
iii. That the Option and the Shares have not been registered for sale
under the Securities Act of 1933, as amended, or under any state "Blue Sky
Law"; and
iv. That there are substantial restrictions on the transferability of
the Option and of the Shares; there is no public market, and there will not
necessarily be any public market, for the Option or the Shares in the
United States; Xxxxxxxx will not be able to avail himself of the provisions
of Rule 144 adopted by the Securities and Exchange Commission under the
Securities Act of 1933, as amended, unless all of the conditions of Rule
144 are met, and accordingly, Xxxxxxxx may have to hold the Option and the
Shares and bear the economic risk of this investment for an indefinite
period.
l. If in the future Xxxxxxxx desires to offer or dispose of the Option or
any of the Shares or any interest therein, he will do so only in compliance with
applicable securities laws and this Option Agreement.
x. Xxxxxxxx understands and agrees that the Company has no obligation to
complete any public or private offering and sale of its common stock to other
investors, and that the Company shall have no liability to Xxxxxxxx if it cannot
complete any such offering and sale upon terms which, in the Company's sole
discretion, are favorable to the Company.
x. Xxxxxxxx acknowledges that there may be restrictions under the
securities laws of the jurisdiction(s) in which he resides on the sale of the
shares he obtains on exercise of the options, and that he should seek legal
assistance before proceeding with the purchase or sale of said shares.
Xxxxxxxx agrees that the representations and warranties of Xxxxxxxx set
forth in this Section 8 shall survive the exercise of the Option and the
termination or expiration of this Option Agreement.
9. Governing Law.
This Option Agreement shall be construed in accordance with and governed by
the laws of the State of New York without regard to the principles of conflicts
of laws or choice of law. .
10. Benefit.
This Option Agreement shall be binding upon the Company, Xxxxxxxx, their
heirs, executors, administrators, legal representatives, successors, and
permitted assigns, and Xxxxxxxx in furtherance thereof may execute a will
directing Xxxxxxxx'x executor to perform this Option Agreement and to execute
all documents necessary to effectuate the purposes of this Option Agreement, but
the failure to execute such a will shall not affect the rights of the Company or
the obligations of Xxxxxxxx'x estate as provided in this Option Agreement.
Nothing in this Option Agreement, expressed or implied, is intended to confer
upon any person, other than the parties hereto, any rights or remedies under or
by reason of this Option Agreement.
11. Specific Performance.
a. The parties to this Option Agreement hereby agree that an award of
damages alone is inadequate to remedy a breach of the terms of this Option
Agreement and that specific performance, injunctive relief or other equitable
remedy is the only way by which the intent of this Option Agreement may be
adequately realized upon breach by one or more of the parties. Such remedy
shall, however, be cumulative and not exclusive, and shall be in addition to any
other remedy which the parties may have.
b. In furtherance of and not in limitation of the foregoing, should any
dispute arise concerning a sale, purchase, encumbrance, pledge, transfer,
hypothecation, assignment or other disposition of the Option or any of the
Shares which is alleged to contravene the provisions of this Option Agreement,
an injunction may be issued restraining any such transaction pending the
determination of such controversy.
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12. Waiver.
Failure to insist upon strict compliance with any of the terms, covenants
or conditions of this Option Agreement shall not be deemed a waiver of such
terms, covenants or conditions, nor shall any waiver or relinquishment of any
right or power hereunder at any one time or more times be deemed a waiver or
relinquishment of such right or power at any other time or times.
13. Notice.
All notices required to be given under the terms of this Agreement or which
any of the Parties may desire to give hereunder shall be in writing and
delivered personally or sent by express delivery, by facsimile, or by registered
or certified mail with proof of receipt, postage and expenses prepaid and with
return receipt requested, addressed as follows:
If to the Company:
Poland Communications, Inc.
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
X.X.X.
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, III, Chief Executive Officer
Xxxxxx Xxxxx, General Counsel
With a copy to:
Xxxx X. Xxxx
Xxxxx & XxXxxxxx
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxx, X.X. 00000
X.X.X.
Facsimile: (000) 000-0000
If to Xxxxxxxx:
Xxxxxx Xxxxxxxx
Facsimile:
b. Notice given in accordance with this Section 13 shall be deemed to have
been given when delivered personally, or when received if sent via express
delivery, facsimile, or registered or certified mail, postage prepaid and return
receipt requested.
c. Any party may change its address for notices by communicating its new
address in writing to the other party.
14. Entire Agreement.
This Option Agreement is subject to that certain between Xxxxxxxx and the
Company of even date herewith (the "Executive Employment Agreement"), and in the
event of a conflict between them, the provisions of the Executive Employment
Agreement shall prevail. Except as provided in the foregoing sentence, this
Option Agreement constitutes the entire agreement between the parties hereto
with respect to the subject matter hereof and may be amended only by a writing
executed by all of the parties.
15. Severability.
The invalidity or unenforceability of any provision of this Option
Agreement shall in no way affect the validity or enforceability of any other
provision hereof.
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16. Headings.
The headings to the sections of this Option Agreement are used for
reference only and are not to be construed as limiting or extending the
provisions hereof.
17. Counterparts.
This Option Agreement may be executed in any number of counterparts, each
of which shall be considered an original but all of which shall constitute the
Option Agreement by and among the parties.
IN WITNESS WHEREOF, the undersigned have executed this Option Agreement
effective as of the date first above written.
Poland Communications, Inc., a
New York corporation
/s/ XXXXXX X. XXXXXX, III
--------------------------------------
By: Xxxxxx X. Xxxxxx, III
Its: Chief Executive Officer
/s/ XXXXXX XXXXXXXX
--------------------------------------
Xx. Xxxxxx Xxxxxxxx
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