Exhibit 10.3
METROMEDIA INTERNATIONAL GROUP, INC.
INCENTIVE BONUS AGREEMENT
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THIS AGREEMENT is entered into as of the 1st day of October, 2006 (the
"Effective Date") by and between Metromedia International Group, Inc., a
Delaware corporation (the "Company"), and Xxxxxx X. Xxxx III ("Executive").
WHEREAS, the Company has entered into a letter of intent pursuant to which
it anticipates selling all or substantially all of its assets (the "LOI Sale
Transaction"); and
WHEREAS, Executive is currently employed by the Company as its Chief
Financial Officer, and the Board of Directors of the Company (the "Board") has
determined that it is in the best interests of the Company and its stockholders
to provide an incentive for Executive to attain value for the stockholders and
perform Executive's duties to the Company in furtherance of the Company's
efforts to consummate the LOI Sale Transaction or any other "Sale Transaction"
(as defined below); and
WHEREAS, to such end, the Company desires to provide Executive with certain
payments and benefits pursuant to the terms of this Agreement; and
WHEREAS, the Board of Directors has authorized the Company to enter into
this Agreement.
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements contained herein and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Company and Executive hereby agree as follows:
I. Incentive Bonus. The Company agrees that, if a definitive agreement to
consummate the LOI Sale Transaction or any other sale of the Company or
transaction pursuant to which the Company sells all or substantially all of its
assets (collectively with the LOI Transaction, a "Sale Transaction") is entered
into by January 31, 2007, the Sale Transaction is subsequently consummated and
the holders of shares of preferred stock, par value $1.00 per share, of the
Company ("Preferred Stock") have received an amount equal to $68.00 per share of
Preferred Stock, Executive shall be entitled to receive a bonus equal to
$1,000,000 (the "Incentive Bonus"), which shall be payable in a single lump sum
cash payment as soon as reasonably practicable following the date of the last
payment to the holders of Preferred Stock that results in such holders receiving
at least $68.00 per share (the "Payment Date"), subject to Executive's continued
employment on such date. Notwithstanding the foregoing, if Executive's
employment is terminated by the Company without "Cause" (as defined in the
employment agreement, entered into on October 6, 2003 and effective as of
October 1, 2003, by and between Executive and the Company, as amended from time
to time (the "Employment Agreement") at any time before the Payment Date,
Executive shall be entitled to receive the Incentive Bonus on the Payment Date
if it occurs.
II. Withholding Taxes. The Company may withhold from all payments due to
Executive hereunder all taxes which, by applicable federal, state, local or
other law, the Company is required to withhold therefrom.
III. Non-Exclusivity of Rights. Other than as specifically stated in this
Agreement, nothing in this Agreement shall prevent or limit Executive's right to
participate in any benefit, bonus, incentive or other plan or program provided
by the Company and for which Executive may qualify, nor shall anything herein
limit or reduce such rights as Executive may have under any agreements with the
Company, and amounts which are vested benefits or which Executive is otherwise
entitled to receive under any plan or program of the Company shall be payable in
accordance with such plan or program, except as explicitly modified by this
Agreement; provided, that Executive and the Company agree that if a Sale
Transaction is entered into by January 31, 2007, and if the Sale Transaction is
subsequently consummated, then the special bonus agreement, dated as of August
9, 2005 by and between Executive and the Company shall be void and of no further
force and effect, and Executive shall have no rights to any payments or benefits
thereunder.
IV. Entire Agreement. This Agreement constitutes the entire agreement of the
parties hereto and supersedes all prior and contemporaneous agreements and
understandings (including term sheets) both written and oral, between the
parties hereto, or either of them, with respect to bonuses payable in connection
with the Sale Transaction. No agreements or representations, oral or otherwise,
express or implied, with respect to bonuses payable in connection with the Sale
Transaction have been made by either party which are not expressly set forth in
this Agreement. For the avoidance of doubt, Executive acknowledges that, as of
the date of this Agreement, he is not entitled to any severance payments or
benefits under Section 7.08 of the Employment Agreement, relating to payments to
Executive in connection with a termination without Cause, or Section 8.02 of the
Employment Agreement, relating to payments to Executive in connection with a
termination without Cause following a "Change in Control" (as defined in the
Employment Agreement).
V. Not an Employment Agreement. This Agreement is not, and nothing herein
shall be deemed to create, a contract of employment between Executive and the
Company. The Company may terminate the employment of Executive with the Company
at any time, subject to the terms of this Agreement and/or the Employment
Agreement and/or any other employment agreement or arrangement between the
Company and Executive that may be in effect.
VI. Successors; Binding Agreement.
A. The Company agrees that it will cause any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business of the Company (other than a successor in
connection with the Sale Transaction), unconditionally to assume, by written
instrument delivered to Executive (or his beneficiary or estate) if such
assumption does not occur by operation of law, all of the obligations of the
Company hereunder. As used in this Agreement, "Company" shall mean (i) the
Company as hereinbefore defined, and (ii) any successor described in the
preceding sentence or which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law, including any parent or
subsidiary of such a successor.
B. This Agreement shall inure to the benefit of and be enforceable by
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If Executive shall die
while any amounts have been earned and are due Executive hereunder, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to such person or persons appointed in writing by
Executive to receive such amounts or, if no person is so appointed, to
Executive's estate. Neither this Agreement nor any right arising hereunder may
be assigned or pledged by Executive.
VII. Notice.
A. For purposes of this Agreement, all notices and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given when delivered or, if later, five days after deposit in the
United States mail, certified and return receipt requested, postage prepaid or
two days after deposit with a nationally recognized overnight courier service,
addressed as follows:
If to Executive:
Metromedia International Group, Inc.
0000 Xxxxx Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx X.Xxxx III
Phone: (000)000-0000
Fax: (000)000-0000
If to the Company:
Metromedia International Group, Inc.
0000 Xxxxx Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxx, Esq.
Phone: (000)000-0000
Fax: (000)000-0000
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
VIII. Arbitration: Any dispute between the parties to this Agreement in
connection with, arising out of or asserting breach of this Agreement, or any
statutory or common law claim by Executive relating to Executive's rights under
this Agreement (including any tort or discrimination claim), shall be
exclusively resolved by binding statutory arbitration. Such dispute shall be
submitted to arbitration in New York, before a panel of three neutral
arbitrators in accordance with the Commercial Rules of the American Arbitration
Association then in effect, and the arbitration determination resulting from any
such submission shall be final and binding upon the parties hereto. Judgment
upon any arbitration award may be entered in any court of competent
jurisdiction.
IX. Governing Law: This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to conflicts
of laws principles that would cause the laws of another jurisdiction to apply.
X. Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed to be an original and all of which together shall constitute one
and the same instrument.
XI. Miscellaneous. No provision of this Agreement may be modified or waived
unless such modification or waiver is agreed to in writing and signed by
Executive and by a duly authorized officer of the Company. No waiver by either
party hereto at any time 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 provisions or
conditions at the same or at any prior or subsequent time. Failure by Executive
or the Company to insist upon strict compliance with any provision of this
Agreement or to assert any right Executive or the Company may have hereunder,
shall not be deemed to be a waiver of such provision or right or any other
provision or right of this Agreement. Except as otherwise specifically provided
herein, the rights of, and benefits payable to Executive, his estate or his
beneficiaries pursuant to this Agreement are in addition to any rights of, or
benefits payable to, Executive, his estate or his beneficiaries under any other
employee benefit plan or compensation program of the Company.
[Remainder of Page Intentionally Left Blank; Signature Page to Follow]
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
a duly authorized officer of the Company and Executive has executed this
Agreement as of the day and year first above written.
METROMEDIA INTERNATIONAL GROUP, INC.
By: /S/ Xxxx X. Xxxx
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Name: Xxxx X. Xxxx
Title: Chief Executive Officer
/S/ Xxxxxx X. Xxxx III
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