Exhibit 4.59
February 3, 2003
WITHOUT PREJUDICE
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PRIVATE & CONFIDENTIAL
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Xx. Xxxxx Xxxxx
00 Xxxxxx Xxxxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Dear Xxxxx:
Further to our conversation of January 13, 2003, this letter confirms that, in
accordance with paragraph 5 of your employment agreement dated April 18, 2000
(the "Contract"), CanWest Global Communications Corp. ("CanWest") on behalf of
Global Television Network Inc. (the "Company"), does not wish to renew your
employment arrangements after the current term of your engagement ends, being
August 31, 2003 and, hence, the Contract will not be renewed upon its expiry.
With respect to the expiry of the Contract on August 31, 2003, and the
associated arrangements for the transition of your responsibilities and
severance, we confirm and propose the following:
1. During the week of January 27, 2003 (or at such later time as
determined by CanWest), as part of a larger announcement (the
"Announcement") in respect of the restructuring of the management of
CanWest's Canadian Media operations, we will jointly announce our
mutual intention to not renew your Contract as President and Chief
Executive Officer of the Company when it expires on August 31, 2003.
2. As of the date of the Announcement, you will relinquish your position
as President & CEO of the Company and be appointed as Special Advisor
to the Chief Operating Officer ("COO") of CanWest. Notwithstanding the
relinquishment of such position, you will make yourself available to
provide assistance, advice and consultation to the COO and other
CanWest executives in connection with transitioning your position.
3. Following the Announcement, the Company will make available to you an
office at one of its business premises in Toronto (or Xxx Xxxxx),
together with access to secretarial assistance, in order to permit you
to use same for seeking new employment following the expiry of the
Contract. The Company confirms your advice to it that you will prefer
to relocate to these alternate premises, though you will be available
to assist the COO in transitioning your position to him or his
designatee. Between now and August 31, 2003, you will be entitled to
accept employment with a new employer; provided that you make it a
condition of such new employment, and your new employer accepts such
condition, that prior to August 31, 2003, you will be available, both
during normal and outside
normal business hours, to provide assistance, advice and consultation
to the COO, as may be reasonably requested from time to time by the
COO.
4. Notice of the Company's intention not to renew the Contract will be
deemed to be given on January 14, 2004, for the purpose of paragraph 5
of the Contract.
5. Your compensation (including "Base Salary", "Salary Bonus" and
"Incentive", all as defined in accordance with the Contract), benefits,
vacation entitlement and perquisites to August 31, 2003 will continue
to be determined and paid to August 31, 2003 in accordance with the
Contract; further, however, the Company agrees that:
(a) in no event shall the Salary Bonus amount be less than $685,000;
(b) commencing February 1, 2003, your monthly draw against the Salary
Bonus shall be $54,230 (95% x $685,000 /12); and
(c) the aggregate amount of your Base Salary, Salary Bonus and
Incentive for the August 31, 2003 fiscal year shall not be less
than $1,275,000.
Accordingly, the minimum sum of $687,500 ($1,275,000 - ($500,000 x
5/12) - ($650,000 x 7/12), being $1,275,000 - $208,333 - $379,166) in
respect of the Incentive component of your compensation for the period
ending August 31, 2003 shall be paid to you on or before December 31,
2003, and any additional amounts payable to you shall be paid as soon
as determined in accordance with the Contract. Your Salary Bonus and
Incentive shall be determined in a manner consistent with Xxxx
Xxxxxxxxx'x e-mail of December 17, 2002 regarding shared services
charge backs, the determination thereof for the August 31, 2002 fiscal
year and the Company's past practices.
6. On August 31, 2003, you will return to the Company, all Company-owned
property in your possession; provided however, that should you elect
prior to August 31, 2003, the Company shall sell to you on a "where is,
as is" basis, the following equipment at the noted prices (plus
applicable taxes):
HDTV located at your residence $3,000
IBM laptop computer to be determined
Home computer to be determined
The purchase price of any such property purchased by you shall be
deducted from the minimum payment of $687,500 due to you on or before
December 31, 2003 referred to in paragraph 5 above. In the case of the
purchase price noted "to be determined", the Company will determine the
purchase price after consultation with you.
7. The Company will continue to pay for the leasing and insuring of the
two (2) vehicles currently being leased for your and your family's use,
until the earlier of the expiry of the said leases and August 31, 2004
(the lease costs to continue being treated as taxable benefits to you
for tax purposes, as is currently the case); at which time, the
vehicles shall be returned to the Company. Commencing September 1,
2003, you will be responsible for the cost of operating and maintaining
(including fuel) the vehicles.
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8. In addition, notwithstanding the expiry of the Contract and without
acknowledging any liability for same, and subject to your complying
with the provisions of this letter and the Contract, including
paragraph 12 of the latter (Non-competition), the Company will:
(a) continue to pay monthly your Base Salary of $41,666.66 per month
for the period from September 1, 2003 to August 31, 2004; and
(b) pay to you a fixed amount equal to the Salary Bonus, if any,
payable for the fiscal year ending August 31, 2003, which the
Company agrees shall not be less than an additional $185,000
($685,000 - $500,000, based on the Company's agreement that the
Salary Bonus in respect of August 31, 2003 shall not be less than
$685,000); provided however, that in no event shall the payments
to you under subparagraph 8(a) and this subparagraph 8(b) exceed,
in the aggregate, $1.5 million. This payment will be paid prior to
December 31, 2004:
9. The Company shall continue to provide you with group life insurance
(including in the case of long-term disability coverage, either
maintaining coverage with the Company's current insurer, or obtaining
separate coverage for you), extended health care and other employee
benefits currently received by you, for a period expiring on the
earlier of August 31, 2004 and the effective date on which any
subsequent employer of yours may provide you with similar group
benefits or reimburse you the costs of acquiring such benefits. The
cost of providing the foregoing benefits shall be allocated between the
Company and you in accordance with the current arrangements applicable
thereto. Notwithstanding the generality of the foregoing, for greater
certainty, for the purposes of determining your entitlement under the
Company's Pension Plan and Retirement Compensation Arrangement, your
continuous years of service shall be credited to August 31, 2004, which
the Company calculated to be 19.333 years as of such date.
10. All payments made to you, or to your estate or on your behalf, shall be
subject to the Company's making all income tax remittances and
applicable deductions at source.
11. Any of the stock options to acquire 100,000 subordinated voting shares
of the Company previously granted to you pursuant to your employment
contract that are unvested as at August 31, 2003 will vest on that
date, in accordance with paragraph 11 of the Contract. In accordance
with the terms of the Company's Share Compensation Plan, your right to
exercise these and other stock options will expire ninety (90) days
after the expiration of the Contract on August 31, 2003.
12. For the remaining period of the Contract, and for a period of twelve
(12) months thereafter, namely, prior to August 31, 2004, you will, in
accordance with paragraph 12 of the Contract, not engage in the
competitive activities described in such paragraph, without the prior
written consent of CanWest.
13. You will continue to be bound by your covenant of confidentiality with
the Company, as described in paragraph 13 of the Contract, both during
the remaining period of your employment and thereafter. As part of your
continuing fiduciary obligations to the Company, you agree to support
the Company in its restructuring efforts in respect of its
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Canadian operations, and agree not make any disparaging remarks in
respect of the Company, its proprietors, directors or management,
either during the remaining period of the Contract or thereafter.
The Company will not, either during the period of the Contract or
thereafter, make any disparaging remarks about you. The Company
acknowledges, should you be retained in a position such as an
investment advisor or investment analyst, that you may be required
to comment on the financial and business performance of the
Company, which the Company agrees you may do at any time following
August 31, 2004.
14. The Company agrees that, notwithstanding the provisions of paragraph 13
of the Contact, you shall not be prohibited from hiring employees of
the Company or its affiliates pursuant to:
(a) general calls or any public advertisements of employment
opportunities; or
(b) unsolicited applications for employment received by any subsequent
employer(s) of yours.
15. The Company agrees that, should you die prior to receiving the payments
provided for in this letter agreement, all such remaining unpaid
amounts shall be paid to your estate and all benefits described in
paragraph 9 above shall be subject to the provisions in such Plan
applicable to your death.
16. For greater certainty, a copy of the Contract is attached as Schedule 1
to this letter agreement.
17. You will resign as an officer and director of all companies affiliated
with the Company forthwith, upon being requested to do so by the
Company.
18. Notwithstanding your ceasing to be an officer, director or employee of
the Company, the Company shall continue to indemnify you in accordance
with the Indemnification Agreement dated January 11, 2001 (copy
attached as Schedule 2) between yourself and CanWest. You agree that
you will assist the Company, both prior to and after August 31, 2003,
in any litigation pertaining to events occurring while you were an
employee of the Company or any of its affiliates; including as a
witness on behalf of the Company; provided that in such event, the
Company shall reimburse you for all legal fees and disbursements
incurred by you in providing such assistance.
19. You will continue to abide by all other terms of the Contract. Except
as noted herein, all of the terms of the Contract shall continue to
apply to your employment and the applicable termination provisions.
20. The foregoing shall supersede, and be paid to you in lieu of, all other
claims and amounts associated with your ceasing to be an employee of
the Company, save and except those arising pursuant to any pension
arrangements with the Company or CanWest, including the terms of
CanWest's Retirement Compensation Agreement.
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21. In accepting this letter, you acknowledge having received independent
legal advice in respect of the terms and content of this letter.
22. The Company and its affiliates and subsidiaries hereby release you and
your successors, assigns and executors from and forever compromise any
and all claims and demands whatsoever, whether monetary or otherwise,
including claims for damages and also from all manner of action or
actions, suit or suits, complaint or complaints, cause or causes of
action, whether before any judicial or quasi-judicial or administrative
tribunal or otherwise, which it now has, ever had or can or may have,
against you in respect of your employment with the Company and any
predecessor employer for which the Company may be responsible or a
successor employer, matter or thing arising out of or connected
therewith, save and except:
(a) the terms of this letter; and
(b) any fraudulent act committed by you or any criminal act of the
nature of an indictable offence committed by you while you were an
employee of the Company or any of its, affiliates.
23. Subject to the foregoing, upon your acceptance of this letter, you
hereby release the Company and its affiliates, successors, assigns,
directors and employees from and forever compromise any and all claims
and demands whatsoever, whether monetary or otherwise, including claims
for damages, wages, salary, commissions, bonuses, and other
remuneration, as well as any benefits or sums due under the Company or
its affiliates' plans or policies, and also from all manner of action
or actions, suit or suits, complaint or complaints, cause or causes of
action, whether before any judicial or quasi-judicial or administrative
tribunal or otherwise, which you now have, ever had or can or may have,
against the Company in respect of your employment with the Company and
any predecessor employer for which the Company may be responsible or a
successor employer, and separation thereof, or any cause, matter or
thing arising out of or connected therewith, save and except the terms
of this letter and any right or entitlement you have under any
applicable pension or retirement plan.
Yours truly,
CANWEST GLOBAL COMMUNICATIONS CORP.
ON BEHALF OF GLOBAL TELEVISION NETWORK INC.
Per:
Xxxxxx X. Strike
Chief Operating Officer, Corporate
Attachments:
Schedule 1 - Contract
Schedule 2 - Indemnification Agreement
The foregoing is accepted and agreed to this __ day of February, 2003.
/s/ XXXXX XXXXX
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Xxxxx Xxxxx
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SCHEDULE 1
April 18, 2000
Xx. Xxxxx Xxxxx
CanWest Pacific
Communications Pty Limited
Xxxxx 0000, 00 Xxxxxx Xxxxxx
X.X. Xxx X000, QVB Post Office
Xxxxxx, XXX 0000
Xxxxxxxxx
Dear Xxxxx:
Subject: Employment Arrangements
Further to our several discussions, I am setting out below what we agreed would
be the principle terms of your employment arrangement.
1. Title
President and Chief Executive Officer, Global Television Network
Limited (the "Company").
2. Responsibilities
Those customarily exercised by a President and Chief Executive Officer,
which principally are to increase the Company's revenues and earnings,
and specifically:
o Corporate development of the Canadian assets and operations of
CanWest Global Communications Corp. ("CG"), which fall under the
Company's purview and responsibility, excluding CanWest
Entertainment and its subsidiaries. For clarification, assets
under the purview of the Company will include those assets and
operations acquired by the Company in New Media opportunities and
in respect of which your incentive bonus will be determined.
o Manage the relationship that the Company has with government,
regulators, the media and the communities in which it carries on
business. To a lesser extent, you will be involved in maintaining
and promoting investor relations.
o Day-to-day operational matters. Your duties should focus primarily
on programming and sales. You should spend no more than 50% of
your time on operational matters,
with the balance of your time being spent on items contained in
the two preceding sub-paragraphs.
You will have such other duties which may be delegated to you by the
Board of Directors of the Company or CG, and will be expected to devote
your entire business time, attention and skill exclusively to the
Company's business. However, nothing will prevent you from engaging in
additional activities in connection with personal investments and
community affairs that are not inconsistent with your duties; provided
that such personal investments shall not exceed more than 1% of any
class of securities of any enterprise whose shares are listed on any
national or recognized stock exchange.
You will report to CG's COO, unless otherwise directed by the CEO.
If elected as an officer or director of the Company or any of its
affiliates, you will fulfill such duties as an officer or director
without additional compensation.
3. Term
Commencing May 1, 2000 to August 31, 2003.
4. Xxxxxxxx
Xxxxxxx, Xxxxxxx. However, given the national scope of the Company's
operations, both present and future, you will be expected to travel a
reasonable amount of time.
5. Renewal
The term of your employment will end on August 31, 2003. If either the
Company or you do not wish to renew the agreement, we will so inform
the other no later than February 28, 2003. In the event that we both
wish to renew the term, then we will both use our best efforts to
initiate renewal discussions by March 1, 2003 and to complete them by
May 31, 2003.
6. Base Salary
$500,000 (Cdn.) per annum throughout the term of the agreement ("Base
Salary"), subject to the next following paragraphs.
7. Salary Bonus
The salary component of your remuneration will be the greater of
$500,000 per annum and 0.33% of the consolidated earnings of the
Company's Canadian operations (excluding CanWest Entertainment and its
subsidiaries) before interest, depreciation and taxes ("EBITDA") for
each fiscal year, commencing September 1, 2000 (the "Salary Bonus").
For the purposes of this calculation, EBITDA will include both earnings
and losses from acquisitions and start-up operations. However, because
the next year will involve a transition in respect of WIC and its
assets, for the purposes of determining your Salary Bonus, the earnings
from the WIC assets will not be included in EBITDA for the
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fiscal year ending August 31, 2001 (but will be included for subsequent
years). Further, EBITDA will not be reduced by reasons of CG disposing
of assets (for instance, CKVU-TV) in order to comply with the CRTC's
decision in respect of CG's pending license application regarding WIC.
In the case of any such dispositions, the earnings from such disposed
of business will be annualized if such disposition occurs during the
fiscal year ending August 31, 2001.
8. Draw
You will be entitled to draw monthly, the greater of (a) $41,660, being
1/12 of the Base Salary; and (b) 95% of the estimated Salary Bonus,
based upon the approved EBITDA budget for the applicable year. The
amount of the draw will be reviewed every six months and adjusted to
reflect any anticipate change in the forecasted EBITDA for the ensuing
six months, with a final adjustment of your Salary Bonus to be made
following the completion of the Company's audited financial statements.
Any over-payment of the Salary Bonus, as confirmed by the Company's
audited financial statements, will be effected by adjusting the draw
payable to you for the six months following finalization of the audited
statement.
9. Incentive
In addition to the Base Salary and the Salary Bonus, you will be
entitled in each year, commencing in respect of the year ending August
31, 2002, to an incentive payment ("Incentive") equal to 5% of the
year-over-year annual increase in the Company's consolidated EBITDA.
The base line for the Incentive payment calculation shall be August 31,
2001, with the first Incentive payment, if any, being determined for
the fiscal year ending August 31, 2002. In recognition of the Incentive
not being available to you until the year ending August 31, 2002, you
will receive an additional payment on account of your Base Salary of
$300,000 (the "Special Payment") for the fiscal year ending August 31,
2001, paid to you by way of 12 equal monthly payments of $8,333.33,
commencing September 1, 2000, with the balance of the Special Payment
to be paid within six (6) months following the August 31, 2001
year-end.
In calculating the Incentive, we both acknowledge that:
(a) increases in EBITDA derived through acquiring a business (a "New
Business") with earnings should be excluded; but that once
acquired, the Incentive calculation should apply to any increase
in earnings of a New Business following its acquisition;
(b) increases in EBITDA derived through acquiring a New Business with
a loss, or a loss pertaining to a start up operation (a
"Start-up"), reducing earnings in one year and thereby possibly
"inflating" EBITDA in the next year should be excluded from the
calculation;
(c) decreases in EBITDA derived through acquiring a New Business with
existing losses, or disposing of a business with earnings, should
be excluded from the calculation; and
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(d) WIC Assets will be included in the base year, August 31, 2001.
(e) The earnings from dispositions of WIC Assets occurring in the
August 31, 2001 base year will be deducted on an annualized basis
from the EBITDA calculation for the August 31, 2001 base year;
and,
(f) An adjustment will be made (by deducting the applicable EBITDA
earnings, on annualized basis) in respect of a disposition of any
WIC Asset which, though not completed until subsequent to the
August 31, 2001, was the subject of a sale agreement entered into
prior to August 31, 2001.
Accordingly, to reflect the foregoing principles, in calculating the
Incentive in respect of any New Business or Start-up, a separate
calculation and account will be established for each New Business and
Start-up. The Incentive will be calculated, without duplication, on the
basis of 5% of the year-over-year increase in EBlTDA for each
segregated New Business and Start-up. No fee will be payable in respect
of any segregated entity unless it attains positive EBITDA. The
calculation will be pro rated by annualizing the results of any
Start-up or New Business which is started or acquired during the fiscal
year.
All amounts owing under the Incentive component will be paid following
completion of each annual audited financial statements and within six
months of the then completed year end. In the event that there is any
dispute or difference regarding the calculation of the Incentive, then
such dispute shall be determined by the Company's auditors, acting as a
sole arbitrator whose decision shall be final. The detailed wording
associated with the calculation of the Incentive will be added as an
appendix to this letter with accompanying examples so there is no
uncertainty regarding its implementation.
10. Cap and Minimum
The total Base Salary and Salary Bonus shall not exceed, for the year
ending August 31, 2001 - $800,000 (inclusive of the Special Payment);
the total Base Salary, Salary Bonus and Incentive shall not exceed for
the year ending August 31, 2001 - $1 million; and for the year ending
August 31, 2003 - $1.5 million. As well, for the period May 1, 2000 to
August 31, 2000, you will be entitled to a special one-time payment for
these 4 months of $8,333.33 per month.
11. Stock Options
You will be granted, on May 1, 2000, an option to acquire 100,000
subordinate voting shares of CG at a price equal to the Toronto Stock
Exchange ("TSE") closing trading price for such shares on the later of
May 1, 2000 and the date the granting of such option is approved by the
CG board. These options will be granted to you pursuant to CG's
executive stock option plan ("ESOP") and will be subject thereto,
including the applicable vesting rights described therein, except as
provided in this paragraph. In the event that the Company is not
prepared to renew your employment agreement on reasonable terms (but
for greater certainty "reasonable term" need not be on terms as
favorable to you as this agreement, provided the Company negotiates any
terms of renewal with you in good faith) other than for "just cause",
the, options will be vested at
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the expiration of the term. In the event that this agreement is
renewed, then the vesting provisions in the ESOP will apply to the
option granted pursuant to this paragraph. In the event that the
foregoing vesting provision requires TSE approval, the Company will use
it's best efforts to obtain such approval. In the event that
notwithstanding the Company has offered you reasonable terms of
renewal, you choose not to renew the term of this agreement, then any
options which are not vested on August 31, 2003 will lapse.
12. Non-competition
In the event that you resign, or your agreement is not renewed, or is
terminated by the Company, you will not, for a period of 12 months
thereafter, engage in, consult to, give advice to, or be employed by an
entity or business engaged in television broadcasting (including
specialty cable operations, satellite or other means of television
broadcasting) in any market where CG or its affiliates then, in respect
of a television broadcasting business or undertaking, (a) has a
material interest (being an interest in excess of a 10% economic
interest), and (b) operates or has an influence over (including board
representation). For certainty, the non-competition covenant will not
apply in respect of a market where CG may own a material interest in a
television undertaking, but is not engaged in its operation or does not
have an influence over or have representation on such entity's Board.
13. Confidentiality and Non-solicitation
You will not divulge, either during the term of your employment or
thereafter, any confidential information regarding CG or its
affiliates, and will not seek to employ or assist any entity in seeking
to employ any person who is an employee of CG or any of its affiliates
at the time your employment ceases.
14. Vehicles
The Company shall either reimburse you the cost of leasing, or shall
lease for your use, up to two vehicles, having a combined retail
purchase price of $80,000.
The Company shall also, at its cost or by way of reimbursement, pay for
all amounts necessary to operate, maintain and ensure such vehicles.
15. Benefits
You will be entitled to participate in such pension, group life
insurance, extended health care and other employee benefit plans of CG
that may be in effect from time to time and available to the Company's
senior executives. In the event that your employment term is not
renewed, the Company shall either extend these benefits to you for the
lesser of one year following such, termination and the effective date
on which your subsequent employer may provide you with similar group
benefits, or shall reimburse you the cost of your acquiring equivalent
coverage through a private insurer for such period.
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16. Termination
The Company shall be entitled to terminate, your employment in the
event of:
(a) your death,
(b) your disability,
(c) for just cause, or
(d) without cause upon not less than 12 months' notice.
You will be entitled to terminate this agreement on ,not less than six
months' notice to the Company. For the purposes of this paragraph,
"disability" and "cause" shall be defined in accordance with the
employment agreement between yourself and CanWest Pacific
Communications PTY Limited, dated April 1, 1998 (the "CPC Agreement").
In the event of termination by either the Company or you, for any
reason other than by the Company for cause, you will be entitled to
receive a pro rated (to the date of termination) Base Salary
($500,000), Incentive amount and Salary Bonus for the fiscal year in
which termination is effective, but not for any subsequent fiscal
years. In the event that the Company terminates the agreement for
cause, you will be entitled to your Base Salary ($500,000) prorated to
the date of termination, but no Salary Bonus or Incentive. In the event
that you resign, you will be entitled to receive your Base Salary
($500,000) pro rated to the date of termination, but no Salary Bonus or
Incentive for the year in which you resign. In the event that the
Company terminates the agreement without cause, you will be entitled to
receive your Base Salary ($500,000) to the end of the term (August 31,
2003), as well as a pro rated (to the date of termination) Salary Bonus
and Incentive for the fiscal year during which termination is
effective, but not for any subsequent fiscal years.
17. Relocation
The Company will reimburse you in respect of all moving and related
costs (supported by proper voucher) pertaining to you and your family
locating to Canada in an amount not exceeding $50,000 (Cdn.). It will
also reimburse you for any costs associated with canceling your
existing residential lease in Sydney. The Company shall also provide to
you and each member of your immediate family, two round trip economy
airfares between Sydney and Toronto to be used prior to August 31,
2000.
18. Vacations
You will be entitled to six weeks' paid vacation for each fiscal year,
provided, however, that no more than three weeks' vacation will be
taken by you at any one time, without the express prior consent of CG.
You may only carry unused vacation time forward from year to year with
the express consent of CG.
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19. Announcement
The timing of the announcement of this engagement will be mutually
agreed upon, but both parties agree that they will attempt to make the
announcement during the week of April 17, 2000. The terms of this
agreement will be kept confidential by both parties, except where
disclosure is required by law.
20. Binding Effect
On the strength of this letter, and your acceptance of this position,
we will be giving a public notice of your engagement. Accordingly, upon
your acceptance of this letter, there will be a binding agreement
between both parties in accordance with its terms, even though it may
be ultimately replaced by a formal agreement. In the event that there
is any dispute or difference regarding the terms of any more formal
agreement, both parties agree that the CPC Agreement will be applied in
respect of matters such as non-disclosure by you, obligations on
termination, and general provisions. In the event of any inconsistency
between the terms of this letter and the CPC Agreement, the terms of
this letter shall prevail. In the event that there is any dispute or
difference regarding the terms of any more formal agreement, then the
same shall be submitted to a sole arbitrator mutually acceptable to
both parties; failing which, appointed by the President of the Law
Society of Manitoba. Upon this agreement becoming effective, the CPC
Agreement shall be deemed to be at an end, save and except for the
calculation and payment of any incentive payments payable to you for
the period prior to the end of the CPC Agreement.
21. Counterpart
This agreement may be signed in counterpart by the parties.
Xxxxx, I believe that this letter contains all of the substantive points that we
discussed. If so, please sign a copy so we can move forward with the exciting
prospect of your coming back to Canada for many productive and enjoyable years
together.
Yours very truly,
Xxxxxxx Xxxxx
President & Chief Executive Officer
Agreed to and accepted this __ day of April, 2000.
/s/XXXXX XXXXX
________________
Xxxxx Xxxxx
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SCHEDULE 2
INDEMNIFICATION AGREEMENT
THIS AGREEMENT is made as of this day of January, 0000,
X X X X X X X:
CANWEST GLOBAL COMMUNICATIONS CORP., a
corporation incorporated under the Canada
Business Corporations Act
(the "Corporation")
- and -
XXXXXX XXXXX
(the "Indemnified Party")
RECITALS:
A. The Canada Business Corporations Act (the "CBCA") permits, and in some
cases requires, the Corporation to indemnify individuals who are or
were directors and officers of the Corporation, or who act or acted at
the Corporation's request as directors or officers of other
corporations of which the Corporation is or was a shareholder or a
creditor (a "Body Corporate", a term which, for the purposes of this
indemnification agreement (the "Agreement") shall include a corporation
that becomes a Body corporate in the future). In this Agreement:
(i) all such individuals are referred to as "Directors" and
"Officers", respectively, and the phrase "Director and Officer"
means an individual who is or was a Director and not an Officer,
an individual who is or was an Officer and not a Director, or an
individual who is both a Director and an Officer;
(ii) unless the context otherwise requires, words importing the
singular include the plural and vice versa and words importing
gender include all genders; and
(iii) unless otherwise indicated, references to sections are to
sections in this Agreement.
B. The Corporation's By-laws require the Corporation to indemnify
Directors and Officers;
C. It is generally agreed that, because of the ambiguities and
uncertainties of the indemnification provisions of the CBCA and the
uncertainties in relying upon an indemnity in a corporation's by-laws,
it is desirable for Directors and Officers to obtain a contractual
indemnity from the corporations they serve;
D. It is in the best interest of the Corporation to attract and retain
responsible and capable Directors and Officers, and the entering into
of an agreement containing broad indemnification provisions of the kind
contained in this Agreement is of vital importance to achieving these
goals. Accordingly, the Corporation and Indemnified Party wish to enter
into this Agreement, and in so doing affirm that they intend that all
the provisions of this Agreement be given legal effect to the full
extent permitted by applicable law.
NOW THEREFORE in consideration of the sum of $1.00 now given
by the Indemnified Party to the Corporation, and of the mutual covenants and
agreements contained in this Agreement and other good and valuable consideration
(the receipt and sufficiency of which are hereby acknowledged), the parties
agree as follows:
1. Subject to section 2, the Corporation agrees to indemnify and save
harmless the Indemnified Party:
1.1. from and against all costs, charges and, expenses reasonably
incurred by the Indemnified Party in respect of any civil, criminal or
administrative action or proceeding to which the Indemnified Party is
made a party by reason of being or having been a Director and Officer;
and
1.2. from and against all liabilities, damages, costs, charges and
expenses whatsoever that the Indemnified Party may sustain or incur as
a result of serving as a Director and Officer in respect of any act,
matter, deed or thing whatsoever made, done, committed, permitted or
acquiesced in by the Indemnified Party as a Director and Officer,
whether before or after the effective date of this Agreement.
2. Indemnification under section 1 shall be made only if the Indemnified
Party:
2.1. acted honestly and in good faith with a view to the best interests
of the Corporation; and
2.2. in the case of a criminal or administrative action or proceeding
that is enforced by a monetary penalty, the Indemnified Party had
reasonable grounds for believing that the Indemnified Party's conduct
was lawful.
Sections 2.1 and 2.2 are referred to in this Agreement as the
"Standards of Conduct".
3. For the purposes of this Agreement:
3.1. "action or proceeding" shall include a claim, demand, suit,
proceeding or investigation, whether anticipated, threatened, pending,
commenced, continuing or completed, and any appeal or appeals
therefrom;
3.2. "costs, charges and expenses" shall include:
3.2.1. an amount paid to settle au action or satisfy a judgment;
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3.2.2. a fine, penalty, levy or charge paid to any domestic or
foreign government (federal, provincial, municipal or otherwise)
or to any regulatory authority, agency, commission or board of any
domestic or foreign government, or imposed by any court or any
other law, regulation or rule-making entity having jurisdiction in
the relevant circumstances (collectively, a "Governmental
Authority"), including as a result of a breach or alleged breach
of any statutory or common law duty imposed on directors or
officers or of any law, statute, rule or regulation or of any
provision of the articles, by-laws or any resolution of the
Corporation or a Body Corporate;
3.2.3. an amount paid to satisfy a liability arising as a result
of the failure of the Corporation or a Body Corporate to pay
wages, vacation pay and any other amounts that may be owing to
employees or to make contributions that may be required to be made
to any pension plan, retirement income plan or other benefit plan
for employees or to remit to any Governmental Authority payroll
deductions, income taxes or other taxes, or any other amounts
payable by the Corporation or a Body Corporate;
3.2.4. legal costs on a solicitor and his own client basis,
including those incurred in enforcing the Indemnified Party's
rights under this Agreement;
3.3. the Indemnified Party shall be considered to have been made a
"party" to any action or proceeding if the Indemnified Party has any
participation whatsoever in such action or proceeding, including merely
as a witness.
4. The indemnities in section 1 shall also apply in respect of offices
held or functions performed by the Indemnified Party, at the
Corporation's request, similar to those held or performed by a Director
and Officer, for a partnership, trust, joint venture or other
unincorporated entity of which the Corporation is or was a creditor or
in which the Corporation has or had an interest (an "Unincorporated
Entity"). For this purpose, in this Agreement:
4.1. "Body Corporate" shall include an Unincorporated Entity; and
4.2. "Director and Officer" shall include an individual who holds an
office or performs a function for an Unincorporated Entity that is
similar to an office held or function performed by a director or
officer of a corporation.
5. The parties wish to facilitate the payment by the Indemnified Party of
ongoing costs in connection with matters for which indemnification
under this Agreement is provided. Accordingly, the parties agree as
follows:
5.1. Subject to section 5.2 below, the Corporation shall, upon demand,
make advances ("Expense Advances") to the Indemnified Party of all
reasonable legal fees and disbursements and all other out-of-pocket
costs, charges and expenses for which the Indemnified Party seeks
indemnification under this Agreement before the final disposition of
the relevant action or proceeding. In connection with such demand, the
Indemnified Party shall provide the Corporation with a written
affirmation of the
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Indemnified Party's good faith belief that the Indemnified Party has
met the Standards of Conduct, along with sufficient particulars of the
costs, charges and expenses to be covered by the proposed Expense
Advance to enable the Corporation to make an assessment of its
reasonableness.
5.2. The Corporation shall make Expense Advances to the Indemnified
Party unless a resolution is passed by the affirmative vote of a
majority of those members of the Corporation's board of directors who
have no interest in the relevant action or proceeding, determining that
the Indemnified Party did not comply with the Standards of Conduct or
is otherwise not entitled to indemnification. The board of directors
shall make any determination under this section acting reasonably, in
light of all relevant circumstances, and in good faith. In particular,
the board of directors shall retain independent counsel and make
reasonable inquiries before making such a determination.
5.3. The Indemnified Party shall repay to the corporation, upon demand,
all Expense Advances if and to the extent that it is determined, either
by the Corporation's board of directors or by a court of competent
jurisdiction, that the Indemnified Party had not met the Standards of
Conduct or is otherwise not entitled to indemnification.
6. The indemnities in section 1 shall not apply in respect of any action
or proceeding initiated by the Indemnified Party:
6.1. against the Corporation or a Body Corporate, unless it is brought
to establish or enforce any right under this Agreement;
6.2. against any Director or Officer unless the Corporation or the Body
Corporate, as the case may be, has joined in or consented to the
initiation of such action or proceeding; or
6.3. against any other corporation, partnership, trust, joint venture,
unincorporated entity or person, unless it is a counterclaim.
7. The settlement of any action or proceeding shall not create a
presumption that the Indemnified Party did not meet or would not have
met the Standards of Conduct.
8. The Corporation shall ensure that all liabilities of the Corporation
under this Agreement are at all times covered by directors' and
officers' liability insurance with a responsible insurer. In this
regard, the parties agree that:
8.1. the responsibility for obtaining and maintaining directors' and
officers' liability insurance shall rest with a senior manager of the
Corporation, who shall retain an insurance broker or other person
having expertise and experience in directors' and officers' liability
insurance;
8.2. the Corporation shall provide to the Indemnified Party a copy of
each policy of insurance providing the coverages contemplated by this
section 8 promptly after such coverage is obtained, and shall promptly
notify the Indemnified Party if the insurer cancels or refuses to renew
such coverage (or any part of such coverage);
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8.3. coverage need not be obtained for any liabilities of the
Corporation under this Agreement if the coverage is not generally
available from responsible insurers, or is available from one or more
responsible insurers but at a cost which, in the opinion of the
Corporation, acting reasonably and taking into account the financial
condition and size of the Corporation and the nature of its business,
is excessive and
8.4. the Corporation shall not do any act or thing (including changing
insurers) or fail to do any act or thing that could cause or result in
a denial of insurance coverage or of any claim under such coverage;
without limiting the generality of the foregoing, the Corporation shall
give prompt and proper notice to the insurer of any claim against the
Indemnified Party.
9. Should any payment made pursuant to this Agreement, including the
payment of insurance premiums or any payment made by an insurer under
an insurance policy, be deemed to constitute a taxable benefit or
otherwise be or become subject to any tax or levy, then the Corporation
shall pay any amount as may be necessary to ensure that the amount
received by or on behalf of the Indemnified Party, after the payment of
or withholding for such tax, fully reimburses the Indemnified Party for
the actual cost, expense or liability incurred by or on behalf of the
Indemnified Party.
10. Each of the provisions contained in this Agreement is distinct and
severable and a declaration of invalidity or unenforceability of any
such provision or part thereof by a court of competent jurisdiction
shall not affect the validity or enforceability of any other provision
hereof. To the extent permitted by applicable law, the parties waive
any provision of law which renders any provision of this Agreement
invalid or unenforceable in any respect. The parties shall engage in
good faith negotiations to replace any provision which is declared
invalid or unenforceable with a valid and enforceable provision, the
economic effect of which comes as close as possible to that of the
invalid or unenforceable provision which it replaces.
11. This Agreement shall be governed by and construed in accordance with
the laws of the Province of Manitoba and the laws of Canada applicable
therein.
12. The obligations of the Corporation under this Agreement shall continue
after the Indemnified Party ceases to be a Director or Officer and
shall survive indefinitely.
13. Except as expressly provided in this Agreement, no amendment or waiver
of this Agreement shall be binding unless executed in writing by the
party to be bound thereby. No waiver of any provision of this Agreement
shall constitute a waiver of any other provision nor shall any waiver
of any provision of this Agreement constitute a continuing waiver
unless otherwise expressly provided.
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14. This Agreement shall ensure to the benefit of the Indemnified Party and
the Indemnified Party's heirs, administrators, executors and personal
representatives and shall be binding upon the Corporation and its
successors.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
CANWEST GLOBAL COMMUNICATIONS CORP.
by: /s/ XXXXXXX X. XXXXX
-------------------------------------
XXXXXXX X. XXXXX
President & Chief Executive Officer
/s/ XXXXXX XXXXX
-------------------------------------
XXXXXX XXXXX
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