CME DEVELOPMENT CORPORATION Aldwych House
CME
DEVELOPMENT CORPORATION
Xxxxxxx
Xxxxx
00
Xxxxxxx
Xxxxxx
XX0X 0XX
Xxxxxx
Xxxxxxx
July
28,
0000
Xxxxxxx
X. Xxxxx
00
Xxxxx
Xxxx
Xxxxxxxxxx,
XX 00000
Re:
Amendment
of Employment Agreement
Dear
Xxxxxxx:
This
letter, when countersigned by you, will amend certain terms of your employment
agreement dated March 30, 2004 (the "Agreement") with CME Development
Corporation (the "Company"). Capitalized terms used in this letter shall have
the meanings set forth in the Agreement.
The
Agreement is hereby amended as follows:
A. Paragraph
1 of the Agreement is hereby deleted, and the following is substituted in its
place:
Your
employment with the Company will be for a term commencing February 2, 2004
and
ending January 31, 2010 (subject to earlier termination in accordance with
paragraph 8 hereof), unless extended by a written agreement signed by you and
the Company.
B. The
second sentence of paragraph 2 of the Agreement is hereby deleted, and the
following is substituted in its place:
Your
annual base salary for your duties performed in the United States will be
$485,000 and your annual base salary for your duties performed in the United
Kingdom will be $140,000 through the period ending January 31, 2008; and
commencing February 1, 2008 through January 31, 2010, your annual base
salary for your duties performed in the United States will be $582,000 and
your
annual base salary for your duties performed in the United Kingdom will be
$168,000, all of the foregoing payable in accordance with the Company's payroll
practices.
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C. The
penultimate sentence of paragraph 4 of the Agreement is hereby deleted, and
the
following is substituted in its place:
The
Company recognizes that you currently serve as a director of American Media
and
MortgageIT and that, subject to the next following sentence, you may serve
as a
director of up to three companies.
D. The
paragraph reference in the last sentence of paragraph 4 of the Agreement is
hereby modified to reference paragraph 7.
E. Paragraph
5 of the Agreement is hereby deleted, and the following is substituted in its
place:
While
you
are employed by the Company, you will be eligible to receive an annual incentive
bonus with a targeted amount equal to your combined annual base salary for
your
duties performed in the United States of America and in the United Kingdom,
as
described in this paragraph 5. One-half of any such annual incentive bonus
shall
be based upon achievement of reasonable quantitative performance criteria
established by the Board and one-half of any such bonus shall be based upon
subjective criteria established by the Board.
F. A
further
proviso is added to the last sentence of paragraph 6 of the Agreement as
follows:
;
and
provided
further, however, that
such
travel expenses also may include reasonable and appropriate travel expenses
incurred for your companion (or spouse, if you are married) accompanying you
on
business travel on behalf of the Company.
G. The
reference to paragraph 9 contained in paragraph 7 of the Agreement is hereby
modified to reference paragraph 10.
H. Paragraph
8 of the Agreement is deleted, and the following is substituted in its
place:
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You
may
terminate your employment hereunder upon at least ninety days’ prior written
notice to the Company, and you will not be entitled to any additional
compensation, severance, termination pay, salary continuation or similar
compensation or benefits upon or after such termination of employment. In
addition, if your employment is terminated due to your death or disability
(as
determined in the good faith judgment of the Board), due to the expiration
of
the employment term set forth in paragraph 1 hereof, or as a result of a
Termination for Cause (as hereinafter defined), you will not be entitled to
any
additional compensation, severance, termination pay, salary continuation or
similar compensation, or benefits upon or after any such termination of
employment (other than those benefits specified in paragraph 9 below in the
case of a termination due to expiration of the term of employment). If the
Company terminates your employment, other than due to Termination for Cause,
and
not because of your death or disability (as determined in the good faith
judgment of the Board) and not due to expiration of the employment term set
forth in paragraph 1 hereof (or if you terminate your employment other than
pursuant to the first sentence of this paragraph because of a material breach
by
the Company of this Agreement), you will have those rights to which you are
entitled as a matter of law in respect of your loss of compensation, stock
options and other contractual entitlements hereunder, and (a) you will not
otherwise be entitled to any additional compensation, severance, termination
pay, salary continuation or similar compensation or benefits upon or after
termination of your employment with the Company, and (b) in connection with
such termination of employment, the Company will not assert that you have any
duty to mitigate damages, provided,
however,
that if
you are engaged to render full-time services following such termination of
employment with the Company, amounts you earn from such full-time employment
during the period you otherwise would have been on the Company’s payroll
hereunder shall offset any financial obligation of the Company to you, and
you
agree to notify the Company in writing of your acceptance of any such other
employment within five (5) days after accepting such other employment. It is
acknowledged and agreed that the “contractual entitlements” referred to in the
immediately preceding sentence include, without limitation, the compensation
and
other benefits due you in respect of the consulting period described in
paragraph 9. For purposes of this Agreement, “Termination for Cause” means
a determination by a majority of the Board to terminate your employment due
to
your (i) conviction of a felony or entering of a plea of nolo contendere
with respect to a charged felony, (ii) gross negligence, recklessness,
dishonesty, fraud, willful malfeasance or willful misconduct in the performance
of the services contemplated by this Agreement, (iii) willful
misrepresentation to shareholders or directors of the Company which is injurious
to the Company, (iv) willful failure without reasonable justification to
comply with a reasonable written order of the Board, or (v) willful and
material breach of your duties or obligations under this Agreement.
Notwithstanding the foregoing, a termination shall not be treated as a
Termination for Cause unless (A) the Company shall have delivered a written
notice to you, stating that it intends to terminate your employment due to
Termination of Cause not less than seven days following the giving of such
notice, and specifying the factual basis for such termination, and (B) the
event or events that form the basis for such notice, if capable of being cured,
shall not have been cured within 30 days of receipt of such
notice.
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I.
Paragraph
9 of the Agreement is hereby deleted, and the following is substituted in its
place:
For
one
year following termination of your employment by the Company due to the
expiration of the employment term as set forth in paragraph 1, the Company
will
engage you as a consultant, and you agree to consult and cooperate with, and
assist the Company in any legal or business matter relating to the Company
or
the Affiliates, as requested by the Company, upon reasonable advance notice
by
the Company; provided
that
you
shall not be required to devote more than thirty (30) hours per month to
providing such services and such services need not be provided to the Company
on
an exclusive basis, as long as you comply with the restrictive covenants
described in paragraph 7 hereof. In consideration for your provision of
such services during such one-year period, the Company will pay you an aggregate
fee of $300,000, payable in equal monthly installments in arrears. During the
one-year consulting period, you will receive continued coverage under the
Company's group health insurance plan on the same terms and conditions that
such
benefits are provided to senior executives of the Company who are employed
by
the Company during such one-year period, and the Company will continue to lease
an office and employ your New York-based assistant at no less than the
compensation level in effect immediately prior to the commencement of such
consulting period to assist you in performing your consulting
services.
J.
A
second
paragraph is added to Annex A, attached to and made a part of the Agreement,
as
follows:
On
July
28, 2006, you will be granted a non-qualified stock option to purchase 80,000
Class A Common Shares of the Company under the Company's 1995 Amended and
Restated 2005 Stock Incentive Plan (“Stock Incentive Plan”). Such option will
become exercisable as to 40% of the total number of shares subject to the option
on each of January 31, 2009 and January 31, 2010, and as to 20% of the total
number of shares subject to the option on January 31, 2011, as long as you
have
been continuously employed by the Company through each such respective date,
except as may be otherwise provided in the Stock Incentive Plan with respect
to
accelerated vesting or applicable exercise periods; provided,
however, that
if
the Company terminates your employment, other than due to Termination for Cause,
such option shall become exercisable in full and may be exercised in accordance
with the Stock Incentive Plan. The terms and conditions of such option shall
be
governed by the Stock Incentive Plan and the applicable option agreement (which
shall be consistent with the Stock Incentive Plan and the terms hereof). For
purposes of this option grant, you will be treated as being continuously
employed by the Company during the one-year consulting term described in
paragraph 9 of the Agreement, provided
that you
are in compliance with the restrictive covenants described in paragraph 7
of the Agreement.
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Except
as
expressly set forth in this letter, the terms of the Agreement are unchanged,
remain in full force and effect and hereby are ratified and affirmed by the
parties hereto.
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Very
truly yours,
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CME
DEVELOPMENT CORPORATION
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By:
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/s/
Xxxxxx X. Xxxxx
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Name:
Xxxxxx X. Xxxxx
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Title:
Director
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Accepted
and Agreed to as of
this
28th
day of
July, 2006:
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/s/
Xxxxxxx X. Xxxxx
|
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|
XXXXXXX
X. XXXXX
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