EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") is made effective
as of December 14, 1998, by and between Xxxxxx X. Xxxxxx, Xx., of 0000 Xxxxx
Xxxxxxxx Xxxxxxxxx Xxxxxxxxxx ("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. "Business" means: (i) providing cable television services anywhere
in Poland; (ii) providing television programming in any city in Poland where the
Company or any Associated Company provides such programming; (iii) providing
local-loop telephony in any city in Poland where the Company or any Associated
Company provides such telephony; and (iv) providing direct to home service
anywhere in Poland.
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 X. Xxxxxx, Xx.
h. "Person" shall mean a natural person, a juridical person of any
kind, a general or limited partnership, a corporation, a limited liability
company or partnership, 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.
i. "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.
j. "@Entertainment" shall mean @Entertainment, Inc., a Delaware
corporation, which is the parent company of Poland Communications, Inc.
2. EMPLOYMENT, DUTIES AND RESPONSIBILITIES
a. PERFORMANCE OF JOB DUTIES. Employee shall be the Chief Operating
Officer of the Company, and shall perform the services and duties customary for
that position, all subject to the general supervision of the Board of Directors
of the Company. Employee shall also perform such services and duties with
respect to Associated Companies as may be assigned to him by the Company's Board
of Directors, so long as such services and duties are consistent with his
position as a senior executive officer of the Company. 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 may be appointed to the Management Board or
Supervisory Board of one or more Associated Companies operating in Poland. The
compensation arrangements in connection with such appointment(s), if any, 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 and
@Entertainment'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's office and principal place of employment shall
be in Warsaw, Poland, and Employee's personal residence shall be in Warsaw, and
he shall travel to the United States, the United Kingdom, the Netherlands or
such other location(s) as necessary to fulfill his duties as described in
Section 2(a). Employee's status in the Company, while based outside the United
States, will be that of a U.S. employee assigned to a non-U.S. post.
3. TERM OF AGREEMENT
This Agreement shall go into effect as of the Effective Date, and shall
continue until the third anniversary of the Effective Date unless terminated
earlier as provided in Section 8.
4. COMPENSATION
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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 Eighteen
Thousand Three Hundred Thirty-Four Dollars (U.S. $18,334) 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. PAYMENT OF BONUSES DURING FIRST YEAR. The Company shall pay Employee
a signing bonus of five thousand dollars (U.S. $5000.00) upon the execution of
this Agreement by both parties. In addition, Employee shall be paid a guaranteed
bonus of one hundred thousand dollars (U.S.$100,000) within thirty (30) days of
the first anniversary of the Effective Date.
c. ELIGIBILITY FOR SUBSEQUENT BONUS. Employee shall be eligible for a
discretionary performance bonus reflecting the value of his services during each
subsequent year of his employment hereunder. The performance criteria (which
shall relate to, among other things, cashflow and subscriber count), amounts, if
any, and payment dates for such bonus shall be determined by the Board of
Directors of the Company in its sole discretion.
d. ADJUSTMENTS TO REFLECT FOREIGN TAXES. If Employee (i) becomes liable
for employment-related taxes and/or social contributions arising out of
employment compensation hereunder in Poland or any other country in addition to
the United States, and (ii) should his combined income taxes, employment related
taxes and/or social contributions arising out of employment compensation legally
owed to the United States, Poland or any other country exceed the amount of such
taxes and social contributions which would have been due if he had served
exclusively in the United States, then the Company will hold Employee harmless
for any such tax and/or social contribution payments made in excess of the
amount of such taxes and social contributions which would have been due if he
had served exclusively in the United States. Employee shall cooperate fully with
the Company, within the bounds of applicable laws, in an attempt to minimize the
burden placed on the Company by this Section 4(d).
e. ALLOWANCES. During the term of this Agreement, Company shall provide
Employee with Three Thousand Dollars (U.S.$3,000) per month which is to serve as
an allowance for additional housing and cost of living expenses in Warsaw.
f. EXPENSES. The Company shall reimburse Employee for reasonable
out-of-pocket expenses (excluding housing and cost of living 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 policies of the Company and @Entertainment relating to
business-related expenses as in effect from time to time.
g. ADDITIONAL EMPLOYEE BENEFITS AND PERQUISITES. In addition to the
foregoing, Employee shall receive the following benefits and perquisites:
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1. BENEFITS. During the term of this Agreement,
Employee shall be eligible to participate in such benefit
programs as are made available from time to time to senior
executives of the Company.
2. VACATION. Employee shall be entitled to twenty
(20) days of paid vacation during each calendar year. Employee
shall also be entitled to all paid holidays given by the
Company to its executives.
3. AUTOMOBILE. The Company shall provide Employee
with a car of similar make or model to those cars provided by
the Company to other senior executives of the Company.
4. TAX ASSISTANCE. The company shall reimburse
Employee for tax planning and preparation services provided to
him by a Big Five accounting firm, up to a maximum amount of
Eight Thousand Dollars (U.S.$8,000) per year.
5. REPATRIATION UPON TERMINATION WITHOUT CAUSE. If
Employee is terminated by the Company without Cause (as
defined in Section 8 hereof), the Company shall reimburse
Employee for the reasonable costs of moving Employee and his
personal belongings to the west coast of the United States, up
to a maximum amount of Twenty Thousand Dollars (U.S.$20,000).
h. DEDUCTION AND WITHHOLDING; PLACE OF PAYMENT. 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. All cash compensation payable to Employee hereunder
shall be paid at such bank or other place within or without the United States
and/or Poland, as Employee may direct, subject to applicable laws.
i. STOCK OPTIONS. The Company shall cause @ Entertainment to grant to
Employee a non-transferable option to purchase Two Hundred Thousand (200,000)
shares of @Entertainment's common stock, $0.01 par value per share, upon the
terms and conditions of a stock option agreement in the form of Exhibit A, at a
price of Fourteen Dollars and thirty cents (U.S. $14.30) per share.
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
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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.
6. EXCLUSIVITY / NON-COMPETITION
a. EXCLUSIVITY/NO COMPETING EMPLOYMENT. For the term of this Agreement
and a period of one (1) year following 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 or entity,
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
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Company, or any person or entity who is, or was within the twelve-month period
immediately preceding, a customer, supplier 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. 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. Said prohibitions shall
also apply with respect to any Person (or any subsidiary thereof) located
within or without the United States that is doing Business, directly or
indirectly, in Poland.
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 Commercial Arbitration Rules of the American Arbitration Association
(except insofar as those rules are modified by the terms of this Section 7).
The arbitration will be held in Hartford, Connecticut, USA; 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
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(notwithstanding the provisions of Section 7(a)) to seek and 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. Should an alleged breach by Employee of
Sections 5 or 6 of this Agreement occur, the Company shall not be entitled to
suspend any payments otherwise 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 EMPLOYEE. Employee may terminate this Agreement, with
or without cause, by sending written notice thereof at least three (3) 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. 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 and other minor offenses which do not
indicate moral turpitude), or (6) a substantial violation of any applicable
polices and
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procedures set forth in any policy manual as may be adopted by the Board of
Directors of the Company or of @ Entertainment.
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 one (1) month's written notice without Cause. In
the event that this Agreement is terminated pursuant to this section 8(c),
Employee shall be entitled to an additional five (5) months of Base Salary
after the effective date of termination.
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; 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 ninety (90) days.
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.
g. ACCRUAL. If the Company or Employee terminates this Agreement,
Employee shall not be entitled to any compensation or benefits after the
effective date of his termination except as provided in section 8(c).
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:
@ Entertainment, Inc.
c/o Chase Enterprises
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
XXX
Attention: Xxxxxxxxxx Xxxxx
(000) 000-0000
With a copy to:
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Xxxx X. Xxxx
Xxxxx & XxXxxxxx
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxx, X.X. 00000
U. S. A.
Facsimile: (000) 000-0000
If to Employee:
Xxxxxx X. Xxxxxx Xx.
Xx. Xxxxxxxxxxx 0X xxxx X,
00-000 Xxxxxxxx, Xxxxxx
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 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 Exhibit A).
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
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hereunder. Except for rights which must be exercised within a specified time
period under this Agreement or Exhibit A, 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.
1. 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 AND THAT IT
EXPLAINS POSSIBLE CONSEQUENCES, BOTH FINANCIAL AND LEGAL, IF EMPLOYEE BREACHES
THE AGREEMENT.
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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
/s/ Xxxxxx X. Xxxxxx, Xx. /s/ Xxxxxx X. Xxxxxx, III
------------------------- By: -------------------------
Xxxxxx X. Xxxxxx, Xx. Xxxxxx X. Xxxxxx, III
Its: Chairman of the Board
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