PRO TV SA - and - Adrian Sarbu
Exhibit
10.38
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DATED
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27 December
2007
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PRO
TV SA
-
and -
Xxxxxx
Xxxxx
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Name
and Address of the Company:
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PRO TV SA with its
registered office at Blvd. Pache Protopopescu 000, xxxxxx 0, xxxxxx xxxx
000000, Bucharest, Romania, registered with the Romanian Trade Registry
under no. J40/24578/1992, fiscal registration no. CUI R 2835638
(the “Company”)
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Name
and Address of the Director:
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Xxxxxx Xxxxx, born April
18, 1955, residing at 000 Xxxxx Xxxxxxxxxxxx, xxxxxx 0, Xxxxxxxxx, Xxxxxxx
(“Xx.
Xxxxx”)
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(The
Company and Xx. Xxxxx shall hereinafter also be referred to collectively as the
“Parties” and each
individually as a “Party”, and this contract shall
hereinafter be referred to as the "Contract")
WHEREAS:
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(A)
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Based
on the resolution of the shareholders of the Company dated 1 June 2007,
taken on the basis of the provisions of art. 17 of the Constitutive Act of
the Company, as restated on 4 October 2007, Xx. Xxxxx was re-appointed to
the office of the President of the Board of Directors of the Company and
General Director of the Company (the “Director”);
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(B)
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The
Company is a member of a group of companies consisting of Central European
Media Enterprises Ltd. (“CME Ltd.”) and any and
all companies under its control (the “CME Group”);
and
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(C)
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The
Company and Xx. Xxxxx hereby wish to agree upon and set forth the terms
and conditions of their mutual co-operation, which shall be carried out in
connection with an exercise by Xx. Xxxxx of his position of the
Director.
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THE
PARTIES AGREE AS FOLLOWS
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1
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SUBJECT-MATTER OF
CONTRACT
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1.1
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The
subject matter hereof shall be the stipulation of the terms and conditions
related to the performance by Xx. Xxxxx of the office of the Director in
consideration of the remuneration and other benefits set forth
below.
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2
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OFFICE AND
DUTIES
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2.1
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Xx.
Xxxxx shall occupy the position of the Director of the Company. In such
capacity Xx. Xxxxx shall perform the duties referred to in Section 2.3
hereof and the Parties shall not enter into a separate agreement in
respect of the performance by Xx. Xxxxx of such
duties.
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2.2
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For
the avoidance of doubt, both Parties hereby acknowledge and agree that no
employment relationship shall be established between Xx. Xxxxx and the
Company hereunder or in connection with any activities carried out by Xx.
Xxxxx hereunder. The relationship created hereunder constitutes a common
law contract based on the provisions of Law 31/1990 regarding commercial
companies as amended and republished and the relevant provisions from the
Civil and Commercial Code.
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2.3
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Xx.
Xxxxx shall perform the duties of the Director as they arise from any
applicable generally binding legal provisions, the provisions of art. 20
from the valid Constitutive Act of the Company, its internal regulations,
the policies of CME Ltd. or from the directives and instructions provided
(if any) and decisions adopted by the Company's General Meeting of
Shareholders including decisions regarding the annual budget, unless the
performance of such duties, obligations, directives and/or instructions
contravenes generally binding legal
provisions.
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2.4
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Xx.
Xxxxx shall perform his office of the Director and any and all of his
obligations arising hereunder with due care. He shall be obliged to do so
in person and in a thorough and diligent
manner.
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2.5
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Xx.
Xxxxx shall use his best endeavours to promote and protect the interests
of the Company and shall not do anything which would be harmful with
respect thereto.
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2.6
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During
the exercise of his duties Xx. Xxxxx, in his capacity of General Director
of the Company may delegate some of his authority to other executives of
the Company. In respect of a limited number of issues he may
delegate some of his authority to third parties (lawyers,
consultants).
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3
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PLACE OF
WORK
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3.1
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In
general, Xx. Xxxxx shall perform his office of the Director in Bucharest,
at the Company’s headquarters or, to the extent required, at the local
stations of the Company.
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4
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REMUNERATION
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4.1
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Xx.
Xxxxx’x base monthly remuneration for the performance of the office of the
Director shall be XXX 120,000 (in words: one hundred and
twenty thousand Romanian Lei) per month ("Monthly Remuneration"),
that being XXX 1,440,000 (in words: one million four
hundred and forty thousand Romanian Lei) per year ("Annual
Remuneration").
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4.2
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The
Monthly Remuneration shall be payable in arrears no later than on the date
of salary payment as fixed for the Company’s employees. The Company shall
pay the Monthly Remuneration, after deducting all mandatory payments as
required to be made by the Company in accordance with the applicable laws
of Romania, including, without limitation, any withholding or other taxes
and payments of social security and health insurance, by wire transfer to
the credit of Xx. Xxxxx’x bank account which Xx. Xxxxx notifies the
Company in writing no later than 10 days prior to the due date of the
Monthly Remuneration (the “Bank
Account”).
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3
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4.3
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From
January 1, 2010, the Parties have agreed that they shall review the amount
of the Monthly Remuneration and consider an increase thereof on annual
basis. For this purpose, both Parties undertake to enter into good faith
negotiations regarding the increase of the Monthly Remuneration provided
that both Parties agree to use best efforts to finalize such negotiations
by no later than January 31 of each calendar
year.
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4.4
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Xx.
Xxxxx shall be entitled to receive a bonus for 2007 (the “Old Bonus”) based on
the Company’s bonus policy as approved by the Company’s Board of
Directors.
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4.5
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From
January 1, 2008, so long as Xx. Xxxxx remains as the Chief Operating
Officer of CME Ltd., he will be eligible to receive an annual bonus of up
to XXX 2,160,000 subject to the approval of the General Meeting of
Shareholders of the Company, (the “COO Bonus”).
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4.6
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In
the event that Xx. Xxxxx is no longer the holder of the position of Chief
Operating Officer of CME Ltd., he will be entitled to receive, from that
moment onward, on a pro rata basis if such an event happens in the middle
of a calendar year, a bonus based on the following formula (the “Revised
Bonus”):
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4.6.1
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An
additional 12 months of salary will be payable if Total Segment EBITDA for
the Company is equal to Budgeted EBITDA for the financial year to which
such revised Bonus relates; and
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4.6.2
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A
further 6 months of salary will be payable if Total Segment EBITDA for the
Company is equal to 105% of Budgeted EBITDA for the
financial year to which such revised Bonus
relates.
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Budgeted
EBITDA for the Company will be the Total Segment EBITDA for the
Romania operations as set forth in the annual budget of CME Ltd. as approved by
the Board of Directors of CME Ltd. and ratified by the Board of Directors of the
Company for the financial year to which the Revised Bonus relates.
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4.7
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The
COO Bonus shall not be payable prior to the date on which CME Ltd.
publishes its Annual Report on Form 10-K for the financial year to which
such COO Bonus relates. The Old Bonus, and, subject to the previous
sentence, the Revised Bonus and the COO Bonus, if any, shall be paid to
Xx. Xxxxx at the Bank Account not later than within 30 days following an
approval of the financial statement of the Company for the prior financial
year by the General Meeting of the Shareholders of the
Company.
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4.8
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Notwithstanding
the foregoing, the Parties hereby acknowledge that additional criteria may
be agreed thereby for the purposes of determining as to whether any of the
Old Bonus, the Revised Bonus and/or the COO Bonus shall be payable in
accordance herewith.
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4
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5
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OTHER
BENEFITS
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5.1
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The
Company shall, at its own cost and expense, provide Xx. Xxxxx with an
office in the place in which the Company has its seat, including adequate
technical and material equipment and personnel support, as is reasonably
necessary for the performance of Xx. Xxxxx’x duties
hereunder.
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5.2
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The
Company shall be obliged to ensure that Xx. Xxxxx be insured by travel
health insurance of the type “Executive plus policy”
based on the reasonable selection of Xx. Xxxxx, providing him with the
highest standard of insurance protection for the whole period of the
performance of his duties hereunder. The Company shall be obliged to pay
the insurance premiums for such travel health
insurance.
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5.3
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The
Company shall, at its own expense, provide Xx. Xxxxx with above-standard
health care by providing Xx. Xxxxx with above-standard health insurance
cover based upon his reasonable
selection.
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5.4
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The
Company shall, at its own expense, also provide Xx. Xxxxx with
above-standard life insurance based upon his reasonable
selection.
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5.5
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Xx.
Xxxxx shall be entitled to compensation in an amount equivalent to his
Annual Remuneration, or the relevant part thereof, in the event of his
suffering illness resulting in an inability to work, provided
that such inability to work is proved to the Company by a doctor’s
certificate (the “Sick
Leave Compensation”). The Sick Leave Compensation shall be in each
case equal to the respective portion of the Annual Remuneration in the
respective year for the period of time during which Xx. Xxxxx is unable to
work, provided that the such inability to work lasts three (3)
months or less. In the event Xx. Xxxxx’x inability to work
exceeds three (3) months, the Sick Leave Compensation shall be further
paid to Xx. Xxxxx in an amount equal to 50% of such Annual
Remuneration.
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The
Company shall have the right to appoint a reputable physician in order to verify
whether the health of Xx. Xxxxx justifies his claim of illness and/or inability
to work in connection with any payment of Sick Leave Compensation
hereunder.
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5.6
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The
provision of any insurance scheme shall not in any way prevent the Company
from lawfully terminating this Contract in accordance with the provisions
of Section 9 hereof even if such termination would deprive Xx. Xxxxx of
membership in or cover under any such
scheme.
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5.7
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Xx.
Xxxxx shall be entitled to use a company car of an executive class
reasonably selected by Xx. Xxxxx with a driver on a 24/7 basis whilst in
Romania. He shall be entitled to use such car for both business and
private purposes. All costs incurred with respect to the operation and use
of such car (including all consumed fuel) shall be covered by the
Company.
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5
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6
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EXPENSES
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6.1
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Neither
the travel nor any other costs incurred by Xx. Xxxxx in the course of the
exercise of the office of the Director are included in the Monthly
Remuneration, bonus or in any other remuneration or benefits hereunder.
The Company shall reimburse any and all duly documented necessary costs
and expenses, which shall be reasonably incurred by the Director in
connection with the exercise of his office hereunder whether in Bucharest
or on business trips, as evidenced by receipts in accordance with the
Company expense policy.
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7
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TIME INVOLVEMENT IN THE
COMPANY
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7.1
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Xx.
Xxxxx shall devote sufficient time to proper performance of his duties
hereunder. Save as set forth herein, no additional pay or time off shall
be permitted to Xx. Xxxxx in connection with his performance of the office
hereunder based on the fact that the remuneration set forth herein has
been agreed between the Parties upon taking into consideration the
anticipated overtime required of Xx. Xxxxx in connection with his duties
hereunder.
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8
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HOLIDAYS
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8.1
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Xx.
Xxxxx shall be entitled to a vacation of up to 25 days per annum during
which Xx. Xxxxx shall not be obliged to perform any duties or obligations
related to the office of the Director to the extent permitted by
applicable laws; provided, however, that during such time, his right to
receive remuneration in accordance with Section 4 hereof and other
benefits set forth hereunder shall not be
affected.
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9
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TERMINATION
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9.1
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This
Contract shall be entered into for a definite period of time, expiring on
the date on which the term of Xx. Xxxxx’x office of Director shall be
terminated in accordance with the terms hereof, the legal provisions
applicable and the Constitutive Act of the Company, unless stipulated
otherwise herein; provided, however, that the obligations of Xx. Xxxxx
under Sections 10 and 11 hereof shall survive the termination of this
Contract.
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9.2
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The
exercise of Xx. Xxxxx’x office of the Director and this Contract shall be
terminated upon:
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(a)
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the
removal of Xx. Xxxxx from the office of the Director on the grounds of a
decision adopted by the General Meeting of Shareholders of the Company in
a manner complying with the respective legal regulations and the
Constitutive Act of the Company other than for the reason set forth under
Section 9.2(b) hereof;
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(b)
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the
removal of Xx. Xxxxx from the office of the Director on the grounds of a
decision adopted by the General Meeting of Shareholders of the Company in
a manner complying with the respective legal regulations and the valid
Constitutive Act of the Company when such grounds are based on
Cause;
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6
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(c)
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the
resignation of Xx. Xxxxx from his office of the Director in accordance
with the respective legal provisions and the valid Constitutive Act of the
Company;
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(d)
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mutual
agreement between the Parties; or
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(e)
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The
death of the Xx. Xxxxx.
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For the
purposes of this Contract, “Cause” shall include any
action by Xx. Xxxxx constituting gross misconduct in the performance of his
duties hereunder, including (i) breach of this Contract, (ii) embezzlement or
any theft or misappropriation of the Company’s assets, (iii) gross negligence or
wilful misconduct by Xx. Xxxxx in the performance of his duties hereunder, (iv)
the provision of information to the Board of Directors of the Company or the
General Meeting of Shareholders of the Company containing any material
misstatement or material omission, or (v) the failure to observe any instruction
or resolution of the Board of Directors of the Company, the General Meeting of
Shareholders of the Company or CME Ltd.
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9.3
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Termination
pursuant to Section 9.2(a) and (c) hereof shall be on twelve months’ prior
written notice. Termination pursuant to Section 9.2(b) hereof shall not
require any prior written notice and shall be effective from the moment of
recall of Xx. Xxxxx from the office of the Director. As of the day of the
termination of the office of Xx. Xxxxx hereunder, he shall cease to
exercise duties related to the office of the
Director.
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9.4
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Upon
the termination, by whatever means, of this Contract, Xx. Xxxxx shall
immediately, however no later than within three (3) business days from the
date of such termination, return to the Company all documents, computer
media and all other property or assets belonging to or relating to the
business of the Company and the performance of his duties hereunder which
is in his possession or under his power or control or otherwise available
to Xx. Xxxxx, and Xx. Xxxxx must not retain copies of any of the above,
save for cases in which it is necessarily required by mandatory applicable
legal regulations to keep such copies in order to be able to produce
evidence in a proceeding that might be initiated against Xx. Xxxxx in
relation to the performance of his duties
hereunder.
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10
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CONFIDENTIAL
INFORMATION
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10.1
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Xx.
Xxxxx agrees, during the term hereof and after the termination of the
office of the Director, not to use or disclose to any person (and shall
use his best endeavours to prevent the use, publication or disclosure of)
any confidential information:
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7
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10.1.1
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concerning
the business of the Company and/or the CME Group which comes to the
knowledge of Xx. Xxxxx during the course of or in connection with the
holding of his office of the Director;
or
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10.1.2
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concerning
the business of any client or person having dealings with the Company
and/or the CME Group and/or a company within the CME Group which is
obtained directly or indirectly in circumstances where the Company is
subject to a duty of
confidentiality.
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10.2
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For
the purposes of Section 10.1 above, information of a confidential or
secret nature includes, but shall not be not limited to, information
disclosed to Xx. Xxxxx or known, learned, created or observed by him as a
consequence of his holding of the office of the Director, not generally
known in the relevant trade or industry about the Company’s and/or the CME
Group’s business activities, services and processes, including, but not
limited to, information concerning advertising, sales promotion,
publicity, sales data, research, programming and plans for programming,
finances, accounting, methods, processes, business plans (including
prospective or pending license applications or investments in license
holders or applicants), client or supplier lists and records, potential
client or supplier lists, and client or supplier
xxxxxxxx.
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10.3
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This
Section shall not apply to information which
is:
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10.3.1
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disclosed
in the proper performance by Xx. Xxxxx of duties of the Director or with
the consent of the Company;
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10.3.2
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ordered
to be disclosed by a court of competent jurisdiction or otherwise
necessarily required to be disclosed by law or pursuant to the rules of
any applicable stock exchange; or
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10.3.3
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in
or comes into the public domain otherwise than due to an omission or a
breach by Xx. Xxxxx hereof.
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11
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NON-COMPETITION
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11.1
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For
the duration of the office of Xx. Xxxxx as the Director and for a period
of twelve (12) months after the termination hereof for any cause, Xx.
Xxxxx shall not:
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(a)
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either
on his own account or on behalf of any other person, firm or company,
directly or indirectly, carry on or be engaged, concerned or interested in
any business which is competitive with a business in which the Company
and/or the CME Group are engaged, including securing television licenses,
operating television stations, programming services and broadcasting, and
with which Xx. Xxxxx was actively involved in the twelve months preceding
the termination of his employment;
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(b)
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seek
to do business and/or do business in competition with any company of the
CME Group with any person, firm or company who at any time during the
twelve months preceding the termination of his employment was a customer
or supplier of the Company and/or any company of the CME Group and/or with
whom during that period Xx. Xxxxx or another person on his behalf had
material dealings in the ordinary course of
business;
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8
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(c)
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interfere
or seek to interfere or take such steps as may interfere with the
continuance of supplies (whether service or goods) to the Company and/or
any company of the CME Group, or the terms on which they are so supplied,
from any suppliers supplying any company of the CME Group at any time
during the period of twelve months prior to such termination;
and/or
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solicit
or employ or cause to be employed, whether directly or indirectly, any employee
of the Company and/or the CME Group who has substantial knowledge of
confidential aspects of the business of the Company and/or the CME Group, and
with whom, at any time during the period of twelve months prior to such
termination, Xx. Xxxxx had material dealings.
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11.2
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For
the duration of the office of Xx. Xxxxx as Director, he shall not accept
or invest in, whether directly or indirectly, any opportunity (a “Corporate Opportunity”)
(i) which is in the line of business of any company of the CME Group, (ii)
which arises or becomes known to him as a result of his position as
Director of the Company, or (iii) in which the CME Group has an interest
or expectancy unless (a) he has presented the Corporate Opportunity to the
Board of Directors of CME Ltd. in reasonable detail and (b) the Board of
Directors of CME Ltd. has decided not to pursue such Corporate Opportunity
after such presentation by him.
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11.3
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Each
of the restrictions in this Section shall be enforceable independently of
each other and their validity shall not be affected if any of the others
are invalid. In the event that any of the restrictions are void, but would
be valid if some part of the restriction were deleted, the restriction in
question shall apply with such modification as may be necessary to make it
valid.
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12
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INTELLECTUAL
PROPERTY
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12.1
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Should
Xx. Xxxxx acquire any Intellectual Property Rights (as hereinafter
defined) arising out of the performance of his duties as
Director of the Company, Xx. Xxxxx shall assign such rights to the
Company, by way of an assignment contracts or a license granted to the
Company. The compensation shall be provided by the Company to Xx. Xxxxx
for the assignment of any Intellectual Property Right by way of deducting
it from the Annual Remuneration for the year in which the Parties executed
the respective License.
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12.2
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Xx.
Xxxxx shall inform the Company of all and full particulars of any
Intellectual Property Right in any work or performance or thing created by
Xx. Xxxxx, immediately after such Intellectual Property Right has arisen ;
however no later than within 3 days thereafter. Xx. Xxxxx shall not use,
assign, purport to assign or disclose to any person or exploit any
Intellectual Property Right without the prior written approval of the
shareholders of the Company.
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9
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12.3
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“Intellectual Property
Right” shall mean any copyright or any other intellectual property
right with respect to any performance, work or another product or any part
thereof or any patent right, trademark right, industrial design right or
any other intangible industrial right or any other intellectual property
right of any nature whatsoever throughout the world (whether registered or
unregistered and including all applications and rights to apply for the
same), which:
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12.3.1
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relates
to the business or any product or service of the Company and/or CME Group;
and
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12.3.2
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is
invented, developed, created or acquired by Xx. Xxxxx (whether alone or
jointly with any other person) during the term of his office of the
Director hereunder within the performance by him of his obligations
arising under the office of the Director hereunder or in connection
herewith.
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13
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DATA
PROTECTION
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13.1
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Xx.
Xxxxx acknowledges and explicitly agrees that the Company will hold and
process personal and sensitive data relating to Xx. Xxxxx (the “Data”) for personnel
administration and management purposes within the period of (i) the
duration of this Contract; and (ii) to the extent required by law, also
after the termination hereof. The Data shall include, in
particular, Xx. Xxxxx’x full name, address, date of birth, birth number,
identification card and passport numbers, references, bank details,
performance appraisals, work, holiday and sickness records, next of kin,
remuneration reviews, remuneration details and other records (which may,
where necessary, include sensitive data relating to health and data held
for equal opportunities purposes).
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13.2
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By
signing this Contract, Xx. Xxxxx agrees that the Company may process any
Data for the above purposes and may, when necessary for those purposes,
make such Data or any part thereof available to its advisers, to third
parties providing products and/or services to the Company and as required
by law.
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14
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GENERAL
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14.1
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This
Contract constitutes the whole and only agreement between the Company and
Xx. Xxxxx relating to the subject matter hereof, including any performance
of any work or duties of Xx. Xxxxx for the Company, and supersedes all
previous contracts, agreements, proposals, both oral and written,
negotiations, presentations, commitments, writings and all other
communications between the Company or any affiliate of the Company and Xx.
Xxxxx, including all agreements on individual and remuneration conditions,
and the Parties represent and warrant to each other that there are no
unsettled claims and/or obligations arising in connection with the
foregoing as of the date hereof.
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14.2
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Should
any of the provisions of this Contract be or become invalid or
unenforceable, such invalidity or unenforceability shall not impair the
validity or enforceability of the other provisions of this Contract to the
extent permitted by relevant laws. Should this be the case, the Parties
undertake to replace such invalid or unenforceable provision with a new
one, which shall be valid, enforceable and shall, in accordance with
relevant laws, comply to the fullest extent possible with the meaning and
effect of the original provision.
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10
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14.3
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This
Contract may be amended or modified only by a written instrument duly
executed by both Parties.
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14.5
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This
Contract can be terminated only as stipulated in Section 9
above.
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14.6
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This
Contract has been executed in four counterparts, two in the English
language and two in the Romanian language. Each of the Parties shall
obtain one counterpart of the Contract in each language. In
case of discrepancies between the English and Romanian language, the
English language version shall
prevail.
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14.7
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This
Contract shall come into force and effect as of the date on which it is
signed by both Parties and approved by the General Meeting of Shareholders
of the Company. The Company shall use its best efforts to ensure that the
approval of the General Meeting of the Company is granted without undue
delay, however, no later than within 3 weeks from the execution
hereof.
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14.8
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This
Contract shall be governed by and construed in accordance with Romanian
law.
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THE
COMPANY AND XX. XXXXX AGREE TO THE TERMS SET OUT ABOVE. IN WITNESS WHEREOF THEY
SIGNED THE CONTRACT AS FOLLOWS:
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In
Bucharest, on 27 December 2007
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For
PRO TV SA.:
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XXXXXX
XXXXX
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By:
/s/ Xxxxxx
Xxxxxxx
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/s/ Xxxxxx
Xxxxx
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Name:
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XXXXXX
XXXXXXX
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Title:
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Director
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11
