Exhibit 10.26
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") is made effective
as of June 8, 1998 by and between Xxxxxx Xxxxxx-Xxxxx, of 00 Xx. Xxxxxxx Xxxxxx
Mews, Xxxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX, Xxxxxx Xxxxxxx ("Employee"), and
@Entertainment, Inc., a Delaware corporation (the "Company").
WITNESSETH:
WHEREAS, Employee desires to serve as Chief Financial Officer of the
Company, and the Company desires to employ Employee as Chief Financial 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 and being 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 television
services anywhere in Poland.
d. "Company" shall mean @Entertainment, Inc., a Delaware 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 Xxxxxx-Xxxxx.
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. "Pounds" and "(pound)" shall mean the lawful currency of the United
Kingdom.
j. "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.
2. EMPLOYMENT, DUTIES AND RESPONSIBILITIES
a. Performance of Job Duties. Employee shall be the Chief Financial
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. Among other things,
Employee shall have general supervision over all of the financial matters of the
Company and with respect to its Subsidiaries. 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) 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 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 shall travel to the United Kingdom, Poland, the
United States, and such other locations as necessary to fulfill his duties as
described in Section 2(a).
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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
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 Ten Thousand
Two Hundred Twenty-Five Pounds ((pound)10,225) 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. Employee shall be eligible for
a performance bonus of up to Thirty Thousand Five Hundred Pounds ((pound)30,500)
during the first year of his employment hereunder. Of such amount, Employee
shall be guaranteed to receive at least Eighteen Thousand Three Hundred Pounds
((pound)18,300). The performance bonus for such first year shall be paid to
Employee 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 the
second and third year of his employment hereunder. The performance criteria,
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. Expenses. The Company shall reimburse Employee for reasonable
out-of-pocket 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
relating to business-related expenses as in effect from time to time.
e. Additional Employee Benefits and Perquisites. In addition to the
foregoing, Employee shall receive the following benefits and perquisites:
(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, such
benefits to include health insurance coverage for Employee and his
immediate family under the Company's health insurance program, life
insurance in the amount of three times annual compensation, and annual
pension contribution in the amount of ten (10) percent of Employee's
Base Salary.
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(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
(pound)30,000 toward the purchase of an automobile, which automobile
shall belong to Employee at the termination of this Agreement.
f. 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 Kingdom
and/or Poland, as Employee may direct, subject to applicable laws.
g. Stock Options. The Company shall grant to Employee a
non-transferable option to purchase Two Hundred Thousand (200,000) shares of the
Company'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.
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
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
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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 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
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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 or the United Kingdom 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 (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
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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 four (4) 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
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substantial violation of any applicable polices and procedures set forth in
any policy manual as may be adopted by the Board of Directors of the Company.
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 six (6) month's written notice without cause.
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.
xx. Xxxxxxxxxxx 0X
Xxxx X
00-000 Xxxxxx, Xxxxxx
Facsimile: (00-00) 000-0000
Attention: Xxxxxxxxxx Xxxxx
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 Xxxxxx-Xxxxx
00 Xx. Xxxxxxx Xxxxxx Xxxx
Xxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxx Xxxxxxx
Facsimile: (00-000) 000 0000
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.
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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 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 Delaware 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
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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.
IN WITNESS WHEREOF, the parties have executed this Executive Employment
Agreement effective as of the date first above written.
@Entertainment, Inc., a
Delaware corporation
______________________________ By:__________________________
Xxxxxx Xxxxxx-Xxxxx
Its:
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