EMPLOYMENT AGREEMENT
AGREEMENT made as of the 21st day of July, 2000, by and between CME
Development Corporation, a Delaware corporation (the "Corporation"), and ▇▇▇▇
▇▇▇▇▇▇ ("▇▇▇▇▇▇" together with the Corporation, the "Parties").
WITNESSETH:
WHEREAS, the Corporation wishes to employ ▇▇▇▇▇▇, and ▇▇▇▇▇▇ wishes to be
employed by the Corporation, on the terms and conditions set forth below;
NOW, THEREFORE, in consideration of the foregoing and the terms and
conditions contained herein, the parties hereto agree as follows:
1. Position and Responsibilities.
1.1. Subject to Section 2.4 hereof, the Corporation hereby employs ▇▇▇▇▇▇ to
serve as Finance Director of the Corporation. Subject to the direction and
authorization of the Vice-President and Chief Financial Officer of the
Corporation or in his or her absence or in case such position is vacant the
direction or authorization of the Chief Operating Officer or such other
executive as determined by the President and the Chief Executive Officer,
▇▇▇▇▇▇ shall perform such functions and undertake such responsibilities as are
customarily associated with such a position. ▇▇▇▇▇▇ shall hold such
directorships and executive officerships in the Corporation and any subsidiary
to which, from time to time, he may be elected or appointed during the term of
this Agreement.
1.2. ▇▇▇▇▇▇ shall devote his full time and best efforts to the business and
affairs of the Corporation and to the promotion of its interests.
2. Term.
2.1. The term of this Agreement shall commence on 12th September, 2000, and
shall be for an indefinite period of time.
2.2. Notwithstanding the provisions of Section 2.1 hereof, the Corporation
shall have the right, on written notice to ▇▇▇▇▇▇, to terminate this Agreement
for Cause (as defined herein), such termination to be effective seven days
after the date on which written notice is given or as of such later date
otherwise specified in the notice.
2.3. For purposes of this Agreement, the term "Cause" shall mean fraud or
dishonesty or acts of gross negligence in the course of providing his services
herein which are injurious to the Corporation; wilful misrepresentation to
shareholders or directors which is injurious to the Corporation; a wilful
failure without reasonable justification to comply with a reasonable written
order of the President and Chief Executive or the Board of Directors of Central
European Media Enterprises Ltd. (the "Board of Directors"), which shall not be
cured within 20 days after written notice; a
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wilful and material breach of this Agreement, which shall not be cured within
20 days after written notice; or the commission of a felony.
2.4. For purposes of this Agreement, the term "Good Reason" shall mean any of
the following: (a) a re-assignment of ▇▇▇▇▇▇ to a position outside of the UK;
or (b) failure by the Corporation to comply with any of the material terms of
this Agreement, which shall not have been cured within 20 days after written
notice thereof. For a period of 30 days after the occurrence of a Good Reason
event, ▇▇▇▇▇▇ shall have the right to terminate this Agreement for Good Reason.
2.5. If this (i) Agreement shall be terminated (a) by the Corporation other
than pursuant to Sections 2.2, 4.1 or 4.2 hereof or (b) by ▇▇▇▇▇▇ for Good
Reason (as defined herein) then the Corporation shall continue to pay to ▇▇▇▇▇▇
his salary for 6 (six) months following the date of termination, but ▇▇▇▇▇▇
shall not be entitled to receive any other compensation, bonuses, benefits or
other payments relating to such 6 (six) month period.
2.6. Upon termination of this Agreement for any reason, the Corporation will
immediately pay ▇▇▇▇▇▇ all amounts due and owing, including but not limited to
bonuses, accrued vacation, expense reimbursements and earned salary.
2.7. Upon expiration or termination of this Agreement, including any extension
thereof, for any reason, all directorships or executive officerships in the
Corporation or any of its affiliates to which ▇▇▇▇▇▇ was elected or appointed
shall also immediately terminate.
2.8. In the event that ▇▇▇▇▇▇ wishes to terminate this Agreement for other than
Good Reason, ▇▇▇▇▇▇ agrees to give the corporation three months notice.
Nevertheless, at the option of the Corporation, ▇▇▇▇▇▇ shall be required to
perform his duties during this notice period.
3. Salary.
3.1. The Corporation shall pay to ▇▇▇▇▇▇ for the services to be rendered by
▇▇▇▇▇▇ hereunder a base salary at the rate of GBP 100,000 per annum. The salary
shall be payable in equal monthly instalments of GBP 8,333.33.
3.2. From 2001 onwards, the Corporation shall provide ▇▇▇▇▇▇ with the
opportunity to earn an annual performance pay. The amount of any such annual
performance pay shall be determined by the CEO of the Corporation and will be
assessed on the basis of achievement of yearly personal deliverables, the
performance of the Company on a combined EBITDA Basis and subject to the
Compensation Committee's approval in its sole discretion. The target
performance pay shall be 30% of the yearly compensation. The personal
deliverables shall be established annually together with the CEO as part of the
budget process. The amount of the performance payment shall based upon combined
station and corporate EBITDA in relation to Budget. If the Budget is achieved,
▇▇▇▇▇▇ shall be eligible for 100% of the target performance pay. If EBITDA is
150% of Budget, ▇▇▇▇▇▇ will be eligible for a payment equal to 200% of target.
Amounts of performance pay between 100% and 200% based upon EBITDA are
calculated according to a non-linear sliding scale. Bonus payment shall be made
in two
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instalments. The first instalment shall be made in the first pay period
following the Board's approval of the audited financial statements and the
second instalment shall be made in the July pay period. In order to be eligible
for these instalments ▇▇▇▇▇▇ must be a full time employee of the Corporation at
the time the payment is due. In the event of any dispute in the calculation of
the performance pay entitlement the decision of the compensation committee
shall be final. For the year 2000 ▇▇▇▇▇▇ shall be eligible for a pro-rata
portion of such performance pay equal to 25% of the amount otherwise payable by
calculation if ▇▇▇▇▇▇ had been the employee of the Corporation for the entire
year.
3.3. ▇▇▇▇▇▇ shall be entitled to participate in, and receive benefits from, any
insurance, medical, disability, bonus, incentive compensation, or other
employee benefit plan, if any are adopted, of the Corporation or any subsidiary
which may be in effect at any time during this Agreement, provided that in any
event ▇▇▇▇▇▇ shall, at the Corporation's expense, be entitled to private
medical insurance for himself, his partner and dependent children, disability
insurance and permanent health insurance at the maximum permissible levels from
time to time, and life insurance in an amount commensurate with the life
insurance offered to the other senior executives of the Corporation. These
benefits will not be reduced from the present level without his prior written
consent. The health insurance provided to ▇▇▇▇▇▇ shall be BUPA Health coverage
or any equivalent to that provided by his previous employer.
3.4. The Corporation agrees to reimburse ▇▇▇▇▇▇ for all reasonable and
necessary business expenses incurred by him on behalf of the Corporation in the
course of his duties hereunder upon the presentation by ▇▇▇▇▇▇ of appropriate
receipts therefore.
3.5. ▇▇▇▇▇▇ shall be entitled to four weeks paid vacation per year or such
other greater number of days provided for similar executives of the Company.
3.6. In the event of completion of a successful reorganisation of the
Corporation, the Corporation shall grant to ▇▇▇▇▇▇ an option at least equal to
any options granted to any other director level employee at the first
opportunity following the completion of the reorganisation. Subject to the
Corporation's then applicable Stock Option Plan, the anticipated initial grant
will be equal to 0.5% of the total issued and outstanding shares at the time
although no specific quantity of options can be committed to at this time. In
addition, the Corporation may at its sole discretion extend the Stock Option
Plan in the future. The timing and amount of any subsequent option awards shall
be at the discretion of the Compensation Committee and the Board of Directors
of the Corporation. Options will be incentive stock options to the extent
permitted by Section 422(d) of the US Internal Revenue Code 1986, as amended.
4. Death; Incapacity.
4.1. If, during the Term, because of illness or other incapacity, ▇▇▇▇▇▇ shall
fail for a period of 180 consecutive days, or for shorter periods aggregating
more than 180 days during any twelve month period, to render the services
contemplated hereunder, then the Corporation, at its option, may terminate this
Agreement by notice from the Corporation to ▇▇▇▇▇▇, effective on the giving of
such notice.
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4.2. In the event of the death of ▇▇▇▇▇▇ during the Term, this Agreement shall
terminate on the date of such death.
4.3. Upon termination of this Agreement, the Corporation shall pay to ▇▇▇▇▇▇ or
his legal representatives any amounts owed to him including but not limited to
expense reimbursement, accrued vacation and earned bonuses, and ▇▇▇▇▇▇ shall
pay to the Corporation any amounts owed to the Corporation, to the date of
termination.
5. Other Activities During Agreement.
5.1. During the Term and for a period of two years thereafter, and except as
contemplated herein, neither ▇▇▇▇▇▇ nor any entity in which he may be
interested as a partner, trustee, director, officer, employee, shareholder,
option holder, lender of money or guarantor (each, a "▇▇▇▇▇▇ Affiliate") shall
be engaged directly or indirectly in the business of licensing of television or
radio stations and provision of programming engaged in by the Corporation, or
any subsidiary, in any country in Europe where the Corporation, or any
subsidiary, conducts such business at any time during the Term (a "Competitive
Activity"); provided, however, that the foregoing shall not be deemed to
prevent ▇▇▇▇▇▇ from investing in not more than 5% of the outstanding securities
of a public company. If, for a period of two years after the Term, ▇▇▇▇▇▇ or a
▇▇▇▇▇▇ Affiliate proposes to engage in what may be a Competitive Activity,
▇▇▇▇▇▇ shall so notify the Corporation in writing which shall fully set forth
and describe in detail the nature of the activity which may be a Competitive
Activity, the names of the companies or other entities with or for whom such
activity is proposed to be undertaken, and whether it is proposed to be engaged
in by ▇▇▇▇▇▇ or by a ▇▇▇▇▇▇ Affiliate (the "Section 5 Notice"). If, within 30
days after notice to the Corporation pursuant to a Section 5 Notice, the
Corporation shall fail to notify ▇▇▇▇▇▇ that it deems the proposed activity to
be a Competitive Activity, then ▇▇▇▇▇▇ shall be free to engage in the
activities described in the Section 5 Notice without violation of this Section
5.1. It is understood and agreed that any opportunity directly or indirectly
related to any business engaged in by the Corporation, or any subsidiary, in any
country in Europe where the Corporation, or any subsidiary, conducts such
business at any time during the Term shall be deemed a corporate opportunity of
the Corporation and ▇▇▇▇▇▇ shall promptly make such opportunity available
exclusively to the Corporation.
5.2. ▇▇▇▇▇▇ shall not at any time during this Agreement or after the
termination hereof directly or indirectly divulge, furnish, use, publish or
make accessible to any person or entity other than Central European Media
Enterprises Ltd. Or any subsidiary thereof. Any Confidential Information (as
hereinafter defined) other than in connection with the performance of his
duties hereunder. It is the specific intent of the Corporation and ▇▇▇▇▇▇ that
each and all of the provisions set forth hereinabove shall be valid and
enforceable as specifically set forth hereinabove; and that ▇▇▇▇▇▇ acknowledges
that the Corporation's remedies at law are likely to be inadequate, and ▇▇▇▇▇▇
consents to the application of the equitable remedies of specific performance
to enforce the Corporation's rights hereunder. Further, should any person seek
to legally compel ▇▇▇▇▇▇ (by oral questions, interrogatories, requests for
information or documents, subpoena, civil investigative demands or otherwise)
to disclose any Confidential Information, ▇▇▇▇▇▇ shall provide the Corporation
with prompt notice followed up in writing so that the Corporation may seek a
protective order or other appropriate remedy, failing which ▇▇▇▇▇▇ shall be
entitled to make such disclosure as is legally required. In
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any event ▇▇▇▇▇▇ shall use his best efforts with the advice of counsel to
furnish only that portion of the Confidential Information which is legally
required and, with the cooperation of the Corporation, will exercise his best
efforts to obtain reliable assurance that confidential treatment will be
accorded information so disclosed. In the event of a breach or a threatened
breach by ▇▇▇▇▇▇ of the provisions of this Section 5.2, the Corporation may, in
addition to any other remedies it may have, obtain injunctive relief in any
court of appropriate jurisdiction to enforce this Section 5.2. The provisions
of this Section 5.3 shall survive the expiration or termination, for any
reason, of this Agreement and shall be separately enforceable. Any records of
Confidential Information prepared by ▇▇▇▇▇▇ or which come into ▇▇▇▇▇▇'▇
possession during the Term are and remain the property of the Corporation and
upon termination of this Agreement all such records and copies thereof shall be
either left with or returned to the Corporation.
5.3 The term "Confidential Information" shall mean information disclosed to
▇▇▇▇▇▇ or known, learned, created or observed by him as a consequence of or
through this Agreement, not generally known in the relevant trade or industry,
about the Corporation'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 billing.
6. Indemnification.
6.1 The Corporation will indemnify ▇▇▇▇▇▇ and pay on his behalf all Expenses (as
defined below) incurred by ▇▇▇▇▇▇ in any Proceeding (as defined below), whether
the Proceeding which gave rise to the right of indemnification pursuant to this
Agreement occurred prior to or after the date of this Agreement provided that
▇▇▇▇▇▇ shall promptly notify the Corporation of such Proceedings and the
Corporation shall be entitled to participate in such Proceedings and, to the
extent that it wishes, jointly with ▇▇▇▇▇▇, assume the defence thereof with
counsel of its choice. This indemnification shall not apply if it is determined
by a court of competent jurisdiction in a Proceeding that any losses, claims,
damages or liabilities arose primarily out of the gross negligence, wilful
misconduct or bad faith of ▇▇▇▇▇▇.
6.2 The term "Proceeding" shall include any threatened, pending or completed
action, suit or proceeding, or any inquiry or investigation, whether brought in
the name of the Corporation or otherwise and whether of a civil, criminal,
administrative or investigative nature, including, but not limited to, actions,
suits or proceedings brought under or predicated upon any securities laws, in
which ▇▇▇▇▇▇ may be or may have been involved as a party or otherwise, and any
threatened, pending or completed action, suit or proceeding or any inquiry or
investigation that ▇▇▇▇▇▇ in good faith believes might lead to the institution
of any such action, suit or proceeding or any such inquiry or investigation, by
reason of the fact that ▇▇▇▇▇▇ is or was a director, officer, employee, agent
or fiduciary of the Corporation, by reason of any action taken by ▇▇▇▇▇▇ or of
any inaction on his part while acting as such director, officer, employee,
agent or fiduciary or by reason of the fact that he is or was serving at the
request of the Corporation as a director, officer, employee, trustee, fiduciary
or agent of another corporation,
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partnership, joint venture, employee benefit plan, trust or other enterprise,
whether or not he is serving in such capacity at the time any liability or
expense is incurred for which indemnification or reimbursement can be provided
under this Agreement.
6.3. The term "Expenses" shall include, without limitation thereto, expenses
(including, without limitation, attorney's fees and expenses) of
investigations, judicial or administrative proceedings or appeals, damages,
judgments, fines, penalties or amounts paid in settlement by or on behalf of
▇▇▇▇▇▇ and any Expenses of establishing a right to indemnification under this
Agreement.
6.4. The Expenses incurred by ▇▇▇▇▇▇ in any Proceeding shall be paid by the
Corporation as incurred and in advance of the final disposition of the
Proceeding at the written request of ▇▇▇▇▇▇. ▇▇▇▇▇▇ hereby agrees and
undertakes to repay such amounts if it shall ultimately be decided in a
Proceeding that he is not entitled to be indemnified by the Corporation
pursuant to this Agreement or otherwise.
6.5. The indemnification and advancement of Expenses provided by this Agreement
shall not be deemed exclusive of any other rights to which ▇▇▇▇▇▇ may be
entitled under the Corporation's Articles of Incorporation or Bye-Laws, any
agreement, any vote of stockholders or disinterested directors, the laws under
which the Corporation was formed, or otherwise, and may be exercised in any
order ▇▇▇▇▇▇ elects and prior to, concurrently with or following the exercise
of any other such rights to which ▇▇▇▇▇▇ may be entitled, including pursuant to
directors and officers insurance maintained by the Corporation, both as to
action in official capacity and as to action in another capacity while holding
such office, and the exercise of such rights shall not be deemed a waiver of
any of the provisions of this Agreement. To the extent that a change in law
(whether by statute or judicial decision) permits greater indemnification by
agreement than would be afforded currently under the Corporation's Articles of
Incorporation, Bye-Laws and this Agreement, it is the intent of the parties
hereto that ▇▇▇▇▇▇ shall enjoy by this Agreement the greater benefit so
afforded by such change. The provisions of this Section 6 shall survive the
expiration or termination, for any reason, of this Agreement and shall be
separately enforceable.
7. Assignment. The Corporation shall require any successor or assign to all or
substantially all the assets of the Corporation, prior to consummation of any
transaction therewith, to expressly assume and agree to perform in writing this
Agreement in the same manner and to the same extent that the Corporation would
be required to perform it if no such succession or assignment had taken place.
This Agreement shall inure to the benefit of and be binding upon the
Corporation and its successors and assigns. ▇▇▇▇▇▇ shall not transfer, assign,
convey, pledge or encumber this Agreement, or his rights, title or interest
herein without the prior consent of the Corporation.
8. No Third Party Beneficiaries. This Agreement does not create, and shall not
be construed as creating, any rights enforceable by any person not a party to
this Agreement, except as provided in Sections 2.6, 2.7, 4.3, 6 and 7 hereof.
9. Headings. The headings of the section hereof are inserted for convenience
only and shall not be deemed to constitute a part hereof or to affect the
meaning thereof.
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10. Interpretation. In case any one or more of the provisions contained in this
Agreement shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein. If, moreover, any one or more of the provisions
contained in this Agreement shall for any reason be held to be excessively
broad as to duration, geographical scope, activity or subject, it shall be
construed by limiting and reducing it, so as to be enforceable to the extent
compatible with the applicable law as it shall then appear.
11. Notices. All notices under this Agreement shall be in writing and shall be
deemed to have been given at the time when mailed by registered or certified
mail or when delivered by hand or recognized overnight courier service,
addressed to the address below stated of the party to which notice is given, or
to such changed address as such party may have fixed by notice:
To the Corporation:
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
Attn: President and Chief Executive Officer
with a copy to:
Legal Department
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
To ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
provided, however, that any notice of change of address shall be effective only
upon receipt.
12. Waivers. If any party should waive any breach of any provision of this
Agreement, it shall not thereby be deemed to have waived any preceding or
succeeding breach of the same or any other provision of this Agreement.
13. Complete Agreement; Amendments. The foregoing is the entire agreement of
the parties with respect to the subject matter hereof and may not be amended,
supplemented, cancelled or discharged except by written instrument executed by
the parties hereto.
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14. Survival. Sections 2.4 - 2.8, 3.3, 3.6, 4.3, 5.1 - 5.3 and 16 shall
survive the termination hereof, whether such termination shall be by expiration
of this Agreement or any early termination pursuant to Section 2 hereof.
15. Governing Law. This Agreement is to be governed by and construed in
accordance with the laws of New York, without giving effect to principles of
conflicts of law. The Parties hereby consent to the jurisdiction of the courts
of the State of New York with respect to any claim arising under or based upon
this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
CME DEVELOPMENT CORPORATION
By: /s/ ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: President and C.E.O.
/s/ ▇▇▇▇ ▇▇▇▇▇▇ Dated July 26, 2000
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