AGREEMENT dated as of July 27, 1999, among CME Development
Corporation ("Development"), Central European Media Enterprises Ltd. ("Media
Enterprises") and Xxxxxx Xxxxxxx ("Executive").
WHEREAS, Executive is a party to employment agreements with
each of Development and Media Enterprises, dated as of March 23, 1998 (the
"Employment Agreements"), that set forth specific obligations for both during
and after the term of the Employment Agreements;
WHEREAS, Executive's employment with Development and Media
Enterprises terminated on March 23, 1999;
WHEREAS, Executive, Development and Media Enterprises wish to
resolve all issues between them regarding Executive's termination of employment;
NOW, THEREFORE, in consideration of their mutual promises
herein contained, the parties do hereby agree as follows:
1. Resignation of Corporate Positions. Executive hereby
acknowledges his resignation from all offices, board memberships and other
corporate positions with Development, Media Enterprises and their respective
subsidiaries and affiliates, effective as of March 23, 1999, and agrees to
promptly take all reasonable acts to effectuate such resignation.
2. Partial Termination of Agreements. Effective as of the date
hereof, all rights and obligations of the parties hereto contained in the
Employment Agreements will cease, other than to the extent specifically retained
herein. In that regard, this Agreement will constitute a written instrument of
amendment to the Employment Agreements, pursuant to Section 17 of each of the
Employment Agreements.
3. Severance Payment, House Acquisition Costs, and Legal Fees.
(a) Development and Media Enterprises will respectively pay to Executive, in
full satisfaction of (i) any obligations related to Executive's employment with
Development and Media Enterprises, including Executive's current and future
rights, if any, to receive bonus payments or other forms of incentive based
compensation, whether pursuant to the Employment Agreements, or otherwise, and
(ii) any other commitments made by Development and/or Media Enterprises to
Executive prior to the date hereof, lump sum severance payments of
275,000 pounds and $846,000 (the "Severance Payments"). The Severance Payments
from Development and Media Enterprises shall be respectively paid to Executive
within 10 days of the date hereof by a direct wire transfer deposit to
Executive's bank accounts in the United Kingdom and in Belgium. The
275,000 pounds severance payment paid by Development will be reduced by
applicable tax withholding to the extent required by law. Development
anticipates that such
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withholding tax will equal 63,250 pounds. Aside from the required tax
withholding, no other amounts will be withheld from the Severance Payments,
except the 63,365 pounds advanced by Development and Media Enterprises to
Executive in connection with the acquisition of a house and related costs
(one-third of which amount was advanced by Development and two-thirds of which
was advanced by Media Enterprises) so that the anticipated amount transferred by
Development will amount to 190,628 pounds and the amount transferred by Media
Enterprises will amount to $780,100. As the 63,365 pounds advance will as a
consequence have been reimbursed by Executive, no further money is owed by
Executive to Development and Media Enterprises and they will not seek repayment
from Executive of any monies.
(b) Media Enterprises will pay to the law firm of
Proskauer Rose LLP ("Proskauer") the sum of $25,000, representing the legal fees
and disbursements owed by Executive in connection with Proskauer's
representation of Executive in connection with his relationship with Development
and Media Enterprises.
4. Stock Options. Pursuant to Section 3(d) of the Employment
Agreement with Media Enterprises, Executive was granted an option (the "Option")
to purchase 225,000 shares of the Class A Common Stock of Media Enterprises,
subject to certain terms and conditions as to the exercise price, vesting and
exercisability of the Option. Executive and Media Enterprises hereby acknowledge
and agree that (i) immediately prior to Executive's termination of employment on
March 23, 1999, the Option was vested as to 87,500 shares of Class A Common
Stock with an exercise price of $24 9/16 per share, (ii) such vested portion of
the Option will remain exercisable until March 23, 2000 and (iii) the remaining
unvested portion of the Option (i.e., as to 137,500 shares) was terminated as of
March 23, 1999, and Executive shall have no further rights with respect to such
terminated portion of the Option. Executive shall have no rights under Section
3(d)(vii) of the Media Enterprises Employment Agreement with respect to any
additional bonus payment upon exercise of the Option.
5. Release of Claims Against Development and Media
Enterprises. In consideration of the commitments and payments set forth in this
Agreement, Executive, for himself and his heirs and personal representatives,
hereby fully and forever releases Development, Media Enterprises and their
respective subsidiaries, shareholders (including indirect shareholders),
affiliates, officers, employees, agents and representatives, from any and all
claims, liabilities, promises, contracts, and suits which have been or could
have been asserted by Executive, or on his behalf, in any forum by reason of
matters arising prior to the date of this Agreement.
6. Release of Claims Against Executive. Development and Media
Enterprises hereby fully and forever release Executive from any and all claims,
liabilities, promises, contracts, and suits which have been or could have been
asserted by any or all of them or on their behalf in any forum by reason of
matters arising prior to the date of this Agreement, other than any claim or
liability based in material part on
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criminal conduct by Executive not known to Development or Media Enterprises as
of the date hereof which would constitute a felony under United States law or an
equivalent crime under applicable foreign law. Development, Media Enterprises
and Executive each represent that, to the best of their knowledge, Executive has
not engaged in any such criminal conduct.
7. Continued Obligations. (a) The parties to this Agreement
agree not to disclose the terms of this Agreement except to their legal counsel
and accountants, and to maintain its confidentiality, except as required by law;
provided that nothing herein will be deemed to prohibit the parties from
disclosing the same as may be required in the conduct of their respective
businesses. The confidentiality requirements under this Section 7(a) shall be
suspended to the extent that the provisions of this Agreement are publicly
disclosed by Development or Media Enterprises pursuant to applicable securities
laws.
(b) Pursuant to Section 11 of the Employment
Agreements, Executive shall continue to be bound by all obligations and
restrictions in the Employment Agreements with respect to noncompetition,
confidentiality, property of Development and Media Enterprises, nondisparagement
and nonsolicitation; except that as of January 1, 2000 Executive shall cease to
be bound by the noncompetition restrictions set forth in Section 6 of the
Employment Agreements.
(c) The obligations of Development and Media
Enterprises to indemnify Executive pursuant to Section 4(d) of the Employment
Agreements shall continue in effect pursuant to the terms of the Employment
Agreements. Additionally, Development and Media Enterprises shall continue to be
bound by the provisions under Section 8 of the Employment Agreements with
respect to nondisparagement of Executive.
(d) All provisions of the Employment Agreements with
respect to arbitration of disputes shall continue in effect, notwithstanding any
other provision of this Agreement.
(e) Executive shall reasonably cooperate with
Development and Media Enterprises and make himself reasonably available for
consultation in connection with any litigation or third party investigation
involving Development or Media Enterprises or any of their respective
subsidiaries, shareholders (including indirect shareholders), affiliates,
officers, employees, agents or representatives. In connection therewith,
Development and Media Enterprises shall reimburse Executive for all reasonable
expenses incurred by Executive.
(f) Development and Media Enterprises covenant that
they will direct a representative of both companies to respond to any inquiries
with respect to Executive's employment with Development and Media Enterprises
and his termination
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of employment in a manner conveying that Executive was a valued executive of
Development and Media Enterprises and terminated employment on amicable terms.
For so long as Xxxxxx X. Xxxxxx ("Xx. Xxxxxx") continues to serve as a member of
the board of directors of Media Enterprises, any successor thereto, or any
subsidiary thereof, Xx. Xxxxxx shall act as the representative described in the
preceding sentence.
8. Miscellaneous. This Agreement will be governed by and
construed in accordance with the laws of the State of New York. This Agreement
constitutes the entire Agreement and understanding among the parties hereto
concerning the subject matter hereof and supersedes and replaces all prior
negotiations, proposed agreements and agreements, written or oral. The parties
agree that neither they nor any of their representatives, agents or attorneys
have made any promises, representations or warranties whatsoever, expressed or
implied, which are not specifically set forth herein, and neither party has
executed this Agreement in reliance upon any such promises, representations or
warranties. This Agreement may not be amended or modified except in a writing
signed by the parties hereto. This Agreement may be executed in one or more
counterparts.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first set forth above.
CME DEVELOPMENT CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Name:
Title:
CENTRAL EUROPEAN MEDIA ENTERPRISES LTD.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Name:
Title:
XXXXXX XXXXXXX
/s/ Xxxxxx Xxxxxxx
--------------------------------------------
