EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT, dated as of March 23, 1998 by and
between CME Development Corporation, a Delaware corporation (the "Company"), and
Michel Delloye ("Executive").
W I T N E S S E T H:
WHEREAS, the Company desires to secure the services of
Executive as an employee, and Executive desires to accept such employment under
the terms and conditions set forth below;
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, the Company and Executive hereby agree as follows:
1. Employment.
(a) Agreement to Employ. Upon the terms and subject to the conditions
of this Agreement, the Company hereby employs Executive, and Executive hereby
accepts employment by the Company.
(b) Term of Employment. The Company shall employ Executive for a term
commencing March 23, 1998 (the "Commencement Date") and ending March 23, 2003,
unless extended by a written agreement signed by both parties. The Company will
advise Executive at least six months prior to the end of the Term whether it
intends to extend the Term. The Term of this Agreement as extended as provided
herein is herein referred to as the "Term". The period commencing on the
Commencement Date and ending on the earlier of (i) the expiration of the Term,
or (ii) the date of Executive's termination of employment pursuant to Section
5(a) shall be referred to as the "Employment Period".
(c) No Conflict. Executive represents that he is entering into this
Agreement voluntarily and that his employment hereunder and compliance by him
with the terms and conditions of this Agreement will not conflict with or result
in the breach of any agreement to which he is a party or by which he may be
bound.
2. Position and Duties.
(a) In general. Executive shall be employed as President and Chief
Executive Officer and shall perform such duties and services, consistent with
such position for the Company, as may be (i) specified in the By-Laws of the
Company or (ii) assigned to him from time to time by the Chairman of the Board
of Directors of Central European Media Enterprises Ltd. (the "Chairman"). The
duties of the Executive shall include serving as an officer or director or
otherwise performing services for any "Affiliate" of the Company as requested by
the Company. An "Affiliate" of any person means any entity that controls, is
controlled by or is under common control with such person.
(b) Full-time employment. During the Employment Period, and subject to
his obligations to Central European Media Enterprises Ltd., which is anticipated
to require two-thirds of his business time, Executive shall devote his full
business time to the services required of him hereunder, except for time devoted
to services required by him to be performed for any "Affiliate" of the Company,
5 weeks vacation time (but without duplication of any vacation time to which
Executive is entitled under any agreement with any Affiliate) and reasonable
periods of absence due to sickness, personal injury or other disability, and
shall use his best efforts, judgement, skill and energy to perform such services
in a manner consonant with the duties of his position and to improve and advance
the business and interests of the Company, provided, however, that Executive
shall perform such services under this Agreement exclusively within the United
Kingdom and the United States and Executive has entered into an employment
agreement with Central European Media Enterprises Ltd. for his services outside
of the United Kingdom and the United States. Executive shall not be engaged in
any other business activity which, in the reasonable judgment of the Chairman,
conflicts with the duties of the Executive under this Agreement. Executive shall
travel to such location or locations within the United Kingdom and the United
States as may be requested by the Company, or which Executive believes is
necessary or advisable, in the performance by Executive of his duties hereunder
or to the extent appropriate to improve and advance the interests of the Company
and its Affiliates.
3. Compensation.
(a) Base Salary. During the Employment Period, the Company shall pay
Executive a base salary at the annual rate of US$125,000 (the "Base Salary").
The Base Salary shall be payable in such installments (but not less frequent
than monthly) as the salaries of other executives of the Company are paid. The
Executive's base salary shall be reviewed annually by the Compensation Committee
of the Board of Directors of
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Central European Media Enterprises Ltd. (the "Compensation Committee"), and
shall be increased by not less than $3,500 per annum, or such greater amount as
the Compensation Committee may determine in its sole discretion.
(b) Annual Bonus. The Company shall provide Executive with the
opportunity to earn an annual cash bonus at the level established for the Chief
Executive Officer under the Annual Bonus Plan for Executives and Officers
established under the Compensation Principles approved by the Board of Directors
of Central European Media Enterprises Ltd. (the "Board") on March 11, 1998.
Under the Annual Bonus Plan, Executive will be eligible to receive a bonus for
each full year of his employment equal to 75% % of his Base Salary if the
performance goals ("target") established by the Compensation Committee for such
year are met. Sixty percent (60%) of the annual bonus, if any, will be based on
the achievement of company-wide objectives established by the Compensation
Committee, and 40% on an evaluation of personal performance as determined by the
Compensation Committee. The actual bonus may range from zero (if 80% of the
established goals are not achieved) to 50% of Base Salary if performance is at
80% of target, 75% of Base Salary if performance is at 100% of target to a
maximum of 100% of Base Salary if performance is at or above 150% of target, in
each case interpolated for actual performance. Executive has been provided a
copy of the Compensation Principles.
4. Benefits, Perquisites and Expenses.
(a) Benefits. During the Employment Period, Executive shall be eligible
to participate in (i) each welfare benefit plan sponsored or maintained by the
Company, including, without limitation, each group life, hospitalization,
medical, dental, health, accident or disability insurance or similar plan or
program of the Company, provided that in any event Executive shall at the
Company's expense, be entitled to private medical insurance for himself, his
wife 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 Company, and (ii) each pension, profit sharing, retirement,
deferred compensation or savings plan sponsored or maintained by the Company, in
each case, whether now existing or established hereafter, to the extent that
Executive is eligible to participate in any such plan under the generally
applicable provisions thereof, provided that if Executive is also entitled to
any of such benefits under an agreement with an Affiliate, the benefits shall be
provided by the Company and its Affiliates to Executive in a manner that avoids
duplication. The Company may amend or terminate any such plan in its discretion.
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(b) Perquisites. During the Employment Period, Executive shall be
entitled to home leave as specified in the Company's Employee Handbook, shall be
provided with a suitable car and driver, and shall also be entitled to receive
such perquisites as are generally provided to other senior officers of the
Company in accordance with the then current policies and practices of the
Company, provided that if Executive is also entitled to any of such benefits
under an agreement with an Affiliate, the benefits shall be provided by the
Company and its Affiliates to Executive in a manner that avoids duplication. For
each calendar month during the Employment Period that Executive maintains a
principal residence in the Greater London Metropolitan Area, Executive shall be
entitled to receive an annual expatriate premium of Pounds Sterling
(pound)67,500 to be paid in equal monthly installments, and subject to annual
increase based on the increase in the consumer price index (HICP) for the London
metropolitan area published by the Office of National Statistics for the
preceding year, or if such index is no longer available, such other generally
available index measuring changes in consumer purchasing power (in the London
metropolitan area or nationally) designated by the Compensation Committee, or
such other amount as may be agreed to by Executive and the Compensation
Committee. The Company shall pay, or reimburse Executive, for the actual and
reasonable costs of moving Executive, his family and their household goods from
Bruxelles, Belgium to London, England (including customary realty and legal fees
on the disposition of Executive's principal residence in Belgium); the actual
and reasonable relocation counseling for Executive's spouse; and the actual and
reasonable costs of moving Executive, his family and their household goods back
from London to Bruxelles, Belgium upon expiration of Executive's employment for
any reason, or to another location requested by Executive (or in the event of
his death, his surviving spouse), provided the cost of moving to such other
location does not exceed the reasonable cost of moving to Bruxelles, Belgium. In
addition, at the end of the Employment Period, the Company shall, if requested
by Executive, assume responsibility for the lease of Executive's residence in
greater metropolitan London, provided the Company shall not be obligated to
assume responsibility for such lease for a period greater than one year from the
end of the Employment Period or for any period during which such residence is
occupied. If Executive accepts employment in England following termination of
his employment with the Company, the Company shall not be responsible for the
costs of relocating Executive thereafter.
(c) Business Expenses. During the Employment Period, the Company shall
pay or reimburse Executive for all reasonable expenses incurred or paid by
Executive in the performance of Executive's duties hereunder, upon presentation
of expense statements or vouchers and such other information as the Company may
require and in accordance with the generally applicable policies and procedures
of the Company.
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(d) Indemnification. The Company shall indemnify Executive and hold
Executive harmless from and against any claim, loss or cause of action arising
from or out of Executive's performance as an officer, director or employee of
the Company or any of its subsidiaries or in any other capacity, including any
fiduciary capacity, in which Executive serves at the request of the Company to
the maximum extent permitted by applicable law and the Company's Articles of
Incorporation and By-Laws. If any claim is asserted against Executive with
respect to which Executive reasonably believes in good faith he is entitled to
indemnification, the Company shall either defend Executive or, at its option,
pay Executive's legal expenses (or cause such expenses to be paid) on a
quarterly basis, provided that Executive shall reimburse the Company for such
amounts, plus simple interest thereon at the 90-day United States Treasury Bill
rate as in effect from time to time, compounded annually, if Executive shall be
found by a court of competent jurisdiction not to have been entitled to
indemnification.
(e) Withholding. Any payments provided for herein shall be reduced by
any amounts required to be withheld by the Company from time to time under any
applicable income tax or other law, rule or regulation.
(f) Currency of Payment. Payments provided for herein shall be in the
currency stated, or in such other mutually beneficial currency as the Company
and Executive shall agree from time to time sufficiently in advance of payment
to permit timely payment. Payment in a currency other than in the currency
stated shall be based at the current exchange rate at the time of payment.
Notwithstanding the foregoing, if a single European currency ("euro") replaces
the national currencies of participating members of The Treaty on European Union
and Final Act of Feb. 7, 1992, 31 I.L.M. 247 (entered into force Nov. 1, 1993),
or other similar or successor treaty, payments hereunder shall, at the election
of Executive, thereafter be made in such common currency (euro), based upon the
exchange rate at the time of such election.
(g) Right of Offset. If the Company makes any payment to a third party
on Executive's behalf or as guarantor of an obligation of Executive, the Company
shall be entitled to seek reimbursement from the Executive of any such amounts
and/or to offset any such amounts against any payments by the Company to
Executive hereunder.
5. Termination of Employment.
(a) Termination of the Employment Period. The Employment Period shall
end upon the earliest to occur of (i) a termination of Executive's employment on
account of Executive's death, (ii) a Termination due to Disability or
Retirement, (iii) a Termination for Cause, (iv) a Termination Without Cause, (v)
a Termination for Good
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Reason, (vi) a Termination Without Good Reason, or (vii) the expiration of the
Term. The Company or the Executive may initiate a termination in any manner
permitted hereunder by giving the other party written notice thereof (the
"Termination Notice"). The effective date (the "Termination Date") of any
termination shall be deemed to be the later of (i) in the case of a Termination
Notice from Executive, 45 days after the receipt by the Company of the
Termination Notice, (ii) the date on which the Termination Notice is given, or
(iii) the date specified in the Termination Notice; provided, however, that in
the case of the Executive's death, the Termination Date shall be the date of
death. Upon termination of his employment for any reason, Executive will
immediately resign from all positions that he holds with the Company and its
Affiliates.
(b) Payments Upon Certain Terminations.
(i) Termination for Good Reason or Termination Without Cause.
In the event that Executive's employment is terminated by Executive for Good
Reason or by the Company Without Cause, the Company shall pay Executive his
Earned Salary, Vested Benefits, and a Severance Benefit (as such terms are
hereinafter defined).
(ii) Termination due to Death. In the event of the termination
of Executive's employment due to Executive's death, the Company shall pay
Executive's estate Executive's Earned Salary, Vested Benefits, and shall provide
to Executive's surviving spouse and children Executive's Base Salary (at the
rate in effect on the date of his death) and the health insurance provided in
Section 4(a)(i) for a period of 12 months and the Relocation Payment.
(iii) Termination due to Disability or Retirement. In the
event of termination of Executive's employment by the Company due to Disability
or a Termination due to Retirement, the Company shall pay Executive his Earned
Salary and Vested Benefits as provided in Section 3(c), plus, in the event of
termination due to Disability, to the Executive or his estate his Base Salary at
the Termination Date on a monthly basis, the benefits provided in Section
4(a)(i) for 12 months and the Relocation Payment. In the event that Executive's
employment with the Company is terminated due to Disability, Executive's
entitlement to continuation of his Base Salary under this subsection (iii) shall
be reduced by the amount of any Company sponsored (and paid for) disability
benefits paid to Executive.
(iv) Termination Without Good Reason. In the event of a
termination of Executive's employment by Executive Without Good Reason, the
Company shall pay Executive his Earned Salary and Vested Benefits.
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(v) Termination for Cause. In the event of a termination of
Executive's employment by the Company for Cause, the Company shall pay Executive
his Earned Salary and Vested Benefits.
(c) Timing of Payments. Earned Salary shall be paid in a single lump
sum as soon as practicable, but in no event more than 60 days, following the end
of the Employment Period. Vested Benefits shall be payable in accordance with
the terms of the plan, policy, practice, program, contract or agreement under
which such benefits have accrued except as otherwise expressly modified by this
Agreement. Severance Benefits shall be paid in equal monthly installments.
(d) Definitions. The following capitalized terms have the following
meanings:
"Earned Salary" means any Base Salary earned, but unpaid, for
services rendered to the Company on or prior to the date on which the Employment
Period ends.
"Normal Retirement Age" means the first day of the month
following Executive attaining age 65.
"Relocation Payments" means an amount equal to the cost of
relocating Executive and his family from the United Kingdom as provided in
Section 4(b).
"Severance Benefit" means Executive's minimum Base Salary for
the remainder of the Term.
"Termination due to Disability" means a termination of
Executive's employment by the Company because Executive has been incapable of
substantially fulfilling the positions, duties, responsibilities and obligations
set forth in this Agreement because of physical, mental or emotional incapacity
resulting from injury, sickness or disease for a period of (i) at least six
consecutive months or (ii) a total of more than 183 days in any twelve month
period. Any question as to the existence, extent or potentiality of Executive's
disability upon which Executive and the Company cannot agree shall be determined
by a qualified, independent physician selected by the Company and reasonably
acceptable to Executive. The determination of any such physician shall be final
and conclusive for all purposes of this Agreement. Executive or his legal
representative or any adult member of his immediate family shall have the right
to present to such physician such information and arguments as to Executive's
disability as he, she or they deem appropriate, including the opinion of
Executive's personal physician.
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"Termination due to Retirement" means termination of
employment by Executive, or termination of Executive's employment by the Company
other than a Termination for Cause, on or after Executive's Normal Retirement
Age.
"Termination for Cause" means a determination by a majority of
the Board to terminate Executive's employment by the Company due to (i)
Executive's conviction of a felony or the entering by Executive of a plea of
nolo contendere with respect to a charged felony, (ii) Executive's gross
negligence, recklessness, dishonesty, fraud, willful malfeasance or willful
misconduct in the performance of the services con templated by this Agreement,
(iii) willful misrepresentation to shareholders or directors which is injurious
to the Company; (iv) a willful failure without reasonable justification to
comply with a reasonable written order of the Chairman; or (v) a willful and
material breach of Executive's duties or obligations under this Agreement.
Notwithstanding the foregoing, a termination shall not be treated as a
Termination for Cause unless the Company shall have delivered a written notice
to Executive stating that it intends to terminate his employment for Cause not
less than seven days following the giving of such notice and specifying the
factual basis for such termination, and the event or events that form the basis
for the notice, if capable of being cured, shall not have been cured within the
period stated in the receipt of such notice.
"Termination for Good Reason" means a termination of
Executive's employment by Executive within 30 days following (i) a reduction in
Executive's annual Base Salary or bonus opportunity contemplated by Sections
3(a) and (b), (ii) a material reduction in Executive's positions, duties,
responsibilities or reporting lines from those described in Section 2 hereof;
(iii) a material breach of this Agreement by the Company, (iv) a permanent
relocation of Executive's principal office outside of the London metropolitan
area or (v) any termination of the Executive's employment with Central European
Media Enterprises Ltd. due to a "Termination Without Cause" by Central European
Media Enterprises Ltd. or a "Termination With Good Reason by Executive", as
those terms are defined in the employment agreement between the Executive and
Central European Media Enterprises Ltd. Notwithstanding the foregoing, a
termination shall not be treated as a Termination for Good Reason (x) if
Executive shall have consented in writing to the occurrence of the event giving
rise to the claim of Termination for Good Reason or (y) unless Executive shall
have delivered a written notice to the Company within 30 days of his having
actual knowledge of the occurrence of one of such events stating that he intends
to terminate his employment for Good Reason and specifying the factual basis for
such termination, and such event, if capable of being cured, shall not have been
cured within 30 days of the receipt of such notice.
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"Termination Without Cause" means any termination by the
Company of Executive's employment hereunder other than (i) a Termination due to
Disability, (ii) a Termination due to Retirement or (iii) a Termination for
Cause.
"Termination Without Good Reason" means any termination by
Executive of Executive's employment hereunder upon not less than three month's
notice to the Company other than (i) a termination due to Executive's death,
(ii) a Termination due to Retirement, (iii) a Termination for Good Reason, or
(iv) a Termination due to Disability.
"Vested Benefits" means amounts which are vested or which
Executive is otherwise entitled to receive under the terms of or in accordance
with any plan, policy, practice or program of, or any contract or agreement
with, the Company, at or sub sequent to the date of his termination without
regard to the performance by Executive of further services or the resolution of
a contingency and expenses incurred prior to termination of employment that are
reimbursable under Section 4(c).
(e) Full Discharge of Company Obligations. The amounts payable to
Executive pursuant to this Section 5 following termination of his employment
(including amounts payable with respect to Vested Benefits) shall be in full and
complete satisfaction of Executive's rights under this Agreement and any other
claims he may have in respect of his employment by the Company or any of its
subsidiaries. Such amounts shall constitute liquidated damages with respect to
any and all such rights and claims and, upon Executive's receipt of such
amounts, the Company shall be released and discharged from any and all liability
to Executive in connection with this Agreement or otherwise in connection with
Executive's employment with the Company and its subsidiaries, other than
Executive's rights to indemnification under Section 4(d).
6. Agreement Not to Compete With Company
(a) During the Employment Period and for a period of two years
thereafter, Executive shall not directly or indirectly own, manage, operate,
finance, join, control, advise, consult, render services to, have an interest or
future interest or participate in the ownership, management, operation,
financing or control of, or be employed by or connected in any manner with any
Competing Business (other than as a holder of common stock of the Company, and
not in excess of 1% of the outstanding voting shares of any other publicly
traded company). "Competing Business" means the business of licensing of
television or radio stations and provision of programming engaged in by the
Company or any Affiliate in any Russia, the former states of the U.S.S.R., or
any country in Central and Eastern Europe where the Company or an Affiliate
conducts such business at any time during the Term, provided that Competing
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Business shall not include any such business the consolidated revenues of which
are less than 5% of the Central European Media Enterprises Ltd.'s consolidated
revenues (in each case determined at the time Executive commences such
affiliation). Any opportunity directly or indirectly related to any business
engaged in by the Company, its subsidiaries and Affiliates of which Executive
becomes aware during the Term shall be deemed a corporate opportunity of the
Company, and Executive shall promptly make such opportunity available to the
Company.
(b) If, during the period of two years after expiration of the
Term, Executive or an Affiliate of Executive proposes to engage in what may be a
Competing Business, Executive shall so notify the Company in a writing which
shall fully set forth and describe in detail the nature of the activity which
may be a competitive Business, the names of the companies or other entities with
or for whom such activity is proposed to be engaged in by Executive or by an
Affiliate of Executive (the "Section 6 Notice"). If, within 30 days after
receipt by the Company of a Section 6 Notice, the Company shall fail to notify
Executive that it deems the proposed activity to be a Competitive Business, then
Executive shall be free to engage in the activities described in the Section 6
Notice without violation of Section 6(a). If, however, the Company notifies
Executive that the proposed activities constitute a Competitive Business, then
(i) Executive shall not engage in such Competitive Business during the two-year
period following expiration of the Term, and (ii) the Company shall pay
Executive, during such two-year period, in equal monthly installments, an amount
equal to his highest Base Salary; provided that the amount payable under this
Section 6(b) shall be reduced by the amount of Severance Benefit that Executive
is receiving for such period.
7. Confidential Information
(a) Without the prior written consent of the Company, Executive shall
not disclose at any time during the Employment Period or any time thereafter any
Confidential Information (as defined below) to any third person other than in
the course of fulfilling Executive's responsibilities under this Agreement
unless such Confidential Information has been previously disclosed to the public
by the Company or an Affiliate or is in the public domain (other than by reason
of Executive's breach of the provisions of this paragraph).
(b) "Confidential Information" is any non-public information pertaining
to the Company or an Affiliate, any of their businesses or the business or
personal affairs of Ronald S. Lauder ("Lauder") or his family and how any of
them conducts its or his business or affairs. "Confidential Information"
includes not only information disclosed by the Company or an Affiliate to
Executive, but information developed, created or
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learned by Executive during the course of or as a result of Executive's
employment with the Company. "Confidential Information" specifically includes
information and documents concerning the Company's and its Affiliates' methods
of doing business; research, telecommunications technology, its actual and
potential clients, transactions and suppliers (including the Company's or an
Affiliate's terms, conditions and other business arrangements with them); client
or potential client or transaction lists and billing; advertising, marketing and
business plans and strategies (including prospective or pending licensing
applications or investments in license holders or applicants); profit margins,
goals, objectives and projections; compilations, analyses and projections
regarding the Company, its Affiliates or any of its clients or potential clients
or their businesses; trade secrets; salary, staffing, management organization or
employment information; information relating to members of the Board and
management of the Company or an Affiliate; files, drawings or designs;
information regarding product development, marketing plans, sales plans or
manufacturing plans; operating policies or manuals, business plans, financial
records or packaging design; or any other financial, commercial, business or
technical information relating to the Company, an Affiliate, Lauder or his
family or information designated as confidential or proprietary that the
Company, an Affiliate or Lauder may receive belonging to others who do business
with any of them.
(c) Nothing herein shall prevent the disclosure by Executive of any
information required by an order of a court having competent jurisdiction or
under subpoena from a government agency, provided that, if Executive receives a
request for the disclosure of any Confidential Information pursuant to court
process or by a government agency, Executive shall immediately (and at the
latest within two business days) notify the Company of that request and
cooperate to the maximum extent authorized by law with the Company in protecting
the Company's and it Affiliates' interest in maintaining the confidentiality of
any Confidential Information.
8. No Disparaging Comments
Each of the parties hereto agrees not to make disparaging or derogatory comments
about the other party, members of the Board or Affiliates, except to the extent
required by law, and then only after consultation with the other party to the
maximum extent possible in order to maintain goodwill for each of the parties.
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9. Return of Company Property
Promptly (and at the latest within ten business days) following Executive's
termination of services, Executive shall:
(i) return to the Company all documents, records, notebooks,
computer diskettes and tapes and anything else containing the
Company's Confidential Information (as defined above), and any
other property or Confidential Information of the Company or
its Affiliates, including all copies thereof in Executive's
possession, custody or control, and
(ii) delete from any computer or other electronic storage medium
owned by Executive any of the proprietary or Confidential
Information of the Company or its Affiliates.
10. No Soliciting or Hiring Company Employees
During the Employment Period and for a two-year period thereafter, Executive
shall not directly or indirectly induce any employee of the Company or any
Affiliate, other than Executive's secretary or personal assistant, to terminate
employment with such entity, and during the Employment Period and for a one-year
period thereafter, shall not directly or indirectly, either individually or as
owner, agent, employee, consultant or otherwise, employ or offer employment to
any person who is or was within 9 months prior to the end of the Employment
Period employed by the Company or any Affiliate as an em ployee, other than
Executive's secretary or personal assistant.
11. Continuing Obligations Following Termination
Executive agrees that his obligations and restrictions with respect to noncom
petition, confidentiality, Company property, nondisparagement and
nonsolicitation, and the Company obligations to indemnify Executive under
Section 4(d), will continue to apply following the termination of Executive's
relationship regardless of the manner in which his relationship with the Company
is terminated, whether voluntarily, for Cause, for Good Reason, without Cause or
otherwise.
12. Arbitration of All Disputes
(a) Any dispute, controversy or claim between the Executive and the
Company or any of its officers, directors, employees or shareholders (who are
expressly made third-party beneficiaries of this agreement) arising out of,
relating to or in connection
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with this agreement, or the breach, termination or validity thereof, shall be
finally resolved by binding and non-appealable arbitration, before a single
arbitrator selected by the procedure set forth below, conducted in New York, New
York. To the extent practicable, any such arbitration shall be consolidated with
any other arbitration proceeding between Executive and any Affiliate of the
Company (if any).
(b) Either party may commence an arbitration proceeding by giving
written notice to the other party of its desire to arbitrate.
(c) The single arbitrator (the "Arbitrator") shall be selected from
among the New York City members of the New York Regional Panel of Distinguished
Neutrals (the "Panel") of the Center for Public Resources ("CPR") by mutual
agreement of the parties, or if the parties are unable to agree, by the
following means:
(A) The Company, on one hand, and Executive
on the other hand, shall simultaneously exchange lists each
containing the names of five members of their choice of the
Panel who have indicated a willingness to serve.
(B) If a single name appears on both lists,
that individual shall be appointed.
(C) If more than one name appears on both
parties' lists, the Arbitrator shall be selected from the
common names by mutual agreement of the parties or by the toss
of a coin.
(D) If the lists contain no names in common,
each party shall strike four names from the other party's list
and the Arbitrator shall be selected from the remaining two
names by mutual agreement of the parties or by the toss of a
coin.
(E) If the CPR ceases to have a Panel or it
is otherwise impossible to select the Arbitrator from the
Panel as contemplated by this Agreement, the Arbitrator shall
be selected by the President of the CPR in the manner that the
President deems closest to satisfying the purposes of this
Section, or, if such person is unable to do so, by the
President of the Association of the Bar of the City of New
York.
(d) The Arbitrator, after appropriate consultation with the parties,
shall (i) determine, in his or her sole discretion, the rules governing the
arbitration proceeding,
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including whether and to what extent the parties shall have any right to
pre-hearing discovery or other forms of disclosure, the manner of presentation
of arguments and/or evidence before or at any hearing, whether and to what
extent formal rules of evidence shall govern the proceeding and the parties'
rights following the proceeding, and (ii) be governed in exercising such
discretion by the goal of reaching a fair and reasonable decision in an
expeditious and efficient manner while endeavoring to streamline the process and
avoid undue litigation costs.
(e) The Arbitrator shall assess the costs of the proceeding (including
the prevailing party's reasonable attorney's fees) on any unsuccessful party to
the extent the Arbitrator concludes that such party is unsuccessful, unless he
or she concludes that matters of equity or important considerations of fairness
dictate otherwise.
(f) The Arbitrator shall be required to state his or her decision in
writing and may, but shall not be required to, elaborate on the reasons for such
decision.
(g) The arbitrator(s) shall have the authority upon application by a
party to direct specific performance, including preliminary or interim specific
performance pending the final resolution of the arbitration, of any portion of
this agreement. The parties expressly consent to the jurisdiction and power of
any federal or state court in New York to enforce the terms of such a direction
upon application by a party. If the arbitrator(s) have not yet been appointed,
the parties may obtain injunctive or other appropriate relief from a court to
enforce the terms of this agreement pending the appointment of the arbitrator(s)
who shall thereafter have full power to continue, modify or vacate the terms of
any injunctive relief ordered by the court.
(h) Notwithstanding the terms of this agreement that provide that New
York law shall govern, the arbitration and the provisions in this agreement
dealing with arbitration shall be governed exclusively by the United States
(Federal) Arbitration Act, 9 U.S.C. ss.ss. 1-16, and judgment on or enforcement
of the award or any direction for specific performance rendered by the
arbitrators may be entered by any court having jurisdiction thereof or having
jurisdiction over the relevant party or assets of such party.
(i) If, notwithstanding the parties' agreement to arbitrate, any issue
is presented to a court for decision, the parties hereby waive any right to
trial by jury.
(j) The parties agree that any dispute between the parties and the
arbitration itself shall be kept confidential and that the existence of the
arbitration and any element of it (including but not limited to any pleading,
brief or other document submitted or exchanged, any testimony or other oral
submission, and any award) shall not be disclosed
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except to the arbitrator(s), the CPR Institute for Dispute Resolution, the
parties, their counsel and any person necessary to the conduct of the
proceeding, except as may be lawfully required in judicial proceedings relating
to the arbitration or otherwise.
13. No Punitive or Emotional Damages
The parties hereto agree that neither the Executive nor the Company will be
entitled to seek or obtain punitive, exemplary or similar damages of any kind
from the other or, in the case of Executive, from the Company's officers,
directors, employees or shareholders, or to seek or obtain damages or
compensation for emotional distress, as a result of any dispute, controversy or
claim arising out of, relating to or in connection with this Agreement, or the
performance, breach, termination or validity thereof. Nothing herein shall
preclude an award of compensatory or punitive damages against any other third
party.
14. Injunctive Relief to Avoid Irreparable Injury
(a) Executive acknowledges and agrees that the individualized services
and capabilities that he will provide to the Company under this Agreement are of
a personal, special, unique, unusual, extraordinary and intellectual character.
(b) Executive acknowledges and agrees that the restrictions in this
agreement are reasonable to protect the Company's rights under this Agreement
and to safeguard the Company's and it Affiliates' Confidential Information.
(c) Executive acknowledges and agrees that the covenants and
obligations of Executive with respect to noncompetition, nonsolicitation,
confidentiality and Company property relate to special, unique and extraordinary
matters and that a violation of any of the terms of such covenants and
obligations will cause the Company and its Affiliates irreparable injury for
which adequate remedies are not available at law. Executive therefore agrees
that the Company shall be entitled to an order of specific performance,
injunction, restraining order or such other interim or permanent equitable
relief (without the requirement to post bond) restraining Executive from
committing any violation of the covenants and obligations contained in this
Agreement
(d) These injunctive remedies are cumulative and are in addition to any
other rights and remedies the Company may have at law or in equity.
(e) Executive represents that his economic means and circumstances are
such that the provisions of this Agreement, including the noncompetition,
nonsolicitation,
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confidentiality and Company property provisions, will not prevent him from
providing for himself and his family on a basis satisfactory to him and them.
15. Automatic Amendment by Arbitral Award or Court Order
and Interim Enforcement
(a) If the Arbitrator(s) or a court determines that, but for the
provisions of this paragraph, any part of this agreement is illegal, void as
against public policy or otherwise unenforceable, the relevant part will
automatically be amended to the extent necessary to make it sufficiently narrow
in scope, time and geographic area to be legally enforceable.
All other terms will remain in full force and effect.
(b) If the Executive raises any question as to the enforceability of
any part or terms of this agreement, including, without limitation, the
provisions relating to noncompetition, nonsolicitation, confidentiality and
Company property, the Executive specifically agrees that he will comply fully
with this Agreement unless and until the entry of an arbitral award to the
contrary.
16. Notices
All notices and other communications required or permitted hereunder shall be
sufficiently given if (a) delivered personally, (b) sent by facsimile
transmission (with confirmation received), (c) sent by a nationally-recognized
air courier assuring overnight delivery, or (d) mailed (by registered or
certified mail, return receipt requested and postage prepaid) as follows:
if to the Executive, to the Executive at:
18 D'Arblay Street
London W1V 3FP, England
with a copy to Executive at:
Michel Delloye
Avenue des Cytises No. 6
B1180 Bruxelles, Belgium
Fax: 011-322-375-2807
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if to the Company, to the Company at
Legal Department
18 D'Arblay Street
London W1V 2FP, England
with a copy to each of:
Hon. Ronald S. Lauder
Suite 4200
767 Fifth Avenue
New York, New York 10153
Fax: (212) 572-4046
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Fax: (212) 909-6836
Attention: Louis Begley, Esq.
or to such other address as shall be furnished by notice from time to time by
one party hereto to the other party. Any such communication shall be deemed to
have been given, (i) in the case of personal delivery, on the date of delivery,
(ii) in the case of delivery by air courier, on the first business day following
the day on which such communication was posted, and (iii) in the case of
mailing, on the third business day following the day on which such notice was
posted.
17. Sole and Entire Understanding; Amendments
The entire understanding and agreement between the Company and Executive have
been incorporated into this Agreement. There are no other promises,
representations, understandings or inducements by the Company to Executive or
Executive to the Company other than those specifically set forth in this
Agreement. This Agreement may not be altered, amended or added to except in a
single writing signed by the Company and the Executive. Coincident herewith,
Executive and Central European Media Enterprises Ltd. are entering into an
Employment Agreement covering Executive's services to Central European Media
Enterprises Ltd. and its subsidiaries (other than the Company).
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18. Waiver of Breach
A waiver or breach of any provision of this Agreement shall not constitute or
operate as a waiver of any other breach of such provision or of any other
provision, and any failure to enforce any provision hereof shall not operate as
a waiver of such provision or of any other provision.
19. Headings
The headings of sections in this Agreement are for convenience only, are not a
part of this Agreement and shall not affect the construction of the provisions
of this Agreement.
20. Arm's Length
(a) This Agreement was entered into at arm's length, without duress or
coercion, and is to be interpreted as an agreement between parties of equal
bargaining strength. Both the Company and the Executive agree that this
Agreement is clear and unambiguous as to its terms, and that no parol or other
evidence will be used or admitted to alter or explain the terms of this
Agreement, but that it will be interpreted based on the language within its four
corners in accordance with the purposes for which it is entered into.
(b) The parties hereto expressly agree that any rule or contractual
interpretation, as applied under California law or anywhere else, that would
allow parol or extrinsic evidence to attempt to show fraud in the inducement or
duress to contradict the plain, unambiguous terms of this Agreement shall not
apply to this Agreement and its performance and enforcement. This provision is a
material part of this Agreement and, should any party try to introduce evidence
contrary to this provision, any other party shall be entitle to consider it a
breach and to rescind this contract in full.
21. Successors and Assigns
(a) This Agreement will inure to the benefit of, and will be binding
upon, the Company, its successors and assigns and upon the Executive and his
heirs, successors and assigns; provided, however, that, because this is an
Agreement for personal services, the Executive cannot assign any of his
obligations under this Agreement to anyone else.
(b) This Agreement may be executed in counterparts, in which case each
of the two counterparts will be deemed to be an original and the final
counterpart shall be deemed to have been executed in New York, New York.
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22. 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 4(d) and 5(b).
23. New York Law Governs
Any questions or other matters arising under this Agreement, whether of
validity, interpretation, performance or otherwise, will therefore be governed
by and construed in accordance with the laws of the State of New York applicable
to agreements made and to be wholly performed in New York, without reference to
principles of conflicts or choice of law under which the law of any other
jurisdiction would apply.
IN WITNESS WHEREOF, this Agreement has been executed by
Executive and then by the Company in New York, New York, on the dates shown
below, but effective as of the date and year first above written.
Date: March 24, 1998 /s/ Michel Delloye
------------------------ ---------------------------
Michel Delloye
CME DEVELOPMENT CORPORATION
Date: BY: /s/ Ronald S. Lauder
------------------------ ------------------------
Title:
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