EXHIBIT 10.13
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (the "AGREEMENT") is entered into by CTC Media,
Inc., a Delaware corporation (the "COMPANY"), and ▇▇▇▇▇▇▇▇ Sergeevich Khanumyan
(the "EXECUTIVE").
WHEREAS, the Executive currently serves as Chief Operating Officer of the
Company, as well as First Deputy General Director of the Company's subsidiaries,
ZAO Set Televissionnykh Stantsiy ("CTC NETWORK") pursuant to an employment
agreement with such company dated January 11, 2005 (as such agreement may be
amended from time to time, the "CTC NETWORK AGREEMENT"), and ZAO Novy Kanal
("DOMASHNY NETWORK") pursuant to an employment agreement with such company dated
December 27, 2004 (as such agreement may be amended from time to time, the
"DOMASHNY NETWORK AGREEMENT"); and
WHEREAS, the Executive and the Company wish to memorialize the terms of the
continued employment of the Executive by the Company and to provide for the
common terms of the continued employment of the Executive in all capacities with
the Company and its direct and indirect subsidiaries (together, the "GROUP");
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Term of Employment. The Company hereby agrees to continue to employ the
Executive, and the Executive hereby accepts continued employment with the
Company, upon the terms set forth in this Agreement, effective as of January 1,
2006. The Executive's employment shall continue until it is terminated in
accordance with the provisions of Section 5.
2. Title; Capacity.
(a) The Executive shall serve as Chief Operating Officer of the Company
and his job duties shall include managing the operations of the Group. In
addition, the Executive shall serve as a member of the Company's operating
committee (for so long as such committee stands) and participate in key
management decisions. The Executive agrees to perform such other duties and
responsibilities as the Company's Chief Executive Officer or his designee
shall from time to time reasonably assign to him.
(b) Without limiting the foregoing, the Executive shall continue to
serve as First Deputy General Director of the CTC Network pursuant to, and
subject to the terms of, the CTC Network Agreement and First Deputy General
Director of the Domashny Network pursuant to, and subject to the terms of,
the Domashny Network Agreement. For purposes of Russian law, the
Executive's employment by the Company pursuant to this Agreement shall be
deemed to be the Executive's principal employment; the Executive's
employment by the other Group entities pursuant to any Other Group
Employment Agreement (as defined below) shall be deemed to be the
Executive's secondary employment.
(c) The Executive shall be based at the Company's headquarters in
Moscow, Russia or such other location as the Company determines in its
discretion.
(d) The Executive shall be subject to the supervision of, and shall have
such authority as is delegated to him by, the Company's Chief Executive
Officer or his designee or the Company's Board of Directors (the "BOARD").
(e) The Executive agrees to devote his entire business time, attention
and energies to the business and interests of the Group during his
employment with the Company and shall not engage in any other business
activities without the prior written approval of the Chief Executive
Officer. The Executive agrees to abide by the rules, regulations,
instructions, personnel practices and policies of the Company and any
changes therein that may be adopted from time to time by the Company.
3. Compensation and Benefits.
(a) Base Salary. The Group shall pay the Executive, in regular
installments in accordance with the Group's standard payroll practices, an
annual base salary of $300,000, less all applicable Russian federal and
local taxes and withholdings; which shall be the aggregate annual base
salary payable to the Executive for his services as Chief Operating Officer
of the Company, First Deputy General Director of the CTC Network, First
Deputy General Director of the Domashny Network and any and all other
capacities in which he serves for any Group company from time to time. Such
salary may be adjusted from time to time in accordance with normal business
practice and upon mutual agreement of the parties. For the avoidance of
doubt, the total aggregate annual base salary payable to the Executive
pursuant to this Agreement and the CTC Network Agreement, the Domashny
Network Agreement and any other employment or service agreement with any
Group company (collectively, the "OTHER GROUP EMPLOYMENT AGREEMENTS" and,
individually, each an "OTHER GROUP EMPLOYMENT AGREEMENT") shall not exceed
the amount as determined in accordance with this clause (a).
(b) Discretionary Bonus. The Executive shall be eligible for an annual
discretionary award of up to $150,000, less all applicable Russian federal
and local taxes and withholdings, subject to the Executive's achievement of
performance targets set by the Board or a committee thereof; which shall be
the aggregate annual discretionary award payable to the Executive for his
services as Chief Operating Officer of the Company, First Deputy General
Director of the CTC Network, First Deputy General Director of the Domashny
Network and any and all other capacities in which he serves for any Group
company. Whether such performance targets have been achieved will be
decided by the Board or a committee thereof in its sole discretion. In any
event, the Executive must be an active employee of the Company on the date
the bonus for any fiscal year is distributed in order to be eligible for a
bonus award. For the avoidance of doubt, the total aggregate annual
discretionary bonus potentially payable to the Executive pursuant to this
Agreement and all Other Group Employment Agreements shall not exceed the
amount as determined in accordance with this clause (b).
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(c) Vacation. The Executive shall be obligated to take 28 calendar days
of paid vacation per calendar year, at such times as may be approved by and
in the sole discretion of the Company. The Executive shall document such
vacation as required by Group procedures and Russian law. Such vacation
days shall accrue at the rate of 2-1/3 days per month. For the avoidance of
doubt, (i) the aggregate number of vacation days allowed pursuant to this
Agreement and all Other Group Employment Agreements shall not exceed the
number provided in this clause (c) and (ii) vacation days taken pursuant to
this Agreement or any Other Group Employment Agreement shall be deemed to
have been taken pursuant to all such agreements.
(d) Transportation. The Company shall provide the Executive with the
exclusive use of an executive class car (which shall remain the property of
the Group) and a driver during the term of the Executive's employment with
the Company.
(e) Personal assistant. The Company shall provide the Executive with a
personal assistant who shall work exclusively for the Executive.
(f) Mobile phone. The Company shall provide the Executive with a mobile
phone and shall pay the line rental and service fees and the cost of any
business-related calls.
4. Taxes. The Executive shall be responsible for all of his own taxes
payable in Russia or any other jurisdiction in which he is subject to tax.
5. Employment Termination. The employment of the Executive by the Company
pursuant to this Agreement shall terminate upon the occurrence of any of the
following:
(a) At the election of the Company, for Cause, immediately upon written
notice by the Company to the Executive. For the purposes of this Agreement,
"CAUSE" for termination shall be deemed to exist upon: (i) a good faith
finding by the Company that (A) the Executive has failed to adequately
perform the material aspects of his assigned duties for the Group in a
manner that materially and adversely affects the Group, after written
notice of such failure to perform such duties and a reasonable opportunity
to correct such failure, or (B) the Executive has engaged in dishonesty,
gross negligence or intentional misconduct that materially and adversely
affects the Group; (ii) the Executive's conviction of, or the entry of a
pleading of guilty or nolo contendere by the Executive, to any crime
involving moral turpitude or any felony; (iii) the Executive's material
breach of the non-competition provisions contained in Section 6 below or
the non-disclosure provisions contained in Section 7 below, caused by the
Executive's intentional misconduct or gross negligence; or (iv) the
Executive's intentional violation of Group policy in a manner that
materially and adversely affects the Group, after written notice of such
violation and a reasonable opportunity to correct such failure.
(b) At the election of the Company, without Cause, upon not less than
six months' prior written notice of termination.
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(c) At the election of the Executive, upon not less than six month's
prior written notice of resignation.
6. Non-Competition and Non-Solicitation.
(a) During the term of the Executive's employment and for a period of
two (2) years after the termination of such employment, the Executive will
not directly or indirectly:
(i) as an individual proprietor, partner, stockholder, officer,
employee, director, joint venturer, investor, lender, or in any other
capacity whatsoever (other than as the holder of not more than one
percent (1%) of the total outstanding stock of a publicly held company),
engage in the business of television broadcasting (or radio broadcasting
to the extent the Group has radio operations at the date of termination
of employment) in Russia or any country in which the Group is operating
or in which it has undertaken material preparations to begin operating,
in each case, as of the date of termination of employment; or
(ii) recruit, solicit or induce, or attempt to induce, any employee
or employees of the Group to terminate their employment with, or
otherwise cease their relationship with, the Group; or
(iii) solicit, divert or take away, or attempt to divert or to take
away, the business or patronage of any of the current or prospective
business partners, advertisers or affiliate stations of the Group with
whom the Executive had significant contact while employed by the Group.
(b) If any restriction set forth in this Section 6 is found by any court
of competent jurisdiction to be unenforceable because it extends for too
long a period of time or over too great a range of activities or in too
broad a geographic area, it shall be interpreted to extend only over the
maximum period of time, range of activities or geographic area as to which
it may be enforceable.
(c) The Executive acknowledges and agrees that the restrictions
contained in this Section 6 are necessary for the protection of the
business and goodwill of the Group and are considered by the Executive to
be reasonable for such purpose. The Executive agrees that any breach of
this Section 6 will cause the Company substantial and irrevocable damage
and therefore, in the event of any such breach, in addition to such other
remedies which may be available, the Company shall have the right to seek
specific performance and injunctive relief.
(d) The provisions of Section 6 survive the termination of the
Executive's employment and the termination of this Agreement.
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7. Proprietary Information.
(a) The Executive agrees that all information and know-how, whether or
not in writing, of a private, secret or confidential nature concerning the
Group's business or financial affairs (collectively, "PROPRIETARY
INFORMATION") is and shall be the exclusive property of the Group. By way
of illustration, but not limitation, Proprietary Information may include
business processes, methods and techniques; programming schedules; material
terms of contracts; projects; developments; plans; research, financial and
personnel data; computer programs; and supplier lists. The Executive shall
not disclose any Proprietary Information to others outside the Group or use
the same for any unauthorized purposes without written approval of the
Chief Executive Officer or the Board, either during or after his
employment, unless and until such Proprietary Information has become public
knowledge without fault by the Executive.
(b) The Executive agrees that all files, letters, memoranda, reports,
records, data, sketches, drawings, notebooks, program listings, or other
written, photographic, or other tangible material containing Proprietary
Information, whether created by the Executive or others, which shall come
into his custody or possession, shall be and are the exclusive property of
the Group to be used by the Executive only in the performance of his duties
for the Group.
(c) The Executive agrees that his obligation not to disclose or use
information, know-how and records of the types set forth in paragraphs (a)
and (b) above also extends to such types of information, know-how, records
and tangible property of business partners of the Group or other third
parties who may have disclosed or entrusted the same to the Group or to the
Executive in the course of the Group's business.
(d) The provisions of this Section 7 survive the termination of the
Executive's employment and the termination of this Agreement.
8. No Restrictions On Employment. The Executive hereby represents that he
is not bound by the terms of any agreement with any previous employer or other
party to refrain from using or disclosing any trade secret or confidential or
proprietary information in the course of his employment with the Group or to
refrain from competing, directly or indirectly, with the business of such
previous employer or any other party. The Executive further represents that his
performance of all the terms of this Agreement and as an employee of the Group
does not and will not breach any agreement to keep in confidence proprietary
information, knowledge or data acquired by him in confidence or in trust prior
to his employment with the Group.
9. Notices. All notices, demands and all other communications required or
permitted under this Agreement shall be in writing in Russian or English and
shall be deemed to have been duly given when delivered or (unless otherwise
specified) mailed by certified or registered mail, return receipt requested,
postage prepaid, to the registered address of the Company (in the case of
notices by the Executive) or to the address of the Executive indicated on the
signature page hereto (in the case of notices by the Company); or to such other
address as either party may have furnished to the other pursuant to the terms of
this Section 9; except that notices of changes of address shall be effective
only upon receipt.
10. Currency of Payments. Salary and bonus payments as set forth in
subsections 3(a) and (b) hereof, although denominated in U.S. dollars, shall be
payable in Russian rubles, calculated at the official exchange rate of the
Central Bank of the Russian Federation effective as of the date of payment, and
paid by wire transfer to the Executive's account with an authorized Russian
bank.
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11. Entire Agreement.
(a) This Agreement, the CTC Network Agreement, the Domashny Network
Agreement, any Other Group Employment Agreement in effect as of the date of
execution of this Agreement, the indemnification agreement dated as of July
22, 2005 between the Company and the Executive and the notice of grant of
stock option with a grant date of April 28, 2005 from the Company to the
Executive (and the related stock option agreements) together constitute the
entire agreement between the parties and supersede all prior agreements and
understandings, whether written or oral, relating to the subject matter
hereof and thereof. In the event of any inconsistency between this
Agreement and any Other Group Employment Agreement, the terms of this
Agreement shall govern to the extent permissible under the laws of the
Russian Federation.
(b) For the avoidance of doubt, payments, benefits and entitlements
under this Agreement and all Other Group Employment Agreements shall not be
cumulative. Any payments, benefits or entitlements provided for under any
Other Group Employment Agreement shall be deducted from any payments,
benefits or entitlements due pursuant to this Agreement.
12. Amendment. This Agreement may be amended or modified only by a written
instrument executed by both the Chief Executive Officer or the Board and the
Executive.
13. Governing Law, Forum and Jurisdiction. This Agreement shall be governed
by and construed under and in accordance with the laws of the State of Delaware.
Any action, suit, or other legal proceeding which is commenced to resolve any
matter arising under or relating to any provision of this Agreement shall be
commenced only in a court of the State of Delaware (or, if appropriate, a
federal court located within Delaware), and the Company and the Executive each
consents to the exclusive jurisdiction of such a court.
14. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of both parties and their respective successors and assigns,
including any corporation with which or into which the Company may be merged or
which may succeed to its assets or business, provided, however, that the
obligations of the Executive are personal and shall not be assigned by him.
15. Acknowledgment. The Executive states and represents that he has had an
opportunity to fully discuss and review the terms of this Agreement with an
attorney of his own choosing. The Executive further states and represents that
he has carefully read this Agreement, understands the contents herein, freely
and voluntarily assents to all of the terms and conditions hereof, and signs his
name of his own free act.
16. No Waiver. No delay or omission by the Company in exercising any right
under this Agreement shall operate as a waiver of that or any other right. A
waiver or consent given by the Company on any one occasion shall be effective
only in that instance and shall not be construed as a bar or waiver of any right
on any other occasion.
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17. Validity/Severability. In case any provision of this Agreement shall be
invalid, illegal or otherwise unenforceable, the validity, legality and
enforceability of the remaining provisions shall in no way be affected or
impaired thereby.
18. Captions. The captions of the sections of this Agreement are for
convenience of reference only and in no way define, limit or affect the scope or
substance of any section of this Agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year set forth below.
CTC MEDIA, INC.
Dated: April 13, 2006 /S/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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By: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Chief Executive Officer
Address: ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ SERGEEVICH KHANUMYAN
Dated: April 12, 2006 /S/ ▇▇▇▇▇▇▇▇ SERGEEVICH KHANUMYAN
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Address:
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