AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
Amendment No. 1, dated as of March 23, 1999, to the Employment Agreement,
dated as of January 1, 1998 (the "Employment Agreement"), between ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ("Executive") and Central European Media Enterprises Ltd. (the
"Company").
W I T N E S S E T H :
WHEREAS, Executive is currently serving as Executive Vice President and
Chief Operating Officer of the Company pursuant to the Employment Agreement;
WHEREAS, the Company has determined that it is in the Company's best
interest to promote Executive from his current position to become President and
Chief Executive Officer of the Company;
NOW, THEREFORE, Executive and the Company agree to amend the Employment
Agreement, effective as of March 23, 1999, as follows:
1. Section 1(b) is hereby amended to replace the reference to "December 31,
2002" in the first sentence thereof with "March 22, 2004".
2. Section 2(a) is hereby deleted in its entirety, and a new Section 2(a)
shall be inserted in lieu thereof to read as follows:
In general. Executive shall be employed as President and Chief
Executive Officer, with overall responsibility for the Company's business
and operations, and shall perform such duties and services, consistent with
such position for the Company, as may be (i) specified in the Bye-Laws of
the Company or (ii) assigned to him from time to time by the Board of
Directors of the Company (the "Board"). On or promptly following March 23,
1999, Executive shall be named to the Company's Board and the Board will
propose Executive for election and re-election to the Board during the
remainder of the Employment Period. 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. Executive shall report to the
Board.
3. Section 2(b) is hereby amended to replace the reference to "two-thirds"
in the first sentence thereof with "one-third". Section 2(b) is further amended
to replace the reference to "CEO" in the second sentence thereof with "Board".
Section 2(b) is further
amended to delete the last sentence thereof, and to insert in lieu thereof a new
last sentence to read as follows:
Executive shall travel to such location or locations outside of the United
Kingdom and the United States as may be requested by the Board, 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.
4. Section 3(a) is hereby deleted in its entirety, and a new Section 3(a)
shall be inserted in lieu thereof to read as follows:
Base Salary. Effective March 23, 1999, and for the duration of the
Employment Period thereafter, the Company shall pay Executive a base salary
(the "Base Salary") at an initial annual rate of US$230,000. 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
Base Salary shall be reviewed annually by the Compensation Committee of the
Board of Directors of the Company (the "Compensation Committee"). The Base
Salary shall be increased annually (commencing March 23, 2000) by 5%, and
may be increased in excess of such amount at the option and sole discretion
of the Compensation Committee.
5. Section 3(b) is hereby deleted in its entirety, and a new Section 3(b)
shall be inserted in lieu thereof to read as follows:
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 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.
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6. Section 3(c) is hereby deleted in its entirety, and a new Section 3(c)
shall be inserted in lieu thereof to read as follows:
Special Long-Term Incentive Bonus. Given that the share price of the
Company is largely dependent on the performance of the individual
television stations, if Executive is employed by the Company or any
successor corporation on December 31, 2003, and if the Fair Market Value of
a Class A Share of Company Stock on December 31, 2003 has increased from
$8.3125, the mean between the high and low prices of the Company's Class A
Shares as reported by NASDAQ for March 22, 1999, and the percentage
increase is greater than the percentage increase in the NASDAQ Composite
Average during the same period, Executive will receive a special one-time
bonus of US$1,000,000.
7. Section 3(d) is hereby amended to add a new second paragraph thereof to
read as follows:
The Company shall grant Executive an additional option to purchase
300,000 Class A Shares of the Company as of March 23, 1999, at an exercise
price per share equal to $8.3125, the mean between the high and low prices
of the Company's Class A Shares as reported by NASDAQ for March 22, 1999
("Option C"). Option C shall become exercisable as to 150,000 shares on
March 23, 1999 and as to the remaining 150,000 shares in five equal
installments on each of the first five anniversaries of March 23, 1999,
provided Executive is employed by the Company on each such anniversary
date. Option C shall expire on March 23, 2009. Option C shall become
immediately exercisable in full in the event that Executive's employment
with the Company is terminated (i) by the Company other than for Cause,
(ii) by the Executive for Good Reason, (iii) by reason of the death or
Disability of the Executive or (iv) by the Company following a Change in
Control (as these terms are hereinafter defined). Once exercisable, Option
C shall remain exercisable for the specified term, except that (i) if
Executive's employment is terminated for Cause Option C shall immediately
terminate and (ii) if Executive's employment terminates for any other
reason, Option C shall remain exercisable for the lesser of the remaining
term of Option C and three years following termination of employment.
8. Section 4(b) is hereby amended to replace the reference to
"(pound)30,000" in the last sentence thereof with "(pound)70,000".
9. Section 5(d) is hereby amended to delete the definition for the defined
term "Severance Benefit" in its entirety, and to insert in lieu thereof a new
definition to read as follows:
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"Severance Benefit" means an amount equal to the greater of (i) the minimum
amount of Base Salary Executive would have been entitled to receive for the
duration of the Term and (ii) three times Executive's Base Salary as of the
Termination Date.
10. Section 5(d) is hereby further amended to delete the reference to "CEO
or" in clause (iv) under the defined term "Termination for Cause".
11. Section 5(d) is hereby further amended to delete clause (ii) under the
defined term "Termination for Good Reason", and to insert a new clause (ii) in
lieu thereof to read as follows:
(ii) a material reduction in Executive's titles, positions, duties,
responsibilities or reporting lines from those described in Section 2
hereof, except the loss of Executive's position and title as Chief
Executive Officer (and the duties, responsibilities and reporting lines
associated with such position and title) in connection with a sale or
merger of the Company which occurs prior to March 23, 2000;
12. Section 7(a) is hereby amended to replace the reference to "US$150,000"
with "US$175,000".
Executive: Central European Media Enterprises Ltd.
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