Exhibit 10.65

PRIVILEGED AND CONFIDENTIAL

 

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EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (“Agreement”) is entered into as of July 9, 2012 (the
“Effective Date”), by and between Central European Distribution Corporation, a
Delaware corporation (the “Company”), and David Bailey (the “Officer”).

WHEREAS, the Company desires to employ the Officer, and the Officer desires to
be employed by the Company, on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and other good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, the parties hereto agree as
follows:

 

1. Employment.

On the terms and conditions set forth in this Agreement, the Company agrees to
employ the Officer and the Officer agrees to be employed by the Company for the
term set forth in Section 2 hereof and in the position and with the duties set
forth in Section 3 hereof.

 

2. Term.

The term of employment of the Officer by the Company as provided in Section 1
hereof (the “Term”) shall commence as of the Effective Date and continue for a
period of up to six months, expiring on January 9, 2013, unless sooner
terminated pursuant to Section 8. The Term may be extended by mutual agreement
of the parties for a period of not more than an additional six months.

 

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3. Position and Duties.

During the Term, the Officer shall serve as Interim Chief Executive Officer of
the Company, and as Interim Chief Executive Officer of CEDC International Sp.
zo.o.(“Subsidiary”), with such duties and responsibilities as the board of
directors of the Company and/or the Subsidiary may from time to time determine
and assign to the Officer. Additionally, during the Term the Officer shall serve
as a member of the Board of Directors of the Company and as the Chairman of the
management board and the managing director of the Subsidiary. The Officer shall
devote the Officer’s reasonable best efforts and substantially full business
time to the performance of the Officer’s duties and the advancement of the
business and affairs of the Company and the Subsidiary.

 

4. Place of Performance.

In connection with the Officer’s employment by the Company, the Officer shall be
based at the principal executive office of the Subsidiary, or such other place
as the Company and the Officer mutually agree, except for required travel on
Company business.

 

5. Compensation.

 

  5(a) Base Salary. During the Term, the Officer shall be paid base salary at
the rate of Sixty-Two thousand Five Hundred USD ($62,500) gross per month by the
Company and Subsidiary (the base salary in effect from time to time, the “Base
Salary”). Any portion of the Base Salary may be paid by the Subsidiary as
determined by the Company in the Company’s sole discretion.

 

  5(b) Bonus. With respect to the second half of the 2012 fiscal year of the
Company, the Officer shall be eligible to receive a cash bonus under the
Company’s Executive Bonus Plan (the “Second Half Bonus”), the target amount of
which shall be $300,000. The terms and conditions relating to the earning and
payment of the Second Half Bonus are set forth in Exhibit A attached hereto, it
being understood that there shall be no requirement that the Officer remain
employed beyond January 9, 2013. Such bonus shall be paid no later than
March 15, 2013.

 

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  5(c) Equity Awards. Subject to shareholder approval (at the Company’s 2012
annual meeting or any special meeting of shareholders) of amendments to the
Company’s 2007 Stock Incentive Plan authorizing additional shares to be reserved
for the granting of equity-based awards, the Company shall grant to the Officer,
as of the date of such approval, a number of restricted stock units (“RSUs”)
having an aggregate value of Two-Hundred Fifty Thousand USD ($250,000) as of
such date. Such RSUs shall become fully vested and payable as of January 9,
2013, so long as the Officer has remained employed to such date; provided, that
vesting and payment in respect of the RSUs shall be accelerated in full in the
event that, prior to such date, the Officer’s employment is terminated by the
Company (other than for Cause, as hereinafter defined), the Officer terminates
his employment for Good Reason (as hereinafter defined), or the Officer’s
employment terminates by reason of death; provided, further, however, that
notwithstanding the previous proviso, in the event the Officer’s employment is
terminated by the Company (other than for Cause) or the Officer terminates his
employment for Good Reason and, in either case, such termination results from
the appointment of a permanent Chief Executive Officer for the Company (such
termination being hereinafter referred to as a “New CEO Termination”), vesting
in respect of the RSUs shall only be accelerated on a pro rata basis, based on
the quotient determined by dividing (A) the number of full and partial months
from the Effective Date to the Date of Termination by (B) the number six (6),
and the remainder of such RSUs shall be forfeited.

 

  5(d) Specific Benefits. The Officer shall receive the following fringe
benefits, subject to the Company’s policies in effect from time to time:

 

  (d)(i) Company Car

 

  (d)(ii) Health plan — Medicover card

 

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  5(e) Other Benefits.

The Officer also shall be entitled to participate in such other benefit plans
and to receive such bonuses, incentive compensation and fringe benefits as may
be granted or established by the Company and/or Subsidiary from time to time.
The Company and Subsidiary each reserve the right to amend, modify or terminate
any compensation or benefit plans, policies or agreements at any time and from
time to time in the Company’s or Subsidiary’s discretion, including, without
limitation, changing carriers or effecting modifications in insurance coverage
for the Officer.

 

  5(f) Vacation: Holidays. The Officer shall be entitled to all public holidays
observed by the Subsidiary, and shall be entitled to fifteen (15) vacation days
during the Term, in accordance with the applicable vacation policies for senior
executives of the Company and applicable law, which shall be taken at a
reasonable time or times.

 

  5(g) Cost-of-Living Adjustments. If the spot foreign exchange of PLN to USD
will drop for over a period of sixty (60) days below 2.50 then the Compensation
Committee shall determine, in its discretion, if an adjustment to all payments
made to the Officer under this Agreement in cash or a cash equivalent
(including, without limitation, any base salary, bonus or reimbursement, and any
corresponding payment, if any, due hereunder following the Officer’s termination
of employment with the Company and the Subsidiary) shall be subject to increase
or decrease pursuant to a cost-of-living adjustment.

 

  5(h) Withholding Taxes and Other Deductions. The Company and the Subsidiary
shall withhold from any payments to the Officer, or with respect to any benefits
provided under this Agreement, any applicable taxes or other deductions as the
Company or Subsidiary determine must be withheld pursuant to applicable law or
payroll policies.

 

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6. Expenses.

 

  6(a) The Company or the Subsidiary shall reimburse the Officer for all
reasonable expenses incurred by the Officer (in accordance with the policies and
procedures in effect for senior executives of the Company and the Subsidiary) in
connection with the Officer’s services under this Agreement. The Officer shall
account to the Company or the Subsidiary, as the case may be, for such expenses
in accordance with policies and procedures established by the Company or the
Subsidiary.

 

  6(b) All reimbursements and in-kind benefits provided under the Agreement
which are subject to Section 409A of the U.S. Internal Revenue Code of 1986, as
amended (the “Code”), shall be made or provided in accordance with the
requirements of Section 409A of the Code, including, where applicable, the
requirement that (i) any reimbursement shall be for expenses incurred during the
Officer’s lifetime (or during a shorter period of time specified in this
agreement), (ii) the amount of expenses eligible for reimbursement, or in-kind
benefits provided, during a calendar year may not affect the expenses eligible
for reimbursement, or in-kind benefits to be provided, in any other calendar
year, (iii) the reimbursement of an eligible expense will be made on or before
the last day of the calendar year following the year in which the expense is
incurred, and (iv) the right to reimbursement or in-kind benefits is not subject
to liquidation or exchange for another benefit.

 

7. Confidential Information.

 

  7(a) The Officer covenants and agrees that the Officer will not ever, without
the prior written consent of the Board or a person authorized by the Board,
publish or disclose to any unaffiliated third party or use for the Officer’s
personal benefit or advantage any confidential information with respect to any
of the Company’s or Subsidiary’s products, services, subscribers, suppliers,
marketing techniques, methods or future plans disclosed to the Officer as a
result of the Officer’s employment with the Company, to the extent such
information has heretofore or shall hereafter remain confidential (except for
unauthorized disclosures) and except as otherwise ordered by a court of
competent jurisdiction.

 

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  7(b) The Officer acknowledges that the restrictions contained in Section 7
(a) hereof are reasonable and necessary, in view of the nature of the Company’s
business, in order to protect the legitimate interests of the Company, and that
any violation thereof would result in irreparable injury to the Company.
Therefore, the Officer agrees that in the event of a breach or threatened breach
by the Officer of the provisions of Section 7(a) hereof, the Company shall be
entitled to obtain from any court of competent jurisdiction, preliminary or
permanent injunctive relief restraining the Officer from disclosing or using any
such confidential information. Nothing herein shall be construed as prohibiting
the Company from pursuing any other remedies available to it for such breach or
threatened breach, including, without limitation, recovery of damages from the
Officer.

 

  7(c) The Officer shall deliver promptly to the Company on termination of
employment, or at any other time the Company may so request, ail confidential
memoranda, notes, records, reports and other documents (and ail copies thereof)
relating to the Company’s and its affiliates’ businesses which the Officer
obtained white employed by, or otherwise serving or acting on behalf of, the
Company or which the Officer may then possess or have under his or her control.

 

8. Termination of Employment.

 

  8(a) Death. The Officer’s employment hereunder shall terminate upon the
Officer’s death.

 

  8(b) By the Company. The Company may terminate the Officer’s employment
hereunder for “Cause.” For purposes of this Agreement, “Cause” shall mean any of
the following:

 

  (i)(A) the willful refusal by the Officer to follow a written order of the
Board of Directors of the Company , in so far as the request does not breach any
federal, state or local law;

 

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  (i)(B) the Officer’s willful engagement in conduct materially injurious to the
Company;

 

  (i)(C) dishonesty of a material nature that relates to the performance of the
Officer’s duties under this Agreement;

 

  (i)(D) the Officer’s conviction of any felony involving moral turpitude; or,

 

  (i)(E) the Officer’s continued failure to perform his duties under this
Agreement (except due to the Officer’s incapacity as a result of physical or
mental illness) to the satisfaction of the Board of Directors of the Company for
a period of at least forty-five (45) consecutive days after written notice from
the Board of Directors is delivered to the Officer specifically identifying the
manner in which the Officer has failed to perform his duties.

 

  8(c) By the Officer for Good Reason. The Officer may terminate the Officer’s
employment hereunder for “Good Reason.” For purposes of this Agreement, “Good
Reason” shall mean (i) the Company’s failure to perform or observe any of the
material terms or provisions of this Agreement, and the continued failure of the
Company to cure such default within thirty (30) days after written demand for
performance has been given to the Company by the Officer, which demand shall
describe specifically the nature of such alleged failure to perform or observe
such material terms or provisions; or (ii) a material reduction in the scope of
the Officer’s responsibilities and duties for the Company or the Subsidiary
(including the appointment of a permanent Chief Executive Officer of the
Company). For the sake of clarity, the appointment of a permanent Chief
Executive Officer of the Subsidiary shall not constitute “Good Reason.”

 

  8(d) The Company may terminate the Officer’s employment for any reason, other
than the reasons specified in Sections 8(b), upon written notice to the Officer
as specified in Section 8(e)(ii). The Officer may terminate his employment for
any reason, other than the reasons specified in Section 8(c), upon ten days’
written notice to the Company.

 

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  8(e) Notice of Termination.

 

  (e)(i) Any termination of the Officer’s employment by the Company or the
Officer (other than pursuant to Section 8(a) hereof) shall be communicated by
written “Notice of Termination” to the other party hereto in accordance with
Section 10 hereof. For purposes of this Agreement, a “Notice of Termination”
shall mean a notice which shall indicate the Date of Termination, the specific
termination provision in this Agreement relied upon, if any, and shall set forth
in reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Officer’s employment under the provision so indicated.

 

  (e)(ii) For any termination of the Officer’s employment by the Company
pursuant to Section 8(d) (other than a New CEO Termination), one (1) month’s
notice must be provided in a Notice of Termination.

 

  (e)(iii) Notwithstanding any other provision of this Agreement to the
contrary, if the Officer’s employment is terminated under Section 8(c) or
Section 8(d), the Company, in its sole discretion, may accelerate the Date of
Termination that is specified in the Notice of Termination. If the Company
determines to accelerate the Date of Termination, then if the Officer terminated
his employment with the Company pursuant to Section 8(c) or the Company
terminated the Officer’s employment pursuant to Section 8(d), the Officer shall
receive compensation and benefits pursuant to Section 9(d) without further
payment with respect to the shortened notice period.

 

  (e)(iv) It is understood by both the Company and the Officer that termination
of this agreement terminates by association any employment agreement with any
and all of the Company’s subsidiaries.

 

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  8(f) Date of Termination. For purposes of this Agreement, the “Date of
Termination” shall mean (i) if the Officer’s employment is terminated by the
Officer’s death, the date of the Officer’s death; or (ii)) if the Officer’s
employment is terminated for any other reason, the date specified as the Date of
Termination in the Notice of Termination. Notwithstanding the previous sentence,
in the case of a termination pursuant to Section 8(b), Section 8(c) or
Section 8(d), if payments to the Officer may be subject to Section 409A of the
Code, the Date of Termination shall be no later than the date the Officer
experiences a “separation from service” as such term is defined under
Section 409A of the Code.

 

9. Compensation Upon Termination.

 

  9(a)

If the Officer’s employment is terminated by the Officer’s death, (1) the
Company shall pay all Accrued Obligations to the Officer’s estate, or as may be
directed by the legal representatives of such estate, (2) the accelerated
vesting provisions of Section 5(c) shall apply, (3) in the case of Officer’s
death prior to the close of the Company’s 2012 fiscal year, the Company shall
pay to the executive’s estate, or as may be directed by the legal
representatives of such estate, a lump sum bonus amount equal to the Remaining
Bonus, as defined and determined under Section 9(d) below, such amount to be
paid at the same time bonuses for 2012 are paid to the Company’s other senior
executives, and (4) the Company shall have no further obligations to the Officer
under this Agreement. “Accrued Obligations” shall mean the following: (1) the
lump sum amount of any Base Salary accrued but unpaid through the Date of
Termination, (2) the lump sum amount of any earned but unpaid annual bonus for
periods with respect to which the performance period to earn such bonus has
closed under the Executive Bonus Plan, (3) the lump sum amount of any accrued
but unused paid time off or sick pay in accordance with Company policy and
applicable law, (4) the lump sum of any business expenses incurred which have
been properly submitted for reimbursement in accordance with Company and/or
Subsidiary policy, but not reimbursed prior to the Date of Termination, (5) any
other compensation or benefits which may be owed or provided to or in respect of
the Officer, paid or provided in accordance with the

 

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  terms and provisions of the applicable benefit plans or programs of the
Company and/or Subsidiary, and (6) less any advances made to the Officer. For
all purposes of this Agreement, the cash payments payable to, or with respect
to, the Officer under clauses (1), (2) and (3) of the definition of Accrued
Obligations shall be paid within ten (10) days of the Date of Termination or, if
earlier, in accordance with applicable law.

 

  9(b) If the Company terminates the Officer’s employment for Cause as provided
in Section 8(b) hereof, the Company shall pay the Officer all Accrued
Obligations and the Company shall have no further obligations to the Officer
under this Agreement.

 

  9(c) If the Officer terminates the Officer’s employment other than for Good
Reason, the Company shall pay to the Officer all Accrued Obligations and the
Company shall have no further obligations to the Officer under this Agreement.

 

  9(d)

If the Company terminates the Officer’s employment other than for Cause,
disability or death, or if the Officer terminates the Officer’s employment for
Good Reason as provided in Section 8(c) hereof, then (1) the Company shall:
(i) pay or provide to the Officer all Accrued Obligations; (ii) except as
hereinafter provided, pay the Officer in a single lump sum payment an amount
equal to the Base Salary that would have been payable to the Officer under
Sections 5(a) through January 9, 2013 (the “Remaining Base Salary”); (iii) pay
the Officer in a single lump sum the bonus to which the Officer would have been
entitled under Section 5(b) had he remained employed to January 9, 2013 (the
“Remaining Bonus”); and (iv) pay the Officer any other amounts and provide to
the Officer benefits that would have been received by him under Section 5(d)
hereof during the remainder of the Term, at the time such amounts or benefits
would otherwise have been due in accordance with the Company’s normal payroll
practices; (2) the full or partial accelerated vesting provisions of
Section 5(c) shall apply; and (3) the Company shall have no further obligations
to the Officer under this Agreement. For purposes of determining the amount of
the Remaining Bonus, the parties

 

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  acknowledge that the portion of the Second Half Bonus which is dependant upon
financial results will be calculated based on such financial results and that
the portion of the Second Half Bonus which is dependant upon operational or
organizational results will be determined in good faith by the Compensation
Committee in consultation with the Officer, if living, but subject to approval
by the Board of Directors of the Company. If certain operational or
organizational targets have been achieved until the date of termination then the
full associated bonus for such operational or organizational actions should be
paid. Notwithstanding the initial sentence of this Section 9(d), in the event of
a New CEO Termination, the Officer shall not be entitled to payment of any
Remaining Base Salary and the amount of the Remaining Bonus shall be pro rated
based on the quotient determined by dividing (A) the number of full and partial
months from the Effective Date to the Date of Termination by (B) the number six
(6).

 

  9(e) Mitigation. The Officer shall not be required to mitigate amounts payable
pursuant to Section 9(a) through Section 9(d) hereof by seeking other
employment, provided, however, that the Company’s obligation to continue to
provide the Officer with benefits pursuant to Section 9(d) hereof shall cease if
the Officer becomes eligible to participate in benefit plans or otherwise
receive employer-provided benefits substantially similar to those provided for
in this Agreement as a result of the Officer’s employment during the period that
the Officer is entitled to such benefits. The Officer must provide prompt notice
to the Company upon acceptance of any subsequent employment that may impose an
offset under this Section 9(e).

 

  9(f)

Release. Notwithstanding any provision of this Agreement to the contrary, the
Company’s obligations to the Officer pursuant to Section 9(d) upon the Officer’s
termination of employment shall be conditioned upon the Officer’s execution and
the irrevocability of a release in substantially the form attached hereto as
Exhibit B hereto (the “Release”). All cash payments (other than any Accrued
Obligations) pursuant to Section 9(d) will be paid on the sixtieth (60th) day
following the Date of Termination, provided that the Release becomes irrevocable
by such sixtieth

 

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  (60th) day, except that the bonus amount referred to in Section 8(d)(1)(ii)
shall be paid at the same time bonuses are paid to Company employees with
respect to the Company’s 2012 fiscal year. The Company shall provide the Release
to the Officer within five days of the Officer’s Date of Termination.

 

10. Notices.

All notices, demands, requests or other communications required or permitted to
be given or made hereunder shall be in writing and shall be delivered,
telecopied or mailed by first class registered or certified mail, postage
prepaid, addressed as follows:

 

  10(a) If to the Company:

 

Central European Distribution Corporation ul. Bobrowiecka 6 00-728 Warsaw,
Poland Telecopier:    48 22 488 34 10 Attention:    James Archbold    Vice
President and Director of Investor Relations or

 

  10(b) If to the Officer:

David Bailey

At the address on file with the Company

Or to such other address as may be designated by either party in a notice to the
other. Each notice, demand, request or other communication that shall be given
or made in the manner described above shall be deemed sufficiently given or made
for all purposes at such time as it is delivered to the addressee (with the
return receipt, the delivery receipt, the answer back or the affidavit of
messenger being deemed conclusive evidence of such delivery) or at such time as
delivery is refused by the addressee upon presentation.

 

11. Severability.

The invalidity or unenforceability of any one or more provisions of this
Agreement shall not affect the validity or enforceability of the other
provisions of this Agreement, which shall remain in full force and effect.

 

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12. Survival.

It is the express intention and agreement of the parties hereto that the
provisions of Section 7 hereof shall survive the termination of employment of
the Officer. In addition, all obligations of the Company to make payments
hereunder shall survive any termination of this Agreement on the terms and
conditions set forth herein.

 

13. Assignment.

The rights and obligations of the parties to this Agreement shall not be
assignable, except that the rights and obligations of the Company hereunder
shall be assignable in connection with any subsequent merger, consolidation,
sale of all substantially all of the assets of the Company or similar
reorganization of a successor corporation.

 

14. Binding Effect.

Subject to any provisions hereof restricting assignment, this Agreement shall be
binding upon the parties hereto and shall inure to the benefit of the parties
and their respective heirs, devisees, executors, administrators, legal
representatives, successors and assigns.

 

15. Amendment Waiver.

This Agreement shall not be amended, altered or modified except by an instrument
in writing duly executed by the parties hereto. Neither the waiver by either of
the parties hereto of a breach of or a default under any of the provisions of
this Agreement, nor the failure of either of the parties, on one or more
occasions, to enforce any of the provisions of this Agreement or to exercise any
right or privilege hereunder, shall thereafter be construed as a waiver of any
subsequent breach or default of a similar nature, or as a waiver of any such
provisions, rights or privileges hereunder.

 

16. Headings.

Section and subsection headings contained in this Agreement are inserted for
convenience of reference only, shall not be deemed to be a part of this
Agreement for any purpose, and shall not in any way define or affect the
meaning, construction or scope of any of the provisions hereof. Any reference
herein to a “Reserved” provision shall not have any meaning for purposes of
interpreting the terms or provisions of this Agreement.

 

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17. Governing Law.

This Agreement, the rights and obligations of the parties hereto, and any claims
or disputes relating thereto, shall be governed by and construed in accordance
with the laws of the State of Delaware (but not including the choice of law
rules thereof).

 

18. Action of Behalf of the Subsidiary.

The Company is executing this Agreement also on behalf of its Subsidiary and
agrees to cause the Subsidiary to fulfill its obligations hereunder, through the
appointment and removal, if necessary, of members of the management board of the
Subsidiary.

 

19. Entire Agreement.

This Agreement constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof, and it supersedes all prior oral or
written agreements, commitments or understandings with respect to the matters
provided for herein.

 

20. Counterparts.

This Agreement may be executed in two or more counterparts, each of which shall
be an original and all of which shall be deemed to constitute one and the same
instrument.

 

21. Parachute Tax.

Anything in this Agreement to the contrary notwithstanding, if it shall be
determined that any payment, award, benefit or distribution by the Company (or
any of its affiliated entities) or by any entity which effectuates a change of
control of the Company (or any of its affiliated entities) to or for the benefit
of the Officer (whether pursuant to the terms of this Agreement or otherwise)
(each a “Payment”) would be subject to the excise tax imposed by Section 4999 of
the Code or any corresponding provisions of state or local tax laws, or any
interest or penalties with respect to such excise tax (such excise tax, together
with any such interest and penalties, are

 

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hereinafter collectively referred to as the “Excise Tax”), and if it shall also
be determined that, by reducing the Payments to a present value (as calculated
in accordance with Section 280G of the Code) that is one dollar less than the
Safe Harbor Amount (as hereinafter defined), the Officer would receive a larger
after-tax benefit from the Payments than if such reduction had not occurred, the
Payments shall be reduced so as to have a present value that is one dollar less
than the Safe Harbor Amount. The reduction of the amounts payable hereunder, if
applicable, shall be made by first reducing the payments or benefits provided
under Section 9(d)(1) before reducing the other payments under this Agreement or
otherwise; thereafter any such reduction shall be made to other cash payments to
which the Officer is entitled. For purposes of this Section 21, “Safe Harbor
Amount” shall mean the greatest amount that could be paid to the Officer such
that the receipt of Payments would not give rise to any Excise Tax. All
determinations required to be made under this Section 21 shall be made by the
public accounting firm that is retained by the Company as of the date
immediately prior to any change in control of the Company (the “Accounting
Firm”), which shall provide detailed supporting calculations both to the Company
and the Officer within fifteen (15) business days of the receipt of notice from
the Officer that there has been a Payment, or such earlier time as is requested
by the Company. All fees and expenses of the Accounting Firm shall be borne
solely by the Company.

 

22. Section 409A.

It is intended that this Agreement will comply with Section 409A of the Code, to
the extent the Agreement is subject thereto, and the Agreement shall be
interpreted on a basis consistent with such intent. If an amendment of the
Agreement is necessary in order for it to comply with Section 409A of the Code,
the parties hereto will negotiate in good faith to amend the Agreement in a
manner that preserves the original intent of the parties to the extent
reasonably possible. Notwithstanding any provision to the contrary in this
Agreement, and except as otherwise provided in this Agreement, if a payment or
benefit is to be paid upon the Officer’s Date of Termination or termination,
then such payment shall be delayed until the Officer has experienced a
“separation from service” (as such term is defined under Section 409A of the
Code); provided, however, that if a payment or benefit is considered to be a
deferral of compensation subject to Section 409A of the Code and the Officer is
deemed to be a “specified employee” within the meaning of that term under
Section 409A(a)(2)(B) of the Code, then with

 

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regard to any payment or the provisions of any benefit that is required to be
delayed pursuant to Section 409A(a)(2)(B) of the Code, such payment or benefit
shall not be made or provided prior to the earlier of (i) the expiration of the
six (6)-month period measured from the date of the Officer’s “separation from
service” (as such term is defined in U.S. Treasury Regulations issued under
Section 409A of the Code), or (ii) the date of the Officer’s death (the “Delay
Period”). As soon as practicable following the expiration of the Delay Period,
all payments and benefits delayed pursuant to this Section 22 (whether they
would have otherwise been payable in a single sum or in installments in the
absence of such delay) shall be paid or reimbursed to the Officer in a lump sum,
and any remaining payments and benefits due under this Agreement shall be paid
or provided in accordance with the normal payment dates specified for them
herein. Notwithstanding the foregoing, to the extent that the foregoing applies
to the provision of any ongoing welfare benefits to the Officer that would not
be required to be delayed if the premiums therefore were paid by the Officer,
the Officer shall pay the full costs of premiums for such welfare benefits
during the Delay Period and the Company shall pay the Officer an amount equal to
the amount of such premiums paid by the Officer during the Delay Period within
thirty (30) days after the conclusion of such Delay Period.

 

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IN WITNESS WHEREOF, the undersigned have duly executed this Agreement, or have
caused this Agreement to be duly executed on their behalf, as of the day and
year fast hereinabove written.

 

CENTRAL EUROPEAN DISTRIBUTION CORPORATION By:  

/s/ Markus Sieger

Name:   Markus Sieger Title:   Chairman of the Compensation Committee

/s/ David Bailey

Name:   David Bailey Title:   The Officer

 

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EXHIBIT A

Terms and Conditions

Of Second Half Bonus

Each of the three targets (a, b, c) count each for 1/3 of the total bonus amount
of US$ 300’000 — each assessed independently.

a. EBITDA target for 2H2012, adjusted for extraordinary, this being unbudgeted

 

  •  

legal fees

 

  •  

impact of financial restatement

 

  •  

fees for investigation

 

  •  

Whitehall restructuring fees (if any)

 

  •  

termination payments for executives

 

  •  

waiver fees

 

  •  

FX impact (as defined in the bonus system)

 

  •  

fees for executive search.

b. Successfully manage and direct the financial restatement process that results
in reissued 2010, 2011 audited financial by October 31st, 2012, Q1 & Q2 2012 and
the Company meeting all financial reporting covenants in 2012, excluding the
August 14th reporting covenant, which is in process of being waived and
excluding any resulting delays from the investigation.

c. Organizational Matters, specifically

 

  •  

Assessment and selection of new GM for Poland latest by December 31st, 2012

 

  •  

Actively Operate and direct the establishment of the Russia Advisory Committee
with activity summary reported to the Board monthly beginning August, 2012

 

  •  

Coordination internal control activities specifically related to recent
deficiencies and provide a Report on Internal Control activities to the Audit
Committee monthly beginning in August.

 

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EXHIBIT B

TO THE

EMPLOYMENT AGREEMENT

BETWEEN

CENTRAL EUROPEAN DISTRIBUTION CORPORATION

AND

DAVID BAILEY

GENERAL RELEASE AND WAIVER AGREEMENT1

This General Release and Waiver Agreement (the “Agreement”) is made as of
            ,          by and between David Bailey (the “Officer”) and Central
European Distribution Corporation, a Delaware corporation (together with all of
its subsidiaries and affiliated entities, collectively hereinafter referred to
as “Company”).

 

I. TERMINATION OF EMPLOYMENT

The parties acknowledge that the Officer terminated his employment with the
Company effective [list date].

 

II. CONSIDERATION

As consideration for Officer’s entering into and abiding by this Agreement,
(i) the Company will pay and provide to the Officer the amounts and benefits
specified in Section 9(d) of the Employment Agreement (the “Employment
Agreement”) between Central European Distribution Corporation and the Officer,
dated as of July 9, 2012 (all such amounts and benefits the “Aggregate Severance
Payments”). The parties agree that the Aggregate Severance Payments are in
excess of any payments or benefits to which Officer may otherwise be entitled
from the Company and its subsidiaries and affiliated entities.

 

III. COMPLETE RELEASE

Officer, for Officer and Officer’s predecessors, successors, assigns, and heirs,
hereby discharges and releases Company and, as applicable, each of the Company’s
predecessors, representatives, the Company’s present or former officers,
directors, employees, stockholders, affiliates, insurers, successors and
assigns, from all claims or demands Officer may have based on Officer’s
employment with Company or the termination of that employment. This includes a
release of any rights or claims Officer may have based on any facts or events,
whether known or unknown by the Officer that occurred on or before the effective
date of this Agreement or events that are contemplated by this Agreement,
including, without limitation, a release of any rights or claims Officer may
have based on (i) the following United States laws: the Civil Rights Acts of
1964, as amended; the Age Discrimination in Employment Act of 1967, as amended;
the Americans with Disabilities Act of 1990; the Rehabilitation Act of 1973; the
Equal Pay Act of

 

1  Provisions of Agreement should be modified to comply with legal requirements
and customs under non-U.S. law.

 

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1963; or the Employee Retirement Income Security Act of 1974, as amended;
(ii) applicable laws of the states of the United States concerning wages,
employment and discharge; (iii) applicable laws of Poland and the European Union
concerning wages, discrimination, employment and discharge; (iv) claims arising
out of any legal restrictions of the right to terminate Officer such as wrongful
or unlawful discharge or related causes of action; (v) defamation, invasion of
privacy, intentional or negligent infliction of emotional distress or any other
tortious conduct; and/or (vi) violations of any contract or promise express or
implied, specifically including, but not limited to the Employment Agreement. No
reference to the aforementioned causes of action or claims is intended to limit
the scope of this Agreement. Notwithstanding the foregoing, the Officer does not
hereby release any rights or claims with respect to enforcement of this
Agreement or the period following the effective date of this Agreement.

 

IV. PERIOD FOR REVIEW AND CONSIDERATION OF AGREEMENT

Officer confirms that Officer is over the age of 40 and has been given
twenty-one (21) days [or forty-five (45) days if applicable under ADEA] to
review and consider this Agreement before signing it.

[If forty-five (45) day period applies, additional information will be attached
as required by ADEA.]

 

V. ENCOURAGEMENT TO CONSULT WITH AN ATTORNEY

Officer is encouraged, at Officer’s own expense, to consult with an attorney
before signing this Agreement.

 

VI. OFFICER’S RIGHT TO REVOKE AGREEMENT

If this Agreement is signed by Officer and returned to Company within the time
specified in Section IV, Officer may revoke this Agreement within seven
(7) calendar days of the date of the Officer’s signature. Revocation can be made
by delivering a written notice of revocation to the Company. For this revocation
to be effective, written notice must be received no later than the close of
business on the seventh (7th) calendar day (or next business day thereafter)
after the Officer signs this Agreement. If the Officer revokes this Agreement,
it shall not be effective or enforceable and Officer will not receive the
payments described in Section II. Notices for the purposes of this paragraph
shall be effective if delivered personally, or by certified mail to the
following address (or such other address as Officer shall notify Company, or
Company shall notify Officer (as the case may be), in each case in writing):

 

Officer:      David Bailey    Company:      Central European Distribution
Corporation [Officer’s Address]    [Company’s Address]         Attention:     
[Company Representative]

 

20

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VII. SEVERABILITY AND JUDICIAL RESTATEMENT

Officer and Company agree that the provisions of this Agreement are severable
and divisible. In the event any portion of this Agreement is determined to be
illegal or unenforceable, the remaining provisions of this Agreement shall
remain in full force and effect.

 

VIII. MISCELLANEOUS

This Agreement shall be governed by and construed in accordance with the laws of
the State of Delaware, without reference to principles of conflict of laws
thereunder.

The captions of this Agreement are not part of the provisions hereof and shall
not have any force or effect.

This Agreement may not be amended or modified otherwise than by a written
agreement executed by the parties hereto or their respective successors and
legal representatives.

Nothing contained in this Agreement is intended to be, or shall be construed to
be, an admission of any liability by any party or an admission of the existence
of any facts upon which liability could be based.

Officer acknowledges and represents that Officer has voluntarily executed this
Agreement.

This Agreement shall not be assignable, except that in the event of the death of
Officer white amounts or benefits are still due hereunder, any remaining
payments due as described in Section II hereof shall be paid to Officer’s
estate.

 

IX. EFFECTIVE DATE OF AGREEMENT

The effective date of this Agreement shall be eight (8) calendar days after the
date this Agreement is signed and dated by Officer. If the Agreement is not
dated by Officer then, in that event, the effective date of this Agreement shall
be eight (8)) calendar days after receipt of the signed Agreement by Company.

PLEASE READ CAREFULLY. THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND
UNKNOWN CLAIMS PRIOR TO THE DATE THE OFFICER SIGNS THIS AGREEMENT INCLUDING
THOSE PURSUANT TO THE AGE DISCRIMINATION IN EMPLOYMENT ACT, AS AMENDED, AND
OTHER LAWS PROHIBITING DISCRIMINATION IN EMPLOYMENT.

 

21

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OFFICER ACKNOWLEDGES THAT OFFICER HAS READ THIS AGREEMENT, UNDERSTANDS IT AND IS
VOLUNTARILY ENTERING INTO IT.

 

CENTRAL EUROPEAN DISTRIBUTION CORPORATION

By:

 

 

Date:

 

 

 

David Bailey

Date:

 

 

 

22