ex10_1.htm


    
      

    

    
      Exhibit
10.1

      


      


      
        	 
      	
                December
      14, 2008

              


      

      


      


      Michael
N. Garin

      49 Moore
Road

      Bronxville,
New York 10708

      


      Dear
Michael:

      


      This
letter represents the agreement between CME Development Corporation (“CME” or
the “Company”) and Michael N. Garin (“you”) with respect to the termination of
your employment (the “Agreement”), effective as of January 1, 2009 (the
“Effective Date”).  Effective as of the Effective Date, you hereby
retire as the Chief Executive Officer of the Company and its parent company,
Central European Media Enterprises, Ltd. (“CME Ltd.”), and resign from all
positions with the Company, CME Ltd., and any subsidiaries of the Company or CME
Ltd., any associated company of any of them and any joint venture in which any
of the foregoing are a partner, member or shareholder (each of the foregoing, an
“Affiliate”), except that you are not resigning as a director on the Board of
Directors of CME Ltd. While you continue to serve as a CME Ltd. director, you
shall have the title of non-executive Vice Chairman. For the period starting on
the Effective Date through January 31, 2011 (the “Consulting Period”), the
Company will engage you as a consultant (as discussed in Paragraph 4 below). You
and the Company acknowledge and agree that the amounts owed to you as set forth
below (other than the amounts provided in Paragraph 2(b) regarding your services
as a director) are not contingent on your remaining on the Board of Directors of
CME Ltd., and neither CME Ltd. nor any  of its directors, officers or
shareholders has any obligation to continue to nominate you to serve on the
Board of Directors of CME Ltd.

      


      1.         Severance
Amount.  (a)         In
consideration of the mutual promises and general release set forth herein, CME
will pay you severance at the rate of your annual base salary, as set forth in
your Employment Agreement dated March 30, 2004, as amended on July 28, 2006 and
November 15, 2007 (as amended, your “Employment Agreement”), for the period
starting on the Effective Date and ending on January 31, 2010. During the period
beginning on the Effective Date and ending January 31, 2010, you shall
continue to be paid at your current annual rate of base salary in accordance
with CME’s regular payroll practices (the “Regular Payroll Amount”) as
follows:

      
         


      

      
        	
                 
      

              	
                i.

              	
                beginning
      on the regular payroll dates (“Regular Payroll Dates”)
      following January 1. 2009, you will receive your  Regular
      Payroll Amount on the Regular Payroll Dates that occur prior to March
      15th  2009;

              


      


      
        
           


        

        
          1

          
            

          

        

        
           


        

      


      
        	
                 
      

              	
                ii.

              	
                beginning
      with the first Regular Payroll Date on or after March 15th 2009, you will
      receive your Regular Payroll Amount, if any remains due, until you have
      received an amount equal to the maximum amount permitted to be paid
      pursuant to Treasury Regulation Section 1.409A-1(b)(9)(iii)(A) (i.e., the
      lesser of two times your annualized compensation or two times the Section
      401(a)(17) limit); provided, however, that in no event shall payment be
      made to you pursuant to this clause (ii) later than December 31,
      2010; and

              


      

      


      
        	
                 
      

              	
                iii.

              	
                the
      balance of your Regular Payroll Amount, if any remains due, will be paid
      to you on your Regular Payroll Dates beginning with
      the Regular Payroll Date that follows the date of the final
      payment pursuant to clause
(ii);

              


      

      


      provided,
however, that because you are a “specified employee” (within the meaning of
Section 409A of the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder (“Code Section 409A”)), any portion of the
aggregate Regular Payroll Amount that would be paid to you during the six-month
period following January 1, 2009 that constitutes deferred
compensation (within the meaning of Code Section 409A), shall be paid to you in
its entirety on the earlier of (A) the first Regular Payroll Date
of July 2009 or (B) your death (the applicable date, the “Permissible
Payment Date”) rather than as described in subclauses (i), (ii) or (iii) above,
as applicable, and any remaining amounts, if any, shall be paid to you or to
your estate, as applicable, by payment of your Regular Payroll Amount on your
Regular Payroll Dates beginning with the Regular Payroll Date that follows the
Permissible Payment Date.  Each payment under this Agreement shall be
considered a “separate payment” and not a series of payments for purposes of
Code Section 409A.

      


      From
February 1, 2010 through the remainder of the Consulting Period, CME will pay
you an aggregate sum of $300,000, payable in equal monthly installments in
arrears.

      


      (b)     You
will also be entitled to receive the Bonus (as defined in the Employment
Agreement) and Additional Bonus (as defined in the Employment Agreement)
(collectively, the “Agreement Bonuses”) for fiscal years 2008 and 2009, and a
pro-rated bonus for 2010 as if you had been employed through the expiration of
your employment term on January 31, 2010  to the extent that any such
Agreement Bonus is earned for any such calendar year under the terms of your
Employment Agreement.  Any Agreement Bonus owed to you will be paid at
the time that it would ordinarily be paid by the Company were you still employed
with the Company, but in no event later than the end of the calendar year
following the calendar year to which the Agreement Bonus
relates.


      
        
           


        

        
          2

          
            

          

        

        
           


        

      


      (c)     With
respect to the foregoing cash severance benefits, CME shall make all payments
subject to applicable employee payroll withholdings and deductions and comply
with all reporting requirements to the extent required by law or otherwise in
accordance with its regular practices.

      


      (d)     If
you are engaged, during the Consulting Period, to render full-time services,
amounts you earn from such full-time employment during the period you otherwise
would have been receiving payments from the Company in accordance with this
Agreement shall offset any financial obligation of the Company to you under this
Agreement, and you agree to notify the Company in writing of your acceptance of
any such other employment within five (5) days after accepting such other
employment.

      


      2.         Benefits.

      


      (a)   
 Your health benefits shall continue for one year following the end of the
Consulting Period, or until January 31, 2012, and thereafter, to the extent
available, you may elect to continue the health insurance coverage that you had
maintained as an employee pursuant to the Consolidated Omnibus Budget
Reconciliation Act, as amended (“COBRA”) for up to 18 months after January 31,
2012 (or up to the maximum period allowed by law if such maximum period is less
than 18 months); provided that your health insurance coverage will terminate
earlier if you obtain other employment or are eligible for other group health
plan coverage.  You agree to immediately notify the Company in writing
of any such eligibility.  If COBRA is not available for the 18 months
following January 31, 2012, the Company will continue to make your health
insurance coverage available for this 18-month period, and you will reimburse
the Company for 100% of the premiums that you would have paid if COBRA had been
available.

      


      (b)     During
the period that you are serving as a director and/or non-executive Vice Chairman
of CME Ltd., you will be entitled to be reimbursed for your travel and
entertainment expenses on the same terms and conditions as other directors of
CME Ltd., and you will be covered by the D&O insurance of CME Ltd. to the
same extent as the other directors of CME Ltd. Except as provided in the
immediately preceding sentence, during the Consulting Period, you will not be
entitled to receive, and you hereby waive any and all rights to receive, any
other fees, compensation, stock options or other amounts or benefits in respect
of your service as a director and/or non-executive Vice Chairman of CME
Ltd.


      
        
           


        

        
          3

          
            

          

        

        
           


        

      


      (c)     During
the Consulting Period, you will be entitled to be reimbursed for any reasonable
out of pocket expenses incurred in performing the Consulting Services that are
authorized in advance by the Company, subject to the submission of appropriate
documentation.

      


      (d)     On
and after the Effective Date, the Company will no longer provide you with an
office or an assistant.

      


      (e)      You
may retain possession and ownership of the Company laptop computer, PDA and
cellphone that you have been most recently using in your Company work, provided,
that the Company shall cease paying for service to the laptop as of the
Effective Date and the cellphone as of February 28, 2009. Prior to February 28,
2009, the Company will obtain a PAC code for you in order to allow you to retain
your UK cellphone number. You shall return your laptop no later than the thirty
days following the Effective Date, and the Company shall have the right to
remove all Company confidential information and Company-licensed software from
such laptop and will deliver the laptop to you within ten (10) days after
receipt thereof by the Company. You will no longer have access to your Company
email account after the Effective Date but the Company will arrange for emails
to your Company email address to be forwarded to you for the period you are
serving as a director of CME Ltd.

      


      3.        Stock
Options.  On the Effective Date, you will be entitled to retain
fully vested non-qualified stock options to purchase 290,000 shares of Class A
Common Stock of CME Ltd. (the “Existing Options”) under CME Ltd.’s 1995 Amended
and Restated 2005 Stock Incentive Plan, as amended as of April 25, 2007 (the
“Stock Incentive Plan”) of which (i) options to purchase 192,500 shares were
already fully vested prior to the Effective Date, (ii) options to purchase
80,000 shares become fully vested on the Effective Date in accordance with the
terms of the Employment Agreement, (iii) options to purchase 7,500 shares that
would have vested on June 2, 2009 will instead become fully vested on the
Effective Date, (iv) options to purchase 5,000 shares that would have vested on
June 8, 2009 will instead become fully vested on the Effective Date, and (v)
options to purchase 5,000 shares that would have vested on June 8, 2010 will
instead become fully vested on the Effective Date. In addition, on or before the
Effective Date, you will be granted options to purchase 30,000 shares of Class A
Common Stock at the fair market value of such shares on the date of grant, which
will become fully vested on or before the Effective Date, provided that on or
before such vesting date you have not revoked this Agreement in accordance with
Paragraph 16 of this Agreement. Except as expressly provided herein, the Option
will be governed by the terms and conditions set forth in the Stock Incentive
Plan and the applicable option agreement (collectively with the Existing
Options, the “Options”). You will have until January 31, 2012 to exercise the
Options, except that in the event that you breach the restrictive covenants
described in Paragraph 6, you will have 90 days following the date that the
Company gives you written notice of its determination of your breach to exercise
the Options.


      
        
           


        

        
          4

          
            

          

        

        
           


        

      


      4.     
  Consultancy.  For
the duration of the Consulting Period, the Company will engage you as a
consultant, and you agree to consult and cooperate with, and assist the Company
in any legal or business matter relating to the Company or the Affiliates, as
requested by the Company, upon reasonable advance notice by the Company; provided that you shall not
be required to devote more than thirty (30) hours per month to providing such
services and such services need not be provided to the Company on an exclusive
basis, as long as you comply with the restrictive covenants in your Employment
Agreement, which are incorporated herein by reference as set forth in Paragraph
6 of this Agreement.

      


      5.    
   Release.  In
consideration of CME’s commitment to the various arrangements described in this
Agreement, that you are not otherwise entitled to receive, you hereby generally
and completely release the Company and CME Ltd., and each of their directors,
officers, employees, shareholders, members, partners, agents, attorneys,
predecessors, successors, parent and subsidiary entities, insurers, affiliates,
and assigns, from any and all claims, liabilities and obligations, both known
and unknown, that arise out of or are in any way related to events, acts,
conduct, or omissions occurring prior to your signing this
Agreement.  This general release includes, but is not limited to: (1)
all claims arising out of or in any way related to your employment with the
Company or the termination of that employment; (2) all claims arising from or
related to your Employment Agreement; (3) all claims related to your
compensation or benefits from the Company, including, but not limited to,
salary, bonuses, commissions, vacation pay, expense reimbursements, severance
pay, fringe benefits, stock, stock options, or any other ownership interests in
the Company; (4) all claims for breach of contract, wrongful termination, and
breach of the implied covenant of good faith and fair dealing; (5) all tort
claims, including, but not limited to, claims for fraud, defamation, emotional
distress, and discharge in violation of public policy; and (6) all federal,
state, and local statutory claims, including, but not limited to, claims for
discrimination, harassment, retaliation, attorneys’ fees, or other claims
arising under the federal Civil Rights Act of 1964 (as amended), the federal
Americans with Disabilities Act of 1990 and the federal Age Discrimination in
Employment Act of 1967 (as amended) (“ADEA”).

      


      You
acknowledge that you are knowingly and voluntarily waiving and releasing any
rights you may have under ADEA, and that the consideration given for the waiver
and release in the preceding paragraph is in addition to anything of value to
which you were already entitled.  You further acknowledge that you
have been advised by this writing that your waiver and release do not apply to
any rights or claims that may arise after the execution date of this
Agreement.

      


      Notwithstanding
anything to the contrary set forth in this Paragraph 5, neither you nor the
Company release, waive, or discharge the other from any claims to seek to
enforce this Agreement or any provision hereof, including without limitation,
the obligations of the Company or you, as the case may be, under the continuing
provisions of the Employment Agreement specified in Paragraph 6 of this
Agreement.


      
        
           


        

        
          5

          
            

          

        

        
           


        

      


      6.      
 Continuing
Obligations under Employment Agreement. It is hereby agreed that the
Company’s obligations under the third and fourth sentences of Section 2
(relating to tax equalization payments), Section 11 (relating to limitations on
damages), Section 12 (relating to indemnification) and Section 4 of Annex B
(relating to non-disparagement) of the Employment Agreement, and your
obligations under Section 7 and Annex B (relating to restrictive covenants and
return of property)  and Section 11 (relating to limitations on
damages) of the Employment Agreement, survive the Effective Date and termination
of the Employment Agreement and are incorporated herein by
reference.

      


      7.      
 Additional
Covenants.          (a)  You
covenant and agree to cooperate with and make yourself readily available to CME
or its General Counsel, as CME may reasonably request, to assist it in any
matter, including but not limited to, providing information, giving truthful
testimony in any litigation or potential litigation over which you may have
knowledge, information or expertise.

      


      (b)  
 On and after the date hereof, you agree that any communication with CME
Ltd. investors, analysts or the media concerning CME Ltd. or its Affiliates or
their respective shareholders, directors or employees shall be done in a manner
consistent  with the guidelines set by the Company and/or CME Ltd. and
their respective Boards of Directors; it being understood that the Company is
developing a communications strategy regarding the transition of management that
will involve a communications role for you.

      


      8.     
  No
Admission of Liability.  By entering into this Agreement, the
Company does not admit and specifically denies, any liability or wrongdoing, and
it is expressly understood and agreed that this Agreement is being entered into
solely for the purposes of avoiding and amicably resolving all disputes and
potential claims between you and the Company.

      


      9.    
   Reemployment or
Reinstatement.  You agree that the Company has no obligation,
contractual or otherwise, to rehire, reemploy or recall you in the
future.

      


      10.   
  Entire
Agreement and Severability.  You and CME agree that this
Agreement may not be modified, altered or changed except by a written agreement
signed by the parties hereto.  You and CME acknowledge that this
constitutes the entire agreement on the matters addressed herein and except as
set forth herein, supersedes all prior agreements or understandings between the
parties with respect thereto, including without limitation your Employment
Agreement (excluding the sections thereof incorporated by reference into this
Agreement as set forth in Paragraph 6).  If the application of any
provision of this Agreement, or any section, subsection, subdivision, sentence,
clause, phrase, word or portion of this Agreement is held to be invalid or
unenforceable, the remaining provisions shall remain in full force and
effect.

      


      11.   
  Choice of
Law and Jurisdiction.  The governing law of this Agreement
shall be the substantive and procedural law of the State of New York, without
regard to conflict of law principles, and the venue of any litigation commenced
hereunder shall be New York, New York.  You hereby submit to the
jurisdiction of all state courts of the State of New York and all federal courts
located in the State of New York for the purposes of the enforcement of this
Agreement.


      
        
           


        

        
          6

          
            

          

        

        
           


        

      


      12.   
  Notices.  Notices
given under this Agreement may be given by registered or certified mail, return
receipt requested, or by personal delivery.  In your case, mailed
notices shall be addressed to you at the home address that you most recently
communicated to the Company in writing with a copy to Daniel M. Wasser, Esq.,
Franklin, Weinrib, Rudell & Vassallo, P.C., 488 Madison Avenue, New York,
New York 10022.  In the case of the Company, mailed notices shall be
addressed to its corporate headquarters, and all notices shall be directed to
the attention of its General Counsel.  A mailed notice shall be deemed
given two (2) business days after mailing.

      


      13.  
   Counterparts.  This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which shall constitute one and the same
instrument.

      


      14.  
   No
Assignment.  This Agreement may not be assigned or encumbered
in any way by you, except that in the event of your death during the Consulting
Period, amounts otherwise payable to you under this Agreement will be paid to
your estate.  The Company may assign this Agreement to any successor
(whether by merger, consolidation, or purchase of the Company’s stock) to all or
a controlling interest in the Company’s business, provided that such successor
assumes in writing the Company’s obligations under this Agreement, in which case
this Agreement shall be binding upon and inure to the benefit of such successors
and assigns.

      


      15. 
    Section
409A.  The terms herein are intended, and shall be interpreted,
to comply with Section 409A of the Internal Revenue Code of 1986, as amended
(“Section
409A”).   Nothing herein requires the Company to satisfy
your obligation to pay (or requires the Company to indemnify you with respect
to) all required taxes on any amounts and benefits provided hereunder, including
any taxes imposed under Section 409A.

      


      16.   
  Acknowledgment.  You
acknowledge that you have carefully read this Agreement and understand all of
its terms including the full and final release of claims set forth
above.  You further acknowledge that you had adequate time to consider
the terms of this Agreement and knowingly and voluntarily entered into it; that
you have not relied upon any representation or statement, written or oral, not
set forth in this Agreement; that the only consideration for signing this
Agreement is as set forth herein; that the consideration received for executing
this Agreement is greater than that to which you may otherwise be entitled; and
that this document gives you the opportunity and advises you that you should
consult with your attorney and have this Agreement reviewed by your attorney and
tax advisor prior to signing it (and you acknowledge that you have done
so).  You further acknowledge that you had 21 days from your receipt
of this Agreement to consider this Agreement before executing and delivering
this agreement.  You also acknowledge that you have seven days after
signing this Agreement to revoke it in writing.  Accordingly, no
payments required under this Agreement shall be made until the seven (7) days
following your execution of this Agreement has expired and you have not revoked
this Agreement during that period, so that the Release described in Paragraph 4
of this Agreement has become effective.  You acknowledge that
revocation of this Agreement does not reinstate you as Chief Executive Officer
of the Company.  The offer set forth in this Agreement expires 21 days
after a draft of the Agreement is delivered to you.


      
        
           


        

        
          7

          
            

          

        

        
           


        

      


      Please
indicate your acceptance of the terms of this Agreement by signing your name in
the space provided below.

      


      


      
        	 
      	
                CME
      Development Corporation

              
	 
      	 
      
	 
      	 
      
	 
      	
                /s/ Herb Granath

              
	 
      	
                By:
      Herb Granath

              
	 
      	
                Title:
      Director

              
	 
      	 
      
	
                ACCEPTED
      AND AGREED:

              	 
      
	 
      	 
      
	 
      	 
      
	
                /s/ Michael N. Garin

              	 
      
	
                Michael
      N. Garin

              	 
      
	
                Dated:
      December 14, 2008

              	 
      


      

       

    

     

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