Document:

Exhibit 99.5

 

STOCK UNIT AGREEMENT

 

STOCK UNIT AGREEMENT (“Agreement”) effective as
of October 27, 2008 (“Grant Date”), by and between AboveNet, Inc.
(the “Company”) and Joseph Ciavarella (the “Participant”).

 

WHEREAS, the Company believes it
desirable that the Participant be provided additional incentive to advance the
interests of the Company through a grant of stock units under the AboveNet, Inc.
2008 Equity Incentive Plan (the “Plan”);

 

NOW, THEREFORE, the parties agree as
follows:

 

1.             Grant of Stock Units.

 

Pursuant
to the Plan and on the terms and subject to the conditions set forth herein and
therein, the Company hereby grants to the Participant 35,000 stock units (the “Stock
Units”). Each Stock Unit constitutes a right to receive from the Company one
share (each a “Unit Share” and collectively the “Unit Shares”) of the Company’s
Common Stock, $.01 par value per share (the “Common Stock”), subject to
adjustment as provided in the Plan. Capitalized terms that are not defined in
this Agreement shall have the respective meanings given in the Plan.

 

2.             Vesting; Delivery of Unit Shares.

 

The
Stock Units vest (i.e., are not subject to forfeiture) as follows: (a) 30%
of the Stock Units shall vest and the underlying Unit Shares shall be delivered
to the Participant on November 16, 2009; (b) 10% of the Stock Units
shall vest and the underlying Unit Shares shall be delivered on November 15,
2010; and (c) 60% of the Stock Units shall vest and the underlying Unit
Shares shall be delivered on November 15, 2011. The Stock Units are
subject to earlier vesting as set forth in Sections 4(a), 4(b), 4(d) and 4(e).
The Unit Shares are subject to earlier delivery only as set forth in Section 4(a) (death)
and Section 4(e) (Change of Control).

 

3.             Withholding.

 

The
Company’s obligation to deliver Unit Shares under this Agreement shall be
subject to the payment by the Participant of any applicable federal, state and
local withholding tax. The Company shall, to the extent permitted by law, have
the right to deduct from any payment of any kind otherwise due to the
Participant any federal, state or local taxes required to be withheld with
respect to the vesting of the Stock Units or the delivery of the Unit Shares.

 

4.             Termination of Employment; Change of Control.

 

(a)           In the event of the
Participant’s death prior to the vesting of all Stock Units granted under this
Agreement, any unvested Stock Units, if any, shall immediately vest and the
underlying Unit Shares shall be immediately delivered to the Participant’s
beneficiary or beneficiaries.

 

 

(b)         Upon the termination of Participant’s
Continuous Service with the Company as a result of a Disability, any unvested
Stock Units shall immediately vest.

 

(c)          In the event of the termination of the
Participant’s Continuous Service by the Company for Cause or by the Participant
other than for Good Reason, any unvested Stock Units shall immediately be
forfeited.

 

(d)         Upon the termination of the Participant’s
Continuous Service by the Company without Cause or by the Employee for Good
Reason, any unvested Stock Units shall immediately vest.

 

(e)          In the event of a Change of Control,
any unvested Stock Units shall immediately vest and the underlying Unit Shares
of all vested Stock Units shall be immediately delivered to the Participant.

 

(f)          The parties may not accelerate the
delivery of any Stock Units before the dates set forth above.

 

5.             Transfer of Stock Units; Limitations on Delivery of Unit Shares; Put Right.

 

(a)           The Stock Units are not transferable
otherwise than by will or the laws of descent and distribution. Any attempt to
transfer the Stock Units in contravention of this subparagraph (a) is void
ab initio. The Stock
Units shall not be subject to execution, attachment or other process.

 

(b)           In the event that on the date of
delivery, any of the following shall be true (1) the Unit Shares may not
be sold by the Participant at such time under Rule 144 of the Securities
Act of 1933, as amended (the “Securities Act”), or pursuant to a currently
effective registration statement under the Securities Act, (2) the
Participant is unable to sell the stock underlying his Unit Shares due to any
Company imposed trading restriction or the Participant otherwise is in
possession of material, non-public information regarding the Company or its
securities or (3) the Company’s shares are not listed on a national stock
exchange, the Company shall be obligated, following notice from the Participant
as provided below, to repurchase such number of Unit Shares at the Fair Market
Value of the Unit Shares on the date of such repurchase as required to meet the
Company’s required minimum tax withholding with respect to the delivered Unit
Shares (based on minimum statutory withholding rates for federal, state and
local purposes, including payroll taxes, that are applicable to such
supplemental taxable income). Notwithstanding the immediately preceding
sentence, in the event the Internal Revenue Service determines that the fair
market value of the Unit Shares is greater than the Fair Market Value as
determined under the Plan and the Participant has incurred additional liability
for income taxes, the Fair Market Value for purposes of this subparagraph (b) shall
be increased to the value determined by the Internal Revenue Service. The
Participant must give his notice to the Company of his election to exercise the
right to require the Company to repurchase a portion of the Unit Shares not
less than two (2) business days before the delivery date. In the event
such Participant does not exercise such right, he shall be deemed to have
elected to forego such right.

 

2

 

6.             No
Rights in Unit Shares.

 

The Participant shall have none of the rights of a
shareholder with respect to particular Unit Shares unless and until such Unit
Shares are issued and delivered to him under this Agreement.

 

7.             No
Right to Employment.

 

Nothing contained herein shall be deemed to confer
upon the Participant any right to remain as an employee of the Company. The
Company reserves the right to dismiss the Participant free from any liability
hereunder, or any claim under the Plan, except as specifically provided in this
Agreement.

 

8.             Governing
Law/Jurisdiction.

 

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

 

9.             Miscellaneous.

 

This Agreement cannot be changed or terminated
orally. The Company at any time, and from time to time, may amend the terms of
this Agreement; provided, however, that the rights under this Agreement shall not be impaired by any such
amendment unless (i) the Company requests the consent of the Participant
and (ii) the Participant consents in writing. This Agreement and the Plan
contain the entire agreement between the parties relating to the subject matter
hereof. In the event of any conflict between the provisions of this Agreement
and those of the Plan, the provisions of the Plan shall control. The paragraph
headings herein are intended for reference only and shall not affect the interpretation
hereof.

 

IN WITNESS WHEREOF, the
parties have executed this Agreement as of the day and year first above
written.

 

 

	
   

  	
  /s/
  Joseph Ciavarella

  
	
   

  	
  Joseph
  Ciavarella

  
	
   

  	
  Participant

  
	
   

  	
   

  
	
   

  	
  ABOVENET,
  INC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Robert Sokota

  
	
   

  	
   

  	
  Name:

  	
  Robert Sokota

  
	
   

  	
   

  	
  Title:

  	
  SVP & General Counsel

  

 

3Unassociated Document

    
      

    

    Exhibit
10.9

    

    March 30,
2004

    

    Mr.
Michael N. Garin

    49 Moore
Road

    Bronxville,
New York 10708

     

    Dear
Michael:

     

    We are
pleased to confirm to you our offer of employment by CME Development
Corporation  (the “Company”).  The purpose of this letter
agreement (this “Agreement”) is to set forth our understanding of the terms of
your employment.

     

    
      	
              1.

            	
              Your
      employment with the Company will be for a term commencing February 2,
      2004, and ending January 31, 2008 (subject to earlier termination in
      accordance with paragraph 7 hereof), unless extended by a written
      agreement signed by you and the
Company.

            

    

     

    
      	
              2.

            	
              Your
      duties will be performed in the United States of America and in the United
      Kingdom. Your annual base salary for your duties performed in the United
      States of America will be $485,000 and your annual base salary for your
      duties performed in the United Kingdom will be $140,000, payable in
      accordance with the Company’s payroll practices. Although your duties
      hereunder will be performed in the United States and in the United
      Kingdom, you maintain your principal residence in Westchester County, New
      York. If the performance of your duties results in the taxation of your
      income and/or withholdings from your income (e.g., withholdings to fund
      governmental health programs) which are in excess of the taxation and
      withholdings that would apply if all of your income were received by you
      in New York then, after taking account of any tax credits resulting from
      tax treaties or otherwise, the Company will pay you a tax-equalization
      amount so that, on an after-tax basis, your total combined income
      hereunder is no less than would have been the case had all of your
      compensation hereunder been received in New York. In addition, Company
      will reimburse you for costs you incur for multiple tax returns and tax
      advice, not to exceed US$15,000 in any
year.

            

    

     

    
      	
              3.

            	
              The
      Compensation Committee of the Board of Directors of the Company’s ultimate
      sole shareholder, the Central European Media Enterprises Limited (“CME
      Ltd”)  (the “Board”) will review your base salary at least
      annually, and the Board may, in its discretion, increase, but not
      decrease, your base salary.

            

    

     

    
      	
              4.

            	
              You
      will be employed as the Chief Executive Officer of the Company, reporting
      solely to the Board.  All employees of the Company will report
      directly to you or your designees.  During the term of your
      employment, you will also be a director of CME Ltd.  Your duties
      shall include serving as an officer and otherwise performing services for
      the Company or for any parent company of the Company, for any holding
      company of the Company and any subsidiaries of the Company or of any such
      holding company, 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, other than the Company, an “Affiliate”) as
      requested by the Board.  All such services requested of you will
      be consistent with your senior status as the Company’s Chief Executive
      Officer.  You acknowledge that you shall be required to travel
      regularly to and work at the Company’s and any Affiliate’s offices and
      facilities in central and eastern Europe and/or from time to time, such
      other locations in Europe as appropriate to the performance of your
      services on behalf of the Company and the Affiliates, or as requested by
      the Board.  You agree to serve the Company faithfully and to the
      best of your ability and to devote your full business time, energy,
      experience and talents to the business of the Company and the Affiliates;
      provided, however, that you
      shall be permitted to manage your personal investments and to engage in or
      serve such civic, community, charitable, educational, or religious
      organizations as you may reasonably select as long as such service does
      not interfere with the performance of your duties under this
      Agreement.  The Company recognizes that you currently serve as a
      director of Canal Plus Nordic, Cablecom, AMC Theatres and American Media
      and serve as an advisor to MortgageIT and that you may be invited to serve
      on MortgageIT’s board of directors.  You agree, if so requested
      by the Company, to limit your service and engagements as described in the
      immediately preceding sentence to the extent necessary to comply with any
      corporate governance recommendations of the U.S. Securities and Exchange
      Commission or the National Association of Securities Dealers, and, as so
      limited, you may continue such services and engagements as long as such
      services and engagements do not interfere with the performance of your
      duties under this Agreement or violate the restrictive covenants described
      in paragraph 6 hereof.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              5.

            	
              While
      you are employed by the Company, you will be eligible to receive an annual
      incentive bonus in any amount not exceeding your combined annual base
      salary payable for your duties performed in the United States of America
      and in the United Kingdom, as described in this paragraph
      4.  One-half of any such bonus will be based upon achievement of
      reasonable quantitative performance criteria established by the Board and
      one-half of any such bonus shall be based upon subjective criteria
      established by the Board.

            

    

     

    
      	
              6.

            	
              While
      you are employed by the Company, you will be eligible to participate in
      the employee benefit plans and programs made available from time to time
      for the Company’s other senior executive officers (provided, however, the Company
      shall continue to provide you with medical and travel insurance benefits
      in the event the Company ceases to provide medical and travel insurance
      benefits to other employees).  Without limiting the foregoing,
      while you are employed by the Company, (a) you will be eligible to receive
      options to purchase Class A Common Shares of the Company as described in
      Annex A
      hereto, (b) the Company will provide you with an assistant selected by
      you, and (c) the Company will pay or reimburse all reasonable travel
      expenses you incur in providing services for the Company, in accordance
      with the Company’s policies, provided, however, that in no
      event will your use of business class travel be deemed to violate such
      policies.

            

    

     

    
      	
              7.

            	
              You
      acknowledge and agree that the individualized services and capabilities
      that you will provide to the Company under this Agreement are of a
      personal, special, unique, unusual, extraordinary and intellectual
      character.  Therefore, you will comply with and be bound by the
      restrictive covenants set forth in Annex B
      attached to, and made a part of, this Agreement, and you acknowledge and
      agree that the restrictions in this Agreement (and the duration, extent
      and application thereof) are no greater than is necessary to protect the
      goodwill and trade connection of the Business (as defined in Annex B) and
      are reasonable to protect the Company’s rights under this Agreement and to
      safeguard the Company’s and the Affiliates’ Confidential Information (as
      defined in Annex
      B).  You and the Company agree that the obligations and
      restrictions with respect to non-competition, confidentiality, Company
      property, nondisparagement and non-solicitation, as set forth in Annex B, will
      continue to apply to you following the termination of your relationship
      regardless of the manner in which your relationship with the Company is
      terminated, whether voluntarily, due to Termination for Cause (as defined
      herein), not due to Termination for Cause or otherwise.  You
      represent that your economic means and circumstances are such that the
      provisions of this Agreement, including the noncompetition,
      nonsolicitation, confidentiality and Company property provisions, will not
      prevent you from providing for yourself and your family on a basis
      satisfactory to you and them.  You acknowledge and agree that
      your covenants and obligations with respect to noncompetition,
      nonsolicitation, confidentiality and Company property relate to special,
      unique and extraordinary matters and that a violation of any of the terms
      of such covenants and obligations will cause the Company and the
      Affiliates irreparable injury for which adequate remedies are not
      available at law.  You therefore agree that the Company shall be
      entitled to an order of specific performance, injunction, restraining
      order or such other interim or permanent equitable relief (without the
      requirement to post bond) restraining you from committing any violation of
      the covenants and obligations contained in this
      Agreement.  These remedies are cumulative and are in addition to
      any other rights and remedies the Company may have at law or in
      equity.  You agree that each of the paragraphs and
      sub-paragraphs of Annex B
      constitutes an entirely separate, severable and independent covenant and
      restriction on you.   If the arbitrator appointed under
      paragraph 9 hereof or a court determines that, but for the provisions of
      this paragraph, any part of this Agreement is illegal, void as against
      public policy or otherwise unenforceable, the relevant part will
      automatically be amended to the extent necessary to make it sufficiently
      narrow in scope, time and geographic area to be legally
      enforceable.  All other terms of this Agreement will remain in
      full force and effect.  If you raise any question as to the
      enforceability of any part or terms of this Agreement, including, without
      limitation, the provisions relating to noncompetition, nonsolicitation,
      confidentiality and Company property, you specifically agree that you will
      comply fully with this Agreement unless and until the entry of an arbitral
      decision to the contrary.

            

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    
      	
              8.

            	
              You
      may terminate your employment hereunder upon at least ninety days' prior
      written notice to the Company, and you will not be entitled to any
      additional compensation, severance, termination pay, salary continuation
      or similar compensation or benefits upon or after such termination of
      employment.  If the Company terminates your employment, other
      than due to Termination for Cause, and not because of your death or
      disability (as determined in the good faith judgment of the Board) and not
      due to expiration of the employment term set forth in paragraph 1 hereof
      (or if you terminate your employment other than pursuant to the
      immediately preceding sentence because of alleged breaches by the Company
      of this Agreement), you will have those rights to which you are entitled
      as a matter of law in respect of your loss of compensation, stock options
      and other contractual entitlements hereunder, and (a) you will not
      otherwise be entitled to any additional compensation, severance,
      termination pay, salary continuation or similar compensation or benefits
      upon or after termination of your employment with the Company, and (b) in
      connection with such termination of employment the Company will not assert
      that you have any duty to mitigate damages, provided, however, that if you
      are engaged to render full-time services following such termination of
      employment with the Company, amounts you earn from such full-time
      employment during the period you otherwise would have been on the
      Company's payroll hereunder shall offset any financial obligation of the
      Company to you, 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.  For purposes of this
      Agreement, “Termination for Cause” means a determination by a majority of
      the Board to terminate your employment due to your (i) conviction of a
      felony or entering of a plea of nolo contendere with respect to a charged
      felony, (ii) gross negligence, recklessness, dishonesty, fraud, willful
      malfeasance or willful misconduct in the performance of the services
      contemplated by this Agreement, (iii) willful misrepresentation to
      shareholders or directors of the Company which is injurious to the
      Company; (iv) willful failure without reasonable justification to comply
      with a reasonable written order of the Board; or (v) willful and material
      breach of your duties or obligations under this
      Agreement.  Notwithstanding the foregoing, a termination shall
      not be treated as a Termination for Cause unless (A) the Company shall
      have delivered a written notice to you, stating that it intends to
      terminate your employment due to Termination for Cause not less than seven
      days following the giving of such notice, and specifying the factual basis
      for such termination, and (B) the event or events that form the basis for
      such notice, if capable of being cured, shall not have been cured within
      30 days of receipt of such
notice.

            

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    
      	
              9.

            	
              For
      one year following termination of your employment with the Company other
      than due to Termination for Cause, 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 twenty 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
      described in paragraph 6 hereof.  In consideration for your
      provision of such services during such one-year period, the Company will
      pay you an aggregate fee of $250,000, payable in equal monthly
      installments in arrears.

            

    

    

    
      	
              10.

            	
              You
      and the Company agree that any dispute, claim or controversy between you
      and the Company or an Affiliate or any of their respective officers,
      directors, employees or shareholders (who are hereby expressly made
      third-party beneficiaries of this Agreement for this purpose) arising out
      of, relating to or in connection with this Agreement, or the breach,
      termination or validity thereof, or otherwise arising from your employment
      or the termination of your employment, will be referred to and finally
      resolved by binding and non-appealable arbitration, before a single
      arbitrator under the American Arbitration Association’s National Rules for
      the Resolution of Employment Disputes, which Rules are deemed to be
      incorporated by reference into this Agreement.  The place of
      arbitration shall be New York City.  To the extent practicable,
      any such arbitration shall be consolidated with any other arbitration
      proceeding between you and any
Affiliate.

            

    

    

    
      	
              11.

            	
              You
      and the Company agree that neither you nor the Company will be entitled to
      seek or obtain punitive, exemplary or similar damages of any kind from the
      other or, in your case, from the Company’s officers, directors, employees
      or shareholders, or to seek or obtain damages or compensation for
      emotional distress, as a result of any dispute, controversy or claim
      arising out of, relating to or in connection with this Agreement, or the
      performance, breach, termination or validity thereof.  Nothing
      herein shall preclude an award of compensatory or punitive damages against
      any other third party.

            

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    
      	
              12.

            	
              The
      Company will indemnify and hold you harmless from and against any claim,
      loss or cause of action arising from or out of your performance as an
      officer, director or employee of the Company or any of its subsidiaries or
      in any other capacity, including any fiduciary capacity, in which you
      serve at the request of the Company to the maximum extent permitted by
      applicable law and the Company’s Memorandum of Association and
      Bye-Laws.  If any claim is asserted against you with respect to
      which you reasonably believe in good faith you are entitled to
      indemnification, the Company will either defend you or, at its option, pay
      your reasonable legal expenses (or cause such expenses to be paid) as they
      become payable by you, provided that you will
      reimburse the Company for any such amounts, plus simple interest thereon
      at the 90-day United States Treasury Bill rate as in effect from time to
      time, compounded annually, if the Company’s payment or reimbursement of
      such amounts violates any law binding on the
  Company.

            

    

    

    
      	
              13.

            	
              All
      notices and other communications required or permitted hereunder shall be
      sufficiently given if (a) delivered personally, (b) sent by facsimile
      transmission (with confirmation received), (c) sent by a
      nationally-recognized air courier assuring overnight delivery, or (d)
      mailed (by registered or certified mail, return receipt requested and
      postage prepaid) as follows:

            

    

    

    If to
you, to you at:

    

    Michael
N. Garin

    49 Moore
Road

    Bronxville,
New York 10708

    Facsimile
number:  (212) 509-1268

    

    With a
copy to:

    

    Franklin,
Weinrib, Rudell & Vassallo, P.C.

    488
Madison Avenue

    New York,
New York 10022

    Facsimile
number:  (212) 308-0642

    Attention:  Michael
I. Rudell, Esq.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    If to the
Company, to the Company at

    

    8th Floor,
Aldwych House

    71-91
Aldwych

    London
WC2B 4HN

    United
Kingdom

    Facsimile
number:  44-207-430-5403

    Attention:  Andrea
Kozma, Esq.

    

    With a
copy to:

    

    

    the
Chairman of the Compensation Committee

    of the
Board of Directors of Central European Media Enterprises Ltd767 Fifth
Avenue

    Suite
4200

    New York,
NY 10153

    Facsimile
number:  (212) 572-4067

    

    or to
such other address as shall be furnished by notice from time to time by one
party hereto to the other party.  Any such communication shall be
deemed to have been given, (i) in the case of personal delivery, on the date of
delivery, (ii) in the case of delivery by air courier, on the first business day
following the day on which such communication was posted, and (iii) in the case
of mailing, on the third business day following the day on which such notice was
posted.

    

    
      	
              14.

            	
              This
      Agreement constitutes the entire agreement between you and the Company
      with respect to the subject matter hereof, supersedes any prior agreements
      and undertakings, both written and oral, and may not be modified or
      amended in any way except in writing by you and the
      Company.  The validity, interpretation, construction and
      performance of this Agreement, and all disputes arising under or in
      connection with this Agreement, shall be governed by the laws of the State
      of New York (to the exclusion of its conflict of law
      rules).  All amounts payable hereunder shall be subject to the
      withholding of all applicable taxes and deductions required by any
      applicable law.

            

    

     

    If you
agree with the terms outlined in this Agreement, please acknowledge the same by
signing this Agreement and the enclosed duplicate original hereof and returning
such signed duplicate original copy in the envelope provided.

     

    
      
        
          	 	
                  Sincerely,

                
	 	 
      
	 	
                  CME
      Development Corporation

                
	 	 
      
	 	 
      
	 	
                  By:

                	
                  /s/ Ronald S. Lauder

                
	 	 
      	
                  Name:  Ronald
      S. Lauder

                
	 	 
      	
                  Title:  Director

                

        

      

    

    

    Accepted
and Agreed to as of this 2nd day of
February 2004:

    

    

    /s/ Michael
Garin

    MICHAEL
GARIN

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    Annex
A

     

    Stock
Options

    

    

    You have
been granted, effective February 2, 2004, a non-qualified stock option to
purchase 160,000 Class A Common Shares of CME Ltd under  CME Ltd’s
1995 Stock Option Plan (the “Option Plan”).  Such option will become
exercisable for 25% of the total number of shares subject to such option on each
of the following dates:  January 31, 2005, 2006, 2007 and 2008, as
long as you have been continuously employed by the Company through each such
respective date, except  to the extent that you may become entitled to
an accelerated right to exercise the option pursuant to the terms of the Option
Plan;  or
except as otherwise provided in the Option Plan with regard to death, disability
or retirement at or after age 65; provided, however, that if
the Company terminates your employment, other than due to Termination for Cause,
such option shall become exercisable in full and may be exercised in accordance
with the Option Plan.  The exercise price of such option shall be the
fair market value of the Class A Common Shares on February 2, 2004 as determined
in accordance with the Option Plan.  The terms and conditions of such
option shall be governed by the Option Plan and the applicable option agreement
(which shall be consistent with the Option Plan and the terms
hereof).

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    Annex
B

     

    Restrictive
Covenants

    

     

    
      	
              1

            	
              Definitions

            

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                	
                                        the
      Business

                                      	
                                        the
      business of investing in, developing and operating national and regional
      commercial television stations and networks in Central and Eastern Europe
      or any part of it carried on by the Company or any Affiliate at any time,
      or, with respect to matters following the Termination Date, any such
      business in respect of which Executive had been concerned or involved to
      any material extent at any time during the twelve (12) month period
      immediately prior to the Termination Date.

                                      
	 
      	 
      
	
                                        Executive

                                      	
                                        Michael
      Garin

                                      
	 
      	 
      
	
                                        Material
      Interest

                                      	
                                        (a)   the
      holding of any position as director, officer, employee, consultant,
      partner, principal or agent;

                                      
	 
      	 
      
	 
      	
                                        (b)   the
      direct or indirect control or ownership (whether jointly or alone) of any
      shares (or any voting rights attached to them) or debentures except for
      the ownership for investment purposes only of not more than 1% of the
      issued ordinary shares of a company whose shares are listed on any
      recognized investment exchange; or

                                      
	 
      	 
      
	 
      	
                                        (c)   the
      direct or indirect provision of any financial
  assistance.

                                      
	 
      	 
      
	
                                        Senior
      Executive

                                      	
                                        a
      person with whom Executive had dealings in the course of his employment or
      services and who is or was:

                                      
	 
      	 
      
	 
      	
                                        (a)    engaged
      or employed as an employee, director or consultant of the Company or any
      Affiliate;

                                      
	 
      	 
      
	 
      	
                                        (b)   engaged
      or employed in a capacity in which he obtained Confidential Information;
      and

                                      
	 
      	 
      
	 
      	
                                        (c)   with
      respect to matters following the Termination Date, engaged or employed at
      the Termination Date or at any time during the twelve (12) month period
      immediately prior to the Termination Date.

                                      
	 
      	 
      
	
                                        Termination
      Date

                                      	
                                        the
      date on which Executive’s employment with the Company terminates,
      howsoever occurring, or, if later, the later of:  (a) the date
      on which the one-year term of Executive’s consulting, cooperation and
      assistance services pursuant to paragraph 8 of this Agreement terminates,
      and (b) the expiration of any period during or with respect to which
      Executive received compensation or other payments from the Company in
      respect of his loss of compensation, stock options and other contractual
      entitlements under this Agreement in connection with any termination of
      his employment by the
Company.

                                      

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    
      	
              2

            	
              Executive
      covenants with the Company that he shall not (other than on behalf of the
      Company) without the prior written consent of the Board (such consent to
      be withheld only insofar as it may be reasonably necessary to protect the
      legitimate interests of the Company and any Affiliates) directly or
      indirectly:

            

    

     

    
      	
               
      

            	
              2.1

            	
              during
      the term of Executive’s employment by, or other services to, the Company,
      and for twelve (12) months following the Termination Date hold a Material
      Interest in a business the same as or in competition with the Business
      anywhere in the Czech Republic; Romania; Ukraine; Bulgaria; Slovakia;
      Slovenia; Russia; Poland; Latvia; Croatia; Yugoslavia or any other country
      or territory in which the Company of any Affiliate has any business
      interests.

            

    

     

    
      	
               
      

            	
              2.2

            	
              during
      the term of Executive’s employment by, or other services to, the Company,
      and for 12 months following the Termination
  Date:

            

    

     

    
      	
               
      

            	
              2.2.1

            	
              in
      relation to a business the same as or in competition with the Business
      perform any services or supply goods to any person, firm or company who
      was a client or customer of the Company or any Affiliate at any time, or,
      with respect to matters following the Termination Date, at the Termination
      Date or during the twelve (12) month period immediately prior to the
      Termination Date, and with whom during that period Executive had contact
      or dealings or was aware of in the course of his employment or
      services;

            

    

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              2.2.2

            	
              in
      relation to a business the same as or in competition with the Business,
      canvass, solicit or approach, or cause to be canvassed, solicited or
      approached, for the purpose of obtaining business, orders or custom any
      person, firm or company who was a client or customer of the Company or any
      Affiliate at any time, or, with respect to matters following the
      Termination Date, at the Termination Date or during the twelve (12) month
      period immediately prior to the Termination Date and with whom during that
      period Executive had contact or dealings or was aware of in the course of
      his employment or services; or

            

    

     

    
      	
               
      

            	
              2.2.3

            	
              in
      relation to a business the same as or in competition with the Business,
      offer employment to or employ or offer or conclude any contract for
      services with any Senior Executive or procure or facilitate the making of
      such an offer by any person, firm or
company;

            

    

     

    
      	
               
      

            	
              2.3

            	
              at
      any time solicit, entice or prepare or endeavor to solicit, entice or
      procure:

            

    

     

    
      	
               
      

            	
              2.3.1

            	
              an
      employee of the Company or any Affiliate to breach his contract of
      employment; or

            

    

     

    
      	
               
      

            	
              2.3.2

            	
              a
      person to breach his contract for services with the Company or any
      Affiliate;

            

    

     

    
      	
               
      

            	
              2.4

            	
              at
      any time:

            

    

     

    
      	
               
      

            	
              2.4.1

            	
              falsely
      represent himself as being connected with or interested in the Company or
      any Affiliate or in the Business;
or

            

    

     

    
      	
               
      

            	
              2.4.2

            	
              do
      or say anything likely or calculated to lead any person firm or company to
      withdraw from or cease to continue offering to the Company or any
      Affiliate any rights of purchase, sale, import, distribution or agency
      then enjoyed by it.

            

    

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    
      	
              3

            	
              Without
      the prior written consent of the Company, Executive shall not disclose at
      any time during his term of employment or services with the Company or any
      time thereafter any Confidential Information (as defined below) to any
      third person other than in the course of fulfilling Executive’s
      responsibilities under this Agreement unless such Confidential Information
      has been previously disclosed to the public by the Company or an Affiliate
      or is in the public domain (other than by reason of Executive’s breach of
      the provisions of this paragraph).  “Confidential Information”
      is any non-public information pertaining to the Company or an Affiliate,
      any of their businesses or the business or personal affairs of Ronald S.
      Lauder (“Lauder”) or his family and how any of them conducts its or his
      business or affairs.  “Confidential Information” includes not
      only information disclosed by the Company or an Affiliate to Executive,
      but information developed, created or learned by Executive during the
      course of or as a result of Executive’s employment with the
      Company.  “Confidential Information” specifically includes
      information and documents concerning the Company’s and Affiliates’ methods
      of doing business; research, telecommunications technology, its actual and
      potential clients, transactions and suppliers (including the Company’s or
      an Affiliate’s terms, conditions and other business arrangements with
      them); client or potential client or transaction lists and billing;
      advertising, marketing and business plans and strategies (including
      perspective or pending licensing applications or investments in license
      holders or applicants); profit margins, goals, objectives and projections;
      compilations, analyses and projections regarding the Company, Affiliates
      or any of its clients or potential clients or their business; trade
      secrets; salary, staffing, management organization or employment
      information; information relating to members of the Board of Directors and
      management of the Company or an Affiliate; files, drawings or designs;
      information regarding product development, marketing plans, sales plans or
      manufacturing plans; operating policies or manuals, business plans,
      financial records or packaging design; or any other financial, commercial,
      business or technical information relating to the Company, an Affiliate,
      Lauder or his family or information designated as confidential or
      proprietary that the Company, an Affiliate or Lauder may receive belonging
      to others who do business with any of them.  Nothing herein
      shall prevent the disclosure by Executive of any information required by
      an order of a court having competent jurisdiction or under subpoena from a
      government agency, provided that, if
      Executive receives a request for the disclosure of any Confidential
      Information pursuant to court process or by a government agency, Executive
      shall immediately (and at the latest within two business days) notify the
      Company of that request and cooperate to the maximum extent authorized by
      law with the Company in protecting the Company’s and the Affiliates’
      interest in maintaining the confidentiality of any Confidential
      Information.

            

    

     

     

    
      	
              4

            	
              Each
      of the parties to this Agreement agrees not to make disparaging or
      derogatory comments about the other party, members of the Board or
      Affiliates, except to the extent required by law, and then only after
      consultation with the other party to the maximum extent possible in order
      to maintain goodwill for each of the
parties.

            

    

     

     

    
      	
              5

            	
              Promptly
      (and at the latest within ten business days) following Executive’s
      termination of services, Executive
shall:

            

    

     

    
      	
               
      

            	
              5.1

            	
              return
      to the Company all documents, records, notebooks, computer diskettes and
      tapes and anything else containing the Company’s Confidential Information,
      and any other property or Confidential Information of the Company or
      Affiliates, including all copies thereof in Executive’s possession,
      custody or control, and

            

    

     

    
      	
               
      

            	
              5.2

            	
              delete
      from any computer or other electronic storage medium owned by Executive
      any of the proprietary or Confidential Information of the Company or
      Affiliate

            

    

     

     

    11

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