Document:

ex-10_29.htm

  

  

Exhibit 10.29

EASTMAN CHEMICAL COMPANY

 

PERFORMANCE SHARE AWARD SUBPLAN

 

OF THE 2007 OMNIBUS LONG-TERM COMPENSATION PLAN

 

2012-2014 PERFORMANCE PERIOD

 

Section 1. Background.  Under Article 4 of the Eastman Chemical Company 2007 Omnibus Long-Term Compensation Plan (the “Plan”), the “Committee” (as defined in the Plan), may, among other things, award shares of the $.01 par value common stock (“Common Stock”) of Eastman Chemical Company (the “Company”) to “Participants” (as defined in the Plan), and such awards may take the form of “Performance Awards” (as defined in the Plan) which are contingent upon the attainment of certain performance objectives during a specified period, and subject to such other terms, conditions, and restrictions as the Committee deems appropriate.  Performance Awards may be structured as “Qualified Performance-Based Awards” (as defined in the Plan) in order to be exempt from the compensation deduction limit of Section 162(m) of the Internal Revenue Code of 1986 (“Code Section 162(m)”).The purpose of this Performance Share Award Subplan (this “Subplan”) is to set forth the terms of the Performance Awards to be awarded for the 2012-2014 Performance Period specified herein, effective as of January 1, 2012 (the “Effective Date”).

 

Section 2. Definitions.

 

(a) The following definitions shall apply to this Subplan:

      

       (i) “Actual Grant Amount” means the number of shares of Common Stock to which a participant is entitled under a Performance Award, calculated in accordance with Section 6 of this Subplan.

 

       (ii) “Award Amount” means the number of shares of Common Stock subject to the Performance Award granted to the Participant under this Subplan at the beginning of the Performance Period.

 

       (iii) “Award Payment Date” means the date the Committee approves the payout of Common Stock covered by an award under this Subplan to a Participant.

 

       (iv) “Comparison Group” is the group of companies within the S&P 1500 “Materials Sector” that are classified by Standard & Poor’s as Chemical companies.  The S&P “Materials Sector” index is an index of industrial companies selected from the S&P “Super Composite 1500” Index, identified as Global Industry Classification Standard (“GICS”) 15.

 

       (v)  “Cost of Capital” reflects the Company’s cost of debt and the cost of equity, expressed as a percentage, reflecting the percentage of interest charged on debt and the percentage of expected return on equity. “Cost”, “debt”, “equity”, “interest”, “interest charged on debt”, and “return on equity” shall be determined and measured in accordance with accounting principles generally accepted in the United States (“GAAP”) as applied in preparing the Company’s consolidated financial statements as of the Effective Date, excluding the impact of any subsequent changes during the Performance Period in GAAP or in the manner of application of GAAP in the preparation of the Company’s consolidated financial statements, and including the results from any operations which are included in the Company's continuing operations as of the Effective Date and which are subsequently presented as discontinued operations during the Performance Period as a result of a divestiture.

 

       (vi) “Earnings from Continuing Operations” shall be defined as the total sales of the Company minus the costs of all operations of any nature used to produce such sales, including taxes, plus after-tax interest associated with the Company’s capital debt (as defined in Section 2(a)(xi)). “Sales”, “costs of operations”, “taxes”, and “after-tax interest associated with capital debt” shall be determined and measured in accordance with accounting principles generally accepted in the United States (“GAAP”), as

 

 

    137

Exhibit 10.29

 applied in preparing the Company’s consolidated financial statements as of the Effective Date, excluding the impact of any subsequent changes during the Performance Period in GAAP or in the manner of application of GAAP in the preparation of the Company’s consolidated financial statements, and including the results from any operations which are included in the Company's continuing operations as of the Effective Date and which are subsequently presented as discontinued operations during the Performance Period as a result of a divestiture.

 

       (vii)  “Maximum Deductible Amount” means the maximum amount deductible by the Company, taking into consideration the limitations under Code Section 162(m), of the Internal Revenue Code of 1986, as amended, or any similar or successor provisions thereto.

 

       (viii) “Participation Date” means November 1, 2011.

 

       (ix) “Performance Period” means January 1, 2012 through December 31, 2014.

 

       (x) “Performance Year” means one of the three calendar years in the Performance Period.

 

       (xi) “Return on Capital” shall mean the return produced by funds invested in the Company and shall be determined as Earnings from Continuing Operations, as defined in Section 2(a)(vi), divided by the Average Capital Employed.  Average Capital Employed shall be derived by adding the Company’s capital debt plus equity at the close of the last day of the year preceding the Performance Year to the Company’s capital debt plus equity at the close of the last day of the present Performance Year, with the resulting sum being divided by two.  Capital debt is defined as the sum of borrowing by the Company due within one year and long-term borrowing, as designated on the Company’s balance sheet.  The resulting ratio shall be multiplied by One Hundred (100) in order to convert such to a percentage.  Such percentage shall be calculated to the third place after the decimal point (i.e., xx.xxx%), and then rounded to the second place after the decimal point (i.e., xx.xx%). “Equity”, “borrowing due within one year”, and “long-term borrowing” shall be determined and measured in accordance with accounting principles generally accepted in the United States (“GAAP”), as applied in preparing the Company’s consolidated financial statements as of the Effective Date, excluding the impact of any subsequent changes during the Performance Period in GAAP or in the manner of application of GAAP in the preparation of the Company’s consolidated financial statements, and including the results from any operations which are included in the Company's continuing operations as of the Effective Date and which are subsequently presented as discontinued operations during the Performance Period as a result of a divestiture.

 

       (xii) “Target Award Range” means, with respect to any eligible Participant, the number of Shares within the range specified on Exhibit A hereto for the Salary Grade applicable to such Participant.

 

       (xiii) “TSR” means total stockholder return, as reflected by the sum of (A) change in stock price (measured as the difference between (I) the average of the closing prices of a company’s common stock on the New York Stock Exchange, or of the last sale prices or closing prices of such stock on another national trading exchange, as applicable, in the period beginning on the tenth trading day preceding the beginning of the Performance Period and ending on the tenth trading day of the Performance Period and (II) the average of such closing or last sale prices for such stock in the period beginning on the tenth trading day preceding the end of the Performance Period and ending on the tenth trading day following the end of the Performance Period) plus (B) dividends declared, assuming reinvestment of dividends, and expressed as a percentage return on a stockholder’s hypothetical investment.

 

  

138  

Exhibit 10.29

 

(b) Any capitalized terms used but not otherwise defined in this Subplan shall have the respective meanings set forth in the Plan.

 

Section 3. Administration.  This Subplan shall be administered by the Compensation and Management Development Committee of the Board of Directors.  The Committee shall have authority to interpret this Subplan, to prescribe rules and regulations relating to this Subplan, and to take any other actions it deems necessary or advisable for the administration of this Subplan, and shall retain all general authority granted to it under Article 4 of the Plan.  At the end of the Performance Period, the Committee shall approve Actual Grant Amounts awarded to participants under this Subplan in accordance with the applicable approval and certification requirements specified in the Plan.

 

Section 4. Eligibility; Types of Awards.  The Participants who are eligible to participate in this Subplan are those employees who, as of the Participation Date, are at Salary Grade 49 and 105 and above.  Employees who are promoted during the Performance Period to a position that would meet the above criteria, but who do not hold such position as of the Participation Date, are not eligible to participate in this Subplan.  The Covered Employees identified on Schedule A shall receive Performance Awards that are Qualified Performance-Based Awards.  The remainder of the Participants shall receive Performance Awards that are not intended to be Qualified Performance-Based Awards.

 

Section 5. Form of Payout of Awards.  Subject to the terms and conditions of the Plan and this Subplan, amounts earned in connection with the Performance Awards under this Subplan shall be paid out in the form of unrestricted shares of Common Stock; provided, however, that any fractional share of Common Stock, payable as a result of Section 9 of this Subplan or otherwise, shall be paid in cash in an amount representing the market value of such fractional share at the time of payment.

 

Section 6. Size of Awards.

 

(a) Target Award Range.  Exhibit A hereto shows by Salary Grade the Target Award Range. The Salary Grade to be used in determining the size of any Award Amount to a Participant under this Subplan shall be the Salary Grade applicable to the position held by the participant on the Participation Date.  The actual size of the Award Amount to the Participant shall be determined by the Committee with respect to Participants who are executive officers of the Company, and by the Committee’s senior management delegates in the case of all other Participants, based on the Participant’s past performance and potential for contributions to the Company’s future long term success.  Based on this assessment, the Participant may receive no award, the target award amount, or any amount within the Target Award Range in increments of 10 Shares.  The Committee shall provide its delegates with guidelines for determining the cumulative award targets for Participants who are not executive officers of the Company.

 

(b) Actual Grant Amount.  Subject to the Committee’s authority to adjust the Actual Grant Amount described in Section 12, the Actual Grant Amount awarded to the Participant at the end of the Performance Period is determined by applying a multiplier to the Participant’s Award Amount.  The multiplier shall be determined by comparing Company performance relative to two measures:

 

       (i) The Company’s TSR during the Performance Period relative to the TSRs of the companies in the Comparison Group during the Performance Period.  The Company and each company in the Comparison Group shall be ranked by TSR, in descending order, with the company having the highest TSR during the Performance Period being ranked number one.  The Comparison Group shall further be separated into quintiles (first 20%, second 20%, etc.) and the Company’s position, in relation to the Comparison Group, shall be expressed as a position in the applicable quintile ranking; and

 

  

139  

Exhibit 10.29

 

       (ii) The arithmetic average, for each of the Performance Years during the Performance Period, of the Company’s average Return on Capital minus a Return on Capital target. The Return on Capital target will be determined by the Committee.  In the case of Performance Awards that are intended to be Qualified Performance-Based Awards, the Return on Capital target for each year included in the Performance Period shall be established within 90 days after commencement of the Performance Period. Moreover, in the case of Performance Awards that are intended to be Qualified Performance-Based Awards, Return on Capital will be measured in a manner that complies with Code Section 162(m), including the requirement that the performance goals be objectively measured.

 

An award multiplier table is shown in Exhibit B.  The award multiplier is based on the Company’s performance relative to its quintile ranking relative to the Comparison Group, and its average Return on Capital relative to a target during the Performance Period.  The award multipliers range from 2.5 (i.e., 250%), if the Company’s TSR is in the top performing quintile (top 20%) of companies in the Comparison Group and the average Return on Capital minus the target Return on Capital is greater than 7 percentage points, to 0.0 (with no shares of Common Stock earned by Participants under this Subplan) if the Company does not meet the specified levels of performance relative to the two measures.

Section 7. Composition of Comparison Group.

 

(a) Qualified Performance-Based Awards.  In the case of Performance Awards that are intended to be Qualified Performance-Based Awards, any member of the Comparison Group that ceases to exist during the Performance Period shall be disregarded for the entire Performance Period.  There shall be no other adjustments in the Comparison Group after commencement of the Performance Period with respect to Performance Awards that are intended to be Qualified Performance-Based Awards.

 

(b) Performance Awards.  In the case of Performance Awards that are not intended to be Qualified Performance-Based Awards, the Committee retains the discretion to make the following adjustments in the Comparison Group during the Performance Period.  A company in the Comparison Group may be dropped from the Comparison Group if a company’s common stock ceases to be publicly traded on a national stock exchange or market; or a company is a party to a significant merger, acquisition, or other reorganization.  Under these, or similar, circumstances, the company or companies may be removed from the Comparison Group, and may be replaced with another company or companies by Standard & Poor’s, consistent with their established criteria for selection of companies for the Comparison Group.  In any case where the Comparison Group ceases to exist, or is otherwise determined to no longer be appropriate as the basis for a measure under this Subplan, the Committee may designate a replacement Comparison Group.  In any such case, the Committee shall have authority to determine the appropriate method of calculating the TSR of such former and/or replacement Comparison Group, whether by complete substitution of the replacement Comparison Group (and disregard of the former Comparison Group) over the entire Performance Period or by pro rata calculations for each Comparison Group or otherwise.

 

Section 8. Preconditions to Payout Under Performance Awards.

 

(a) Continuous Employment.  Except as specified in paragraph (b) below, to be eligible for payout under a Performance Award under this Subplan, a Participant must remain continuously employed with the Company or a Subsidiary at all times from the Effective Date through the Award Payment Date.

 

(b) Death, Disability, Retirement, or Termination for an Approved Reason Before the Award Payment Date.  If a Participant’s employment is terminated due to death, disability, retirement, or any approved reason as determined by the Committee (in the case of an executive officer) or the executive officer responsible for Human Resources (in the case of non-executive officers) (including reduction in force, divestiture, special separation, or termination by mutual consent) prior to the Award Payment Date, the Participant shall receive, subject to the terms and conditions of the Plan and this Subplan, a payout representing a prorated portion of the Actual Grant Amount to which such Participant otherwise would have been entitled to receive under Section 6 of this Subplan had the Participant remained in employment to the end of the Performance Period, with the precise amount of such payout to be determined by multiplying the Actual Grant Amount by a fraction, the numerator of which is the number of full calendar months employed in the Performance Period from the Effective Date through and including the effective date of such termination, and the denominator of which is 36 (the total number of months in the Performance Period).

 

  

140  

Exhibit 10.29    

[Mark J. Costa Subplan:  8(c)

    (c)  Termination Without Cause or for Good Reason Before the Award Payment Date.  If a participant's employment with the Company or a Subsidiary is terminated without "Cause" or for "Good Reason" (as such terms are defined in the participants' Employment Agreement dated May 4, 2006) prior to the Award Payment Date, the participant shall receive, subject to the terms and conditions of the Plan and this Subplan, within 30 days of termination (or such other date as may be required under Internal Revenue Code Section 409A), shares of Common Stock underlying outstanding performance shares (as if all performance objectives with respect thereto had been met at a level of 100%) on a pro rata basis based upon the number of full calendar months employed in the Performance Period from the Effective Date through and including the effective date of such termination.]

Section 9. Manner and Timing of Award Payments.

 

(a) Timing of Award Payment.  Except as provided in Section 9(c), if any Awards are payable under this Subplan, the payment of such Awards to Participants shall be made as soon as is administratively practicable after final approval by the Committee of such payments and within the first taxable year immediately following the end of the Performance Period.

 

(b) Tax Withholding.  The Company may withhold or require the grantee to remit a cash amount sufficient to satisfy federal, state, and local taxes (including the participant’s FICA obligation) required by law to be withheld.  Further, either the Company or the grantee may elect to satisfy the withholding requirement by having the Company withhold shares of Common Stock having a Fair Market Value on the date the tax is to be determined equal to the minimum statutory total tax which could be imposed on the transaction.

 

(c) Deferral of Award in Excess of the Maximum Deductible Amount.  If payment under a Performance Award would, or could in the reasonable estimation of the Committee, result in the participant’s receiving compensation in excess of the Maximum Deductible Amount in a given year, then such portion (or all, as applicable) of the Award as would, or could in the reasonable estimation of the Committee, cause such participant to receive compensation from the Company in excess of the Maximum Deductible Amount may, at the sole discretion of the Committee, be converted into the right to receive a cash payment, which shall be paid at such time as permitted under Internal Revenue Code Section 409A and applicable Treasury Regulations and guidance thereunder.

 

Section 10. No Rights as Stockholder.  No certificates for shares of Common Stock shall be issued under this Subplan, nor shall any participant have any rights as a stockholder as a result of participation in this Subplan, until the Actual Grant Amount has been determined and such participant has otherwise become entitled to an Award under the terms of the Plan and this Subplan.  In particular, no participant shall have any right to vote or to receive dividends on any shares of Common Stock under this Subplan until certificates for such shares have been issued as described above.

 

Section 11. Application of Plan.  The provisions of the Plan shall apply to this Subplan, and the provisions of this Subplan shall be interpreted in a manner consistent with the terms of the Plan.

 

Section 12. Adjustment of Actual Grant Amount.  The Committee may, in its sole discretion, adjust the Actual Grant Amount to reflect overall Company performance and business and financial conditions, except in the case of a Performance Award that is a Qualified Performance-Based Award where such actions would cause the Performance Award that is a Qualified Performance-Based Award to cease to qualify for the Section 162(m) Exemption.  In the case of a Performance Award that is a Qualified Performance-Based Award, the Committee shall retain the discretion to adjust such Award downward, either on a formula or discretionary basis or any combination, as the Committee determined.

 

  

141  

Exhibit 10.29    

 

Section 13. Reimbursement of Certain Compensation Following Restatement.  The Performance Awards are subject to the provisions of the Plan and any applicable law or Company policy requiring reimbursement to the Company of certain incentive-based compensation following an accounting restatement due to material non-compliance by the Company with any financial reporting requirement or due to other events or conditions.

 

Section 14. Amendments.  The Committee may, from time to time, amend this Subplan in any manner.

 

Section 15.  Code Section 409A.  All Performance Awards granted under this Subplan shall be subject to the provisions of the Plan concerning Code Section 409A, which provisions shall be incorporated into this Subplan by reference.

  

142  

 

Exhibit 10.29    

EXHIBIT A

 

Eastman Chemical Company

Performance Share Award Grant Table

2012-2014 Cycle

 

 

 

 

 

ON FILE IN GLOBAL COMPENSATION

 

  143  

Exhibit 10.29    

EXHIBIT B

TSR

2012 -2014 Award Multiplier Table

	  	
 

<5.50

(-7 to

-5%)

	
5.51 to

7.50

(-4.99 to

–3%)

	
7.51 to

9.50

(-2.99 to

-1%)

	
9.51 to

10.50

(-.99 to

0%)

	
10.51 to

11.50

(.01 to

1%)

	
11.51 to

13.50 (1.01 to 3%)

	
13.51 to

15.50

(3.01 to

5%)

	
15.51 to

17.50

(5.01 to

7%)

	
>17.51

(7.01 to

10%)

	
5Q

	
0.00

	
0.00

	
0.00

	
0.00

	
0.20

	
0.30

	
0.40

	
0.50

	
0.60

	
4Q

	
0.00

	
0.00

	
0.40

	
0.50

	
0.60

	
0.70

	
0.80

	
0.90

	
1.00

	
3Q

<50%

	
0.00

	
0.00

	
0.50

	
0.60

	
0.80

	
1.00

	
1.20

	
1.40

	
1.60

	
3Q

>50%

	
0.00

	
0.40

	
0.60

	
0.80

	
1.00

	
1.25

	
1.50

	
1.75

	
2.00

	
2Q

	
0.40

	
0.60

	
0.80

	
1.00

	
1.25

	
1.50

	
1.75

	
2.00

	
2.25

	
1Q

	
0.60

	
0.80

	
1.00

	
1.20

	
1.50

	
1.75

	
2.00

	
2.25

	
2.50

Return on Capital Performance = ROC-(COC + 2%) = ROC – 10.5%

Cost of Capital = 8.5%

 

  

144  

Exhibit 10.29    

NOTICE OF PERFORMANCE SHARES

AWARDED PURSUANT TO THE

EASTMAN CHEMICAL COMPANY

2007 OMNIBUS LONG-TERM COMPENSATION PLAN

Recipient:

Performance Period: 2012-2014

Target Award:

1.  Award of Performance Shares.  This Award Notice serves to notify you that the Compensation and Management Development Committee of the Board of Directors (the “Committee”) of Eastman Chemical Company ("Company") has awarded to you, under the 2012-2014 Performance Share Award Subplan ("Subplan") of the 2007 Omnibus Long-Term Compensation Plan ("Plan"), on the terms and conditions set forth in the Subplan and the Plan, the number of performance shares (the "Performance Shares") of its $.01 par value Common Stock ("Common Stock") specified above.  The Performance Shares are rights to receive Awards in the form of shares of Common Stock, subject to the attainment of specified performance conditions by the Company.  Subject to satisfaction of the minimum performance conditions and the other terms of the Subplan, Awards under the Subplan will ultimately be paid in the form of unrestricted shares of Common Stock.

This Award Notice provides a summary of the terms and conditions of your performance shares, all of which terms and conditions are contained in the Subplan and the Plan.  Capitalized terms not defined herein have the respective meanings set forth in the Subplan and the Plan, as applicable.

2.  Performance Conditions.  The performance conditions for the Subplan are: 1)  a comparison of the total stockholder return (referred to in the Subplan as "TSR," and reflecting both the change in stock price and the amount of dividends declared) of the Company during the period from January 1, 2012 through December 31, 2014 (the "Performance Period"), to the TSRs of the companies in the Comparison Group (the group of companies within the Standard and Poor’s “Materials Sector” that are classified as Chemical companies.  The S&P “Materials Sector” index, identified as Global Industry Classification Standard 15, is an index of industrial companies selected from the S&P “Super Composite 1500” index); and 2) the arithmetic average for each of the Performance Years during the Performance Period, of the Company’s average Return on Capital minus a Return on Capital target.   The specific terms of the performance conditions are summarized in Section 3 of this Award Notice and are detailed in Section 6 of the Subplan.

3.  Number of Performance Shares Awarded.  The number of Performance Shares that you have been awarded is shown above (the "Target Award").  However, the actual number of shares of Common Stock to which you will be entitled under the Subplan (the "Actual Grant Amount") may be more or less than the Target Award, depending upon the quintile ranking of the Company's TSR when ranked among the TSRs of the Comparison Group, and the Company’s average Return on Capital relative to a Return on Capital target for each of the Performance Years during the Performance Period.  The Company’s performance relative to these measures shall determine a multiplier to be applied to the Target Grant Amount.  Multipliers range from 2.5 (i.e., 250%), if the Company’s TSR is ranked in the top performing quintile (top 20%) of companies in the Comparison Group, and the average Return on Capital minus the target Return on Capital is greater than 7 percentage points, to 0.0 (with no shares of Common Stock being delivered to participants), if the Company does not meet certain levels of performance relative to the two measures.  The award multiplier table is shown in Exhibit A.  Subject to the Committee’s authority to adjust the Actual Grant Amount described in Section 12 of this Award Notice, your Actual Grant Amount is determined by applying the multiplier corresponding to the Company’s performance (Exhibit A) to your Target Award.

4.  Payment of Award.  If you are entitled to payment of an Award under the Subplan, such payment will be made as soon as administratively practicable after the end of the Performance Period and final approval by the Committee; provided, however, that if payment of the Award could, in the reasonable estimation of the Committee, result in your receiving compensation, in the year of scheduled payment, in excess of the amount deductible by the Company under Section 162(m) of the Internal Revenue Code, then such portion (or all, as applicable) of the Award as

  

145  

Exhibit 10.29    

could, in the reasonable estimation of the Committee,  create such excess compensation, may, at the sole discretion of the Committee, be converted into the right to receive a cash payment, which shall be paid at such time as permitted under Internal Revenue Code Section 409A and applicable Treasury Regulations and guidance thereunder, as specified in Section 9 of the Subplan.

If any portion of an Award is converted into a right to receive a cash payment as described above, an amount representing the Fair Market Value of the deferred portion of the Actual Grant Amount will be credited to the Stock Account of the Executive Deferred Compensation Plan (the “EDCP”) and hypothetically invested in units of Common Stock.  Thereafter, such amount will be treated in the same manner as other investments in the EDCP, all as specified in Section 9 of the Subplan.

The Company may withhold or require you to remit a cash amount sufficient to satisfy federal, state, and local taxes (including your FICA obligation) required by law to be withheld.  Further, either the Company or you may elect to satisfy the withholding requirement by having the Company withhold shares of common stock having a Fair Market Value on the date the tax is to be determined equal to the minimum statutory total tax which could be imposed on the transaction.

5.  Nontransferability.  Unless and until unrestricted shares of Common Stock are delivered or, if applicable, an amount is credited under the EDCP to you in payment of an earned Award of the Performance Shares, the Performance Shares are not transferable except by will or by the laws of descent and distribution, and may not be sold, assigned, pledged or encumbered in any way, whether by operation of law or otherwise.

6.  Limitation of Rights.  You will not have any rights as a stockholder with respect to the Performance Shares unless and until certificates for shares of Common Stock have been issued to you.  No such certificates will be issued under the Subplan until the Actual Grant Amount has been determined and you have otherwise become entitled to payment of an Award under the terms of the Plan and the Subplan.    Neither the Plan, the Subplan, the granting of these Performance Shares nor this Award Notice gives you any right to remain employed by the Company.

7.  Termination.  Upon termination of your employment with the Company and its Subsidiaries by reason of death, disability or retirement, or for another approved reason as determined by the Committee (in the case of executive officers) or the executive officer responsible for Human Resources (in the case of non-executive employees), you will receive after the end of the Performance Period, subject to the terms and conditions of the Plan and the Subplan, an Award representing a prorated portion of the Actual Grant Amount to which you otherwise would have been entitled to receive under Section 6 of the Subplan had you remained in employment to the end of the Performance Period, based on the number of full calendar months from January 1, 2012 through the effective date of such termination.  Upon termination of your employment with the Company and its Subsidiaries for a reason other than death, disability, retirement or another approved reason prior to the date the shares of Common Stock covered by the Award are delivered to you, you will not be eligible or entitled to receive any Award under the Subplan.

[Alternative Section 7 for Mark J. Costa Award Notice:

7.  Termination.  Upon termination of your employment with the Company and its Subsidiaries ("termination")  by reason of death, disability or retirement, or for another approved reason as determine by the Committee, you will receive after the end of the Performance Period, subject to the terms and conditions of the Plan and the Subplan, an Award representing a prorated portion of the Actual Grant Amount to which you would have been entitled to receive under Section 6 of the Subplan had you  remained in employment to the end of the Performance, based on the number of full calendar months employed from January 1, 2012 through the effective date of such termination.  Upon termination without "Cause" or resignation for "Good Reason" (as such terms are defined in your Employment Agreement dated May 4, 2006) Eastman will issue to you, within 30 days of your termination (or such other date as may be required under Internal Revenue Code Section 409A), shares of Common Stock underlying outstanding performance shares (as if all performance objectives with respect thereto had been met at a level of 100%) on a pro rata basis based upon the number of full calendar months employed during the performance period.  Upon termination for a reason other than death, disability, retirement or another reason described above prior to the date the shares of Common Stock covered by the Award are delivered to you, you will not be eligible or entitled to receive any Award under the Subplan.

  

146  

Exhibit 10.29    

8.  Noncompetition; Confidentiality.  You will not, without the written consent of the Company, either during your employment by the Company or thereafter, disclose to anyone or make use of any confidential information which you have acquired during your employment relating to any of the business of the Company, except as such disclosure or use may be required in connection with your work as an employee of the Company.  During your employment by the Company, and for a period of two years after the termination of such employment, you will not, either as principal, agent, consultant, employee or otherwise, engage in any work or other activity in competition with the Company in the field or fields in which you have worked for the Company.  The agreement in this Section 8 applies separately in the United States and in other countries but only to the extent that its application shall be reasonably necessary for the protection of the Company.  You will forfeit all rights under this Award Notice to or related to the Performance Shares if,  in the determination of the Committee (in the case of executive officers) or of the executive officer responsible for Human Resources (in the case of non-executive employees), you have violated any of the provisions of this Section 8, and in that event any issuance of shares, payment or other action with respect to the Performance Shares shall be made or taken, if at all, in the sole discretion of the Committee or the executive officer responsible for Human Resources.

9.  Restrictions on Issuance of Shares.  If at any time the Company determines that listing, registration or qualification of the shares covered by an Award upon any securities exchange or under any state or federal law, or the approval of any governmental agency, is necessary or advisable prior to the delivery of any certificate for shares of Common Stock subject to the Award, no such certificate may be delivered unless and until such listing, registration, qualification or approval shall have been effected or obtained free of any conditions not acceptable to the Company.

10. Change in Ownership; Change in Control.  Article 14 of the Plan contains certain special provisions that will apply in the event of a Change in Ownership or Change in Control, respectively.

11. Adjustment of Terms.  The adjustment provisions Article 15 of the Plan will control in the event of a nonreciprocal transaction between the company and its stockholders that causes the per-share value of the Common Stock to change (including, without limitation, any stock dividend, stock split, spin-off, rights offering, or large nonrecurring cash dividend) or upon the occurrence of in anticipation of any other corporate event or transaction involving the Company (including, without limitation, any merger, combination, or exchange of shares).

12. Adjustment of Actual Grant Amount.   The Committee may, in its sole discretion, adjust the Actual Grant Amount to reflect overall Company performance and business and financial conditions, except in the case of a Performance Award that is a Qualified Performance-Based Award where such actions would cause the Performance Award that is a Qualified Performance-Based Award to cease to qualify for the Section 162(m) Exemption.  In the case of a Performance Award that is a Qualified Performance-Based Award, the Committee shall retain the discretion to adjust such Award downward, either on a formula or discretionary basis or any combination, as the Committee determined.

13. Reimbursement of Certain Compensation Following Restatement.  The Award is subject to the provisions of the Plan and any applicable law or Company policy requiring reimbursement to the Company of certain incentive-based compensation following an accounting restatement due to material non-compliance by the Company with any financial reporting requirement or due to other events or conditions.

14. Plan and Subplan Control.  In the event of any conflict between the provisions of the Plan or the Subplan and the provisions of this Award Notice, the provisions of the Plan or the Subplan, as applicable, will be controlling and determinative.

  

147  

Exhibit 10.29    

EXHIBIT A

 

TSR

2012 -2014 Award Multiplier Table

	  	
 

<5.50

(-7 to

-5%)

	
5.51 to

7.50

(-4.99 to

–3%)

	
7.51 to

9.50

(-2.99 to

-1%)

	
9.51 to

10.50

(-.99 to

0%)

	
10.51 to

11.50

(.01 to

1%)

	
11.51 to

13.50 (1.01 to 3%)

	
13.51 to

15.50

(3.01 to

5%)

	
15.51 to

17.50

(5.01 to

7%)

	
>17.51

(7.01 to

10%)

	
5Q

	
0.00

	
0.00

	
0.00

	
0.00

	
0.20

	
0.30

	
0.40

	
0.50

	
0.60

	
4Q

	
0.00

	
0.00

	
0.40

	
0.50

	
0.60

	
0.70

	
0.80

	
0.90

	
1.00

	
3Q

<50%

	
0.00

	
0.00

	
0.50

	
0.60

	
0.80

	
1.00

	
1.20

	
1.40

	
1.60

	
3Q

>50%

	
0.00

	
0.40

	
0.60

	
0.80

	
1.00

	
1.25

	
1.50

	
1.75

	
2.00

	
2Q

	
0.40

	
0.60

	
0.80

	
1.00

	
1.25

	
1.50

	
1.75

	
2.00

	
2.25

	
1Q

	
0.60

	
0.80

	
1.00

	
1.20

	
1.50

	
1.75

	
2.00

	
2.25

	
2.50

Return on Capital Performance = ROC-(COC + 2%) = ROC – 10.5%

Cost of Capital = 8.5%

  

  148WebFilings | EX 10.47 12.31.2011 Q4

Exhibit 10.47

DATED                                                  February 20, 2012

CME Media Services Limited 

- and -

Daniel Penn

	
			
	 
	CONTRACT OF EMPLOYMENT
	 

CONTRACT OF EMPLOYMENT AND STATEMENT OF PARTICULARS PURSUANT TO SECTION 1 OF THE EMPLOYMENT RIGHTS ACT 1996 (the “Contract”)

	
		
	Name and Address of Employer:
	CME Media Services Limited, 5 Fleet Place, London EC4M 7RD, United Kingdom (the “Company”)

	Name and Address of Employee:
	Daniel Penn, 2 St Lukes House, 14 Fitzroy Square, London W1T 6ED, United Kingdom

	Date this Contract takes effect:
	February 20, 2012

		
	1
	COMMENCEMENT OF AND CONDITIONS TO EMPLOYMENT

		
	1.1
	Your employment with the Company shall commence on February 20, 2012 or such other date as agreed between you and the President and Chief Executive Officer of the CME group, subject to compliance with clause 1.2 below (the “Commencement Date”). 

		
	1.2
	You shall establish to the Company's satisfaction (through production of original documents reasonably requested by us) that you are entitled to live and work in the United Kingdom without any additional approvals. You will notify the Company immediately if you cease to be so entitled at any time during your employment with the Company.

		
	1.3
	You represent and warrant that you are not bound by or subject to any contract, court order, agreement, arrangement or undertaking which in any way restricts or prohibits you from entering into this Contract or performing your duties under it.

		
	2
	JOB TITLE AND DUTIES

		
	2.1
	Your job title is General Counsel, reporting to the President and Chief Executive Officer of the CME group.  

		
	2.2
	Your main duties are:

		
	2.2.1
	managing the CME group legal department and legal matters relating to the operations and investments of the CME group and performing such functions and undertaking such responsibilities as are customarily associated with such matters, including the supervision of legal staff based in the CME group operations;

		
	2.2.2
	reporting to and advising the Board of Directors of Central European Media Enterprises Ltd. (“CME Ltd.”) and its committees;

		
	2.2.3
	acting as statutory director of such entities of the CME group as may be determined from time to time; and

		
	2.2.4
	undertaking such additional tasks in respect of the business of the CME group as the President and Chief Executive Officer of the CME group directs from time to time.

		
	2.3
	You shall use your best endeavours to promote and protect the interests of the CME group and shall not do anything that is harmful to those interests. 

		
	2.4
	You shall devote the whole of your working time (unless prevented by ill-health or accident or otherwise directed by the Company) to the duties of this Contract and you shall not be directly or 

indirectly interested or concerned in any manner in any other business (other than holding as a bona-fide personal investment equity in any company whose shares are listed on any recognised exchange or does not otherwise contravene clause 17) except with the Company's prior written consent. If such consent is given, you must provide the Company with the number of hours worked for any other employer each month. 

		
	3
	PLACE OF WORK  

You will be based in the Company's London office. However, it is agreed that your position will require that you spend extensive time travelling for the proper performance of your duties.

		
	4
	REMUNERATION

		
	4.1
	From January 1, 2012, your basic salary is GBP 335,000 per year, payable monthly in arrears by credit transfer into your bank account after all necessary deductions for relevant taxes and social security payments. Your salary will be reviewed on an annual basis on or about the anniversary of your Commencement Date.  Any increase is entirely at the Company's discretion. 

		
	4.2
	You shall be entitled to participate in the CME Management Compensation Policy in effect from time to time (the “Policy”). The amount, if any, of any bonus awarded pursuant to the Policy shall be determined by the President and Chief Executive Officer of the CME group, pursuant to the rules of the Policy. Any bonus awarded will be based on a figure representing 100% of your gross annual salary.

		
	5
	OTHER BENEFITS

		
	5.1
	You are entitled to membership of such insurance schemes (each referred to below as an “insurance scheme”) provided by the Company from time to time, including:

		
	5.1.1
	a medical and dental expenses insurance scheme providing such cover for you and your spouse/partner and any children under the age of eighteen (18) as the Company may from time to time notify to you; 

		
	5.1.2
	a salary continuance on long-term disability insurance scheme providing such cover for you as the Company may from time to time notify to you; and

		
	5.1.3
	a life insurance scheme providing such cover for you as the Company may from time to time notify to you.

		
	5.2
	Benefits shall be subject to the terms of any applicable insurance policy and are conditional upon your complying with and satisfying any applicable requirements of the insurers or other benefits provider.  Copies of these rules and policies and particulars of the requirements shall be provided to you on request.  The Company shall not have any liability to pay any benefit to you under any insurance scheme unless it receives payment of the benefit from the insurer under the scheme.

		
	5.3
	Any insurance scheme which is provided for you is also subject to the Company's right to alter the cover provided or any term of the scheme or to cease to provide (without replacement) the scheme at any time if in the reasonable opinion of the Company your state of health is or becomes such that the Company is unable to insure the benefits under the scheme at the normal premiums applicable.

		
	5.4
	The provision of any insurance scheme or any benefits hereunder does not in any way prevent the Company from lawfully terminating this Contract in accordance with the provisions in clause 9 even if to do so would deprive you of membership of or cover under any such scheme or benefit.

 

		
	6
	EXPENSES

The Company shall reimburse you for all reasonable expenses incurred by you in the proper performance of your duties under this Contract on production of appropriate receipts in accordance with the CME Group Expenses Policy in effect from time to time.

		
	7
	HOURS OF WORK

Your normal working hours are 40 hours per week Monday to Friday together with such additional hours as may be necessary for the proper performance of your duties. This may include working in the evenings, outside normal office hours, at weekends or on public holidays.  No additional pay or time off will be permitted.

		
	8
	HOLIDAYS

		
	8.1
	You are entitled to 30 days' holiday per annum (in addition to public holidays). 

		
	8.2
	Your entitlement to holiday accrues pro rata on an annual basis as calculated from 1 January until 31 December (inclusive) each year (the “Holiday Year”).  

		
	8.3
	On termination, you will be paid for accrued holiday in the relevant Holiday Year as well as holiday carried over from previous years.

		
	8.4
	The Company may also refuse to allow you to take holiday in circumstances where it would be inconvenient to the business of the Company.  If, in exceptional circumstances, the Company is forced to cancel holiday previously booked by you, all reasonable and properly documented accommodation, reservation and travel expenses incurred by you in connection therewith up to the date of cancellation that are not otherwise refundable will be reimbursed by the Company.

		
	9
	TERMINATION

		
	9.1
	The Company may terminate this Contract on giving you twelve months' notice in writing to expire at any time. You are required to give the Company the same period of notice, to expire at any time. 

		
	9.2
	In the event you give notice of termination pursuant to this clause 9, the Company may  in its sole discretion determine that you will be required to continue to provide services to the Company as a full-time employee during the full twelve-month notice period or during a specified time shorter than such twelve-month period. You will continue to receive your basic salary and other entitlements hereunder during the period that you remain employed by the Company.  Upon termination of your employment with the Company following expiration of the twelve-month notice period, or upon such termination after you have satisfied any shorter period of continued employment determined by the Company, you will be entitled to receive a lump sum amount as severance, within thirty days following the effective date of your termination of employment, in an amount equal to the excess of (i) your basic salary for a period of twelve months, minus (ii) the portion, if any, of your basic salary paid while you performed services as a full-time employee during the twelve-month notice period (with 

your basic salary computed at the rate payable immediately prior to the date you provided notice to the Company of your termination of employment).  Upon your termination of employment with the Company, you will also be entitled to receive any earned but unpaid bonus awarded in accordance with clause 4.2 hereof and any accrued holiday in accordance with clause 8.3 hereof. All payments made pursuant to this clause 9.2 shall be subject to deductions for income tax and social security contributions as appropriate. You will not, under any circumstances, have any right to payment in lieu of notice unless the Company has exercised its option as described in this clause 9.2.

		
	9.3
	If the Company gives notice of termination (other than Termination for Cause (as defined below)), the Contract and your employment with the Company will terminate with immediate effect and the Company will pay you a lump sum amount as severance within thirty days following the effective date of your termination of employment, in an amount equal to twelve months of your basic salary (with your basic salary computed at the rate payable immediately prior to the date the Company provided such notice of your termination of employment).  As additional severance compensation, the Company will pay a lump sum amount consisting of (i) an amount equal to your target bonus in respect of your notice period (at the rate payable immediately prior to the date the Company delivered such notice of termination), (ii) an amount equal to the number of days of holiday in respect of the notice period plus the number of days of accrued holiday in accordance with clause 8.3, and (iii) any accrued bonus as of the date of notice of termination and any earned but unpaid bonus awarded in accordance with clause 4.2 hereof. In addition, you shall be entitled to medical and dental insurance as provided in clause 5.1.1 for a period of twelve months following the date on which this Contract is terminated pursuant to this clause 9.3. All payments made pursuant to this clause 9.3 shall be subject to deductions for income tax and social security contributions as appropriate. 

		
	9.4
	The Company may terminate this Contract due to Termination for Cause without notice, payment in lieu of notice or any other payment whatsoever. “Termination for Cause” means  your (i) conviction of a felony or entering a plea of nolo contendere (or its equivalent) with respect to a charged felony; (ii) gross negligence, recklessness, dishonesty, fraud, wilful malfeasance or wilful misconduct in the performance of your duties under this Contract; (iii) wilful misrepresentation to the shareholders or directors of CME Ltd. that is injurious to CME Ltd.; (iv) wilful failure without reasonable justification to comply with a reasonable written instruction or resolution of the Board of Directors of CME Ltd.; or (v) a material breach of your duties or obligations under this Contract. The Company may, in its reasonable judgment, suspend you on full pay during any investigation that the Company may undertake into any fact or circumstance which could lead to your Termination for Cause. Notwithstanding the foregoing, a termination shall not be treated as Termination for Cause unless the Company has delivered a written notice to you stating that it intends to terminate your employment due to Termination for Cause and specifying the basis for such termination. 

		
	9.5
	Upon the termination by whatever means of this Contract you shall immediately return to the Company all documents, computer media and hardware, credit cards, mobile phones and communication devices, keys and all other property belonging to or relating to the business of the Company which is in your possession or under your power or control and you must not retain copies of any of the above.

		
	10
	SUSPENSION

		
	10.1
	The Company may suspend you from your duties on full pay to allow the Company to investigate any bona-fide complaint made against you in relation to your employment with the Company.  

		
	10.2
	Provided you continue to enjoy your full contractual benefits and receive your pay in accordance with this Contract, the Company may in its absolute discretion do all or any of the following during the notice period or any part of the notice period, after you or the Company have given notice of termination to the other, without breaching this Contract or incurring any liability or giving rise to any 

claim against it:

		
	10.2.1
	exclude you from the premises of any company of the CME group;

		
	10.2.2
	require you to carry out only specified duties (consistent with your status, role and experience) or to carry out no duties;

		
	10.2.3
	announce to any of its employees, suppliers, customers and business partners that you have been given notice of termination or have resigned (as the case may be);

		
	10.2.4
	prohibit you from communicating in any way with any or all of the suppliers, customers, business partners, employees, agents or representatives of the CME group until your employment has terminated except to the extent that you are authorised by the General Counsel of the CME group in writing; and

		
	10.2.5
	require you to comply with any other reasonable conditions imposed by the Company.

		
	10.3
	You will continue to be bound by all obligations owed to the Company under this Contract until termination of this Contract in accordance with clause 9 or such later date as provided herein.

		
	11
	CONFIDENTIAL INFORMATION

		
	11.1
	You agree during and after the termination of your employment not to use or disclose to any person (and shall use your best endeavours to prevent the use, publication or disclosure of) any confidential information:

		
	11.1.1
	concerning the business of the CME group and which comes to your knowledge during the course of or in connection with your employment or your holding office with the CME group; or

		
	11.1.2
	concerning the business of any client or person having dealings with the CME group and which is obtained directly or indirectly in circumstances where the CME group is subject to a duty of confidentiality.

		
	11.2
	For the purposes of clause 11.1.1 above, information of a confidential or secret nature includes but is not limited to information disclosed to you or known, learned, created or observed by you as a consequence of or through your employment with the Company, not generally known in the relevant trade or industry about the Company or any member of the CME group's business activities, services and processes, including but not limited to information concerning advertising, sales promotion, publicity, sales data, research, programming and plans for programming, finances, accounting, methods, processes, business plans (including prospective or pending licence applications or investments in licence holders or applicants), client or supplier lists and records, potential client or supplier lists, and client or supplier billing.

		
	11.3
	      This clause shall not apply to information which is:

		
	11.3.1
	used or disclosed in the proper performance of your duties or with the consent of the Company;

		
	11.3.2
	ordered to be disclosed by a court of competent jurisdiction or otherwise required to be disclosed by law or pursuant to the rules of any applicable stock exchange; or

		
	11.3.3
	in or comes into the public domain (otherwise than due to a default by you).

		
	12
	INTELLECTUAL PROPERTY

		
	12.1
	You shall assign with full title your entire interest in any Intellectual Property Right (as defined below) to the Company to hold as absolute owner. 

		
	12.2
	You shall communicate to the Company full particulars of any Intellectual Property Right in any work or thing created by you and you shall not use, license, assign, purport to license or assign or disclose to any person or exploit any Intellectual Property Right without the prior written consent of the Company.  

		
	12.3
	In addition to and without derogation of the covenants imposed by the Law of Property (Miscellaneous Provisions) Act 1994, you shall prepare and execute such instruments and do such other acts and things as may be necessary or desirable (at the request and expense of the Company) to enable the Company (or its nominee) to obtain protection of any Intellectual Property Right vested in the Company in such parts of the world as may be specified by the Company (or its nominee) and to enable the Company to exploit any Intellectual Property Right vested in it to its best advantage.

		
	12.4
	You hereby irrevocably appoint the Company to be your attorney in your name and on your behalf to sign, execute or do any instrument or thing and generally to use your name for the purpose of giving to the Company (or its nominee) the full benefit of the provisions of this clause and a certificate in writing signed by any director or the secretary of the Company that any instrument or act relating to such Intellectual Property Right falls within the authority conferred by this clause shall be conclusive evidence that such is the case in favour of any third party.

		
	12.5
	You hereby waive all of your moral rights (as defined in the Copyright, Designs and Patents Act 1988) in respect of any act by the Company and any act of a third party done with the Company's authority in relation to any Intellectual Property Right which is or becomes the property of the Company.

		
	12.6
	“Intellectual Property Right” means a copyright, know-how, trade secret and any other intellectual property right of any nature whatsoever throughout the world (whether registered or unregistered and including all applications and rights to apply for the same) which:

		
	12.6.1
	relates to the business or any product or service of the Company; and

		
	12.6.2
	is invented, developed, created or acquired by you (whether alone or jointly with any other person) during the period of your employment with the Company;

and for these purposes and for the purposes of the other provisions of this clause 12, references to the Company shall be deemed to include references to any Associated Company (as defined in clause 17.5 below).

		
	13
	COLLECTIVE AGREEMENTS/WORKFORCE AGREEMENTS

There are no collective agreements or workforce agreements applicable to you or which affect your terms of employment.

		
	14
	DATA PROTECTION

		
	14.1
	You acknowledge that the Company will hold personal data relating to you.  Such data will include 

your employment application, address, references, bank details, performance appraisals, work, holiday and sickness records, next of kin, salary reviews, remuneration details and other records (which may, where necessary, include sensitive data relating to your health and data held for equal opportunities purposes).  The Company will hold such personal data for personnel administration and management purposes and to comply with its obligations regarding the retention of your records.  Your right of access to such data is as prescribed by law.

		
	14.2
	By signing this Contract, you agree that the Company may process personal data relating to you for personnel administration and management purposes and may, when necessary for those purposes, make such data available to its advisors, to third parties providing products and/or services to the Company and as required by law.  

		
	15
	CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

Unless the right of enforcement is expressly granted, it is not intended that a third party should have the right to enforce the provisions of this Contract pursuant to the Contracts (Rights of Third Parties) Act 1999.

		
	16
	MONITORING OF COMPUTER SYSTEMS

		
	16.1
	The Company will monitor messages sent and received via the email and voicemail system to ensure that employees are complying with the CME group's Information Technology policy in effect from time to time.  

		
	16.2
	The Company reserves the right to retrieve the contents of messages for the purpose of monitoring whether the use of the email system is in accordance with the Company's best practice, whether use of the computer system is legitimate, to find lost messages or to retrieve messages lost due to computer failure, to assist in the investigations of wrongful acts or to comply with any legal obligation. 

		
	16.3
	You should be aware that no email or voicemail sent or received through the Company's system is private.  The Company reserves and intends to exercise its right to review, audit, intercept, access and disclose on a random basis all messages created from it or sent over its computer system for any purpose.  The contents of email or voicemail so obtained by the Company in the proper exercise of these powers may be disclosed without your permission.  You should be aware that the emails or voicemails or any document created on the Company's computer system, however confidential or damaging, may have to be disclosed in court or other proceedings.  An email which has been trashed or deleted can still be retrieved.

		
	16.4
	The Company further reserves and intends to exercise its right to monitor all use of the internet through its information technology systems, to the extent authorised by law.  By your signature to this Contract, you consent to any such monitoring.

		
	17
	POST-EMPLOYMENT RESTRICTIONS

		
	17.1
	For the duration of your employment with the Company and for a period of twelve (12) months after the termination thereof for any cause, you shall not:

		
	17.1.1
	either on your own account or on behalf of any other person, firm or company, directly or indirectly, carry on or be engaged, concerned or interested in any business the same as that of the CME group or which is competitive with any CME Business (as hereinafter defined) 

and with which you were actively involved at any time in the twelve months preceding the termination of your employment within the territories in which the CME group operates or is considering to operate (the “Territory”);

		
	17.1.2
	seek to do business and/or do business, perform any services or supply any goods or seek to do so, in competition with any company of the CME group with any person, firm or company who at any time during the twelve months preceding the termination of your employment was a client, customer or supplier of any company of the CME group and with whom during that period you or another person on your behalf had contact or dealings in the ordinary course of business or were aware of in the course of your employment; 

		
	17.1.3
	interfere or seek to interfere or take such steps as may or are calculated to interfere with the continuance of supplies (whether services or goods) or any rights of purchase, sale, import, distribution or agency enjoyed by or supplied to any company of the CME group, or the terms on which they are so supplied or enjoyed, from any person, firm or company supplying or offering rights to any company of the CME group at any time during the period of twelve months prior to such termination; 

		
	17.1.4
	solicit, entice or procure or endeavour to solicit, entice or procure any employee of the CME group to breach his contract of employment or any person to breach his contract for services with the Company or any Associated Company;

		
	17.1.5
	in relation to any CME Business in the Territory, solicit, employ, engage or offer or cause to be employed or engaged, whether directly or indirectly, any employee, director or consultant of any company of the CME group engaged or employed at the date of termination of your employment or at any time during the twelve months preceding such termination who has knowledge of confidential aspects of the business of the CME group, and with whom, at any time during the period of twelve months prior to such termination, you had material dealings and/or

		
	17.1.6
	you shall not at any time falsely represent yourself as being connected with or interested in the Company or any Associated Company or in the business of the CME group.

		
	17.2
	For the duration of your employment with the Company, you shall not, either on your own account or through any other person, firm or company, directly or indirectly,  carry on, accept or be engaged, concerned or interested in, any opportunity (a “Corporate Opportunity”) in Central and Eastern Europe and any other country that CME Ltd. has identified from time to time (i) which is in the line of business of any company of the CME group from time to time (including, without limitation, securing broadcasting licenses, operating television stations, broadcasting on any distribution platform, selling advertising on any platform, developing and operating internet sites, providing production services, producing programming and other content for broadcast on any platform or for exhibition, distributing or licensing content for exhibition, home entertainment or otherwise, providing other programming services, owning and operating cinemas) (each a “CME Business”) or in any Ancillary Business (ii) which arises or becomes known to you as a result of your employment by the Company, or (iii) in which it can reasonably be expected that the CME group has an interest or expectancy (including any Ancillary Business) unless (a) you have presented the Corporate Opportunity to the Board of Directors of CME Ltd. in reasonable detail and (b) the Board of Directors of CME Ltd. has decide not to pursue such Corporate Opportunity after such presentation by you.  

For purposes of this clause, “Ancillary Business” means any business or opportunity that is related to any CME Business, can reasonably be expected to a customer or supplier of goods or services of any such CME Business in the usual and ordinary course of business, or is otherwise necessary to support the primary activities of any CME Business.

		
	17.3
	Each of the restrictions in this clause shall be enforceable independently of each other and its validity shall not be affected if any of the others is invalid.  If any of the restrictions is void but would be valid if some part of the restriction were deleted, the restriction in question shall apply with such modification as may be necessary to make it valid.

		
	17.4
	The restrictions set forth in this clause 17 shall not apply if the Company is in breach of this Contract.

		
	17.5
	For the purposes of this Contract, “Associated Company” shall mean a subsidiary (as defined by the Companies Act 1985 as amended) and any other company which is for the time being a holding company (as defined by the Companies Act 1985 as amended) of the Company or another subsidiary of such holding company.

		
	18
	INDEMNITY 

		
	18.1
	The Company will indemnify you and pay on your behalf all Expenses (as defined below) incurred by you in any Proceeding (as defined below), whether the Proceeding which gave rise to the right of indemnification pursuant to this Contract occurred prior to or after the date of this Contract, provided that you shall promptly notify the Company of such Proceeding and the Company shall be entitled to participate in such Proceeding and, to the extent that it wishes, jointly with you, assume the defence thereof with counsel of its choice.  This indemnification shall not apply if it is determined by a court of competent jurisdiction in a Proceeding that any losses, claims, damages or liabilities arose primarily out of your gross negligence, wilful misconduct or bad faith.

		
	18.2
	The term “Proceeding” shall include any threatened, pending or completed action, suit or proceeding, or any inquiry or investigation, whether brought in the name of the Company or otherwise and whether of a civil, criminal, administrative or investigative nature, including, but not limited to, actions, suits or proceedings brought under or predicated upon any securities laws, in which you may be or may have been involved as a party or otherwise, and any threatened, pending or completed action, suit or proceeding or any inquiry or investigation that you in good faith believe might lead to the institution of any such action, suit or proceeding or any such inquiry or investigation, in each case by reason of the fact that you are or were serving at the request of the Company as a director, officer or manager of any other Associated Company, whether or not you are serving in such capacity at the time any liability or expense is incurred for which indemnification or reimbursement can be provided under this Contract. 

		
	18.3
	The term “Expenses” shall include, without limitation thereto, expenses (including, without limitation, attorneys fees and expenses) of investigations, judicial or administrative proceedings or appeals, damages, judgments, fines, penalties or amounts paid in settlement by or on behalf of you and any expenses of establishing a right to indemnification under this Contract.

		
	18.4
	The Expenses incurred by you in any Proceeding shall be paid by the Company as incurred and in advance of the final disposition of the Proceeding at your written request.  You hereby agree and undertake to repay such amounts if it shall ultimately be decided in a Proceeding that you are not entitled to be indemnified by the Company pursuant to this Contract or otherwise.

		
	18.5
	The indemnification and advancement of Expenses provided by this Contract shall not be deemed exclusive of any other rights to which you may be entitled under the Company's Articles of Association or the constituent documents of any other Associated Company for which you are serving as a director, officer or manager at the request of the Company, the laws under which the Company was formed, or otherwise, and may be exercised in any order you elect and prior to, concurrently with or following the exercise of any other such rights to which you may be entitled, including pursuant to directors' and officers' insurance maintained by the Company, both as to action in official capacity 

and as to action in another capacity while holding such office, and the exercise of such rights shall not be deemed a waiver of any of the provisions of this Contract.  To the extent that a change in law (whether by statute or judicial decision) permits greater indemnification by agreement than would be afforded under this Contract, it is the intent of the parties hereto that you shall enjoy by this Contract the greater benefit so afforded by such change.  The provisions of this clause shall survive the expiration or termination, for any reason, of this Contract and shall be separately enforceable.

		
	19
	SECTION 409A

		
	19.1
	This Contract is intended to comply with, or otherwise be exempt from, Section 409A of the U.S. Internal Revenue Code of 1986, as amended (the “Code”) and any regulations and U.S. Treasury guidance promulgated thereunder.  If the Company determines in good faith that any provision of this Contract would cause you to incur an additional tax, penalty or interest under Section 409A of the Code, the Company and you will use reasonable efforts to reform such provision, if possible, in a mutually agreeable fashion to maintain to the maximum extent practicable the original intent of the applicable provision without violating the provisions of Section 409A of the Code.

		
	19.2
	For purposes of Section 409A of the Code, the right to a series of installment payments under this Contract shall be treated as a right to “separate payments” within the meaning of Section 409A.

		
	19.3
	With respect to any reimbursement of expenses of, or any provision of in-kind benefits to, you, as specified under this Contract, such reimbursement of expenses or provision of in-kind benefits shall be subject to the following conditions: (1) the expenses eligible for reimbursement or the amount of in-kind benefits provided in any other taxable year shall not affect the expense eligible for reimbursement or the amount of in-kind benefits provided in any other taxable year, except for any medical reimbursement arrangement providing for the reimbursement of expenses referred to in Section 105(h) of the Code, (2) the reimbursement of an eligible expense shall be made no later than the end of the year after the year such expense was incurred; and (3) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit. 

		
	19.4
	“Termination of employment” or words of similar import, as used in this Contract, means, for purposes of determining the timing of any payments under this Contract that are payments of deferred compensation under Section 409A of the Code, your "separation from service" as defined in Section 409A of the Code; provided, however, that for the avoidance of doubt, the foregoing provisions relate only to the determination of the time at which a payment is due, and do not relate to the determination of your right to receive compensation or benefits or to vest in compensation or benefits, including without limitation the determination of bonuses. 

		
	19.5
	If a payment obligation under this Contract arises on account of your separation from service while you are a "specified employee" (as defined under Section 409A of the Code and determined in good faith by the Company), any payment of "deferred compensation" (as defined under U.S. Treasury Regulation 1.4019A-1(b)(1)), after giving effect to the exemptions in U.S. Treasury Regulations Sections 1.409A-1(b)(3) through (b)(12)) that is scheduled to be paid within six (6) months after such separation from service shall accrue without interest and shall be paid within 15 days after the end of the six (6) month period beginning on the date of such separation from service or, if earlier, within fifteen (15) days after the appointment of your personal representative or executor of your estate following your death. 

		
	20
	GENERAL

		
	20.1
	You hereby authorise the Company to deduct from any salary payable to you any sums owing by you to the Company.

		
	20.2
	As from the effective date of this Contract, all other agreements or arrangements between you and the Company shall cease to have effect.

		
	20.3
	This Contract shall be governed by and construed in accordance with English law. The parties agree to submit to the non-exclusive jurisdiction of the English courts in respect of any dispute hereunder.

The Company and Daniel Penn agree to the terms set out above.

	
		
	Signed as a Deed by CME Media Services Limited acting by:
	 

	Oliver Meister, Director
	 /s/ Oliver Meister

	Dave Sturgeon, Director
	 /s/ Dave Sturgeon

	Signed as a Deed by Daniel Penn
	 /s/ Daniel Penn

	in the presence of:
Witness signature:
	 /s/ Joelma Aguiar

	Name:
	 Joelma Aguiar

	Address:
	 

	 
	 

	Occupation:
	 Office Support Assistant

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