Document:

Exhibit 10.4

 

LIMITED LIABILITY COMPANY AGREEMENT

OF

ANTERO RESOURCES MIDSTREAM LLC

 

a Delaware limited liability company

 

This LIMITED LIABILITY COMPANY AGREEMENT (this “Agreement”) of ANTERO RESOURCES MIDSTREAM LLC, dated as of October 1, 2013, is adopted, executed and agreed to by the Members (as defined below).

 

1.              Formation.  Antero Resources Midstream LLC (the “Company”) has been formed as a Delaware limited liability company under and pursuant to the Delaware Limited Liability Company Act (the “Act”). Alvyn A. Schopp, as an authorized person within the meaning of the Act, has executed, delivered and filed the certificate of formation of the Company, and such execution, delivery and filing is hereby authorized, confirmed, adopted and ratified.

 

2.                                      Term.  The Company shall have perpetual existence, until cancellation of the certificate of formation of the Company as provided in the Act.

 

3.                                      Purposes.  The purposes of the Company are to carry on any lawful business, purpose or activity for which limited liability companies may be formed under the Act.

 

4.                                      Interests.  The Company shall have two classes of members and associated interests in the Company, with such interests being referred to as “Common Economic Interests” and “Special Interests”. The Common Economic Interests shall represent the right to a 100% share of the Company’s distributions and shall have such other designations, preferences and rights as are expressly specified in this Agreement. The Special Interests shall represent the right to cause the Company to take the actions specified in Section 16 hereof and shall have such other designations, preferences and other rights as are expressly specified in this Agreement (but shall not, for the avoidance of doubt, entitle any holder thereof to share in the Company’s distributions).

 

5.                                      Members.  Antero Resources Midstream Management LLC, a Delaware limited liability company (“Antero Midstream Management”), and Antero Resources Corporation (“Antero” and with Antero Midstream Management, the “Initial Members”), shall be the initial members of the Company (the “Members”). No additional Members shall be admitted to the Company without the written consent of Antero Midstream Management.

 

6.                                      Issuance of Initial Interests.  All of the authorized Common Economic Interests have been issued to Antero and all of the authorized Special Interests have been issued to Antero Midstream Management.

 

7.                                      Allocations.  All items of income, gain, loss deduction and credit of the Company shall be allocated among the Members holding Common Economic Interests in proportion to their holdings of such Common Economic Interests.

 

8.                                      Distributions.  Distributions (including, without limitation, liquidating distributions) made by the Company shall be allocated among the Members holding Common Economic Interests in proportion to their holdings of such Common Economic Interests. Notwithstanding any provision to the contrary contained in this Agreement, the Company shall not be required to make a

 

 

distribution to a Member or any holder of Common Economic Interests on account of its interest in the Company if such distribution would violate the Act or any other applicable law.

 

9.                                      Management.  Subject to the rights and limitations set forth in Section 16 hereof, the management of the Company shall be exclusively vested in Antero (or any successor Member holding Common Economic Interests), and the Company shall not have “managers,” as that term is used in the Act. Except as set forth in this Agreement, the powers of the Company shall be exercised by or under the authority of, and the business and affairs of the Company shall be managed under the direction of, Antero (or any successor Member holding Common Economic Interests). For the avoidance of doubt, except pursuant to Section 16, no initial public offering of equity securities of the Company or any successor thereto may be effected without the written agreement of each of the Members.

 

10.                               Officers.  Antero may designate one or more persons to be officers of the Company.  Officers are not “managers,” as that term is used in the Act. Any officers who are so designated shall have such titles and authority and perform such duties as Antero may delegate to them. Unless the authority of an officer is limited by Antero, any officer so appointed shall have the same authority to act for the Company as a corresponding officer of a Delaware corporation would have to act for a Delaware corporation in the absence of a specific delegation of authority. Any decision or act of an officer within the scope of the officer’s designated or delegated authority shall control and shall bind the Company (and any business entity for which the Company exercises direct or indirect executory authority).

 

11.                               Dissolution.  The Company shall dissolve and its affairs shall be wound up at such time, if any, as Antero may elect, subject to the approval of Antero Midstream Management. To the fullest extent permitted by applicable law, no other event will cause the Company to dissolve. Notwithstanding any other provision of this Agreement, the bankruptcy (as such term is used in the Act) of a Member shall not cause such Member to cease to be a member of the Company.

 

12.                               Governing Law.  THIS AGREEMENT IS GOVERNED BY AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE (EXCLUDING ITS CONFLICT-OF-LAWS RULES).

 

13.                               Amendments.  This Agreement may not be modified, altered, supplemented or amended except by a written agreement executed and delivered by each of the Members.

 

14.                               Liability.  The Members and the officers of the Company shall not have any liability for the obligations, debts or liabilities of the Company except to the extent provided in the Act.

 

15.                               Duties, Exculpation and Indemnity.

 

(a)                                 Notwithstanding any other provisions of this Agreement, whether express or implied, or any obligation or duty at law or in equity, to the fullest extent permitted by applicable law, the Members shall have no fiduciary or other duties (including any duty of disclosure) to the Company, the other Members or any other person or entity that is a party to or bound by this Agreement. To the fullest extent permitted by applicable law, neither any Member, nor their partners, members or equityholders nor any of their respective directors, managers, officers or employees (individually, a “Member Covered Person” and, collectively, the “Member Covered Persons”) shall, in their capacities as Member Covered Persons, be liable or accountable in

 

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damages or otherwise to the Company or any other person or entity that is a party to or bound by this Agreement for any act or omission done or omitted by any Member Covered Person unless such act or omission constituted fraud or willful misconduct. To the fullest extent permitted by applicable law, the Company shall indemnify and hold harmless each Member Covered Person against any loss, liability, damage, judgment, demand, claim, cost or expense incurred by or asserted against such Member Covered Person (including, without limitation, reasonable attorneys’ fees and disbursements incurred in the defense thereof) arising out of any act or omission of any Member Covered Person in its capacity as a Member Covered Person in connection with the Company, unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that, in respect of such act or omission, and taking into account the acknowledgements and agreements set forth in this Agreement, such Member Covered Person engaged in fraud or willful misconduct. Notwithstanding the preceding sentence, the Company shall be required to indemnify a Member Covered Person in connection with a proceeding (or part thereof) commenced by such Member Covered Person only if the commencement of such proceeding (or part thereof) by the Member Covered Person was authorized in the specific case by the Members of the Company. Reasonable expenses, including reasonable attorneys’ fees and disbursements, incurred by any Member Covered Person and relating to any proceeding in connection with which indemnification is sought under this Section 15 shall be advanced by the Company upon written demand by such Member Covered Person; provided that such Member Covered Person shall reimburse the Company for such expenses if it is finally determined that such Member Covered Person is not entitled to indemnification hereunder.

 

(b)                                 To the fullest extent permitted by applicable law, the Company shall indemnify and hold harmless (i) each officer of the Company and (ii) each person who is or was an employee of the Company or a director, officer or employee of any subsidiary of the Company who Antero expressly designates as being entitled to the rights to indemnification set forth in this Section 15(b) in a written resolution (individually, an “O&E Covered Person” and, collectively, the “O&E Covered Persons”) against any loss, liability, damage, judgment, demand, claim, cost or expense incurred by or asserted against the O&E Covered Person (including, without limitation, reasonable attorneys’ fees and disbursements incurred in the defense thereof) arising out of any act or omission of the O&E Covered Person in its capacity as an O&E Covered Person in connection with the Company to the same extent as if the Company were a corporation organized under the laws of the State of Delaware that indemnified and held harmless its directors, officers, employees and agents to the fullest extent permitted under Section 145 of the General Corporation Law of the State of Delaware as in effect on date of this Agreement (but including any expansion of rights to indemnification thereunder from and after the date of this Agreement), unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that, in respect of such act or omission, and taking into account the acknowledgements and agreements set forth in this Agreement, such O&E Covered Person would not be so entitled to be indemnified and held harmless if the Company were a corporation organized under the laws of the State of Delaware that indemnified and held harmless its directors, officers, employees and agents to the fullest extent permitted under Section 145 of the General Corporation Law of the State of Delaware as in effect on date of this Agreement (but including any expansion of rights to indemnification thereunder from and after the date of this Agreement). Notwithstanding the preceding sentence, the Company shall be required to indemnify an O&E Covered Person in connection with a proceeding (or part thereof) commenced by such O&E Covered Person only if the commencement of such proceeding (or part thereof) by the O&E Covered Person was authorized in the specific case by the Members of the Company. Reasonable expenses, including reasonable attorneys’ fees and disbursements,

 

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incurred by a O&E Covered Person and relating to any proceeding in connection with which indemnification is sought under this Section 15 shall be advanced by the Company upon written demand by such O&E Covered Person; provided that such O&E Covered Person shall reimburse the Company for such expenses if it is finally determined that such O&E Covered Person is not entitled to indemnification hereunder.

 

16.                               Special Interests.  The holders of the Special Interests may, in their sole discretion and acting unanimously, but without the consent of any other Member or other person or entity, deliver a written notice to the Company and each other Member of their intent to initiate a Qualified Public Offering pursuant to this Section 16 and may, without the consent of any other Member or other person or entity, thereafter cause the Company to convert into, or exchange all of the Company’s outstanding limited liability company interests for, interests in a limited partnership organized pursuant to the laws of the State of Delaware (the “MLP Issuer”), and to initiate and approve an underwritten initial public offering of the MLP Issuer in the form of a master limited partnership or similar structure (a “Qualified Public Offering”). In connection with a Qualified Public Offering, (i) the Special Interests will convert in accordance with this Section 16 solely into a non-economic general partner interest in the MLP Issuer and all of the incentive distribution rights (the “IDRs”) in the MLP Issuer and (ii) the Common Economic Interests will be exchanged for or convert solely into all of the common units of the MLP Issuer (including any subordinated common units) and other limited partner interests (if any) of the MLP Issuer that are not sold to the public in the Qualified Public Offering (collectively, the “IPO Conversion”). Notwithstanding anything to the contrary in this Agreement, at any time after delivering such written notice, the holders of the Special Interests shall be solely entitled and authorized to approve all transactions necessary to effect the IPO Conversion and the Qualified Public Offering, including: (i) determining the terms of the initial and the amended and restated organizational documents of the MLP Issuer; (ii) the formation of any entities required or necessary in connection with the IPO Conversion or the Qualified Public Offering; and (iii) causing to be transferred any assets between or among the Company, Antero, the MLP Issuer and any of the Company’s subsidiaries. If the holders of the Special Interests elect to exercise the right to initiate a Qualified Public Offering under this Section 16, each of the Members shall (i) take such actions as may be reasonably requested in connection with consummating the IPO Conversion and (ii) use commercially reasonable efforts to cooperate with the other Initial Member so that the IPO Conversion is undertaken in as tax-efficient a manner as reasonably practicable. Any Qualified Public Offering (and the terms of the interests in the MLP Issuer) shall be substantially consistent with the terms set forth on Annex A hereto. Each Member hereby irrevocably makes, constitutes and appoints Antero Midstream Management as its true and lawful agent and attorney-in-fact, with full power of substitution to its affiliates and full power and authority in its name, place and stead, to make, execute, sign, acknowledge, swear to, record and file all instruments required or necessary to effect an IPO Conversion or Qualified Public Offering, including any instruments related to any subscription by the Member in any MLP Issuer, and all other instruments required or necessary to facilitate a Qualified Public Offering in accordance with this Section 16.

 

Prior to a Qualified Public Offering, the Company may not sell, transfer or otherwise dispose of any of Antero’s or the Company’s midstream assets without the written consent of Antero Midstream Management. The Company shall not amend or modify any agreement between the Company on the one hand, and Antero on the other, without the written consent of Antero Midstream Management.

 

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Unless a clear contrary intention appears, all references in this Section 16 and in Annex A to Antero Midstream Management shall be deemed to be references to the holder or holders of the Special Interests in the event of any permitted transfer of such interests prior to a Qualified Public Offering.

 

17.                               Transfers of Limited Liability Company Interests.  Prior to the consummation of a Qualified Public Offering, other than as may be required in connection with an IPO Conversion, no Member may directly or indirectly transfer or otherwise dispose of all or any portion of such Member’s interests in the Company without the prior unanimous consent of each of the other Members; provided that Antero Midstream Management (or any of its permitted transferees of its interests in the Company) may, without the consent of any other person or entity, transfer all or a portion of its Special Interests to any person or entity that directly or indirectly Controls, is Controlled by or is under common Control with, Antero Midstream Management (or such permitted transferee). For purposes of this Agreement “Control” (and correlative forms thereof) means possession, directly or indirectly (through one or more intermediaries), of the power to direct or cause the direction of management or policies (whether through ownership of securities or any partnership or other ownership interest, by contract or otherwise) of a person or entity.  Any permitted transferee of liability company interests in the Company shall be automatically admitted to the Company as a Member (holding the applicable class of interests transferred) upon the delivery to the Company of a joinder agreement pursuant to which such person or entity ratifies this Agreement, agrees to be bound by this Agreement to the same extent as if the transferee were an original party to this Agreement and shall assume all obligations of a Member (holding the applicable class of interests transferred) under this Agreement. If a Member transfers all of its interests in the Company in accordance with this Section 17, such Member shall cease to be a member of the Company immediately after the admission of the permitted transferee as a Member of the Company.

 

18.                               Reimbursement for Services.  Prior to the consummation of a Qualified Public Offering, Antero shall provide to the Company customary management and general administrative services. The Company, or a Member on the Company’s behalf, shall reimburse Antero at cost for the direct expenses incurred on the Company’s behalf and a proportionate amount for the indirect expenses incurred on the Company’s behalf, including, but not limited to, compensation expenses. After any Qualified Public Offering, such services will be provided for, and reimbursed in accordance with, the terms set forth on Annex A hereto.

 

19.                               Severability; Counterparts.  Each provision of this Agreement shall be considered severable and if for any reason any provision or provisions herein are determined to be invalid, unenforceable or illegal under any existing or future law, such invalidity, unenforceability or illegality shall not impair the operation of or affect those portions of this Agreement which are valid, enforceable and legal. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original of this Agreement and all of which together shall constitute one and the same instrument.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the undersigned, being the Initial Members of the Company, have caused this Limited Liability Company Agreement to be duly executed as of the date first set forth above.

 

	
 
    	
ANTERO   RESOURCES CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Alvyn A. Schopp
    
	
 
    	
 
    	
Name:
    	
Alvyn   A. Schopp
    
	
 
    	
 
    	
Title:
    	
Authorized   Person
    
	
 
    	
 
    	
 
    
	
 
    	
ANTERO   RESOURCES MIDSTREAM
    
	
 
    	
MANAGEMENT   LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Alvyn A. Schopp
    
	
 
    	
 
    	
Name:
    	
Alvyn   A. Schopp
    
	
 
    	
 
    	
Title:
    	
Authorized   Person
    

 

SIGNATURE PAGE TO
 LIMITED LIABILITY COMPANY AGREEMENT OF ANTERO RESOURCES MIDSTREAM LLC

 

 

ANNEX A: SUMMARY OF PRINCIPAL TERMS OF QUALIFIED PUBLIC OFFERING

 

	
Master   Limited Partnership:
    	
 
    	
Antero   Resources Midstream LLC, a Delaware limited liability company, will convert   into a Delaware limited partnership (the “Partnership”).
    
	
 
    	
 
    	
 
    
	
Capital   Structure:
    	
 
    	
Common   units, subordinated units, non-economic general partner interest and   incentive distribution rights (“IDRs”).
    
	
 
    	
 
    	
 
    
	
Common   Units:
    	
 
    	
50%   of the outstanding limited partner interests (other than the incentive   distribution rights) in the Partnership. All of the common units will be held   by Antero Resources Corporation (“Antero”)   prior to the consummation of the Qualified Public Offering. Common units will   accrue arrearages in quarters in which the minimum quarterly distribution   (the “MQD”) is not paid.
    
	
 
    	
 
    	
 
    
	
Subordinated   Units:
    	
 
    	
50%   of the outstanding limited partner interests (other than the incentive   distribution rights) in the Partnership. Subordinated units will initially   all be held by Antero. During the subordination period, subordinated units   will not be entitled to receive distributions until the common units have   received the MQD plus any arrearages in the payment of the MQD from prior   quarters. Subordinated units will not accrue arrearages.
    
	
 
    	
 
    	
 
    
	
Subordination   Period:
    	
 
    	
Three   years from the closing date of the initial public offering of the   Partnership, with the possibility of ending earlier if customary earn and pay   tests are met.
    
	
 
    	
 
    	
 
    
	
General   Partner:
    	
 
    	
Antero   Resources Midstream Management LLC (“Antero Midstream   Management”).
    
	
 
    	
 
    	
 
    
	
General   Partner Interest:
    	
 
    	
Antero   Midstream Management will hold a non-economic general partner interest in the   Partnership. The non-economic general partner interest will allow Antero   Midstream Management to manage the Partnership’s business and affairs, but   will not be entitle it to receive any cash distributions.
    
	
 
    	
 
    	
 
    
	
Pricing   Terms:
    	
 
    	
Antero   Midstream Management will have the sole ability to establish the terms on   which the Partnership securities may be offered in an initial public   offering, including but not limited to, (i) the aggregate number of   shares of Common Units, Subordinated Units and IDRs to be offered,   (ii) the price at which the Common Units will be sold by the Partnership   and (iii) the underwriting discounts and
    

 

ANNEX A-1

 

	
 
    	
 
    	
commissions   to be paid to any underwriter of the initial public offering.
    
	
 
    	
 
    	
 
    
	
Incentive   Distribution Rights:
    	
 
    	
Right   to receive an increasing percentage of quarterly distributions of available   cash in excess of the MQD when certain target distribution levels have been   achieved. These target distribution levels will be set at 115%, 125% and 150%   of the MQD. All incentive distribution rights will be held by Antero   Midstream Management. The IDRs will have customary splits for distributions   as follows:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Marginal Percentage
   Interest
   in Distributions
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Unitholders
    	
 
    	
Incentive
   Distribution
   Rights
    	
 
    
	
 
    	
 
    	
Minimum Quarterly Distribution 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
115% of Minimum Quarterly Distribution 
    	
 
    	
100.0
    	
%
    	
15.0
    	
%
    
	
 
    	
 
    	
125% of Minimum Quarterly Distribution 
    	
 
    	
85.0
    	
%
    	
25.0
    	
%
    
	
 
    	
 
    	
150% of Minimum Quarterly Distribution 
    	
 
    	
75.0
    	
%
    	
50.0
    	
%
    
	
 
    	
 
    	
 
    
	
Distributions:
    	
 
    	
Subject   to applicable law, the Partnership will distribute all available cash   generated each quarter, with “available cash” defined as cash flow from   operations for the quarter, less cash needed for maintenance capital   expenditures, debt service and other capital obligations, and reserves for   future operating or capital needs that the board of directors of the General   Partner of the Partnership deems appropriate.
    
	
 
    	
 
    	
 
    
	
Minimum   Quarterly Distribution:
    	
 
    	
The   MQD will be based on a customary coverage based on the forecast included in   the final prospectus for the Qualified Public Offering, to be determined in   the discretion of Antero Midstream Management.
    
	
 
    	
 
    	
 
    
	
Provision   of Services:
    	
 
    	
Antero   shall provide customary management and general administrative services to the   Partnership. The General Partner shall reimburse Antero at cost for its   direct expenses incurred on behalf of the Partnership and a proportionate   amount of its indirect expenses incurred on behalf of the Partnership,   including, but not limited to, compensation expenses.
    

 

ANNEX A-2Exhibit 10.1

EXECUTION VERSION

	
DATED

	
OCTOBER ­­14, 2013

CME MEDIA SERVICES LIMITED

and

DAVID SACH

 

 

 

 

SEPARATION AGREEMENT

WITHOUT PREJUDICE AND SUBJECT TO CONTRACT

THIS AGREEMENT is made on 14 October 2013,

 

BETWEEN:

 

	(1)	CME Media Services Limited (Company number 06847543) whose registered office is at 5 Fleet Street, London EC4M 7RD (“the Company”); and

 

	(2)	David Sach of Dlouha 25, Praha 1, 110 00 Czech Republic (“the Employee”).

 

BACKGROUND:

 

The Company and the Employee have had discussions concerning the termination of the Employee’s employment with the Company.

 

	(A)	The Employee was employed by the Company from 1 March 2010 under a contract dated 26 February 2010 and amended on 1 January 2011 (the “Contract”).

 

	(B)	The Employee’s employment with the Company shall terminate on 29 October 2013 in accordance with Article 52(c) of the Labour Code.

 

	(C)	The parties have entered into this Agreement to record and implement the terms on which they have agreed to settle any claims which the Employee has or may have in connection with his employment and its termination or otherwise against the Company or any Group Company (as defined below) or their directors, officers or employees whether or not those claims are, or could be, in the contemplation of the parties at the time of signing this Agreement.

 

	(D)	The parties intend this Agreement to be an effective waiver of any such claims.

 

IT IS AGREED that:

 

	1	INTERPRETATION

 

For the purposes of this Agreement, the following definitions apply:

 

Confidential Information: is information in whatever form (including, but not limited to, in written, oral, visual or electronic form or on any magnetic or optical disk or memory and wherever located) relating to the business, products or affairs and finances of the Company or any Group Company for the time being confidential to the Company or any Group Company and trade secrets including, without limitation, information concerning advertising, carriage fees and other revenue sources, sales data, sales promotion, research, programming and plans for programming, production and plans for production, finances, accounting, methods, processes, business plans, lists and records of any current or potential suppliers, clients, customers, agents, distributors or other technical data and know‐how relating to the business of the Company or any Group Company or any of their current or potential suppliers, clients, customers, agents, distributors, shareholders or management whether or not such information (if in anything other than oral form) is marked confidential;

 

Copies: copies or records of any Confidential Information in whatever form (including, but not limited to, in written, oral, visual or electronic form or on any magnetic or optical disk or memory and wherever located) including, but not limited to, extracts, analysis, studies, plans, compilations or any other way of representing or recording and recalling information which contains, reflects or is derived or generated from Confidential Information;

 

Group Company: is the Company, Central European Media Enterprises Ltd ("CME Ltd.") any company of which they are a Subsidiary (their holding company) and any Subsidiary of the Company, CME Ltd. or of any such holding company;

 

Labour Code: the labour code applicable in the Czech Republic (Act no. 262/2006 Coll.);

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Non-Affiliated Party: any party, firm or entity that is not a Third Party;

 

Subsidiary: in relation to a company (a holding company) means a subsidiary (as defined in section 1159 of the Companies Act 2006) and any other company which is a subsidiary (as so defined) of a company which is itself a subsidiary of such holding company;

 

Termination Date: 29 October 2013;

 

Termination Payment: as defined in clause 3; and

 

Third Party: any Group Company or any director, officer or employee of the Company or any Group Company.

 

	1.1	
The headings in this Agreement are inserted for convenience only and shall not affect its construction.  The Company is entering into this Agreement for itself and as agent and trustee for all Group Companies and is duly authorised to do so.

 

	1.2	A reference to a particular law is a reference to it as it is in force for the time being taking account of any amendment, extension, or re-enactment and includes any subordinate legislation for the time being in force made under it.

 

	2	ARRANGEMENTS PRIOR TO THE TERMINATION DATE

 

	2.1	The Company shall:

 

	
 

	2.1.1	pay the Employee’s basic salary up to the Termination Date in the usual way; and

 

	
 

	2.1.2	continue to provide any benefits to the Employee in the usual way up to the Termination Date.

 

	2.2	The payment and benefits in clause 2.1 shall be subject to any tax and social or health insurance contributions or other statutory deductions that the Company is obliged by law to pay or deduct.

 

	2.3	As of the Termination Date, the Employee does not have any accrued holiday entitlement.

 

	2.4	The Employee shall within 7 days of the Termination Date submit a final expenses claim, if any, and the Company shall reimburse the Employee for any expenses properly incurred prior to the Termination Date in accordance with normal Company guidelines.

 

	2.5	The Employee will use all reasonable endeavours until the Termination Date to promote, protect and develop the business of the Company and any Group Company.  The Employee will also faithfully perform his duties under this Agreement and any applicable duties under his Contract (which shall, for the avoidance of doubt, remain in force until the Termination Date) as well as such other duties or directions reasonably and lawfully given by the directors or officers of the Company, including, but not limited to conducting an effective handover of his duties to any such person nominated by the Company, including any successor.  If the Employee fails to carry out these duties to the reasonable satisfaction of the Company and/or breaches any of the material terms of this Agreement and/or his Contract or if the Employee is guilty of any serious misconduct or any other conduct which seriously affects or is likely seriously to affect prejudicially the interests of the Company or any Group Company, the Company may terminate this Agreement with immediate effect and without making the Termination Payment.

 

	2.6	Subject to clause 2.5, the Company reserves the right to place the Employee on garden leave at any point prior to the Termination Date.  If the Employee is placed on garden leave, he will be unable to contact clients, customers, suppliers, investors, analysts and/or employees of the Company other than, in the case of employees of the Company, for purely social purposes. The Employee will be available to provide any reasonable support on any queries that arise prior to the Termination Date.

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	3	COMPANY’S OBLIGATIONS

 

	3.1	Subject to the terms set out below (including clause 5.1) and the Employee materially complying with the terms of this Agreement, the Employee will receive an amount equal to CZK 33,447,554 (thirty three million four hundred forty seven thousand five hundred fifty four Czech koruna) (“the Termination Payment”).

 

	3.2	
The Termination Payment will be made within 7 days of the later of:

 

	
 

 

	3.2.1	the Company’s receipt of this Agreement signed by the Employee and the independent adviser's certificate as required by clause 6.4 of this Agreement; and

 

		3.2.2	the Termination Date; and

 

		3.2.3	the Employee’s compliance with clause 4.1 of this Agreement.

 

	3.3	The Company will pay up to a maximum of £500 (plus VAT) towards the Employee’s reasonable legal fees incurred in obtaining advice on this Agreement provided that:

 

		3.3.1	the Agreement is finalised and signed by both parties;

 

		3.3.2	the fees relate only to advice concerning this Agreement; and

 

		3.3.3	Employee’s Adviser (identified in clause 6.4) signs and delivers to the Company the endorsement in the form annexed to this Agreement,

 

in which case the fees will be paid to the firm at which the Employee’s Adviser practices within 30 days of the Company receiving a copy of an invoice from such firm addressed to the Employee but marked as “payable by CME Media Services Limited”.

 

	3.4	The Company shall use reasonable endeavours to ensure that its officers will not, whether directly or indirectly, make, publish or otherwise communicate any disparaging or derogatory statements, whether in writing or otherwise, concerning the Employee or any statements which may have the effect of damaging or lowering the reputation of the Employee.

 

	3.5	The Employee has been granted by CME Ltd. 204,998 (two hundred and four thousand nine hundred and ninety eight) restricted stock units (the "RSUs") under the terms of CME Ltd.'s Amended and Restated Stock Incentive Plan ("Stock Incentive Plan") which shall vest upon the Termination Date,  provided, that this Agreement has not been lawfully terminated prior to the Termination Date.  Following the Termination Date, the Employee shall, and the Company shall procure that CME Ltd. shall, complete such documentation as is reasonably required to give effect to the vesting and settlement of the RSUs in accordance with the rules of the Stock Incentive Plan, the corresponding award agreements for such RSUs and the CME Insider Trading Policy.

 

	3.6	The Company shall reimburse to the Employee or cause to be paid the costs of preparing the Employee’s personal income tax return for the Czech Republic for the year ending 31 December 2013.

 

	
3.7

	In the event the Company publishes any required regulatory filing or issues any press release in connection with the termination of the Employee’s employment, the Company will use its best endeavours to provide to the Employee a draft of such regulatory filing or press release prior to its issuance.

 

	4	EMPLOYEE OBLIGATIONS

 

	4.1	The Employee warrants that he:

 

		4.1.1	will prior to or immediately on the Termination Date return to the Company:

 

	
 

	(a)	all Confidential Information and Copies;

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		(b)	all books, documents, papers, computer discs and other media (including copies), laptops, mobile handsets, credit cards, keys, security pass, identity badge and all other property in whatever format belonging to or relating to the business of the Company or any Group Company or any of their suppliers, agents or clients;

 

that he knows (having conducted a reasonable search for the same) are in his possession or under his control; and

 

	
 

 

	4.1.2	will prior to or immediately on the Termination Date irretrievably delete  all documents and information belonging to, relating to, obtained from, or prepared for the Company, or any Group Company or any of its or their respective customers or clients that he has stored on any magnetic or optical disk or memory and all matter derived from such sources which is in his possession or under his control outside the premises of the Company (including, without limitation, any email, documents or other data stored on any personal device) and inform the Company of any passwords used by him on computers which are the property of the Company or any Group Company; and

 

	
 

	4.1.3	will, if requested to do so by the Company, provide a signed statement that he has complied fully with his obligations under clauses 4.1.1 and 4.1.2.

 

	4.2	The Employee agrees:

 

	
 

	4.2.1	to keep the terms of this Agreement and all discussions and other correspondence on this subject and the circumstances leading to the termination of his employment confidential and not to disclose them to any other person except to a professional adviser who has agreed to be bound by the restriction, the relevant tax authorities, his immediate family (who have agreed to be bound by the restriction)  and except as may be required by law or by regulatory authorities or with the Company’s written consent;

 

		4.2.2	not, whether directly or indirectly, to make, or publish any untrue, disparaging or derogatory statements in relation to the Company or any Group Company or its or their directors, officers, employees or shareholders or any statements which may have the effect of damaging or lowering the reputation of the Company or any Group Company or any of their directors, officers, employees or shareholders;

 

		4.2.3	to provide the Company or any Group Company with such assistance as they may reasonably require in the conduct of such proceedings as may arise in respect of which the Company or its legal advisers believes the Employee may be able to provide assistance as a result of or in connection with his employment by the Company and subject to reasonable notice, provided that the Company will pay reasonable expenses and compensate for reasonable loss of earnings or holiday incurred in providing such assistance insofar as the Employee’s assistance cannot be compelled by a court of competent jurisdiction;

 

		4.2.4	not, except as may be required by law, to divulge to any person whatsoever or otherwise make use of (and shall use his best endeavours to prevent publication of) any trade secret or any Confidential Information concerning the business, or finances of the Company or any other Group Company or any of their dealings transactions or affairs or any such Confidential Information except insofar as any trade secret or Confidential Information may have come into the public domain, (other than as a result of any breach of any obligation made by the Employee to the Company).

 

	4.3	The Employee authorises the Company to deduct any sums due to the Company or any Group Company from the Employee from the monies payable under this Agreement.

PAGE 5

	4.4	If the Employee materially breaches any provision of this Agreement or pursues a claim against the Company or any Group Company or any of their directors, officers, employees or shareholders notwithstanding the provisions of this Agreement, he acknowledges and agrees to pay to the Company a sum equal to CZK 33,447,554 (thirty three million four hundred forty seven thousand five hundred fifty four Czech koruna) and that the said sum is recoverable from him by the Company as a debt and that the Company shall be released from any continuing obligations under this Agreement.

 

	4.5	The Employee warrants and represents to the Company as a strict condition of this Agreement and that as at the date of the Agreement:

 

		4.5.1	he has not withheld or failed to disclose any material fact concerning the performance of his duties with the Company and/or any Group Company or any breach of any material term (express or implied) of his Contract which would have entitled the Company to have dismissed him summarily without notice or payment in lieu of notice (if he was still employed) and any payment of the Termination Payment is conditional upon this being so;

 

		4.5.2	he has not and will not in the future request any personal data from the Company or any Group Company;

 

		4.5.3	he has not presented a claim to an office of the Employment Tribunals or issued a claim in the High Court or County Court in England or Wales or any similar tribunal, agency or court in any other jurisdiction in respect of any claim in connection with the Employee’s employment or his directorships or the Contract or its termination and he undertakes that no such proceedings have been or will be issued in connection with the same (other than to enforce the provisions conferred or preserved by this agreement or the rights referred to in clause 6.2.2(a) and 6.2.2(b) below) and further agrees that all monies paid to the Employee under this Agreement will be repayable to the Company, as a debt and upon demand if he breaches this provision;

 

		4.5.4	there are no matters of which the Employee is aware relating to any act or omission by the Employee or by any other director, officer, employee, shareholder or agent of the Company or any Group Company which if disclosed to the Company would or might otherwise affect the Company’s decision to enter into this Agreement;

 

		4.5.5	as at the date of this Agreement, he is not aware nor ought reasonably to be aware of any facts or matters which might give rise to a claim by the Employee for personal injury against the Company or any Group Company;

 

		4.5.6	he has acted in the best interests of the Company or any Group Company and not knowingly committed any breach of duty of any kind owed to the Company or any Group Company; and

 

		4.5.7	he has not as at the date of this Agreement obtained employment or entered into a contract for services, a consultancy agreement or any partnership or agency agreement with any person, firm or company and that he does not have any offer or expectation of an offer of employment or of a contract for services or consultancy or any partnership or agency agreement from any person, firm or company.

 

	5	
TAX

 

	5.1	The monies paid under clause 3.1 above will be paid net of tax as well as any social and health insurance or any statutory deductions as are required by law, where applicable.

 

	5.2	The Employee will indemnify the Company and any Group Company in respect of any additional tax, social insurance or health insurance in all cases if they are ultimately a liability of his as employee, together with interest and/or any penalties for which the Company or any Group Company has to account (save where such interest and/or penalties arise by reason of the Company’s default or delay) to any relevant taxing authority (including, but not limited to the relevant tax authorities in Czech Republic) in respect of this Termination Payment or the other terms contained in this Agreement or arising from the Contract provided always that prior to making any such payment the Company has notified the Employee of the tax claim or demand concerned and copied all relevant correspondence to the Employee within fourteen days of receipt and that the Employee will have the opportunity to make such representations as the Employee considers appropriate prior to the Company making the payment.

PAGE 6

	6	WAIVER OF CLAIMS

 

	6.1	But for this Agreement, the Employee could bring proceedings against the Company, any Group Company and their respective officers, directors, shareholders or employees for the contractual, statutory and tortious claims listed below (although for the avoidance of doubt the Company does not accept liability for such claims):

 

		6.1.1	a claim that the termination of the Employee's employment on the Termination Date was a wrongful dismissal;

 

		6.1.2	a claim for breach of contract;

 

		6.1.3	a claim that a failure by the Company or any Group Company to make a payment to the Employee of wages, fees, bonus, commission, holiday pay, sick pay, overtime payments or other benefits in kind was an unauthorised deduction from wages under the Employment Rights Act 1996 (as amended) ("ERA");

 

		6.1.4	a claim that the termination of the Employee's employment was an unfair dismissal under the ERA;

 

		6.1.5	a claim for a redundancy payment whether statutory or otherwise;

 

		6.1.6	the following claims under the Equality Act 2010 ("Equality Act"):

 

		(a)	a claim that any act or omission of the Company at any time was unlawful direct or indirect discrimination or harassment because of or in relation to age under the Equality Act;

 

		(b)	a claim that any act or omission of the Company at any time was unlawful direct or indirect discrimination because of or in relation to disability or because of something arising in consequence of the Employee's disability or discrimination by failure to comply with a duty to make reasonable adjustments or harassment because of or related to disability under the Equality Act;

 

		(c)	a claim that any act or omission of the Company at any time was unlawful direct or indirect discrimination or harassment because of or in relation to gender reassignment under the Equality Act;

 

		(d)	a claim that any act or omission of the Company at any time was unlawful direct or indirect discrimination or harassment because of or in relation to marriage or civil partnership under the Equality Act;

 

		(e)	a claim that any act or omission of the Company at any time was unlawful direct or indirect discrimination or harassment because of or in relation to race under the Equality Act;

 

		(f)	a claim that any act or omission of the Company at any time was unlawful direct or indirect discrimination or harassment because of or in relation to religion or belief under the Equality Act;

 

		(g)	a claim that any act or omission of the Company at any time was unlawful discrimination or harassment because of or in relation to sex under the Equality Act;

PAGE 7

		(h)	a claim that any act or omission of the Company at any time was unlawful direct or indirect discrimination or harassment because of or in relation to sexual orientation under the Equality Act;

 

		(i)	a claim that any act or omission of the Company at any time was victimisation under section 27 of the Equality Act;

 

		6.1.7	a claim that by virtue of any act or omission of the Company at any time the Employee suffered a detriment on a ground set out in section 47B ERA (protected disclosure);

 

		6.1.8	a claim under section 3 of the Protection from Harassment Act 1997 that the Employee has been subject to a course of conduct amounting to harassment;

 

		6.1.9	a claim that the Company failed to comply with its obligations under the Data Protection Act 1998.

 

	6.2	The terms of this Agreement are reached without admission of liability and are in full and final settlement of:

 

		6.2.1	the Employee's claims listed under clause 6.1;

 

		6.2.2	all other claims or rights of action whatsoever past and future (if any) whether contractual, in common law, tort, statutory or otherwise and whether contemplated or not under United Kingdom, Czech (including under the Labour Code),  and/or European Union law or under the law of any other country or jurisdiction elsewhere in the world which the Employee has or may have against the Company or any Group Company or their respective former or present officers, directors, shareholders, agents, workers, consultants or employees arising out of or in connection with the Employee's employment, the Contract or his directorships(s) or  their termination and he irrevocably waives any such claims or rights of action which he now has (if any) or may become aware of hereafter but excluding:

 

		(a)	any claims for personal injury which satisfy all of the following:

 

		(i)	they do not relate to the matters covered by clauses 6.1.6 (a)-(i)

 

		(ii)	at the date of this Agreement he was unaware of them; and

 

		(iii)	at the date of this Agreement he may be reasonably be expected to be unaware of them

 

		(b)	
 any claims in respect of accrued pension rights.

 

	6.3	The Employee represents and warrants to the Company as a strict condition of this Agreement that as at the date of this Agreement:

 

		6.3.1	he has disclosed to the relevant independent adviser (identified in clause 6.4) all facts or circumstances that may give rise to a claim against the Company or any Group Company or their respective officers, directors, shareholders or employees and he is not aware of any facts or circumstances that may give rise to such claim other than those claims specified in clause 6.1; and

 

		6.3.2	the claims listed at clause 6.1 include all of the complaints, claims and concerns which the Employee has against the Company or any Group Company or their respective officers, directors shareholders or employees arising out of the Employee's employment under the Contract or any act or omission relating to the Employee's employment or his directorships(s) or relating to, arising out of or connected to the manner of their termination.

PAGE 8

	6.4	The Employee further represents and warrants to the Company as a strict condition of this Agreement that as at the date of this Agreement the Employee has received independent legal advice from a relevant independent adviser as to the terms and effect of this agreement and in particular its effect on the Employee's ability to pursue statutory rights before an employment tribunal.  The name of the relevant independent adviser who has so advised the Employee is Gareth Brahams of Brahams Dutt Badrick French LLP of 23 Austin Friars London EC2N 2QP ("Employee's Adviser") and the Employee's Adviser has signed the endorsement annexed to this Agreement.

 

	6.5	The Company and the Employee agree and acknowledge that the conditions regulating settlement agreements and settlement contracts contained in section 147 of the Equality Act, section 203(3) of the ERA, and regulating settlement agreements/compromise agreements/settlement contracts/compromise contracts contained in any other act or statutory instrument referred to in clause 6.1 are intended to be and have been satisfied.

 

	6.6	The Employee shall indemnify the Company and any Group Company and their employees, directors, officers and shareholders in full and keep them fully indemnified for and against all and any claims, demands, judgements, orders, liabilities, damages, expenses or costs including without limitation all reasonable legal and professional fees and disbursements (together with VAT thereon) incurred by such parties arising out of or in connection with any breach by the Employee of the warranties in clauses 4 and 6 which warranties the Company has relied upon in entering into this Agreement.

 

	6.7	The Employee agrees that, except for the payments and benefits provided for in clauses 2 and 3, he shall not be eligible for any further payment or provision of any remuneration, bonus, or other emolument or benefit, including share or incentive awards from the Company or any Group Company or any of their respective current and former employees, officers, directors or shareholders relating to his employment, or his directorship(s) or their termination, whether under the Contract or otherwise.

 

	7	MISCELLANEOUS

 

	7.1	Contracts (Rights of Third Parties) Act 1999

 

The Contracts (Rights of Third Parties) Act 1999 shall only apply to this Agreement to the extent (but no more) set out in this clause.  Any Third Party shall be entitled to enforce the benefits conferred on it by this Agreement.  The consent of a Third Party shall not be required for the variation or termination of this Agreement even if that variation or termination affects the benefits conferred on any Third Party.

 

	7.2	
Binding Agreement

 

This Agreement, although marked “without prejudice” will, upon signature by all of the parties, be treated as an open document, evidencing an Agreement binding on the parties.

 

	7.3	
Governing Law and Jurisdiction

 

		7.3.1	This Agreement is governed by and shall be construed in accordance with the Laws of England and Wales.

 

		7.3.2	The parties to this Agreement submit to the exclusive jurisdiction of the Courts of England and Wales.

 

	7.4	Entire Agreement

 

		7.4.1	This Agreement and the Contract contains the entire agreement and understanding between the parties and supersedes all previous agreements and arrangements (if any) relating to the Employee’s employment and its termination other than the third sentence of clause 9.3  and clauses 11 (Confidentiality), 12 (Intellectual Property), and 18 (Post-Employment Restrictions and Corporate Opportunities) of the Contract, which shall survive termination thereof.  The third paragraph of the letter agreement between the Company and the Employee dated 26 February 2010 shall likewise survive.

PAGE 9

		7.4.2	Each of the parties acknowledges and agrees that in entering into this Agreement, it does not rely on, and shall have no remedy in respect of, any statement, representation, warranty or understanding (whether negligently or innocently made) other than as expressly set out in this Agreement.  The only remedy available to any party in respect of any such statement, representation, warranty or understanding shall be for breach of contract under the terms of this Agreement.

 

		7.4.3	Nothing in this clause 7 shall operate to exclude any liability for fraud.

 

		7.4.4	Nothing in this agreement shall prevent the Employee from disclosing information which he is entitled to disclose under sections 43A to 43L of the Employment Rights Act 1996 provided that the disclosure is made in accordance with the provisions of that Act.

 

 

	
Signed for and on behalf of the Company:

	
/s/ David Sturgeon

	
 

 

Dated:

	
 

14 October 2013

  

 

	
Signed by the Employee:

	
/s/ David Sach

	
 

 

Dated:

	
 

 

14 October 2013

 

 

PAGE 10

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