CME 8-k 10-5-2006
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
Date
of Report (date of earliest event reported) October 5,
2006
CENTRAL
EUROPEAN MEDIA ENTERPRISES LTD.
(Exact
name of registrant as specified in its charter)
BERMUDA
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0-24796
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98-0438382
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(State
or other jurisdiction of incorporation and organisation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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Clarendon
House, Church Street, Hamilton
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HM
CX Bermuda
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant's
telephone number, including area code: (441)
296-1431
Not
applicable
(Former
name or former address, if changed since last report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
¨
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Item
1.01:
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Material
Definitive Agreement
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Marina
Williams
On
October 5, 2006, Marina Williams, executive vice president of Central European
Media Enterprises Ltd. (the “Company”), entered into an amended and restated
employment agreement with our wholly-owned subsidiary CME Development
Corporation. Pursuant to this agreement, the term of Ms. Williams’ employment as
executive vice president is extended from November 21, 2007 to March 31, 2010.
During the term of this extension, and effective April 1, 2006 she is entitled
to receive a base salary of £225,000 per annum with a five percent increase per
annum on April 1 of each year.
In
connection with the extension of Ms. Williams’ employment agreement, on April
27, 2006 our compensation committee approved a grant to Ms. Williams of options
to purchase 50,000 shares of our Class A Common Stock, consisting of four annual
grants of options to purchase 12,500 shares of Class A Common Stock. The initial
grant of an option to purchase 12,500 shares of our Class A Common Stock was
made on May 1, 2006, as previously reported; the remaining three grants of
options to purchase 12,500 shares of Class A Common Stock will occur on April
1
of 2007, 2008 and 2009. The exercise price of the May 1 grant was $64.81 per
share, which represents the closing price of a share of our Class A Common
Stock
on May 1, 2006. Such options become exercisable in four annual installments,
with 25% vesting on May 1, 2007, 25% on May 1, 2008, 25% on May 1, 2009 and
25%
on May 1, 2010.
During
her employment term, Ms. Williams has the opportunity to earn an annual cash
bonus based on a target amount equal to 33% and a maximum amount of 66% of
her
gross annual base salary, based on the performance of the Company on a combined
EBITDA basis in related to budgeted goals and also on personal performance
goals. Further, Ms. Williams will be entitled to an additional bonus of 50%
of
her gross annual base salary in the event the EBITDA results of our Ukrainian
operations are equal to the EBITDA target established by our board of directors
in the annual budget for such fiscal year, plus an additional 10% of gross
annual base salary for each 5% increment by which such EBITDA results exceed
the
corresponding EBITDA target for such year. Additional bonuses may be awarded
based on changes in the scope of Ms. Williams’ responsibilities.
Ms.
Williams’ employment agreement also contains non-competition provisions
applicable for a six-month period following termination of her employment and
a
prohibition on use of confidential information of the Company during the term
of
the employment agreement and thereafter.
The
Company’s wholly-owned subsidiary may terminate the employment agreement at any
time prior to the expiration of the term. Upon early termination of Ms. Williams
by us, Ms. Williams is entitled to the outstanding balance of her base salary
from the date of termination until March 31, 2010 and any unpaid bonus that
has
been awarded. Ms. Williams may voluntarily terminate the employment agreement
at
any time on six months’ notice. Any options that have become vested and
exercisable as of such termination date may be exercised for a period of 90
days
following the date of her termination. In the event Ms. Williams’ employment is
terminated due to her death, disability or retirement at or after age 65, her
stock options will automatically become vested and exercisable for a period
of
one year following such termination.
Wallace
Macmillan
On
October 6, 2006, Wallace Macmillan, chief financial officer of Central European
Media Enterprises Ltd. (the “Company”), entered into an amended and restated
employment agreement with our wholly-owned subsidiary CME Development
Corporation. The amendment is effective April 1, 2006 and Mr. Macmillan is
entitled to receive a base salary of £250,000 per annum. Mr. Macmillan’s
employment agreement is for an indefinite term.
In
connection with the amendment of Mr. Macmillan’s employment agreement, Mr.
Macmillan is to be granted options to purchase 50,000 shares of our Class A
Common Stock, consisting of four annual grants of options to purchase 12,500
shares of Class A Common Stock. Our compensation committee will establish the
date of grant for such options. The exercise price for such options will
represent the closing price of a share of our Class A Common Stock on the date
of such grant. The options will vest in four equal instalments.
During
his employment term, Mr. Macmillan has the opportunity to earn an annual cash
bonus based on a target amount 50% and a maximum amount of 100% of his gross
annual base salary,
based
on the performance of the Company on a combined EBITDA basis in related to
budgeted goals and also on personal performance goals.
Mr.
Macmillan’s employment agreement also contains non-competition provisions
applicable for a one-year period following termination of his employment and
a
prohibition on use of confidential information of the Company during the term
of
the employment agreement and thereafter.
The
Company’s wholly-owned subsidiary may terminate the employment agreement with
twelve months notice or at any time if the Company’s subsidiary makes payment in
lieu of notice. Mr. Macmillan may voluntarily terminate the employment agreement
at any time for good reason or on 90 days’ notice for any reason. Upon
termination for good reason, Mr. Macmillan is entitled to a lump sum payment
including one year of his base salary. Any options that have become vested
and
exercisable as of such termination date may be exercised for a period of 90
days
following the date of his termination. In the event Mr. Macmillan’s employment
is terminated due to his death, disability or retirement at or after age 65,
his
stock options will automatically become vested and exercisable for a period
of
one year following such termination.
Signatures
Pursuant
to the requirements of the Securities Exchange Act of 1934, we have duly caused
this report to be signed on our behalf by the undersigned thereunto duly
authorized.
Date:
October 10, 2006
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/s/
Wallace Macmillan
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Wallace
Macmillan
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Vice
President - Finance
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(Principal
Financial Officer and Duly Authorized
Officer)
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