TRANSACTION BONUS AGREEMENT
---------------------------
THIS AGREEMENT is entered into as of the 1ST day of March,
2005 (the "Effective Date") by and between
Metromedia International Group, Inc.,
a Delaware corporation (the "Company"),
Metromedia International
Telecommunications Services, Inc., a
Delaware corporation and subsidiary of the
Company ("MITSI"), and Victor Koresh
("Employee").
WHEREAS, Employee is currently employed by MITSI pursuant to
an employment agreement, dated as of
October 23, 2003, by and between Employee
and MITSI (the "Employment Agreement");
and
WHEREAS, the Board of Directors of the Company (the "Board")
recognizes that a sale of Peterstar ZAO
("Peterstar") may arise and that such a
transaction, or the possibility of such a
transaction, may result in the
departure or distraction of key employees,
to the detriment of the Company and
its stockholders; and
WHEREAS, Employee is a key employee, and the Board has
determined that it is in the best interests
of the Company and its stockholders
to secure Employee's continued services and
to ensure Employee's continued and
undivided dedication to his duties in the
event of any sale of Peterstar; and
WHEREAS, the Board has authorized the Company to enter into
this Agreement.
NOW, THEREFORE, for and in consideration of the premises and
the mutual covenants and agreements
contained herein, and other good and
valuable consideration, the receipt and
sufficiency of which is hereby
acknowledged, the Company and Employee
hereby agree as follows:
I. Effect of this Agreement on
the Employment Agreement; Duration of this
Agreement.
A. Other than as
specifically stated in this Agreement, the Employment
Agreement shall remain in full force and
effect.
B. Section 12.2
of the Employment Agreement is hereby amended by deleting
Section 12.2(d) of the Employment Agreement
in its entirety; provided, that such
Section 12.2(d) shall once again become
effective on October 1, 2005 if and only
if a Peterstar Sale does not close before
that date.
C. Section 12.3
of the Employment Agreement is hereby amended by deleting
the following from Section 12.3(a) ",
provided that the Employee shall have
first been offered in writing a new
appointment with the successor or surviving
company (or, in the case of a Designated
Company, with the Company or any other
Group Company) on terms no less favorable
to him than under this Agreement";
provided, that such Section 12.3 shall once
again become effective on October 1,
2005 if and only if a Peterstar Sale does
not close before that date.
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D. Upon and
following the closing of a Peterstar Sale on or before
September 30, 2005, the Employment
Agreement shall terminate and be of no
further force and effect, except with
respect to Sections 7, 8 and 12.2(a)-(c)
of the Employment Agreement (relating to
certain restrictive covenants in favor
of MITSI and the Company), which shall
survive in accordance with their terms.
E. This
Agreement shall terminate and be of no further force and effect
if
a Peterstar Sale does not close on or
before September 30, 2005.
F. For purposes
of this Agreement, a "Peterstar Sale" shall mean the sale,
directly or indirectly, of the Company's
entire interest in the Peterstar
business venture.
II. Effect of a Peterstar Sale. Upon the
closing of a Peterstar Sale on or
before September 30, 2005, subject to
Employee's continued employment by MITSI
or the Company until and as of such date,
(i) Employee's employment with MITSI
or the Company shall terminate at the
closing of the Peterstar Sale, as
applicable, and the Employment Agreement
shall terminate as of such time;
provided that Sections 7, 8 and 12.2(a)-(c)
of the Employment Agreement shall
survive in accordance with their terms, and
(ii) the Company shall pay or cause
to be paid to Employee, concurrent with the
consummation of the Peterstar Sale
(subject to Section V below), a lump sum
cash amount equal to $1,000,000 (the
"Transaction Bonus"). Employee shall have
no further rights to any compensation
or other benefits under this Agreement or
the Employment Agreement, and any
other benefits (including rights to
retirement income and insurance) due
Employee following the Peterstar Sale shall
be determined in accordance with the
plans, policies and practices of the
Company, MITSI or any other Group Company,
as applicable; provided, however, that
Employee shall not be entitled to any
payments or benefits under any separately
stated severance, retention or change
of control plan, policy, program or
arrangement of the Company, MITSI or any
other Group Company.
III. No Duplication of Benefits. It is the
intent of the parties that no
duplication of benefits occur between this
Agreement and the Employment
Agreement.
IV. Withholding Taxes. The Company or
MITSI, as applicable, may withhold from
all payments due to Employee hereunder all
taxes which, by applicable federal,
state, local or other law or the law of the
country of which Employee is a
citizen or resident and/or in which he is
rendering services, as applicable, the
Company or MITSI is required to withhold
therefrom.
V. Nature of Obligations. The payments and
benefits provided under this
Agreement are contingent on (i) Employee's
compliance with Section 7 and Section
8 of the Employment Agreement, and (ii)
Employee's compliance with applicable
provisions of Section 12.2(a)-(c) of the
Employment Agreement. In addition, for
the avoidance of doubt, and
notwithstanding
