Exhibit 10.12
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
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THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement") is
entered into by CTC Media, Inc., a Delaware corporation (the
"Company"), and
Nilesh Lakhani (the "Executive").
WHEREAS, the Company and the Executive are party to an Employment
Agreement dated May 20, 2005 (the "Existing Agreement"); and
WHEREAS, the Company and the Executive wish to amend and restate
the
Existing Agreement and to supercede the Existing Agreement in its
entirety with
this Agreement.
In consideration of the mutual covenants and promises contained
herein,
and other good and valuable consideration, the receipt and
sufficiency of which
are hereby acknowledged by the parties hereto, the parties agree as
follows:
1.
Term of Employment. The Company hereby agrees to employ the
Executive,
and the Executive hereby accepts employment with the Company, upon
the terms set
forth in this Agreement, effective on November 1, 2004 (the
"Commencement
Date"). The Executive's employment shall continue until it is
terminated in
accordance with the provisions of Section 5.
2.
Title; Capacity.
a)
The Executive shall serve as Chief Financial Officer and
his job duties shall include managing the finance function of the
Company and each of its subsidiaries, including, without
limitation,
the preparation of management accounts, U.S. GAAP financial
statements
and tax filings, reporting to the Company's audit committee,
working
with the Company's external auditors to ensure the delivery of
timely
audit reports, supervising and assessing the Company's internal
control
procedures, supervising financial due diligence reviews of the
proposed
acquisition targets and managing investor relations. In addition,
the
Executive also shall serve as a member of the Company's operating
committee and participate in all key management decisions. The
Executive agrees to perform such other duties and responsibilities
as
the Company's Chief Executive Officer or his designee shall from
time
to time reasonably assign to him.
b)
The Executive shall be based at the Company's
headquarters in Moscow, Russia or such other location as the
Company
and the Executive shall mutually agree.
c)
The Executive shall be subject to the supervision of,
and shall have such authority as is delegated to him by, the
Company's
Chief Executive Officer or his designee or the Company's Board of
Directors (the "Board").
d)
The Executive agrees to devote his entire business time,
attention and energies to the business and interests of the Company
during his employment with the Company and shall not engage in any
other business activities without the prior written approval of the
Chief Executive Officer. The Executive agrees to abide by the
rules,
regulations, instructions, personnel practices and policies of the
Company and any changes therein that may be adopted from time to
time
by the Company.
3.
Compensation and Benefits.
a)
Base Salary. The Company shall pay the Executive, in
regular installments in accordance with the Company's standard
payroll
practices, an annual base salary of $300,000, less all applicable
U.S.
and Russian federal, state and local taxes and withholdings. Such
salary may be adjusted from time to time in accordance with normal
business practice and upon mutual agreement of the parties.
b)
Discretionary Bonus. Beginning in 2005, the Executive
shall be eligible for an annual discretionary award of up to
$150,000,
less all applicable U.S. and Russian federal, state and local taxes
and
withholdings, subject to the reasonable discretion of the Board or
a
committee thereof (which may include the Board or a committee
thereof
setting performance targets the achievement thereof being the
criteria
for determining whether the Executive shall be entitled to such
award).
Whether such performance targets, if any, have been achieved will
be
decided by the Board or a committee thereof in its reasonable
discretion. In any event, the Executive must be an active employee
of
the Company on the date the bonus for any fiscal year is
distributed in
order to be eligible for a bonus award.
c)
IPO Bonus. Upon the closing of a firm commitment
underwritten public offering of the Company's common stock (the
"IPO")
and conditional upon the Executive being an active employee of the
Company on the date of the closing of the IPO, the Company shall
promptly pay to the Executive an amount equal to $275,000 as a
bonus
for his efforts in connection with the IPO.
d)
Relocation Expenses. The Company shall reimburse the
Executive for all reasonable out-of-pocket relocation expenses up
to an
aggregate of $85,000, including (i) an up-front $50,000 lump sum
cash
payment (the "Lump-Sum Payment") to cover incidental costs related
to
the relocation of the Executive and his immediate family to Moscow,
such as the sale of his house in the United States and the purchase
of
replacement items in Russia, for which he shall not be required to
provide receipts, and (ii) up to a further $35,000 for the
following
items upon presentation of appropriate receipts: business class
airlines tickets from the United States to Russia for the Executive
and
his immediate family; shipment of household goods, temporary living
and
accommodation expenses in the Moscow area for a period of up to two
months; and agency costs charged by a local broker for locating a
suitable home for the Executive and his family in the Moscow area.
The
Lump-Sum Payment is contingent upon the Executive's remaining
continuously employed by the Company for twelve (12) months after
the
Commencement Date. If the Executive voluntarily terminates his
employment prior to twelve (12) months after the Commencement Date
for
any reason, the Lump-Sum Payment (less any taxes paid by the
Executive
in respect thereof) shall be repayable to the Company and the
Company
shall have the right to offset the amount of such relocation
assistance
against any other amounts payable to the Executive.
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e)
Vacation. The Executive shall be eligible to accrue a
maximum of 20 business days of paid vacation per calendar year,
subject
to proration to the Commencement Date and to be taken at such times
as
may be approved by and in the sole discretion of the Company. Such
vacation days shall accrue at the rate of 1.667 days per month.
f)
Insurance. While the Executive is employed by the
Company, the Company shall provide him with disability insurance
coverage to the extent of 60% of the Executive's annual base salary
and
$1,000,000 in term life insurance coverage with a beneficiary or
beneficiaries of the Executive's designation. The Company also
shall
provide the Executive and his immediate family with worldwide
medical,
vision and dental insurance with a reputable international health
insurance provider. The Executives insurance coverage shall be
governed
by the terms of the insurance policies and the Company will use its
best efforts to cause such coverage to take effect as of November
1,
2004.
g)
Retirement Benefits. Prior to June 30, 2005, the Company
may establish a 401(k) plan in which the Executive shall be
eligible to
participate subject to and in accordance with the formal plan
documents
governing such plan. If such a plan is established, the Company
shall
make a matching contribution equal to 50% of any contribution made
by
the Executive to the 401(k) plan, provided that the Company shall
not
be required to contribute more than $7,000 to the Executive's
401(k)
account in any calendar year. The Company is not responsible for
how
any such contributions are treated for tax purposes by taxing and
government authorities. In the event that the Company determines
not to
so establish a 401(k) plan for the Executive, the Company shall
provide
the Executive with an annual retirement benefit of $17,200 on or
before
December 31st of each year of the Executive's employment with the
Company (pro-rated for any partial employment years). The Executive
shall be responsible for all applicable U.S. and Russian federal,
state
and local taxes and withholdings on such benefit.
h)
Stock Options. The Company shall amend and restate the
options granted to the Executive on November 1, 2004 so that such
options are in accordance with the terms and conditions set forth
in
Exhibits A and B hereto (the "Amended and Restated Options").
i)
Russian visas. The Company shall use its best efforts to
assist the Executive and his immediate family to obtain the
necessary
visas required for them to live in Russia and for the Executive to
work
in Russia, in each case, for the term of the Executive's employment
with the Company. The Company will bear the cost of obtaining such
visas and also reimburse the Executive for any reasonable
immigration
and legal consultation costs, up to $2,000 per year, relating to
preserving the U.S. residency status of the Executive's spouse. The
Company makes no representations regarding the ability of the
Executive
and/or his immediate family members to obtain any such visas and/or
maintain such status. The Executive shall be responsible for
maintaining any documents relating to his entry to and continued
performance of work in Russia.
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j)
Transportation. The Company shall provide the Executive
with the exclusive use of a luxury class four wheel drive sedan car
such as an Audi A8 or the reasonable equivalent thereof (which
shall
remain the property of the Company) and a driver during the term of
the
Executive's employment with the Company.
k)
Personal assistant. The Company shall provide the
Executive with a personal assistant who shall work exclusively for
the
Executive.
l)
Mobile phone. The Company shall provide the Executive
with a mobile phone and shall pay the line rental and service fees
and
the cost of any business-related calls.
m)
Equipment. The Company shall consider on a case-by-case
basis the Executive's reasonable requests for home office equipment
(such as a laptop computer, printer and/or fax machine) and, to the
extent the Company believes the Executive's service to the Company
requires the use of such items, it shall provide them to the
Executive
(but, at all times, such items shall remain the property of the
Company).
n)
Indemnification Agreement. The Company shall enter into
an officer indemnification agreement with the Executive (the
"Indemnification Agreement") that is reasonably acceptable to both
the
Company and the Executive which shall provide that, subject to the
terms and conditions thereof, the Company shall indemnify the
Executive
for liabilities incurred by him arising from his services to the
Group
(as defined below).
4.
Taxes. The Executive shall be responsible for all of his own
federal
and/or state taxes payable in the United States, Russia or any
other
jurisdiction in which he is subject to tax. During the term of the
Executive's
employment with the Company and for any tax year which includes a
period during
which the Executive was employed by the Company, the Company shall
pay the costs
of retaining tax accountants to prepare the U.S. (federal and, if
any, state)
and Russian tax returns for the Executive and his immediate family;
provided,
however, that if the Executive wishes to retain his own tax
accountants, their
fees must be pre-approved by the Company (if in excess of $5,000
per annum).
5.
Employment Termination. The employment of the Executive by the
