-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Mpom9cbkz8MTxY/cWogU5ptpZhB8RaU1wL54dMqI9LBAdNpqVqIrLUqjhfUkhHXD MO29fF08tIZe2+9v1YVY3Q== 0001157523-05-007308.txt : 20050810 0001157523-05-007308.hdr.sgml : 20050810 20050810163221 ACCESSION NUMBER: 0001157523-05-007308 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20050808 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Termination of a Material Definitive Agreement ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050810 DATE AS OF CHANGE: 20050810 FILER: COMPANY DATA: COMPANY CONFORMED NAME: METROMEDIA INTERNATIONAL GROUP INC CENTRAL INDEX KEY: 0000039547 STANDARD INDUSTRIAL CLASSIFICATION: RADIO TELEPHONE COMMUNICATIONS [4812] IRS NUMBER: 580971455 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-05706 FILM NUMBER: 051013855 BUSINESS ADDRESS: STREET 1: 8000 TOWER POINT DRIVE CITY: CHARLOTTE STATE: NC ZIP: 28227 BUSINESS PHONE: 7043217380 MAIL ADDRESS: STREET 1: 8000 TOWER POINT DRIVE CITY: CHARLOTTE STATE: NC ZIP: 28227 FORMER COMPANY: FORMER CONFORMED NAME: ACTAVA GROUP INC DATE OF NAME CHANGE: 19930723 FORMER COMPANY: FORMER CONFORMED NAME: FUQUA INDUSTRIES INC /DE/ DATE OF NAME CHANGE: 19920703 8-K 1 a4950452.txt METROMEDIA INTERNATIONAL GROUP 8-K As filed with the Securities and Exchange Commission on August 10, 2005 ================================================================================ 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): August 8, 2005 METROMEDIA INTERNATIONAL GROUP, INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 1-5706 58-0971455 - -------------------------------- ------------ ------------------- (State or other jurisdiction of (Commission File Number) (IRS Employer incorporation) Identification No.) 8000 Tower Point Drive, Charlotte, NC 28227 ------------------------------------- --------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (704) 321-7380 ---------------- (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): |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 1.01. Entry into a Material Definitive Agreement. Indemnification Agreements On August 1, 2005, Metromedia International Group, Inc. (the "Company") completed the sale of its entire interest in NWE Capital (Cyprus), Ltd., a company organized under the Companies Law of Cyprus whose sole asset is a 71% interest in PeterStar ZAO, a closed joint stock company organized under the laws of the Russian Federation ("PeterStar"). In connection with the closing of the PeterStar sale, the Buyers requested that Mark S. Hauf, the Chief Executive Officer and Chairman of the Company, and Natasha Alexeeva, the General Counsel and Secretary of the Company, remain on the board of directors of PeterStar until such time as a new board of directors of PeterStar can be duly elected in compliance with Russian law in order to ensure that the quorum requirements necessary for the PeterStar board of directors to conduct business are satisfied. In consideration for Mr. Hauf's and Ms. Alexeeva's agreement to remain on the PeterStar board, PeterStar and one of the PeterStar buyer's agreed to indemnify Mr. Hauf and Ms. Alexeeva (each an "Indemnitee") against litigation (pending or threatened) risks and expenses incurred by each Indemnitee in connection with his or her continued service as a PeterStar director (including as a member of any committee of the PeterStar board of directors). On August 9, 2005, the Company's board of directors authorized the Company to enter into an indemnification agreement (each an "Indemnification Agreement") with each Indemnitee pursuant to which the Company agreed to provide a backup indemnity as of August 1, 2005 to the indemnity provided by PeterStar and one of the PeterStar buyer's. The Indemnification Agreements entered into with each of Mr. Hauf and Ms. Alexeeva are attached hereto as Exhibits 10.1 and 10.2, respectively, and are incorporated herein by reference. Bonus Award Agreements On August 9, 2005, the Company entered into bonus award agreements (each a "Bonus Award Agreement") with each of Harold F. Pyle, III, the Chief Financial Officer and Treasurer of the Company, and B. Dean Elledge, the Chief Accounting Officer of the Company. The Bonus Award Agreements entered into with each of Mr. Pyle and Mr. Elledge are attached hereto as Exhibits 10.3 and 10.4, respectively, and are incorporated herein by reference. The following summary of such Bonus Award Agreement is qualified in its entirety by reference to the applicable Bonus Award Agreement. Bonus Award Agreement with Harold F. Pyle, III Under the terms of Mr. Pyle's Bonus Award Agreement, he is entitled to the following compensation and benefits: o The Company has agreed to pay Mr. Pyle a one-time, lump-sum cash bonus equal to $416,500 (the "Pyle Bonus") as soon as reasonably practicable following the first date as of which both of the following conditions have been satisfied: (x) the Company's annual reports on Form 10-K and quarterly reports on Form 10-Q required to be filed with the Securities and Exchange Commission (the "SEC") prior to such date have been filed and (y) at least 21 calendar days remain prior to the next date that the Company is required to file with the SEC any periodic report on Form 10-K or Form 10-Q (the "Pyle Payment Date"). Notwithstanding the foregoing, if at any time prior to the Pyle Payment Date Mr. Pyle's employment is terminated by the Company without "Cause" (as defined in the employment agreement between Mr. Pyle and the Company, dated as of October 6, 2003 and as amended July 29, 2005), Mr. Pyle shall be entitled to receive the Pyle Bonus as soon as reasonably practicable following the date of such termination. Bonus Award Agreement with B. Dean Elledge Under the terms of Mr. Elledge's Bonus Award Agreement, he is entitled to the following compensation and benefits: o The Company has agreed to pay Mr. Elledge a one-time, lump-sum cash bonus equal to $233,000 (the "Elledge Bonus") as soon as reasonably practicable following the first date as of which both of the following conditions have been satisfied: (x) the Company's annual reports on Form 10-K and quarterly reports on Form 10-Q required to be filed with the SEC prior to such date have been filed and (y) at least 21 calendar days remain prior to the next date that the Company is required to file with the SEC any periodic report on Form 10-K or Form 10-Q (the "Elledge Payment Date"). Notwithstanding the foregoing, if at any time prior to the Elledge Payment Date Mr. Elledge's employment is terminated by the Company without "Cause" (as defined in the employment agreement between Mr. Elledge and the Company, dated as of October 6, 2003 and as amended July 29, 2005), Mr. Elledge shall be entitled to receive the Elledge Bonus as soon as reasonably practicable following the date of such termination. Item 1.02 Termination of a Material Definitive Agreement. On August 8, 2005, the Company completed the redemption of all of its outstanding 10 1/2% Senior Notes due 2007 (the "Senior Notes") and terminated the Indenture, dated as of September 30, 1999, between the Company and U.S. Bank National Association (f/k/a U.S. Bank Trust National Association), a national banking association, as trustee (as amended, modified and supplemented from time to time in accordance with its terms). The aggregate redemption price of the Senior Notes, including accrued interest, was approximately $157.7 million. The press release announcing this matter is attached as Exhibit 99.1 and is incorporated herein by reference. Item 9.01. Financial Statements and Exhibits. (c) Exhibits. 10.1 Indemnification Agreement, dated August 1, 2005, by and between Metromedia International Group, Inc. and Mark S. Hauf. 10.2 Indemnification Agreement, dated August 1, 2005, by and between Metromedia International Group, Inc. and Natasha Alexeeva. 10.3 Bonus Award Agreement, dated August 9, 2005, by and between Metromedia International Group, Inc. and Harold F. Pyle, III. 10.4 Bonus Award Agreement, dated August 9, 2005, by and between Metromedia International Group, Inc. and B. Dean Elledge. 99.1 Press Release of Metromedia International Group, Inc., dated August 8, 2005. SIGNATURE --------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. METROMEDIA INTERNATIONAL GROUP, INC. By: /S/ HAROLD F. PYLE, III ------------------------------- Name: Harold F. Pyle, III Title: Executive Vice President Finance, Chief Financial Officer and Treasurer Date: August 10, 2005 Charlotte, NC EX-10.1 2 a4950452ex101.txt EXHIBIT 10.1 Exhibit 10.1 ------------ INDEMNIFICATION AGREEMENT This AGREEMENT (the "Agreement") is made and entered into as of August 1, 2005, between Metromedia International Group, Inc., a Delaware corporation (the "Indemnitor"), and Mark S. Hauf ("Indemnitee"). WHEREAS, the Indemnitor has entered into that certain Share Purchase Agreement (as amended, supplemented or modified from time to time in accordance with its terms, the "Purchase Agreement"), dated as of February 17, 2005, by and among the Indemnitor, First National Holding S.A., a societe anonyme organized under the laws of Luxembourg ("FNH"), Emergent Telecom Ventures S.A., a societe anonyme organized under the laws of Switzerland ("ETV"), and Pisces Investment Limited, a company organized under the Companies Law of Cyprus and wholly-owned subsidiary of FNH and ETV, pursuant to which the Company has agreed to sell its entire interest in NWE Capital (Cyprus), Ltd., a company organized under the Companies Law of Cyprus whose sole asset is a 71% interest in PeterStar ZAO, a closed joint stock company organized under the laws of the Russian Federation ("PeterStar"); WHEREAS, in connection with the closing of the transaction contemplated by the Purchase Agreement, FNH and PeterStar have requested that the Indemnitee remain as a director of PeterStar; WHEREAS, to induce the Indemnitee remain as a director of PeterStar, the Indemnitor desires to provide Indemnitee with full indemnification against litigation risks and expenses; and WHEREAS, Indemnitee is relying upon the rights afforded under this Agreement in continuing to serve as a director of PeterStar. NOW, THEREFORE, in consideration of the promises and the covenants contained herein, the Indemnitor and the Indemnitee do hereby covenant and agree as follows: 1. Definitions. (a) "Corporate Status" describes the status of a person who is serving or has served as a Director, including as a member of any committee of the board of directors of PeterStar. (b) "Director" shall mean a member of the board of directors of PeterStar. (c) "Expenses" shall mean all fees, costs and expenses incurred in connection with any Proceeding (as defined below), including, without limitation, reasonable attorneys' fees, disbursements and retainers (including, without limitation, any such fees, disbursements and retainers incurred by Indemnitee pursuant to Sections 4 and 6(b) of this Agreement), fees and disbursements of expert witnesses, private investigators and professional advisors (including, without limitation, accountants and investment bankers), court costs, transcript costs, fees of experts, travel expenses, duplicating, printing and binding costs, telephone and fax transmission charges, postage, delivery services, secretarial services and other disbursements and expenses. Indemnification Agreement - Page 2 (d) "Liabilities" shall mean judgments, damages, liabilities, losses, penalties, excise taxes, fines and amounts paid in settlement. (e) "Proceeding" shall mean any threatened, pending or completed claim, action, suit, arbitration, alternate dispute resolution process, investigation, administrative hearing, appeal, or any other proceeding, whether civil, criminal, administrative, arbitrative or investigative, whether formal or informal, including a proceeding initiated by Indemnitee pursuant to Section 6 of this Agreement to enforce Indemnitee's rights hereunder. 2. Agreement to Indemnify. The Indemnitor agrees to indemnify Indemnitee as follows: If Indemnitee was or is a party or is threatened to be made a party to any Proceeding by reason of Indemnitee's Corporate Status, Indemnitee shall be indemnified by the Indemnitor against all Expenses and Liabilities incurred or paid by Indemnitee in connection with such Proceeding (referred to herein as "Indemnifiable Expenses" and "Indemnifiable Liabilities", respectively, and collectively as "Indemnifiable Amounts"). 3. Procedure for Payment of Indemnifiable Amounts. Indemnitee shall submit to the Indemnitor a written request specifying the Indemnifiable Amounts for which Indemnitee seeks payment under Section 2 of this Agreement. The Indemnitor shall pay such Indemnifiable Amounts to Indemnitee within ten (10) calendar days of receipt of the request. 4. Agreement to Advance Expenses. The Company shall pay to Indemnitee all Indemnifiable Expenses incurred by Indemnitee in connection with any Proceeding, including a Proceeding by or in the right of the Company, in advance of the final disposition of such Proceeding, as the same are incurred. 5. Procedure for Advance Payment of Expenses. Indemnitee shall submit to the Indemnitor a written request specifying the Indemnifiable Expenses for which Indemnitee seeks an advancement under Section 4 of this Agreement, together with documentation evidencing that Indemnitee has incurred such Indemnifiable Expenses. Payment of Indemnifiable Expenses under Section 4 shall be made no later than ten (10) calendar days after the receipt of such request by the Indemnitor. 6. Reduction for Amounts Paid by Others. The Indemnitor's obligation to indemnify or advance Indemnifiable Amounts hereunder to Indemnitee shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of expenses from FNH or PeterStar or otherwise pursuant to that certain Indemnification Agreement, entered into as of August 1, 2005, between FNH, PeterStar and Indemnitee (the "FNH/PeterStar Indemnity Agreement"). To the extent the Indemnitor indemnifies or advances Indemnifiable Amounts hereunder to Indemnitee that are subsequently indemnified or advanced to Indemnitee pursuant to the FNH/PeterStar Indemnity Agreement, Indemnitee shall promptly notify Indemnitor and return such Indemnifiable Amounts to Indemnitor in accordance with instructions provided by Indemnitor promptly following such notification. Indemnification Agreement - Page 3 7. Remedies of Indemnitee. (a) Right to Petition Court. In the event that Indemnitee makes a request for payment of Indemnifiable Amounts under Sections 2 and 3 above or a request for an advancement of Indemnifiable Expenses under Sections 4 and 5 above and the Indemnitor fails to make such payment or advancement in a timely manner pursuant to the terms of this Agreement, Indemnitee may petition a court of law to enforce the Indemnitor's obligations under this Agreement. (b) Expenses. The Indemnitor agrees to reimburse Indemnitee in full for any Expenses incurred by Indemnitee in connection with investigating, preparing for, litigating, defending or settling any action brought by Indemnitee under Section 7(a) above, or in connection with any claim or counterclaim brought by the Indemnitor in connection therewith. (c) Validity of Agreement. The Indemnitor shall be precluded from asserting in any Proceeding, including, without limitation, an action under Section 7(a) above, that the provisions of this Agreement are not valid, binding and enforceable or that there is insufficient consideration for this Agreement and shall stipulate in court that they are each bound by all the provisions of this Agreement. 8. Representations and Warranties of the Indemnitor. The Indemnitor hereby represents and warrants to Indemnitee as follows: (a) Authority. The Indemnitor has all necessary power and authority to enter into, and be bound by the terms of, this Agreement, and the execution, delivery and performance of the undertakings contemplated by this Agreement have been duly authorized by the Indemnitor. (b) Enforceability. This Agreement, when executed and delivered by the Indemnitor in accordance with the provisions hereof, shall be a legal, valid and binding obligation of the Indemnitor, enforceable against the Indemnitor in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar laws affecting the enforcement of creditors' rights generally. 9. Fees and Expenses. During the term of the Indemnitee's service as a Director, the Indemnitor shall promptly reimburse the Indemnitee for all expenses incurred by Indemnitee in connection with his service as a Director or member of any committee of the board of directors of PeterStar or otherwise in connection with PeterStar's business. 10. Contract Rights Not Exclusive. The rights to payment of Indemnifiable Amounts and advancement of Indemnifiable Expenses provided by this Agreement shall be in addition to, but not exclusive of, any other rights which Indemnitee may have at any time under applicable law, PeterStar's by-laws or certificate of incorporation, or any other agreement, vote of stockholders or the board of directors of PeterStar (or any committee thereof), or otherwise, both as to action in Indemnitee's official capacity or Indemnitee's Corporate Status and as to action in any other capacity as a result of Indemnitee's serving as a Director. Indemnification Agreement - Page 4 11. Successors. This Agreement shall be (a) binding upon all successors and assigns of the Indemnitor (including any transferee of all or a substantial portion of the business, stock and/or assets of the Indemnitor and any direct or indirect successor by merger or consolidation or otherwise by operation of law) and (b) binding on and shall inure to the benefit of the heirs, personal representatives, executors and administrators of Indemnitee. This Agreement shall continue for the benefit of Indemnitee and such heirs, personal representatives, executors and administrators after Indemnitee has ceased to have Corporate Status. 12. Severability. Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement, or any clause thereof, shall be determined by a court of competent jurisdiction to be illegal, invalid or unenforceable, in whole or in part, such provision or clause shall be limited or modified in its application to the minimum extent necessary to make such provision or clause valid, legal and enforceable, and the remaining provisions and clauses of this Agreement shall remain fully enforceable and binding on the parties. 13. Modifications and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by each of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement (whether or not similar), nor shall such waiver constitute a continuing waiver. 14. General Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given (a) when delivered by hand, (b) when transmitted by facsimile and receipt is acknowledged, or (c) if mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed: (a) If to Indemnitee, to: Mark S. Hauf c/o Metromedia International Group, Inc. 8000 Tower Point Drive Charlotte, NC 28227 Fax: 704-845-1815 (b) If to the Indemnitor, to: Metromedia International Group, Inc. 8000 Tower Point Drive Charlotte, NC 28227 Attn: Board of Directors Fax: 704-845-1815 Indemnification Agreement - Page 5 or to such other address as may have been furnished in the same manner by any party to the others. 15. Governing Law; Jurisdiction. Each of the parties hereto: (a) irrevocably and unconditionally submits to the exclusive jurisdiction of the courts of the State of New York and of the federal courts sitting in the State of New York with respect to all actions and proceedings arising out of or relating to this letter agreement and the transactions contemplated hereby; (b) agrees that all claims with respect to any such action or proceeding shall be heard and determined in such courts and agrees not to commence any action or proceeding relating to this letter agreement or the transactions contemplated hereby except in such courts; (c) irrevocably and unconditionally waives any objection to the laying of venue of any action or proceeding arising out of this letter agreement or the transactions contemplated hereby and irrevocably and unconditionally waives the defense of an inconvenient forum; and (d) irrevocably appoints The Corporation Trust Company in the case of the Indemnitor as its agent for the sole purpose of receiving service of process or other legal summons in connection with any such dispute, litigation, action or proceeding brought in such courts and agrees that it will maintain The Corporation Trust Company in the case of the Indemnitor at all times as its duly appointed agent in the State of New York for the service of any process or summons in connection with any such dispute, litigation, action or proceeding brought in such courts and, if it fails to maintain such an agent during any period, any such process or summons may be served on it by mailing a copy of such process or summons to it in accordance with, and in the manner provided in, Section 13 of this Agreement, with such service deemed effective on the fifth day after the date of such mailing. 16. Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party, it being understood that all parties need not sign the same counterpart. This Agreement, to the extent signed and delivered by means of a facsimile machine or electronic mail in .pdf file format, will be treated in all manner and respects as an original agreement and will be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. Signature Page to Director Indemnification Agreement IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. METROMEDIA INTERNATIONAL GROUP, INC. By: /S/ Harold F. Pyle, III ------------------------------------------- Name: Harold F. Pyle, III Title: Chief Financial Officer INDEMNITEE /S/ Mark S. Hauf --------------------------------------------------- Name: Mark S. Hauf EX-10.2 3 a4950452ex102.txt EXHIBIT 10.2 Exhibit 10.2 ------------ INDEMNIFICATION AGREEMENT This AGREEMENT (the "Agreement") is made and entered into as of August 1, 2005, between Metromedia International Group, Inc., a Delaware corporation (the "Indemnitor"), and Natasha Alexeeva ("Indemnitee"). WHEREAS, the Indemnitor has entered into that certain Share Purchase Agreement (as amended, supplemented or modified from time to time in accordance with its terms, the "Purchase Agreement"), dated as of February 17, 2005, by and among the Indemnitor, First National Holding S.A., a societe anonyme organized under the laws of Luxembourg ("FNH"), Emergent Telecom Ventures S.A., a societe anonyme organized under the laws of Switzerland ("ETV"), and Pisces Investment Limited, a company organized under the Companies Law of Cyprus and wholly-owned subsidiary of FNH and ETV, pursuant to which the Company has agreed to sell its entire interest in NWE Capital (Cyprus), Ltd., a company organized under the Companies Law of Cyprus whose sole asset is a 71% interest in PeterStar ZAO, a closed joint stock company organized under the laws of the Russian Federation ("PeterStar"); WHEREAS, in connection with the closing of the transaction contemplated by the Purchase Agreement, FNH and PeterStar have requested that the Indemnitee remain as a director of PeterStar; WHEREAS, to induce the Indemnitee remain as a director of PeterStar, the Indemnitor desires to provide Indemnitee with full indemnification against litigation risks and expenses; and WHEREAS, Indemnitee is relying upon the rights afforded under this Agreement in continuing to serve as a director of PeterStar. NOW, THEREFORE, in consideration of the promises and the covenants contained herein, the Indemnitor and the Indemnitee do hereby covenant and agree as follows: 1. Definitions. (a) "Corporate Status" describes the status of a person who is serving or has served as a Director, including as a member of any committee of the board of directors of PeterStar. (b) "Director" shall mean a member of the board of directors of PeterStar. (c) "Expenses" shall mean all fees, costs and expenses incurred in connection with any Proceeding (as defined below), including, without limitation, reasonable attorneys' fees, disbursements and retainers (including, without limitation, any such fees, disbursements and retainers incurred by Indemnitee pursuant to Sections 4 and 6(b) of this Agreement), fees and disbursements of expert witnesses, private investigators and professional advisors (including, without limitation, accountants and investment bankers), court costs, transcript costs, fees of experts, travel expenses, duplicating, printing and binding costs, telephone and fax transmission charges, postage, delivery services, secretarial services and other disbursements and expenses. Indemnification Agreement - Page 2 (d) "Liabilities" shall mean judgments, damages, liabilities, losses, penalties, excise taxes, fines and amounts paid in settlement. (e) "Proceeding" shall mean any threatened, pending or completed claim, action, suit, arbitration, alternate dispute resolution process, investigation, administrative hearing, appeal, or any other proceeding, whether civil, criminal, administrative, arbitrative or investigative, whether formal or informal, including a proceeding initiated by Indemnitee pursuant to Section 6 of this Agreement to enforce Indemnitee's rights hereunder. 2. Agreement to Indemnify. The Indemnitor agrees to indemnify Indemnitee as follows: If Indemnitee was or is a party or is threatened to be made a party to any Proceeding by reason of Indemnitee's Corporate Status, Indemnitee shall be indemnified by the Indemnitor against all Expenses and Liabilities incurred or paid by Indemnitee in connection with such Proceeding (referred to herein as "Indemnifiable Expenses" and "Indemnifiable Liabilities", respectively, and collectively as "Indemnifiable Amounts"). 3. Procedure for Payment of Indemnifiable Amounts. Indemnitee shall submit to the Indemnitor a written request specifying the Indemnifiable Amounts for which Indemnitee seeks payment under Section 2 of this Agreement. The Indemnitor shall pay such Indemnifiable Amounts to Indemnitee within ten (10) calendar days of receipt of the request. 4. Agreement to Advance Expenses. The Company shall pay to Indemnitee all Indemnifiable Expenses incurred by Indemnitee in connection with any Proceeding, including a Proceeding by or in the right of the Company, in advance of the final disposition of such Proceeding, as the same are incurred. 5. Procedure for Advance Payment of Expenses. Indemnitee shall submit to the Indemnitor a written request specifying the Indemnifiable Expenses for which Indemnitee seeks an advancement under Section 4 of this Agreement, together with documentation evidencing that Indemnitee has incurred such Indemnifiable Expenses. Payment of Indemnifiable Expenses under Section 4 shall be made no later than ten (10) calendar days after the receipt of such request by the Indemnitor. 6. Reduction for Amounts Paid by Others. The Indemnitor's obligation to indemnify or advance Indemnifiable Amounts hereunder to Indemnitee shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of expenses from FNH or PeterStar or otherwise pursuant to that certain Indemnification Agreement, entered into as of August 1, 2005, between FNH, PeterStar and Indemnitee (the "FNH/PeterStar Indemnity Agreement"). To the extent the Indemnitor indemnifies or advances Indemnifiable Amounts hereunder to Indemnitee that are subsequently indemnified or advanced to Indemnitee pursuant to the FNH/PeterStar Indemnity Agreement, Indemnitee shall promptly notify Indemnitor and return such Indemnifiable Amounts to Indemnitor in accordance with instructions provided by Indemnitor promptly following such notification. Indemnification Agreement - Page 3 7. Remedies of Indemnitee. (a) Right to Petition Court. In the event that Indemnitee makes a request for payment of Indemnifiable Amounts under Sections 2 and 3 above or a request for an advancement of Indemnifiable Expenses under Sections 4 and 5 above and the Indemnitor fails to make such payment or advancement in a timely manner pursuant to the terms of this Agreement, Indemnitee may petition a court of law to enforce the Indemnitor's obligations under this Agreement. (b) Expenses. The Indemnitor agrees to reimburse Indemnitee in full for any Expenses incurred by Indemnitee in connection with investigating, preparing for, litigating, defending or settling any action brought by Indemnitee under Section 7(a) above, or in connection with any claim or counterclaim brought by the Indemnitor in connection therewith. (c) Validity of Agreement. The Indemnitor shall be precluded from asserting in any Proceeding, including, without limitation, an action under Section 7(a) above, that the provisions of this Agreement are not valid, binding and enforceable or that there is insufficient consideration for this Agreement and shall stipulate in court that they are each bound by all the provisions of this Agreement. 8. Representations and Warranties of the Indemnitor. The Indemnitor hereby represents and warrants to Indemnitee as follows: (a) Authority. The Indemnitor has all necessary power and authority to enter into, and be bound by the terms of, this Agreement, and the execution, delivery and performance of the undertakings contemplated by this Agreement have been duly authorized by the Indemnitor. (b) Enforceability. This Agreement, when executed and delivered by the Indemnitor in accordance with the provisions hereof, shall be a legal, valid and binding obligation of the Indemnitor, enforceable against the Indemnitor in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar laws affecting the enforcement of creditors' rights generally. 9. Fees and Expenses. During the term of the Indemnitee's service as a Director, the Indemnitor shall promptly reimburse the Indemnitee for all expenses incurred by Indemnitee in connection with his service as a Director or member of any committee of the board of directors of PeterStar or otherwise in connection with PeterStar's business. 10. Contract Rights Not Exclusive. The rights to payment of Indemnifiable Amounts and advancement of Indemnifiable Expenses provided by this Agreement shall be in addition to, but not exclusive of, any other rights which Indemnitee may have at any time under applicable law, PeterStar's by-laws or certificate of incorporation, or any other agreement, vote of stockholders or the board of directors of PeterStar (or any committee thereof), or otherwise, both as to action in Indemnitee's official capacity or Indemnitee's Corporate Status and as to action in any other capacity as a result of Indemnitee's serving as a Director. Indemnification Agreement - Page 4 11. Successors. This Agreement shall be (a) binding upon all successors and assigns of the Indemnitor (including any transferee of all or a substantial portion of the business, stock and/or assets of the Indemnitor and any direct or indirect successor by merger or consolidation or otherwise by operation of law) and (b) binding on and shall inure to the benefit of the heirs, personal representatives, executors and administrators of Indemnitee. This Agreement shall continue for the benefit of Indemnitee and such heirs, personal representatives, executors and administrators after Indemnitee has ceased to have Corporate Status. 12. Severability. Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement, or any clause thereof, shall be determined by a court of competent jurisdiction to be illegal, invalid or unenforceable, in whole or in part, such provision or clause shall be limited or modified in its application to the minimum extent necessary to make such provision or clause valid, legal and enforceable, and the remaining provisions and clauses of this Agreement shall remain fully enforceable and binding on the parties. 13. Modifications and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by each of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement (whether or not similar), nor shall such waiver constitute a continuing waiver. 14. General Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given (a) when delivered by hand, (b) when transmitted by facsimile and receipt is acknowledged, or (c) if mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed: (a) If to Indemnitee, to: Natasha Alexeeva c/o Metromedia International Group, Inc. 8000 Tower Point Drive Charlotte, NC 28227 Fax: 704-845-1815 (b) If to the Indemnitor, to: Metromedia International Group, Inc. 8000 Tower Point Drive Charlotte, NC 28227 Attn: Board of Directors Fax: 704-845-1815 Indemnification Agreement - Page 6 or to such other address as may have been furnished in the same manner by any party to the others. 15. Governing Law; Jurisdiction. Each of the parties hereto: (a) irrevocably and unconditionally submits to the exclusive jurisdiction of the courts of the State of New York and of the federal courts sitting in the State of New York with respect to all actions and proceedings arising out of or relating to this letter agreement and the transactions contemplated hereby; (b) agrees that all claims with respect to any such action or proceeding shall be heard and determined in such courts and agrees not to commence any action or proceeding relating to this letter agreement or the transactions contemplated hereby except in such courts; (c) irrevocably and unconditionally waives any objection to the laying of venue of any action or proceeding arising out of this letter agreement or the transactions contemplated hereby and irrevocably and unconditionally waives the defense of an inconvenient forum; and (d) irrevocably appoints The Corporation Trust Company in the case of the Indemnitor as its agent for the sole purpose of receiving service of process or other legal summons in connection with any such dispute, litigation, action or proceeding brought in such courts and agrees that it will maintain The Corporation Trust Company in the case of the Indemnitor at all times as its duly appointed agent in the State of New York for the service of any process or summons in connection with any such dispute, litigation, action or proceeding brought in such courts and, if it fails to maintain such an agent during any period, any such process or summons may be served on it by mailing a copy of such process or summons to it in accordance with, and in the manner provided in, Section 13 of this Agreement, with such service deemed effective on the fifth day after the date of such mailing. 16. Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party, it being understood that all parties need not sign the same counterpart. This Agreement, to the extent signed and delivered by means of a facsimile machine or electronic mail in .pdf file format, will be treated in all manner and respects as an original agreement and will be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. Signature Page to Director Indemnification Agreement IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. METROMEDIA INTERNATIONAL GROUP, INC. By: /S/ Harold F. Pyle, III -------------------------------------- Name: Harold F. Pyle, III Title: Chief Financial Officer INDEMNITEE /S/ Natasha Alexeeva ---------------------------------------------- Name: Natasha Alexeeva EX-10.3 4 a4950452ex103.txt EXHIBIT 10.3 Exhibit 10.3 8000 TOWER POINT DRIVE CHARLOTTE, NC 28227 704-321-7380 METROMEDIA INTERNATIONAL GROUP, INC. August 9, 2005 Harold F. Pyle III Chief Financial Officer Metromedia International Group, Inc. 8000 Tower Point Drive Charlotte, NC 28227 Re: Bonus Award Dear Ernie: Metromedia International Group, Inc. (the "Company") considers it essential to the best interests of the Company and its stockholders to reinforce and encourage your continued attention and dedication to your duties to the Company as its Chief Financial Officer. The Company recognizes that the performance of your duties over the past several months, specifically those duties in connection with the preparation of the Company's audited and unaudited financial statements, has required an increased commitment of your time and energy. The Company is aware that you will be required to continue to devote a significant amount of time and energy to the performance of such duties over the coming months. The Compensation Committee of the Board of Directors of the Company has determined that it is in the best interests of the Company and its stockholders to pay you a bonus award to both reward you for the services you have provided in connection with the preparation of such financial statements and to incentivize you to continue to provide your undivided dedication and attention to your duties to the Company and, specifically, in connection with preparing such financial statements. This letter agreement sets forth the terms and conditions of the payment by the Company to you of the bonus award described herein. 1. Bonus Award The Company shall pay you a one-time, lump-sum cash bonus equal to $416,500 (the "Bonus") as soon as reasonably practicable following the first date as of which the Company's annual reports on Form 10-K and quarterly reports on Form 10-Q required to be filed with the Securities and Exchange Commission (the "SEC") prior to such date have been filed and that is at least 21 calendar days prior to any date that the Company is required to file with the SEC any periodic report on Form 10-K or Form 10-Q (the "Payment Date"). Notwithstanding the foregoing, if at any time prior to the Payment Date your employment is terminated by the Company without "Cause" (as defined in the employment agreement between you and the Company, dated as of October 6, 2003 and as amended July 29, 2005 (the "Employment Agreement")), you shall be entitled to receive the Bonus as soon as reasonably practicable following the date of such termination. 2. General Nothing in this letter agreement shall limit your right to participate in or receive compensation, including any bonuses or equity-based compensation awards, under the Employment Agreement, any compensation or other employee benefit plan, program, policy or arrangement of the Company or pursuant to the Transaction Bonus Agreement between you and the Company, dated as of July 29, 2005. The terms of this letter agreement may not be amended or modified other than by a written agreement executed by the parties hereto or their respective successors and legal representatives. This letter agreement may be executed in counterparts, each of which shall constitute an original, but all of which taken together shall constitute one and the same agreement. This letter agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to conflicts of laws principles which could cause the laws of another jurisdiction to apply. The Company may withhold from the Bonus such federal, state and local income and employment taxes as may be required to be withheld pursuant to any applicable law or regulation. This letter agreement contains the sole and entire agreement between the parties with respect to the subject matter hereof. The parties acknowledge that any statements or representations that may have been made heretofore regarding the terms and matters dealt with in this letter agreement are void and have no effect and that neither party has relied thereon. Your rights to the Bonus may not be assigned, transferred, pledged or otherwise alienated, other than by will or the laws of descent and distribution. Nothing in this letter agreement shall be deemed to entitle you to continued employment with the Company. Any dispute in connection with, arising out of or asserting breach of this letter agreement shall be exclusively resolved by binding arbitration. Such dispute shall be submitted to arbitration in New York, before a panel of three neutral arbitrators in accordance with the Commercial Rules of the American Arbitration Association then in effect, and the determination of the arbitrators resulting from any such submission shall be final and binding upon the parties hereto. Judgment upon any arbitration award may be entered in any court of competent jurisdiction. 2 Kindly sign this letter agreement in the space indicated below at which time this letter agreement shall become a binding agreement between you and the Company, enforceable in accordance with its terms. Metromedia International Group, Inc. By: /S/ Mark S. Hauf ----------------- Name: Mark Stephen Hauf Title: Chief Executive Officer Accepted and Agreed to: By: /S/ Harold F. Pyle, III --------------------------- Harold F. Pyle III 3 EX-10.4 5 a4950452ex104.txt EXHIBIT 10.4 Exhibit 10.4 8000 TOWER POINT DRIVE CHARLOTTE, NC 28227 704-321-7380 METROMEDIA INTERNATIONAL GROUP, INC. August 9, 2005 Bryce Dean Elledge Vice President of Finance and Chief Accounting Officer Metromedia International Group, Inc. 8000 Tower Point Drive Charlotte, NC 28227 Re: Bonus Award Dear Dean: Metromedia International Group, Inc. (the "Company") considers it essential to the best interests of the Company and its stockholders to reinforce and encourage your continued attention and dedication to your duties to the Company as its Vice President of Finance and Chief Accounting Officer. The Company recognizes that the performance of your duties over the past several months, specifically those duties in connection with the preparation of the Company's audited and unaudited financial statements, has required an increased commitment of your time and energy. The Company is aware that you will be required to continue to devote a significant amount of time and energy to the performance of such duties over the coming months. The Compensation Committee of the Board of Directors of the Company has determined that it is in the best interests of the Company and its stockholders to pay you a bonus award to both reward you for the services you have provided in connection with the preparation of such financial statements and to incentivize you to continue to provide your undivided dedication and attention to your duties to the Company and, specifically, in connection with preparing such financial statements. This letter agreement sets forth the terms and conditions of the payment by the Company to you of the bonus award described herein. 1. Bonus Award The Company shall pay you a one-time, lump-sum cash bonus equal to $233,000 (the "Bonus") as soon as reasonably practicable following the first date as of which the Company's annual reports on Form 10-K and quarterly reports on Form 10-Q required to be filed with the Securities and Exchange Commission (the "SEC") prior to such date have been filed and that is at least 21 calendar days prior to any date that the Company is required to file with the SEC any periodic report on Form 10-K or Form 10-Q (the "Payment Date"). Notwithstanding the foregoing, if at any time prior to the Payment Date your employment is terminated by the Company without "Cause" (as defined in the employment agreement between you and the Company, dated as of October 6, 2003 and as amended July 29, 2005 (the "Employment Agreement")), you shall be entitled to receive the Bonus as soon as reasonably practicable following the date of such termination. 2. General Nothing in this letter agreement shall limit your right to participate in or receive compensation, including any bonuses or equity-based compensation awards, under the Employment Agreement, any compensation or other employee benefit plan, program, policy or arrangement of the Company or pursuant to the Transaction Bonus Agreement between you and the Company, dated as of July 29, 2005. The terms of this letter agreement may not be amended or modified other than by a written agreement executed by the parties hereto or their respective successors and legal representatives. This letter agreement may be executed in counterparts, each of which shall constitute an original, but all of which taken together shall constitute one and the same agreement. This letter agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to conflicts of laws principles which could cause the laws of another jurisdiction to apply. The Company may withhold from the Bonus such federal, state and local income and employment taxes as may be required to be withheld pursuant to any applicable law or regulation. This letter agreement contains the sole and entire agreement between the parties with respect to the subject matter hereof. The parties acknowledge that any statements or representations that may have been made heretofore regarding the terms and matters dealt with in this letter agreement are void and have no effect and that neither party has relied thereon. Your rights to the Bonus may not be assigned, transferred, pledged or otherwise alienated, other than by will or the laws of descent and distribution. Nothing in this letter agreement shall be deemed to entitle you to continued employment with the Company. Any dispute in connection with, arising out of or asserting breach of this letter agreement shall be exclusively resolved by binding arbitration. Such dispute shall be submitted to arbitration in New York, before a panel of three neutral arbitrators in accordance with the Commercial Rules of the American Arbitration Association then in effect, and the determination of the arbitrators resulting from any such submission shall be final and binding upon the parties hereto. Judgment upon any arbitration award may be entered in any court of competent jurisdiction. 2 Kindly sign this letter agreement in the space indicated below at which time this letter agreement shall become a binding agreement between you and the Company, enforceable in accordance with its terms. Metromedia International Group, Inc. By: /S/ Harold F. Pyle, III ------------------------- Name: Harold F. Pyle III Title: Chief Financial Officer Accepted and Agreed to: By: /S/ Bryce Dean Elledge ---------------------- Bryce Dean Elledge 3 EX-99.1 6 a4950452ex99.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 Metromedia International Group Inc. Announces Completion of the Redemption of its Senior Notes and Provides Update on Filing of its 2004 Form 10-K and 2005 Form 10-Q's with the SEC CHARLOTTE, N.C.--(BUSINESS WIRE)--Aug. 8, 2005--Metromedia International Group, Inc. (the "Company") (PINK SHEETS: MTRM) - Common Stock and (PINK SHEETS: MTRMP) - Preferred Stock, the owner of interests in communications and media businesses in the country of Georgia, announced today that the redemption of all of the Company's outstanding $152.0 million 10 1/2% Senior Notes due 2007 (the "Senior Notes") has now been completed. The aggregate redemption price of the Senior Notes, including accrued interest, was approximately $157.7 million. The Company also announced that it has not yet completed restatement activities that the Company undertook as previously disclosed on June 3, 2005 in connection with issuance of its 2004 financial statements. As part of the restatement undertaking, the Company has since identified additional accounting errors that occurred in previously reported audited financial statements that the Company intends to correct as part of the current restatement process. These include, but are not limited to, the Company's conclusion that certain legal entities should have been accounted for following the equity method of accounting as opposed to the consolidation method of accounting. These legal entities are in addition to Telcell Wireless LLC, which was previously disclosed. At present, the Company contemplates that it will file its 2004 Form 10-K with the SEC before the end of August 2005 and file its first quarter and second quarter 2005 quarterly reports on Form 10-Q shortly thereafter. About Metromedia International Group Through its wholly owned subsidiaries, the Company owns interests in communications and media businesses in the country of Georgia. The Company's core businesses includes Magticom, Ltd., the leading mobile telephony operator in Tbilisi, Georgia, and Telecom Georgia, a well-positioned Georgian long distance telephony operator. This news release contains certain forward-looking statements that involve risks and uncertainties, including in particular those regarding the timing of completing its ongoing restatement activities and filing with the SEC its 2004 Form 10-K and first and second quarter2005 Form 10-Q's. Various other factors beyond the Company's control could cause or contribute to such risks and uncertainties. This also includes such factors as are described from time to time in the SEC reports filed by the Company, including the Current Annual Report on Form 10-K for the year ended December 31, 2003, the Company's Form 10-Q for the fiscal quarters ended March 31, 2004, June 30, 2004 and September 30, 2004 and its most recently filed Form 8-K reports (dated October 19, 2004, November 4, 2004, November 16, 2004, November 22, 2004 and December 9, 2004, January 6, 2005, February 9, 2005, February 17, 2005, March 9, 2005, March 23, 2005, April 19, 2005, April 20, 2005, June 7, 2005, June 17, 2005, July 12, 2005, July 18, 2005, July 25, 2005, July 28, 2005 and August 3, 2005). The Company is not under, and expressly disclaims any, obligation to update the information in this news release for any future events. CONTACT: Metromedia International Group, Inc. Ernie Pyle, 704-321-7380 investorrelations@mmgroup.com -----END PRIVACY-ENHANCED MESSAGE-----