EXHIBIT 10.14(d)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "AGREEMENT") is made and entered into as
of June 19, 2002, (the "EFFECTIVE DATE") by and between Cinemark, Inc., a
Delaware corporation (the "COMPANY") and Xxxxxx Xxxxxx (the "EXECUTIVE").
WITNESSETH:
WHEREAS, the Company and the Executive desire to enter into an
employment arrangement and this Agreement to assure the Company of the
continuing and exclusive service of the Executive and to set forth the terms and
conditions of the Executive's employment with the Company.
NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein, the parties agree as follows:
1. Employment.
1.1 Title and Duties. The Company hereby employs the Executive
as Senior Vice President and Chief Financial Officer of the Company. The
Executive's duties, responsibilities and authority shall be consistent with the
Executive's position and shall include serving in a similar capacity with
Cinemark USA, Inc. and such other duties, responsibilities and authority as may
be assigned to the Executive by the Board of Directors of the Company (the
"BOARD"). The Executive shall report directly to the Chief Executive Officer of
the Company.
1.2 Services and Exclusivity of Services. The Company and the
Executive recognize that the services to be rendered by the Executive are of
such a nature as to be peculiarly rendered by the Executive, encompass the
individual ability, managerial skills and business experience of the Executive
and cannot be measured exclusively in terms of hours or services rendered in any
particular period. The Executive agrees to devote Executive's full business time
and to use Executive's best efforts, energy and ability exclusively toward
advancing the business, affairs and interests of the Company, and matters
related thereto.
1.3 Location of Office. The Company shall make available to
the Executive an office and support services in the Dallas/Plano, Texas area.
The Executive's main office shall be at such Dallas/Plano location.
2. Term. The term of this Agreement (the "TERM") shall commence as of
the Effective Date and shall continue for a period of three years thereafter;
provided, however, that at the end of each year, the Term shall be extended for
an additional one-year period unless the Executive's employment with the Company
is terminated in accordance with Section 5. References in this Agreement to the
"balance of the Term" shall mean the period of time remaining on the scheduled
Term of this Agreement after giving effect to the most recent extension of the
Term occurring prior to any termination of this Agreement.
EMPLOYMENT AGREEMENT Page 1
3. Compensation.
3.1 Base Salary. During the Term, the Company will pay to the
Executive a base salary at the rate of $280,875.00 per year, payable in
accordance with the Company's practices in effect from time to time ("BASE
Salary"). Amounts payable shall be reduced by standard withholding and other
authorized deductions. Such Base Salary shall be reviewed during December of
each year during the Term for increase (but not decrease) in the sole discretion
of the Board or such individual, group or committee that the Board may select as
its delegate (which may include the Company's Chief Executive Officer) not less
frequently than annually during the Term. In conducting any such review, the
Board or such delegate shall consider and take into account, among other things,
any change in the Executive's responsibilities, performance of the Executive,
and compensation of other similarly situated executives of the other comparable
companies and other pertinent factors. The Executive's Base Salary shall not be
decreased except upon mutual agreement between the parties.
3.2 Bonuses; Incentive, Savings and Retirement Plans; Welfare
Benefit Plans.
(a) The Executive shall be entitled to participate in
all annual and long-term bonuses and incentive, savings and retirement plans
generally available to other similarly situated executive employees of the
Company. The Executive, and the Executive's family as the case may be, shall be
eligible to participate in and receive all benefits under welfare benefit plans,
practices, programs and policies provided to other similarly situated executive
employees of the Company, including, without limitation, medical, prescription,
dental, disability, salary continuance, employee life, group life, accidental
death and travel accident insurance plans and programs. The Company reserves the
right to modify, suspend or discontinue any and all of its benefits referred to
in this Section 3.2 at any time without recourse by the Executive so long as
such action is taken generally with respect to other similarly situated peer
executives and does not single out the Executive.
(b) For each fiscal year during the Term, commencing
with the fiscal year ended December 31, 2002, Executive shall be entitled to
receive an annual incentive cash bonus (the "ANNUAL BONUS") based upon Company
EBITDA targets established by the Board (or such individual, group or committee
that the Board may select as its delegate) using the criteria set forth on
Schedule 3.2(b) attached hereto. All such annual cash incentive bonus payments
shall be payable within 90 days after the end of the fiscal year during which
the criteria for payment of the Annual Bonus are achieved and shall be reduced
by standard withholding and other authorized deductions.
3.3 Fringe Benefits. The Executive shall be entitled to
receive fringe benefits consistent with the Executive's duties and position, and
in accordance with the benefits provided to other similarly situated executive
employees of the Company. The Company reserves the right to modify, suspend or
discontinue any and all of its fringe benefits referred to in this Section 3.3
at any time without recourse by the Executive so long as such action is taken
generally with respect to other similarly situated peer executives and does not
single out the Executive.
EMPLOYMENT AGREEMENT Page 2
3.4 Expenses. The Executive shall be entitled to reimbursement
for expenses incurred in the furtherance of the business of the Company in
accordance with the Company's practices and procedures, as they may exist from
time to time. The Executive shall keep complete and accurate records of all
expenditures such that the Executive may fully account according to the
Company's practices and procedures.
3.5 Vacation. The Executive shall be entitled to paid
vacations and other absences from work in accordance with the Company's vacation
and absence policy in effect at the time of such vacations or absences.
3.6 Additional Benefits Upon a Change in Control
(a) In the event a Change of Control (defined below)
occurs during the Term, the Executive shall be entitled to receive,
simultaneously with the completion of any event giving rise to a Change in
Control, a cash lump sum amount equal to:
(i) Executive's Accrued Employment
Entitlements (in accordance with the terms of the benefit plans providing such
benefits, where applicable); plus
(ii) Executive's Base Salary for the balance
of the Term, plus an amount equal to the most recent Annual Bonus received by
the Executive prior to the year in which there is a Change of Control multiplied
by the number of years remaining for the balance of the Term (determined without
regard to any performance goals); plus
(iii) the present value (as determined by a
nationally recognized employee benefits consulting firm agreed to by Executive
and the Company) of the premiums payable by the Company or the Executive under
health, dental, life insurance, disability and accident insurance plans or
programs covering Executive for the balance of the Term.
(b) In the event of a change of control (as defined
in the Company's Long Term Incentive Plan or similar plan or agreement adopted
by the Company hereafter pursuant to which stock-based, equity-based or
performance compensation is granted to the Executive), any such outstanding
stock-based, equity-based or performance compensation awards shall become fully
vested and/or exercisable in accordance with the terms of the plan and agreement
pursuant to which such compensation award was granted.
(c) Notwithstanding any of the provisions of this
Agreement, the amount of all payments to be made pursuant to this Section 3.6
after a Change of Control shall not exceed one dollar ($1.00) less than that
amount that would cause any such payment to be deemed a "parachute payment" as
defined in Section 280G of the Internal Revenue Code of 1986, as amended (the
"CODE"), and as Section 280G of the Code is then in effect at the time of such
payment.
(d) "CHANGE OF CONTROL" shall mean the occurrence of
any of the following:
(i) the acquisition by any person (including
any syndicate or group deemed to be a "person" under Section 13(d)(3) or
14(d)(2) of the United States Securities
EMPLOYMENT AGREEMENT Page 3
Exchange Act of 1934, as amended (the "EXCHANGE ACT"), or any successor
provision to either of the foregoing, of "beneficial ownership" directly or
indirectly, of shares of capital stock of the Company entitling such person to
exercise 50% or more of the total voting power of all "Voting Shares" of the
Company;
(ii) the consummation of any merger or
consolidation of the Company or any sale or other disposition of all or
substantially all of the Company's assets, if the stockholders of the Company
immediately before such transaction own directly or indirectly, immediately
after consummation of such transaction, equity securities (other than options
and other rights to acquire equity securities) possessing less than 50% of the
voting power of the surviving or acquiring entity; or
(iii) the stockholders of the Company
approve a plan of complete liquidation or dissolution of the Company.
Notwithstanding the foregoing, unless otherwise determined by the Company, no
Change in Control of the Company shall be deemed to have occurred if (x) the
Executive is a member of a group which first announces a proposal which, if
successful, would result in a Change of Control, which proposal (including any
modifications thereof) is ultimately successful, (y) the Executive acquires a
one percent or more equity interest in the entity which ultimately acquires the
Company or all or substantially all of the Company's assets pursuant to the
transaction described in (x) of this paragraph or (z) the event otherwise
constituting a Change of Control is approved by the stockholders of the Company
prior to the occurrence of a Change of Control and Executive's employment is
continued by the Company or its successor under this Agreement for the balance
of the Term.
"BENEFICIAL OWNERSHIP" shall be determined in accordance with
Rule 13d-3 promulgated under the Exchange Act, except that a person shall be
deemed to be the "beneficial owner" of all securities that such person has the
right to acquire, whether such right is excisable immediately or only after the
passage of time.
"VOTING SHARE" means all outstanding shares of any class or
classes (however designated) of capital stock of the Company entitled to vote
generally in the election of the Board of Directors of the Company.
3.7 Payment of Compensation and Benefits. Executive
acknowledges and agrees that all payments required to be paid to Executive and
benefits to be provided to Executive may be paid or provided by Cinemark USA,
Inc. or its successor.
4. Confidential Information.
4.1 General. Executive acknowledges that during employment by
and as a result of a relationship with the Company and its affiliates, Executive
has obtained and will obtain knowledge of, and has been given and will be given
access to, information, including, but not limited to, information regarding the
business, operations, products, proposed products, production methods,
processes, customer lists, advertising, marketing and promotional plans and
materials, price lists, pricing policies, financial information and other trade
secrets, confidential
EMPLOYMENT AGREEMENT Page 4
information and proprietary material of the Company and its affiliates or
designated as being confidential by the Company or its affiliates which is not
generally known to non-Company personnel, including information and material
originated, discovered or developed in whole or in part by Executive
(collectively referred to herein as "CONFIDENTIAL INFORMATION"). Executive
agrees that during the Term of this Agreement and, to the fullest extent
permitted by law, thereafter, Executive will, in a fiduciary capacity for the
benefit of the Company and its affiliates, hold all Confidential Information
strictly in confidence and will not directly or indirectly reveal, report,
disclose, publish or transfer any of such Confidential Information to any
person, firm or other entity, or utilize any of the Confidential Information for
any purpose, except in furtherance of Executive's employment under this
Agreement. Executive acknowledges that the Company and its affiliates are
providing Executive additional Confidential Information that Executive was not
given prior to execution of this Agreement, as further consideration to
Executive for executing this Agreement, including the promises and agreements
made by Executive in this Sections 4.1, 4.4 and 4.5 of this Agreement.
4.2 Proprietary Interest. All inventions, designs,
improvements, patents, copyrights and discoveries conceived by Executive during
Executive's employment by the Company or its affiliates that are useful in or
directly or indirectly related to the business of the Company or to any
experimental work carried on by the Company or its affiliates, shall be the
property of the Company. Executive will promptly and fully disclose to the
Company or its affiliates all such inventions, designs, improvements, patents,
copyrights and discoveries (whether developed individually or with other
persons) and shall take all steps necessary and reasonably required to assure
the Company's or such affiliate's ownership thereof and to assist the Company
and its affiliates in protecting or defending the Company's or such affiliate's
proprietary rights therein.
4.3 Return of Materials. Executive expressly acknowledges that
all lists, books, records and other Confidential Information of the Company and
its affiliates obtained in connection with the Company's business is the
exclusive property of the Company or its affiliates and that upon the
termination of Executive's employment by the Company or its affiliates,
Executive will immediately surrender and return to the Company or its affiliates
all such items and all other property belonging to the Company or its affiliates
then in the possession of Executive, and Executive shall not make or retain any
copies thereof.
4.4 Nonsolicitation of Employees, Customers and Suppliers.
Executive covenants that, during Executive's employment with the Company or its
affiliates and for a period of one (1) year from the date of termination of
Executive's employment with the Company or its affiliates, Executive will not
(i) directly or indirectly induce or attempt to induce any employee of the
Company or its affiliates to terminate Executive's employment or (ii) without
prior written consent of the Company or its affiliates, offer employment either
on behalf of himself or on behalf of any other individual or entity to any
employee of the Company or its affiliates or to any terminated employee of the
Company or its affiliates. Executive further covenants that during Executive's
employment with the Company or its affiliates and for a period of one (1) year
from the date of termination of Executive's employment with the Company or its
affiliates, Executive will not directly or indirectly attempt to induce any
customer or supplier of the Company or its affiliates that Executive worked with
during
EMPLOYMENT AGREEMENT Page 5
Executive's employment by the Company or its affiliates to cease being a
customer or supplier of the Company or its affiliates.
4.5 Property of the Company. Executive acknowledges that from
time to time in the course of providing services pursuant to this Agreement
Executive shall have the opportunity to inspect and use certain property, both
tangible and intangible, of the Company and its affiliates and Executive hereby
agrees that such property shall remain the exclusive property of the Company and
its affiliates, and Executive shall have no right or proprietary interest in
such property, whether tangible or intangible, including, without limitation,
Executive's customer and supplier lists, contract forms, books of account,
computer programs and similar property.
4.6 Injunctive Relief. Executive agrees and acknowledges that
the restrictions contained in this Section 4 are reasonable in scope and
duration and are necessary to protect the business interests and Confidential
Information of the Company and its affiliates after the Effective Date of this
Agreement. If any provision of this Section 4 as applied to any party or to any
circumstance is adjudged by a court or arbitrator to be invalid or
unenforceable, the same will in no way affect any other circumstance or the
validity or enforceability of this Agreement. If any such provision in this
Section 4, or any part thereof, is held to be unenforceable because of the
duration of such provision or the area covered thereby, the parties agree that
the court or arbitrator making such determination shall have the power to reduce
the duration and/or area of such provision, and/or to delete specific words or
phrases, and in its reduced form, such provision shall then be enforceable and
shall be enforced. The parties agree and acknowledge that the breach of this
Section 4 will cause irreparable damage to the Company, and upon breach of any
provision of this Section 4, the Company shall be entitled to injunctive relief,
specific performance, or other equitable relief; provided, however, that this
shall in no way limit any other remedies which the Company may have (including,
without limitations, the right to seek monetary damages). Executive acknowledges
and agrees that Executive will receive substantial, valuable consideration from
the Company for the covenants contained in this Section 4, including (i)
Confidential Information, (ii) specialized training and/or (iii) compensation
and other benefits.
5. Termination.
5.1 Termination Prior to Expiration of Term. The Executive's
employment, and Executive's rights under this Agreement, may be terminated prior
to the expiration of the Term of this Agreement only as provided in this Section
5.
5.2 Death or Disability.
(a) The Company may terminate the Executive's
employment hereunder due to death or Disability (as defined below). If the
Executive's employment hereunder is terminated as a result of death or
Disability, the Executive (or the Executive's estate or personal representative
in the event of death) shall be entitled to receive (i) all Base Salary due to
the Executive through the date of termination, (ii) a pro-rata portion of the
Annual Bonus, if any, payable for the period of the Executive's employment
during the fiscal year of the Company prior to Executive's termination of
employment, (iii) any previously vested stock options or
EMPLOYMENT AGREEMENT Page 6
benefits, such as retirement benefits in accordance with the terms of the plan
or agreement pursuant to which such benefits were granted to Executive (items
(i) through (iii) above collectively referred to as "ACCRUED EMPLOYMENT
ENTITLEMENTS"), (iv) the Executive's full Base Salary until the expiration of
six months from the date on which the Executive was first unable substantially
to perform Executive's duties hereunder and, as of the last day of such
six-month period, shall be entitled to receive a lump sum payment equal to an
additional six months of Base Salary and (v) any benefits payable to the
Executive or Executive's beneficiaries, as applicable, in accordance with the
terms of the applicable benefit plan. At the Company's expense, the Executive
and/or the Executive's dependents shall be entitled to continue to participate
in the Company's welfare benefit plans and programs on the same terms as
similarly situated active employees for a period of twelve months from the date
the Executive was first unable to substantially perform the Executive's duties
hereunder. The Executive and/or the Executive's dependents shall thereafter be
entitled to any continuation of such benefits provided under such benefit plans
or by applicable law. Following the death or Disability of the Executive, the
Executive's participation under any stock option or other incentive compensation
plan (other than bonuses included in the definition of Accrued Employment
Entitlements) shall be governed by the terms of such plans.
(b) "DISABILITY" shall mean a total and permanent
physical or mental impairment that (a) renders the Executive unable to perform
the essential functions of the Executive's position, even with reasonable
accommodation that does not impose an undue hardship on the Company, (b) has
existed for sixty days, and (c) in the opinion of a physician mutually agreed
upon by the Company and the Executive (which agreement shall not be unreasonably
withheld) will last for a duration of at least 180 days. The Executive's
Disability shall be determined by the Company, in good faith, based upon
information supplied by the Executive and the physician mutually agreed upon by
the Company and the Executive.
5.3 Termination by the Company for Cause or by the Executive
because of a Voluntary Termination.
(a) The Executive's employment hereunder may be
terminated by the Company for Cause (as hereinafter defined) or by the Executive
under a Voluntary Termination (as hereinafter defined). If the Executive's
employment hereunder is terminated under this Section 5.3, the Executive shall
be entitled to receive the Accrued Employment Entitlements. Furthermore, the
Company shall honor any rights previously vested in the Executive under a stock
option or similar incentive compensation plan or program in accordance with the
terms of such plan or program. Except as specifically set forth in this Section
5.3, the Company shall have no further obligations to the Executive following a
termination for Cause, or a Voluntary Termination.
(b) "CAUSE" shall mean (i) the Executive's conviction
of, or plea of guilty to, a felony; (ii) the commission of fraud, embezzlement
or theft by the Executive in connection with the Executive's duties; (iii) a
material breach of this Agreement by the Executive and/or the Executive's gross
neglect of Executive's duties hereunder determined by the Board pursuant to
Section 5.3(d) below; or (iv) the intentional wrongful damage to property of the
Company or its affiliates.
EMPLOYMENT AGREEMENT Page 7
(c) "VOLUNTARY TERMINATION" shall mean a termination
of employment by the Executive on Executive's own initiative other than (i) a
termination due to Disability or (ii) a termination for Good Reason.
(d) The Company may not terminate the Executive's
employment for Cause pursuant to Section 5.3(b)(iii) unless:
(i) The Company provides the Executive with
written notice (the "NOTICE OF TERMINATION") of its intent to terminate the
Executive's employment for Cause pursuant to Section 5.3(b)(iii), including a
detailed description of the specific reasons which form the basis for such
termination as well as the effective date of such termination of employment
(which effective date may be the date of such Notice of Termination);
(ii) for a period of not less than thirty
(30) days after the date Notice of Termination is provided, the Executive shall
have the opportunity to appear before the Board with or without legal
representation, at the Executive's election, to present arguments and evidence
on Executive's own behalf; and
(iii) following the presentation to the
Board as provided in (ii) above or the Executive's failure to appear before the
Board at a date and time specified in the Notice of Termination (which date
shall not be less than ten (10) days after the date the Notice of Termination is
provided), the termination for Cause pursuant to Section 5.3(b)(iii) shall
become effective as of the effective date specified in the Notice of Termination
if (x) the Board, by the affirmative vote of two-thirds of its members
(excluding the Executive if Executive is a member of the Board, and any other
member of the Board reasonably believed by the Board to be involved in the
events leading the Board to terminate the Executive's employment for Cause
pursuant to Section 5.3(b)(iii)), determines that the actions or inactions of
the Executive specified in the Notice of Termination occurred, that such actions
or inactions constitute Cause pursuant to Section 5.3(b)(iii), and that the
Executive's employment should accordingly be terminated for Cause pursuant to
Section 5.3(b)(iii); and (y) the Board provides the Executive with a written
determination (a "CONFIRMATION OF TERMINATION FOR CAUSE") setting forth in
specific detail the basis of such termination of employment. Unless the Company
reasonably establishes both (i) its compliance with the substantive and
procedural requirements of this Section 5.3(d) prior to confirmation of a
termination of the Executive's employment for Cause pursuant to Section
5.3(b)(iii), and (ii) that the Executive's action or inaction specified in the
Notice of Termination for Cause pursuant to Section 5.3(b)(iii) did occur and
constituted Cause pursuant to Section 5.3(b)(iii), any termination of the
Executive's employment with the Company shall be deemed a Termination without
Cause pursuant to Section 5.3(b)(iii) for all purposes of this Agreement.
5.4 Termination by the Company without Cause or by the
Executive for Good Reason. The Company may terminate the Executive's employment
hereunder without Cause, and the Executive shall be permitted to terminate
Executive's employment hereunder for Good Reason (as hereinafter defined). If
the Company terminates the Executive's employment hereunder without Cause, other
than due to death or Disability, or if the Executive effects a termination for
Good Reason, the Executive shall be entitled to receive the payments and
benefits set forth in this Section 5.4.
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(a) The Executive shall be entitled to receive,
within ten business days following the effective date of such termination of
employment, a lump sum in cash equal to:
(i) the Executive's Accrued Employment
Entitlements (in accordance with the terms of the benefit plans providing such
benefits, where applicable); plus
(ii) Executive's annual Base Salary in
effect as of the date of such termination, plus an amount equal to the most
recent Annual Bonus received by the Executive prior to the date of such
termination (determined without regard to any performance goals), multiplied by
the number of years remaining for the balance of the Term; plus
(iii) at the Executive's option, either (x)
the present value (as determined by a nationally recognized employee benefits
consulting or public accounting firm agreed to by the Executive and the Company)
for one year of the Company's and the Executive's premiums payable under health,
life insurance, disability and accident insurance plans or programs covering the
Executive; or (y) Executive and Executive's dependents shall be entitled to
continue to participate in the Company's welfare benefit plans and insurance
programs on the same terms as similarly situated active employees for a period
of twelve months from the Termination Date. Following the expiration of such
twelve month period, Executive and/or Executive's dependents shall be entitled
to any continuation of benefits as are provided under such benefit plans by the
Company or as are required to be provided in accordance with applicable law.
(b) Any outstanding stock-based, equity-based, stock
option or performance compensation awards granted to the Executive shall become
fully vested and/or exercisable as of the effective date of such termination of
employment and shall remain exercisable in accordance with the terms contained
in the plan and agreement pursuant to which such compensation awards were
granted.
(c) For purposes of the calculation of the
Executive's benefit under any supplemental defined benefit plan in which the
Executive participates, the Executive shall be credited with additional years of
service equal to the balance of the Term hereunder.
(d) "GOOD REASON" means and shall be deemed to exist
if, without the prior written consent of the Executive, (i) the Executive
suffers a significant reduction in duties, responsibilities or effective
authority associated with Executive's titles and positions as set forth and
described in this Agreement or is assigned any duties or responsibilities
inconsistent in any material respect therewith; (ii) the Company fails to pay
Executive any amounts or provide any material benefits required to be paid or
provided under this Agreement; (iii) the Company changes the Executive's title
or reporting requirements; or (iv) the Executive's compensation (other than Base
Salary, which is governed by Section 3.2) or benefits provided for hereunder are
decreased other than as part of reductions affecting the Company's executives
generally. No termination by the Executive shall be for "Good Reason" unless
notice of such termination setting forth in particular the event(s) constituting
Good Reason is delivered to the Company within ninety days following the date on
which the event constituting Good Reason occurs and the Company fails to cure or
remedy the event(s) identified in the notice within thirty (30) days after
receipt of such notice.
EMPLOYMENT AGREEMENT Page 9
5.5 General Release. Except where the termination is the
result of Executive's death and notwithstanding the foregoing, no payment shall
be made by the Company to Executive under this Section 5 unless otherwise
required by state, local or federal law, until Executive executes a general
release of all claims in a form reasonably approved by the Company.
6. Arbitration.
6.1 General. Any dispute, controversy or claim arising out of
or relating to this Agreement, the breach hereof or the coverage or
enforceability of this arbitration provision shall be settled by arbitration in
Dallas, Texas (or such other location as the Company and the Executive may
mutually agree), conducted in accordance with the Commercial Arbitration Rules
of the American Arbitration Association, as such rules are in effect in
Dallas/Fort Worth, Texas on the date of delivery of demand for arbitration. The
arbitration of any such issue, including the determination of the amount of any
damages suffered by either party hereto by reason of the acts or omissions of
the other, shall be to the exclusion of any court of law. Notwithstanding the
foregoing, either party hereto may seek any provisional remedy in a court,
including but not limited to an action for injunctive relief or attachment,
without waiving the right to arbitration.
6.2 Procedure.
(a) Either party may demand such arbitration by
giving notice of that demand to the other party. The notice shall state (x) the
matter in controversy, and (y) the name of the arbitrator selected by the party
giving the notice.
(b) Not more than fifteen days after such notice is
given, the other party shall give notice to the party who demanded arbitration
of the name of the arbitrator selected by the other party. If the other party
shall fail to timely give such notice, the arbitrator that the other party was
entitled to select shall be named by the Arbitration Committee of the American
Arbitration Association. Not more than fifteen days after the second arbitrator
is so named; the two arbitrators shall select a third arbitrator. If the two
arbitrators shall fail to timely select a third arbitrator, the third arbitrator
shall be named by the Arbitration Committee of the American Arbitration
Association.
(c) The dispute shall be arbitrated at a hearing that
shall be concluded within ten days immediately following the date the dispute is
submitted to arbitration unless a majority of the arbitrators shall elect to
extend the period of arbitration. Any award made by a majority of the
arbitrators (x) shall be made within ten days following the conclusion of the
arbitration hearing, (y) shall be conclusive and binding on the parties, and (z)
may be made the subject of a judgment of any court having jurisdiction.
(d) The Company agrees that it will pay Executive's
salary and benefits through conclusion of the arbitration.
(e) Any amount to which Executive is entitled under
this Agreement (including any disputed amount) which is not paid when due shall
bear interest from the date due but not paid at a rate equal to the lesser of
eighteen percent (18%) per annum or the maximum lawful rate.
EMPLOYMENT AGREEMENT Page 10
6.3 Costs and Expenses. All administrative and arbitration
fees, costs and expenses shall be borne by the Company.
7. Non-Assignment. This Agreement shall not be assignable nor the
duties hereunder delegable by the Executive. None of the payments hereunder may
be encumbered or in any way anticipated by Executive (or Executive's estate or
personal representative). The Company shall not assign this Agreement nor shall
it transfer all or any substantial part of its assets without first obtaining in
conjunction with such transfer the express assumption of the obligations hereof
by the assignee or transferee.
8. Remedies. The Executive acknowledges that the services the Executive
is to render under this Agreement are of a unique and special nature, the loss
of which cannot reasonably or adequately be compensated for in monetary damages,
and that irreparable injury and damage will result to the Company in the event
of any default or breach of this Agreement by the Executive. Accordingly, the
Executive agrees that the Company will, in addition to any other remedies
available to it at law, in equity or, without limitation, otherwise, be entitled
to injunctive relief and/or specific performance to enforce the terms, or
prevent or remedy the violation, of any provisions of this Agreement. This
provision shall not constitute a waiver by the Company of any rights to damages
or other remedies which it may have pursuant to this Agreement or otherwise.
9. Survival. The provisions of Sections 4, 5, 6 and 8 shall survive the
expiration or earlier termination of this Agreement.
10. Taxes. All payments to the Executive under this Agreement shall be
reduced by all applicable withholding required by Federal, state or local law.
11. No Obligation to Mitigate; No Rights of Offset.
11.1 The Executive shall not be required to mitigate the
amount of any payment or other benefit required to be paid to the Executive
pursuant to this Agreement, whether by seeking other employment or otherwise,
nor shall the amount of any such payment or other benefit be reduced on account
of any compensation earned by the Executive as a result of employment by another
person.
11.2 The Company's obligation to make the payments provided
for in this Agreement and otherwise to perform its obligations hereunder shall
not be affected by any set-off, counterclaim, recoupment, defense or other
claim, right or action which the Company may have against the Executive or
others.
12. Notices. Any notice or other communications relating to this
Agreement shall be in writing and delivered personally or mailed by certified
mail, return receipt requested, or sent by overnight courier, to the party
concerned at the address set forth below:
If to Company: 0000 Xxxxxx Xxxxxxx
Xxxxx 000
Attn: Chief Executive Officer
EMPLOYMENT AGREEMENT Page 11
If to the Executive: At the Executive's residence address as
maintained by the Company in the regular
course of its business for payroll purposes.
Either party may change the address for the giving of notices
at any time by notice given to the other party under the provisions of this
Section 12. If notice is given by personal delivery or overnight courier, said
notice shall be conclusively deemed given at the time of such delivery or upon
receipt of such couriered notice. If notice is given by mail, such notice shall
be conclusively deemed given upon deposit thereof in the United States mail.
13. Entire Agreement. This Agreement, constitutes the entire agreement
between the parties and supersedes all prior written and oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof. Without limiting the generality of the foregoing
sentence, this Agreement supersedes any prior agreement, oral or written. This
Agreement may not be changed orally, but only by an agreement in writing signed
by both parties.
14. Counterparts. This Agreement may be executed in counterparts, each
of which shall be an original, but all of which together shall constitute one
agreement.
15. Construction. This Agreement shall be governed under and construed
in accordance with the laws of the State of Texas, without regard to the
principles of conflicts of laws. The paragraph headings and captions contained
herein are for reference purposes and convenience only and shall not in any way
affect the meaning or interpretation of this Agreement. It is intended by the
parties that this Agreement be interpreted in accordance with its fair and
simple meaning, not for or against either party, and neither party shall be
deemed to be the drafter of this Agreement.
16. Severability. If any portion or provision of this Agreement is
deter-mined by arbitration or by a court of competent jurisdiction to be
invalid, illegal or unenforceable, the remaining portions or provisions hereof
shall not be affected. The covenants in this Agreement are severable and
separate, and the unenforceability of any specific covenant shall not affect the
enforceability of any other covenant. Moreover, in the event any court of
competent jurisdiction shall determine that the scope, time or territorial
restrictions set forth are unreasonable, then it is the intention of the parties
that such restrictions be enforced to the fullest extent which the court deems
reasonable, and this Agreement shall thereby be reformed.
17. Binding Effect. The rights and obligations of the parties under
this Agreement shall be binding upon and inure to the benefit of the permitted
successors, assigns, heirs, administrators, executors and personal
representatives of the parties.
EMPLOYMENT AGREEMENT Page 12
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and in the year first written above.
COMPANY:
CINEMARK, INC.
By: /s/ XXXX XXXXX
-----------------------------------------
Name: Xxxx Xxxxx
---------------------------------------
Title: President and Chief Operating Officer
--------------------------------------
EXECUTIVE:
/s/ XXXXXX XXXXXX
---------------------------------------------
Xxxxxx Xxxxxx
EMPLOYMENT AGREEMENT Page 13
Schedule 3.2(b)
Executive will be entitled to participate in the Company's current
bonus program in effect or as may be amended from time to time during the Term
of this Agreement. Pursuant to the bonus plan as currently in effect as of the
date of this Agreement, Executive is entitled to an Annual Bonus determined as
follows. During December of each fiscal year, the Board (or such individual,
group or committee that the Board may select as its delegate), shall set a
target EBITDA for the Company on a consolidated basis (the "TARGET") for the
next fiscal year. For the 2002 fiscal year the Target is $186.5 million. The
Executive shall receive a cash bonus equal to (i) a minimum of 20% of
Executive's annual Base Salary if the EBITDA of the Company is at least 95% of
the Target, (ii) 40% of Executive's annual Base Salary if the EBITDA of the
Company is equal to the Target, (iii) a maximum of 60% of Executive's annual
Base Salary if the EBITDA of the Company is at least 105% of the Target. The
percentage of the Executive's annual Base Salary shall be adjusted
proportionately upward or downward, as applicable, from the established
percentages if the EBITDA of the Company falls between the threshold percentages
specified above. If EBITDA for any fiscal year is less than 95% of the Target,
no Annual Bonus will be paid.
The following is an example by way of illustration:
CALCULATION OF 2002 BONUS FOR 40% TARGET POOL
If the Company achieves an EBITDA of $190 million (before adjusting
down for the bonus accrual) which would place the Company at 101.88% of the
EBITDA Target of $186.5 million; at 101.88%, the Annual Bonus would be 47.52%.
Bonus % 20.00 <--------------------> 40.0 <--------------------> 60.00
EBITDA $177.18 M <------------> $186.5 M <-------------> $195.83 M
$190 M = 47.52%
EMPLOYMENT AGREEMENT Page 14
