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EXHIBIT 10.51
CONFIDENTIAL SETTLEMENT
TERMINATION AND CONSULTING AGREEMENT
AND MUTUAL GENERAL RELEASE
This Termination and Consulting Agreement and Mutual General Release
(this "Agreement") is entered into as of the 17th day of April, 1998, by and
between Xxxxxxx X. Xxxxxx, an individual ("Yulish"), JEM Entertainment, Inc., a
California corporation ("JEM"), and Xxxx XxXxxxxx, an individual ("Executive,"
and, together with JEM, "XxXxxxxx") on the one hand, and The Xxxxxx
Entertainment Company (the "Company") on the other, with reference to the
following facts:
A. WHEREAS, on April 17, 1995, Yulish entered into an amended employment
agreement with Company (the "Yulish Employment Agreement"); and
B. WHEREAS, Company has entered into a series of Letter Agreements with
JEM, among others, those dated September 10, 1997 and March 5, 1998 for the
services of Executive (collectively, the "XxXxxxxx Agreements"). (The Yulish
Employment Agreement and the XxXxxxxx Agreements are collectively the
"Xxxxxx-XxXxxxxx Agreements.") The XxXxxxxx Agreements contemplate a continued
profit participation or interest by JEM and/or Executive in certain
entertainment projects developed or to be developed by Executive and/or the
Company; and
C. WHEREAS, Yulish and Executive are husband and wife; and
D. WHEREAS, the Yulish Employment Agreement terminated on April 17, 1998
and the XxXxxxxx Agreements were terminated in April 1998; and
E. WHEREAS, the parties hereto desire to resolve all matters with
respect to the Xxxxxx-XxXxxxxx Agreements, and all other matters covered herein.
F. NOW, THEREFORE, the parties by this Agreement wish, among other
things, (a) to terminate and extinguish any and all obligations of the parties
under or in any way related to the Xxxxxx-XxXxxxxx Agreements and render the
Xxxxxx-XxXxxxxx Agreements of no further force or effect except as provided
herein, (b) to confirm the termination of the Yulish Employment Agreement, and
(c) to release any and all other claims, rights or obligations (whether past,
present or future) of whatever kind or nature by, between or among the parties
hereto through the date of this Agreement, except as set forth herein.
In consideration of the agreements herein contained, the parties hereto
agree as follows:
1. CLOSING PLACE AND DATE. The parties hereto contemplate the
execution of this Agreement as soon as practicable on the "Closing Date." The
parties intend the effective date of this Agreement to be as of April 17, 1998.
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2. PAYMENTS TO YULISH AND XXXXXXXX.
(a) In consideration of Yulish's performance of the
Consulting Services (as hereinafter defined) and for the
release of the Company's obligations under the
Xxxxxx-XxXxxxxx Agreements, upon the execution of this
Agreement the Company shall (i) pay to JEM Seventy-Five
Thousand Dollars ($75,000) and (ii) reimburse
outstanding business expenses incurred by Yulish and
Executive on behalf of the Company through the
termination date of the Yulish Employment Agreement and
XxXxxxxx Agreements, respectively, to the extent such
expenses are properly documented on the expense reports
of Yulish and Executive.
(b) The Company shall pay to Yulish One Hundred Dollars
($100.00) per hour for services requested and performed
during the Consulting Period (as hereinafter defined).
Time that Yulish spends providing Consulting Services to
the Company shall be aggregated on a daily basis and
paid in hourly increments. Payment shall be made every
two weeks in accordance with the Company's customary
practices for time submitted at least 48 hours prior to
the payment date.
(c) The Company shall pay to Yulish $14,218 on May 1, 1998,
less applicable withholding, as compensation for all
accrued vacation through April 17, 1998.
Yulish and XxXxxxxx shall be exclusively liable for the payment of any
federal and state income and the employee share of any employment taxes which
may be due as the result of the payments to be made by the Company hereunder,
and shall indemnify and hold the Company harmless from any failure by them to
pay such taxes.
3. XXXXXX-XXXXXXXX AGREEMENTS. The Xxxxxx-XxXxxxxx Agreements are
terminated as of April 17, 1998 and are of no further force or effect. Except as
set forth below, XxXxxxxx further agrees and hereby releases any and all claims,
profit participations, rights of authors or creators, rights to fees or credits,
and any and all other rights which may have existed with respect to the various
entertainment projects covered by the XxXxxxxx Agreements, all of which shall be
the sole and exclusive property of the Company; provided, however, that the
Company releases any rights it may have had in the following projects: (i) Space
Cadets, (ii) Braveheart and (iii) Beany and Xxxxx. XxXxxxxx further agrees to
execute and acknowledge such further instruments and agreements as may be
necessary to more fully vest in the Company the rights referred to herein and
the release of any such claims by XxXxxxxx.
4. CONSULTING PERIOD. During the period between April 17, 1998
through October 17, 1998 (the "Consulting Period"), Yulish shall be available
for up to 5 hours (10 hours through May 1, 1998) per week (in one hour minimums)
to consult with the Company and its advisors on such matters as the Company may
reasonably request (the "Consulting Services"). The Company shall provide Yulish
with reasonable advance telephonic notice of its needs for his
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services. (The Company is not required to request a minimum level of consulting
services.) Yulish agrees and acknowledges that, during the Consulting Period and
with respect to the Consulting Services, he is and shall at all times be acting
as an independent contractor and not an employee of Company. Yulish agrees to
comply with all of the reasonable and customary personnel policies of Company
not inconsistent herewith. The Consulting Services shall be generally performed
at the principal offices of Company, in Century City, California, or by
telephonic consultation. In addition, the Consulting Services may be performed
by Yulish from time to time on a temporary travel basis (consistent with the
Company's past practice and upon 72 hours' advance notice) at such other
locations as Company shall reasonably request consistent with its reasonable
business needs. (Yulish may xxxx for travel time.) Yulish agrees to perform the
Consulting Services in a competent and professional manner. Yulish shall report
to the Chief Financial Officer of the Company. Yulish agrees that he will be
generally available during the six-month period ending October 17, 1998, and
will coordinate with the Chief Financial Officer of the Company for mutually
convenient times to be available.
5. STOCK OPTIONS. Yulish acknowledges that but for the provisions
of this Agreement, an option to purchase 16,666 shares of the Company's Common
Stock (the "Option") granted to him under the Company's 1994 Stock Option Plan
which was scheduled to vest on April 25, 1998 would not vest due to the
termination of the Yulish Employment Agreement prior to such date. The Company
has agreed that for so long as Yulish continues to be available to perform the
Consulting Services through October 17, 1998, Yulish shall continue to be
eligible for vesting and the continued exercise of such Option and all other
options in his name. Furthermore, the Company agrees that the stock option
floor, i.e., the requirement that the shares of the Company's Common Stock trade
at in excess of $12.00 for a period of fifteen (15) days before exercise, is
deleted from the Option, and the Option, which will fully vest on April 25, 1998
in accordance with its terms, may be exercised by Yulish in accordance with its
terms.
6. EXPENSE REIMBURSEMENT. Upon presentation to Company of
customary documentation, Yulish will be entitled to reimbursement of his
reasonable and customary business expenses incurred on behalf of Company or
Company's affiliates. The Company will advance significant travel costs required
during the Consulting Period.
7. OTHER PROVISIONS. Yulish shall be entitled to COBRA benefits
commencing as of April 17, 1998. The Company shall use its best efforts to amend
its profit sharing plan to provide for the distribution to Yulish of any amounts
therein vested in Yulish's name. Yulish agrees to assume the lease of the
Company car currently used by him a Mercedes S320 and to indemnify and hold the
Company harmless from all costs and expenses incurred with respect to such lease
and such automobile. Yulish agrees to use his best efforts to have the lease
assigned to him and placed in his name and, lacking such assignment by May 5,
1998, to provide the Company with evidence of insurance showing that the Company
is an additional named insured on the leased automobile. Yulish agrees to
provide to the Company, by May 1, 1998, a list of all computers and related
equipment, fax machines, television and audio visual equipment, telephones and
other assets of the Company which are in his possession and the Company and
Yulish shall either agree on a sale price for Yulish to buy such equipment, or
Yulish shall return all of such equipment to the Company on or before May 5,
1998. Yulish and
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XxXxxxxx agree to return to Company all of its proprietary documents, files, and
business information and confirm to the Company that they have destroyed all
Company credit cards, parking cards and office keys.
8. CONFIDENTIALITY. Yulish and XxXxxxxx both agree that their
services to the Company have brought them into close contact with many
confidential affairs of Company and its affiliates, including information about
costs, profits, markets, sales, products, key personnel and other business
affairs and methods and other information not readily available to the public,
and plans for future development. In recognition of the foregoing, Yulish and
XxXxxxxx covenant and agree to keep secret and not use for their benefit all
material confidential matters of Company and its affiliates which are not
otherwise in the public domain and will not disclose them to anyone outside of
Company or its affiliates, and will not use such information in any manner
except on behalf of the Company. Yulish and XxXxxxxx acknowledge that their
breach of paragraph 8 of this agreement will cause irreparable damage to Company
for which legal remedies will be inadequate and agree that, in the event of such
breach, Company will have the right to seek and obtain (in addition to any
available legal remedies) injunctive and other equitable relief from a court of
competent jurisdiction to prevent any further or continued breach of this
paragraph.
9. ALLEGED BREACHES AND CURE. The Company may seek reimbursement
from Yulish and XxXxxxxx of amounts paid pursuant to Section 2 only for the
material breach of any covenant, condition, agreement or term of this Agreement,
and only if Company shall have given written notice to Yulish and XxXxxxxx
specifying the claimed cause or breach and, provided such breach is curable,
Yulish and XxXxxxxx fails to correct the claimed breach or fails to alter the
objectional pattern of conduct specified in the applicable written notice as
soon as practical thereafter but no later than five (5) days after receipt of
the applicable notice. However, in no event shall a breach of the provisions of
Section 8 be subject to cure.
10. MUTUAL GENERAL RELEASES AND WAIVER OF CIVIL CODE SECTION
1542. Yulish and XxXxxxxx on the one hand, and Company, on the other, on behalf
of themselves and their respective predecessors, successors and assigns and
their respective officers, directors, employees, representatives, and
shareholders do hereby remise, release and forever discharge the other and their
respective predecessors, successors and assigns and, in the case of Yulish and
XxXxxxxx, release hereunder the officers, directors, shareholders, agents,
employees, representatives, attorneys of the Company, and of all affiliated
parent or subsidiary corporations or divisions and each of them (the "Related
Parties"), of and from any and all claims, rights, debts, liabilities, demands,
obligations, promises, acts, agreements, costs, expenses (all of the foregoing
being referred to collectively as the "Claims and Expenses") (including, but not
limited to, unknown Claims and Expenses through and including the date hereof
including, without limitation, any and all Claims and Expenses in any way based
on, arising out of or related to the Xxxxxx-XxXxxxxx Agreements or Yulish's or
XxXxxxxx'x employment with the Company) as well as any claim not set forth
herein for severance pay, bonus, sick leave, holiday pay, vacation pay, life
insurance, health and medical insurance or any other fringe benefit, workers'
compensation or disability under Title VII of the Civil Rights Act of 1964, the
Americans with Disabilities Act, or the California Fair Employment and Housing
Act, PROVIDED, HOWEVER,
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that this general release is not intended to and shall not be construed as a
release of any rights, obligations or warranties of the parties under this
Agreement, nor shall Yulish, McGregor, the Company or the Related Parties be
released for prior conduct constituting fraud or breach of fiduciary duty.
Said parties, and each of them, expressly waive and relinquish
all rights and benefits under Section 1542 of the Civil Code of California,
which reads as follows:
"1542. Extent of General Release.
A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have materially
affected his settlement with the debtor."
Said parties, and each of them, acknowledge that they, or any of
them, may hereafter discover facts different from or in addition to those they,
or any of them, now know or believe to be true with respect to the Claims and
Expenses herein released and agree that this Agreement shall be and remain
effective in all respects notwithstanding such different or additional facts. It
is the intention hereby fully, finally and forever to settle and release all
Claims and Expenses which do now exist, may exist or heretofore have existed
between Yulish and XxXxxxxx on the one hand, and Company (or any of its
predecessors in interest in the Xxxxxx-XxXxxxxx Agreements) on the other. In
furtherance of such intention, among other things, the releases herein given
shall be and remain in full force and effect as full and complete mutual general
releases to the full extent of their terms and the Yulish Employment Agreement
and XxXxxxxx Agreements shall be and remain of no further force or effect
notwithstanding the discovery or existence of any such additional or different
claims or facts relative thereto and notwithstanding the breach of any terms or
conditions of this Agreement.
Furthermore, notwithstanding this release, Yulish shall be
entitled to the continued benefit of all contractual and statutory
indemnification agreements provided by the Company in accordance with their
terms.
11. REPRESENTATIONS, WARRANTIES AND INDEMNITIES.
(a) Each party hereto represents and warrants that it has
the full right and authority to enter into this
Agreement and that the officer or representative (if
any) of each party executing this Agreement on its
behalf has the full right and authority to execute this
Agreement and to fully bind such party hereto, and that
this Agreement represents the valid and binding
agreement of each such party enforceable in accordance
with its terms. Yulish and Executive each represent and
warrant to the Company that they are under the age of 40
years old.
(b) Each party represents, warrants and agrees as follows:
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(i) Such party has received independent legal advice
with respect to the advisability of making this
Agreement;
(ii) Such party (nor any officer, agent, employee,
partner, representative or attorney of or any
party) has not made any statement,
representation or promise, other than as set
forth herein, to any other party in entering
into this Agreement which has been relied upon
by any other party (or any officer, agent,
employee, partner, representative or attorney
for another party) in entering into or executing
this Agreement;
(iii) Such party has made such investigation of the
facts pertaining to this Agreement and of all
other matters pertaining hereto as it deems
necessary; and
(iv) Such party has not assigned or transferred to
any person not a party to this Agreement any
released matter or any part or portion thereof
and each shall defend, indemnify and hold
harmless the other from and against any claim
(including the payment of attorneys' fees and
costs actually incurred whether or not
litigation is commenced) based on or in
connection with or arising out of any such
assignment or transfer made, purported or
claimed.
12. NOTICES. Any notice under this Agreement shall not be
effective as such unless addressed as set forth below and mailed by U.S.
certified mail, return receipt requested, postage prepaid, or by telecopy or by
overnight delivery service and not otherwise. Notices shall be effective three
business days after mailing, or upon receipt if sent by telecopy or overnight
delivery service.
If To Company: The Xxxxxx Entertainment Company
0000 Xxxxxx xx xxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Chief Financial Officer
Facsimile: 310/789-1992
with a copy toSidley & Austin
000 Xxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxxx, Esq.
Facsimile: 213/896-6600
If To Yulish or Executive: 0000 Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Home Facsimile: 818/225-8936
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with a copy to: Troop Xxxxxxxxx Xxxxxxx & Xxxxxx
00000 Xxxxxxxx Xxxxxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, XX 00000-0000
Attention: Xxx X. Xxxx, Esq.
Facsimile: 310/443-8511
13. INTEGRATION. This Agreement has been fully negotiated and
shall not be interpreted for or against either party. This Agreement and the
documents referenced and/or incorporated herein constitute an integration of the
entire understanding and agreement of the parties. Any representation, promise
or condition, whether written or oral, not specifically incorporated herein
shall not be binding upon any of the parties hereto and all parties acknowledge
that they have not relied, in entering into this Agreement, upon any
representations, promises or conditions not specifically set forth herein.
14. SURVIVAL. All representations, warranties, covenants,
agreements and acknowledgments made by the parties herein shall be considered to
have been relied upon by the parties hereto and shall survive the execution,
performance and delivery of this Agreement and all other documents contemplated
herein.
15. SUCCESSORS AND ASSIGNS. This Agreement, including, without
limitation, the representations, warranties, covenants, agreements,
acknowledgments and indemnities contained herein, a) shall inure to the benefit
of and be enforceable by the respective parties hereto, and Company, Yulish and
XxXxxxxx'x successors and permitted assigns and permitted transferees, and b)
shall be binding upon and enforceable against the respective parties hereto, and
Company, Yulish and XxXxxxxx'x successors, permitted assigns and permitted
transferees. Either party may assign its rights hereunder, provided that,
notwithstanding any such assignment, the obligations of such party shall remain
in full force and effect until fully performed and satisfied.
16. CONSTRUCTION AND ATTORNEYS' FEES. This Agreement shall be
construed and enforced in accordance with the laws of the State of California
where it is to be executed and delivered. Should any action (including an
arbitration proceeding) be brought by the parties hereto to enforce any
provision or right herein, the prevailing party shall be entitled to recover in
addition to any other relief, reasonable attorneys' fees and costs of litigation
(as determined under California Civil Code Section1717). Disputes hereunder
shall be exclusively settled by arbitration in Los Angeles to be heard and
determined by an arbitrator employed by Judicial Arbitration and Mediation
Services (JAMS) in accordance with the rules established by JAMS for such
proceedings. The parties shall bear their own attorneys' fees incurred in
negotiating and drafting this Agreement and all matters related thereto.
17. PUBLICITY. The parties hereto agree that they will not at any
time engage in any acts, make any statements, or bring any action which, either
directly or indirectly, disparages or results in the actual disparagement of the
other party. The parties hereto agree to cooperate in connection with any
publicity concerning this Agreement.
18. NO MODIFICATION OR AMENDMENT EXCEPT BY WRITING. No
modification,
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amendment or waiver of any of the provisions herein contained, nor any future
representation promises or conditions in connection with the subject matter
hereof, shall be binding upon any party hereto unless made in writing and signed
by such party or by a duly authorized officer or agent on behalf of such party.
19. SEVERABILITY. In the event that any one or more of the
provisions contained herein shall for any reason be held to be invalid illegal
or unenforceable, such provision shall not affect any other provisions of this
Agreement so long as the remaining pro visions can and are construed to fulfill
the intent of the parties as set forth herein as if such invalid, illegal or
unenforceable provision was not contained herein.
20. CAPTIONS AND HEADINGS; COUNTERPARTS. Captions and paragraph
headings used herein are for convenience only and are not a part of this
Agreement and shall not be used in construing it. This Agreement may be executed
in two or more counterparts, all of which when taken together shall constitute
the entire instrument. Photographic copies of such signed counterparts may be
used in lieu of the originals for any purpose.
21. NO ADMISSION. While this Agreement resolves all issues
between the Company, Yulish and XxXxxxxx, as well as any future effects of any
acts or omissions, it does not constitute an admission by Company or by Yulish
or XxXxxxxx of any violation of federal, state or local law, ordinance or
regulation or of any violation of the Company's policies or procedures or any
contract or of any liability or wrongdoing whatsoever. Neither this Agreement
nor anything in this Agreement shall be construed to be or shall be admissible
in any proceeding as evidence of liability or wrongdoing by the Company or
Yulish or XxXxxxxx.
22. FURTHER ASSURANCES. All parties agree to cooperate fully and
to execute any and all supplementary documents and to take all additional
actions that may be necessary or appropriate to give full force to the basic
terms and intent of this Agreement and which are not inconsistent with its
terms. As required from time to time after the Consulting Period, Yulish agrees,
on an informal basis and subject to his availability, and for no fee so long as
the time involved is not material, to consult with Company regarding the status
or background of ongoing matters (including current or future litigation) for
which he had responsibility or substantial involvement during his employment
with Company.
23. ACKNOWLEDGMENT. YULISH AND XXXXXXXX BOTH ACKNOWLEDGE THAT
THEY HAVE CAREFULLY READ, FULLY UNDERSTOOD AND VOLUNTARILY EXECUTED THIS
AGREEMENT. YULISH AND XXXXXXXX BOTH UNDERSTAND THAT THIS IS A LEGAL DOCUMENT AND
THAT THEY HAVE PREVIOUSLY BEEN ADVISED THAT THEY MAY CONSULT WITH AN ATTORNEY
CONCERNING THEIR RIGHTS UNDER THIS AGREEMENT AND WITH THE COMPANY, AND THAT THEY
HAVE DONE SO.
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IN WITNESS WHEREOF, the parties have affixed their signatures on
the date set forth above.
"COMPANY" "YULISH"
THE XXXXXX ENTERTAINMENT COMPANY
By: /s/ Xxxxxxx X. Hope /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Hope Xxxxxxx X. Xxxxxx
Chief Financial Officer
Date:
"EXECUTIVE" "JEM"
JEM ENTERTAINMENT, INC.
/s/ Xxxx XxXxxxxx By: /s/ Xxxx XxXxxxxx
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Xxxx XxXxxxxx Xxxx XxXxxxxx
AGREED AS TO FORM: AGREED AS TO FORM:
Sidley & Austin Troop Xxxxxxxxx Xxxxxxx & Xxxxxx
By: /s/ Xxxx X. Xxxxx, Esq. By: /s/ Xxx X. Xxxx, Esq.
------------------------------- -------------------------------
Xxxx X. Xxxxx, Esq. Xxx X. Xxxx, Esq.
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