Exhibit 10.2
EXECUTION COPY
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EMPLOYMENT AGREEMENT
AGREEMENT, dated as of March 1st, 2002, between LOEWS CINEPLEX
ENTERTAINMENT CORPORATION, a Delaware corporation, which maintains offices at
000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Company"), and Xxxxxx Xxxx (the
"Executive"), residing at 0 Xxxxxxxx Xxxx, Xxxxx Xxxxxx Xxxxx, Xxx Xxxxxx 00000.
WHEREAS, Executive is currently employed by the Company pursuant to an
employment agreement, dated as of May 1, 1998 (the "Current Employment
Agreement");
WHEREAS, Executive and the Company have agreed to terminate the Current
Employment Agreement contingent upon and effective as of the "Effective Date"
(as defined in the Company's Chapter 11 Plan of Reorganization (the "Plan of
Reorganization")), subject to the provisions set forth herein; and
WHEREAS, the Company desires to continue the employment of Executive
and Executive is willing to continue such relationship directly with the
Company, on the terms and conditions set forth herein.
NOW, THEREFORE, the parties hereby agree as follows:
1. TERM OF EMPLOYMENT. The Company hereby agrees to employ the
Executive, and the Executive hereby accepts employment with the Company, on the
terms and subject to the conditions hereinafter set forth in this Agreement, for
a term (the "Employment Period") commencing on the Effective Date and continuing
until the third anniversary of the Effective Date (the "Expiration Date").
2. DUTIES AND PRIVILEGES. During the Employment Period, Executive shall
serve as President of North American Operations and Chief Operating Officer of
the Company and be responsible to and report to the Chief Executive Officer of
the Company (the "CEO"). During the Employment Period, Executive shall have such
authority and perform such duties which are consistent with Executive's title
and position as President of North American Operations and Chief Operating
Officer of the Company as the CEO may from time to time prescribe; devote
Executive's entire business time, ability and energy exclusively to the
performance of Executive's duties hereunder (except that Executive may
participate in charitable and industry activities that do not interfere with his
duties hereunder); and use Executive's best efforts to advance the interests and
businesses of the Company, and its divisions and subsidiaries. Executive's
principal office shall be located in the New York metropolitan area.
3. COMPENSATION.
(a) BASE SALARY. The Company shall pay to the Executive a salary at the
rate of $575,000 per year during the Employment Period; provided, however, that
such amount shall be reviewed by the Board of Directors of the Company (the
"Board") annually, and may, in the sole discretion of the Board, be increased
(as so increased, "Base Salary").
(b) EMPLOYEE BENEFIT PLANS. During the Employment Period, Executive
shall be eligible to participate in all then operative employee benefit plans of
the Company which are applicable generally to the Company's senior executives on
a basis no less favorable than the basis on which the Executive participated in
such plans prior to the Effective Date and which shall provide benefits that are
substantially comparable to those provided prior to the Effective Date
("Employee Benefit Plans"). Notwithstanding the foregoing, Executive shall be
entitled to no less than four weeks paid vacation each year during the
Employment Period. Executive's participation in or entitlement under any such
Employee Benefit Plan shall at all times be subject to the terms and conditions
thereunder. To the extent permitted by law and provided for by the applicable
Employee Benefit Plan, Executive shall be entitled to prior service credit for
eligibility and vesting purposes for his years of service with any group of
which the Company (or its predecessor) was a member in respect of any medical or
retirement Employee Benefit Plan for which years of service are generally
applicable; provided, however, that any such entitlement to prior service credit
will not result in any duplication of benefits to the Executive.
(c) ANNUAL BONUS. During the Employment Period, Executive shall be
eligible to receive an annual bonus (the "Annual Bonus") for each fiscal year
ending during the Employment Period pursuant to a bonus plan providing for
substantially the following opportunity: If the Company meets 85% of its
budgeted EBITDA for the applicable fiscal year, the Annual Bonus shall be equal
to 30% of the Executive's Base Salary; if the Company meets 100% of its budgeted
EBITDA for the applicable fiscal year, the Annual Bonus shall be equal to 60% of
the Executive's Base Salary (the "Target Bonus"); and if the Company meets 115%
of its budgeted EBITDA for the applicable fiscal year, the Annual Bonus shall be
equal to 80% of the Executive's Base Salary ( the 85%, 100% and 115% thresholds
each being referred to herein as a "Budget Threshold"). In respect of any
applicable fiscal year, if the Company meets a percentage of its budgeted EBITDA
that falls in between any two of the Budget Thresholds, the Executive's Annual
Bonus shall be determined by interpolating, on a straight-line basis, the bonus
payable based on performance at each of the Budget Thresholds, such that (for
illustration purposes only) if the Company meets 90% of its budgeted EBITDA for
the applicable fiscal year, the Executive would be entitled to an Annual Bonus
equal to 40.00% of the Executive's Base Salary, such percentage being determined
as the sum of 30% plus the product of (i) (A) 90% minus 85% divided by (B) 100%
minus 85% and (ii) 60% minus 30%. The amount of the Annual Bonus, if any, which
is earned by Executive shall be paid by the Company to Executive no later than
ninety (90) days following the close of the Company's fiscal year.
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(d) EQUITY OFFER. Within one hundred and fifty (150) days of the
Effective Date (the "Offer Period"), the Company shall in good xxxxx xxxxxxx
in writing to Executive a right to acquire equity in the Company ("Equity
Offer"). Executive shall have the right to accept or reject the Equity Offer by
providing written notice to the Company indicating his decision within ninety
(90) days after receiving the Equity Offer (the "Review Period").
(e) AUTOMOBILE. To facilitate Executive's performance of Executive's
duties hereunder, the Company shall make available to Executive, during the
Employment Period, either (as determined by the Company in its sole discretion)
(i) a leased automobile or (ii) a monthly car allowance sufficient to cover all
expenses relating to the Executive's automobile (including any lease or
financing charges, insurance costs, maintenance expenses and parking) payable to
the Executive in cash, but in no event less than the amount of his current car
allowance, in each case in accordance with the Company's automobile policy as
from time to time in effect. In the event the Company provides Executive with a
leased automobile, Company shall also pay for or provide parking to Executive
near the Company's New York office.
4. EXPIRATION OF TERM. Executive's employment by the Company shall
automatically expire and terminate on the Expiration Date unless sooner
terminated pursuant to the provisions of this Section 4.
(a) DEATH. Executive's employment by the Company shall automatically
terminate upon Executive's death.
(b) DISABILITY. The Company shall have the right and option,
exercisable by giving written notice to Executive, to terminate Executive's
employment by the Company at any time after Executive has been unable to perform
the services or duties required of Executive in connection with Executive's
employment by the Company as a result of physical or mental disability (or
disabilities) which has (or have) continued for a period of twelve (12)
consecutive weeks, or for a period of sixteen (16) weeks in the aggregate,
during any twelve (12) month period.
(c) FOR CAUSE. The Company shall have the right and option, exercisable
by giving written notice to Executive, to terminate Executive's employment by
the Company at any time after the occurrence of any of the following events or
contingencies (any such termination being deemed to be a termination "For
Cause"):
(i) Executive (x) materially breaches, materially repudiates or
otherwise materially fails to comply with or perform any of the terms of this
Agreement, any duties of Executive in connection with Executive's employment by
the Company or any of the Company's policies or procedures, (y) deliberately
interferes with the material compliance by any other executive of the Company
with any of the foregoing or (z) commits an act or omission that constitutes
gross negligence in connection with Executive's employment by the Company, and
any such action described in (x), (y) or (z)
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hereof (as applicable), if correctable, is not materially corrected within
thirty (30) days after notice from the Company;
(ii) The conviction by Executive of a felony or the pleading by
Executive of guilty or no contest (or similar plea) to any felony (other than a
crime for which vicarious liability is imposed upon Executive solely by reason
of Executive's position with the Company, and not by reason of Executive's
conduct);
(iii) Any act or omission by Executive constituting fraud or
willful misconduct in connection with Executive's employment by the Company;
provided, however, that any act or omission by the Executive shall not
constitute fraud or willful misconduct if such act or omission is made in good
faith; or
(iv) Any other act, omission, event or condition constituting
cause for the discharge of an executive under the laws of New York which, if
correctable, is not corrected within thirty (30) days after notice from the
Company.
(d) WITHOUT CAUSE. The Company shall have the right and option,
exercisable by giving written notice to Executive, to terminate Executive's
employment by the Company "Without Cause" and for any reason or for no reason
(the Company's "Termination Rights"). The Company's Termination Rights are not
limited or restricted by, and shall supersede, any policy of the Company
requiring or favoring continued employment of its executives during satisfactory
performance, any seniority system or any procedure governing the manner in which
the Company's discretion is to be exercised. No exercise by the Company of its
Termination Rights shall, under any circumstances, be deemed to constitute (i) a
breach by the Company of any term of this Agreement, express or implied
(including without limitation a breach of any implied covenant of good faith and
fair dealing), (ii) a wrongful discharge of Executive or a wrongful termination
of Executive's employment by the Company, (iii) a wrongful deprivation by the
Company of Executive's corporate office (or authority, opportunities or other
benefits relating thereto) or (iv) the breach by the Company of any other duty
or obligation, express or implied, which the Company may owe to Executive
pursuant to any principle or provision of law (whether contract or tort);
provided, however, that notwithstanding the foregoing, a breach by the Company
of its payment obligations pursuant to Section 5 shall be deemed to be a breach
of this Agreement.
The failure or refusal of the Company to renew or extend the Employment
Period, or otherwise offer the Executive a new employment agreement by the
Expiration Date that meets the requirements set forth in the next sentence,
shall be deemed to constitute a termination of Executive's employment by the
Company Without Cause for the purpose of triggering any rights of or causes of
action by Executive under this Agreement. If the Company offers the Executive a
new employment agreement consisting of terms and conditions no less favorable
than those set forth in this Agreement (except that (a) the annual base salary
under such agreement shall not be less than the Executive's Base Salary in
effect immediately prior to the termination of this Agreement and (b) the term
of such agreement shall be for a period no less than two (2)
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years), a termination of the Executive's employment Without Cause shall not be
deemed to have occurred, regardless of whether the Executive accepts or declines
to accept the extended offer of employment.
(e) GOOD REASON. The Executive shall have the right and option,
exercisable by giving written notice to the Company, to terminate Executive's
employment by the Company for Good Reason. For purposes of this Agreement, "Good
Reason" shall mean: (i) the Company's material reduction of the duties or
responsibilities of the Executive or (ii) the Company's material breach of this
Agreement which, if correctable, is not corrected within thirty (30) days after
notice from the Executive.
(f) REJECTION OF, VOLUNTARY TERMINATION PRIOR TO, OR FAILURE TO RESPOND
TO EQUITY OFFER. Executive's employment by the Company shall terminate upon (i)
the Executive's delivery of written notice to the Company within the Review
Period indicating his rejection of the Equity Offer, (ii) the Executive's
voluntary termination prior to responding to the Equity Offer within the Review
Period, or (iii) the expiration of the Review Period if the Executive failed to
respond to the Equity Offer during such period.
(g) FAILURE TO PROFFER EQUITY OFFER. Executive's employment by the
Company shall terminate upon the expiration of the Offer Period if the Company
failed to make the Equity Offer to the Executive during such period.
5. SEVERANCE OBLIGATIONS.
(a) TERMINATION FOR ANY REASON. If the Executive's employment by the
Company is terminated during the Employment Period for any reason, including a
voluntary or For Cause termination, the Company shall pay or provide the
Executive with the following:
(i) ACCRUED COMPENSATION. The Company shall be obligated to pay to
Executive not later than the effective date of such termination all unpaid Base
Salary, car allowance (if any), parking, vacation and reimbursable expenses
which shall have accrued as of the effective date of such termination; and
(ii) OTHER BENEFITS. The terms and conditions of applicable
Employee Benefit Plans, if any, shall control Executive's entitlement, if any,
to receive benefits thereunder.
(b) CERTAIN TERMINATIONS FOLLOWING ACCEPTANCE OF EQUITY OFFER. If
Executive accepts the Equity Offer within the Review Period and his employment
with the Company is thereafter terminated by the Company Without Cause or by the
Executive for Good Reason, the Executive shall, in addition to the benefits
provided pursuant to Section 5(a) hereof, be entitled to the following:
(i) AGREEMENT SEVERANCE. If elected by the Executive, the
Executive shall be entitled to the Agreement Severance. For purposes of
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this Agreement, the "Agreement Severance" shall mean (x) a lump sum amount,
payable in cash within thirty (30) days after the Executive's date of
termination, that is equal to the Executive's Base Salary (at the rate in effect
at on the date of the Executive's termination), Target Bonus, and benefits (to
the extent quantifiable), in each case that would have been payable to the
Executive through the Expiration Date as provided in Sections 3(a), (b), (c) and
(e) hereof, plus (y) the continuance by the Company of any benefits that are not
quantifiable (e.g., health insurance) as provided in Section 3(b) hereof in such
manner as if this Agreement had not been terminated until the Expiration Date;
or
(ii) "SEVERANCE AMOUNT". Alternatively, the Executive may elect to
receive (x) a lump sum cash payment equal to one million one hundred and
sixty-six thousand six hundred and sixty-seven dollars ($1,166,667) (the
"Severance Amount"), plus (y) a pro rata portion of the Target Bonus for the
Company fiscal year in which such termination occurs through the effective date
of such termination (determined by multiplying the Target Bonus for the Company
fiscal year in which such termination occurs by a fraction, the numerator of
which shall be the number of days of such fiscal year that have elapsed during
the Employment Period and the denominator of which shall be three hundred and
sixty-five (365)) (the "Pro Rata Bonus"), which amounts described in (x) and (y)
above shall be paid within thirty (30) days after the date of the Executive's
termination.
(c) TERMINATION PURSUANT TO SECTION 4(f). If the Executive's employment
with the Company is terminated pursuant to Section 4(f) hereof, the Executive
shall, in addition to the benefits provided pursuant to Section 5(a) hereof, be
entitled to (x) a lump sum cash payment equal to one and one-half (1 1/2) times
the Severance Amount or one million seven hundred and fifty thousand dollars
($1,750,000), plus (y) the Pro Rata Bonus (collectively, the "Modified Severance
Amount"), which amounts described in (x) and (y) above shall be paid within
thirty (30) days after the date of the Executive's termination.
(d) CERTAIN TERMINATIONS PRIOR TO ACCEPTANCE OF EQUITY OFFER;
TERMINATION PURSUANT TO SECTION 4(g). (i) If the Executive terminates his
employment with the Company for Good Reason or the Company terminates the
Executive's employment Without Cause, in either case prior to (x) a written
Equity Offer being delivered by the Company to the Executive within the
requisite Offer Period or (y) the Executive's delivery of written notice to the
Company accepting an outstanding Equity Offer within the requisite Review
Period, or (ii) if the Executive's employment with the Company is terminated
pursuant to Section 4(g) hereof, the Executive shall, in addition to the
benefits provided pursuant to Section 5(a) hereof, be entitled to the following:
(A) AGREEMENT SEVERANCE. If elected by the Executive, the
Executive shall be entitled to the Agreement Severance as provided in Section
5(b)(i) hereof; or
(B) MODIFIED SEVERANCE AMOUNT. Alternatively, the Executive may
elect to receive the Modified Severance Amount as provided in Section 5(c)
hereof.
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(e) EQUITY OBLIGATIONS. The terms and conditions of the Equity Offer
shall control Executive's entitlement, if any, with respect to any options or
other equity granted pursuant to such Equity Offer.
(f) MITIGATION; SET-OFF. The Executive shall have no obligation to
mitigate; it being expressly agreed that if Executive receives employment income
from a third party after such termination and on or before the Expiration Date,
such employment income shall not be set off against any payments to be made to
Executive by the Company in connection with its exercise of its Termination
Rights.
(g) RETURN OF PROPERTY. Immediately upon any termination of Executive's
employment hereunder (whether or not pursuant to Section 4), Executive shall
return to the Company all property of the Company heretofore provided to
Executive by the Company, or otherwise in the custody, possession or control of
Executive (including, without limitation, the "Confidential Information"
described in Paragraph 6(b) of Exhibit A attached hereto). Notwithstanding any
provision of this Agreement to the contrary, no termination of Executive's
employment for any reason whatsoever shall in any manner operate to terminate,
limit or otherwise affect the Company's ownership of any of the rights,
properties or privileges granted to the Company hereunder.
(h) SATISFACTION BY COMPANY. Subject to Section 6 hereof, satisfaction
of the severance obligations set forth in this Section 5 by the Company shall
terminate any and all of the Company's severance obligations under this
Agreement and under Section 4.2(a) of the Retention and Severance Plan.
6. Gross-Up Payment.
(a) PAYMENT. In the event it shall be determined that any payment or
distribution of any type to or for the benefit of the Executive by the Company,
whether paid or payable or distributed or distributable pursuant to the terms of
this Agreement or otherwise (the "Total Payments"), is or will be subject to the
excise tax imposed by Section 4999 of the Internal Revenue Code (the "Code") or
any interest or penalties with respect to such excise tax (such excise tax,
together with any such interest and penalties, are collectively referred to as
the "Excise Tax"), then the Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that after payment by the
Executive of all taxes (including any interest or penalties imposed with respect
to such taxes), including any income tax, employment tax or Excise Tax, imposed
upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up
Payment equal to the Excise Tax imposed upon the Total Payments. For purposes of
determining the amount of the Gross-Up Payment, the Executive shall be deemed to
pay federal, state and local income taxes and employment taxes at the highest
marginal rate of federal, state and local income taxation and
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employment taxation in the calendar year in which the Gross-Up Payment is to be
made and/or the calendar year in which the termination date occurs, as
applicable, net of the maximum reduction in federal income taxes that may be
obtained from the deduction of such state and local taxes.
(b) Determination By Accountant. All mathematical determinations, and
all determinations as to whether any of the Total Payments are "parachute
payments" (within the meaning of Section 280G of the Code), that are required to
be made under this Section 6, including determinations as to whether a Gross-Up
Payment is required, the amount of such Gross-Up Payment and amounts relevant to
the last sentence of this Section 6(b), shall be made by an independent
accounting firm selected by the Executive from among the five (5) largest
accounting firms in the United States (the "Accounting Firm"), which shall
provide its determination (the "Determination"), together with detailed
supporting calculations regarding the amount of any Gross-Up Payment and any
other relevant matter, both to the Company and the Executive by no later than
ten (10) days following the termination date, if applicable, or such earlier
time as is requested by the Company or the Executive (if the Executive believes
that any of the Total Payments may be subject to the Excise Tax). If the
Accounting Firm determines that no Excise Tax is payable by the Executive, it
shall furnish the Executive and the Company with an opinion reasonably
acceptable to the Executive and the Company that no Excise Tax is payable
(including the reasons therefor) and that the Executive has substantial
authority not to report any Excise Tax on his federal income tax return. If a
Gross-Up Payment is determined to be payable, it shall be paid to the Executive
within ten (10) days after the Determination (and all accompanying calculations
and other material supporting the Determination) is delivered to the Company by
the Accounting Firm. Any determination by the Accounting Firm shall be binding
upon the Company and the Executive, absent manifest error. As a result of
uncertainty in the application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments not made by the Company should have been made
("Underpayment"), or that Gross-Up Payments will have been made by the Company
which should not have been made ("Overpayments"). In either such event, the
Accounting Firm shall determine the amount of the Underpayment or Overpayment
that has occurred. In the case of an Underpayment, the amount of such
Underpayment (together with any interest and penalties payable by the Executive
as a result of such Underpayment) shall be promptly paid by the Company to or
for the benefit of the Executive. In the case of an Overpayment, the Executive
shall, at the direction and expense of the Company, take such steps as are
reasonably necessary (including, if reasonable, the filing of returns and claims
for refund), and otherwise reasonably cooperate with the Company to correct such
Overpayment, provided, however, that (i) the Executive shall not in any event be
obligated to return to the Company an amount greater than the net after-tax
portion of the Overpayment that he has retained or has recovered as a refund
from the applicable taxing authorities and (ii) this provision shall be
interpreted in a manner consistent with the intent of Section 6(a), which is to
make the Executive whole, on an after-tax basis, from the application of the
Excise Tax, it being understood that the correction of an Overpayment may result
in the Executive repaying to the Company an amount which is
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less than the Overpayment. The fees and expenses of the Accounting Firm shall be
paid by the Company.
7. STANDARD TERMS. Attached as Exhibit A hereto and deemed a part hereof
are the Company's Standard Terms and Conditions of Employment Agreement, all of
which terms are binding on the parties hereto and incorporated herein. For
convenience, provisions of this Agreement shall be referred to as "Sections" and
provisions of the Standard Terms shall be referred to as "Paragraphs." In the
case of any conflict between the terms of this Agreement and the terms of
Exhibit A hereto, the terms of this Agreement shall govern.
8. SUPERSEDING AGREEMENT. Upon the Effective Date, this Agreement,
including Exhibit A hereto, shall constitute the full and entire understanding
of the parties hereto with respect to the subject matter hereof and, upon the
Effective Date, shall supersede any prior agreements with respect thereto,
including, without limitation, the Current Employment Agreement; provided,
however, that any salary accrued by the Executive prior to the Effective Date
under his Current Employment Agreement which remains unpaid as of such date
shall remain the obligation of the Company until satisfied and shall not be
superseded by this Agreement.
9. SURVIVAL. In the event that the Executive's employment by the Company is
terminated pursuant to the provisions set forth under Section 4 hereof or
otherwise, this Agreement shall then also terminate; provided, however, that the
rights and obligations set forth under Sections 5 and 6 of this Agreement and
under Sections 6(a), 6(b), 6(c), 6(d), 6(e), 13, 14(a), 14(b), 14(c), 14(d) and
14(f) of Exhibit A (attached hereto) shall survive until such rights and
obligations are fully satisfied in accordance with the terms set forth herein.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused it to be executed on their behalf as of the date first above written.
/s/ Xxxxxx Xxxx
----------------------------------------
XXXXXX XXXX
LOEWS CINEPLEX ENTERTAINMENT
CORPORATION
By: /s/ Xxxxxxxx X. Xxxxx
--------------------------------
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EXHIBIT A
STANDARD TERMS AND CONDITIONS OF EMPLOYMENT AGREEMENT
1. DEFINITIONS. All capitalized terms used herein shall have the meanings
ascribed to them in the Agreement attached hereto. The following words, terms
and phrases (and variations thereof) used herein shall have the following
meanings:
(a) An "Affiliate", of a party means a Person which, directly or
indirectly, owns or controls, is owned or controlled by, or is under common
ownership or control with, such party.
(b) "Intellectual Property" means any and all intellectual, artistic,
literary, dramatic or musical rights, works or other materials of any kind or
nature (whether or not entitled to protection under applicable copyright laws,
or reduced to or embodied in any medium or tangible form), including without
limitation all copyrights, patents, trademarks, service marks, trade secrets,
contract rights, titles, characters, plots, themes, dialogue, stories, scripts,
treatments, outlines, submissions, ideas, concepts, packages, compositions,
artwork and logos, and all audio, visual or audio-visual works of every kind and
in every stage of development, production and completion, and all rights to
distribute, advertise, promote, exhibit or otherwise exploit any of the
foregoing by any means, media or processes now known or hereafter devised.
(c) "Media Business" means all Persons engaging in any of the
following: (i) the creation, production, distribution, exhibition or other
exploitation of theatrical motion pictures, television programs, sound
recordings or other visual, audio or audio-visual works or recordings of any
kind; (ii) television (including pay, free, over-the-air, cable and satellite)
or radio broadcasting; (iii) book, newspaper or periodical publishing; (iv)
music publishing; (v) "merchandising" (as that term is generally understood in
the entertainment industry); or (vi) advertising.
(d) "Person" means any individual, corporation, trust, estate,
partnership, joint venture, company, association, league, group, governmental
agency or other entity of any kind or nature.
(e) "Theatrical Business" means all Persons engaging in the theatrical
exhibition of motion pictures.
2. COMPENSATION.
(a) Executive's Base Salary shall be payable in equal installments (not
less frequently than monthly) in accordance with the Company's customary payroll
practices. No additional compensation shall be payable to Executive by reason of
the number of hours worked or by reason of any hours worked on Saturdays,
Sundays,
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holidays or otherwise. All compensation payable to Executive hereunder (whether
in the form of Base Salary, benefits or otherwise) shall be subject to all
applicable laws, statutes, governmental regulations or orders, the terms of all
applicable Employee Benefit Plans and the terms of all agreements between or
binding upon the Company and Executive requiring the deduction or withholding of
any amounts from such payments, and the Company shall have the right to make
such deductions and withholdings in accordance with the Company's interpretation
thereof in the Company's sole judgment.
(b) Subject to Section 3(b) of the Agreement, Executive shall be
eligible to participate in fringe benefits, if any, maintained by the Company
for executives generally on the same basis as comparable executives of the
Company.
(c) Subject to the requirements of Executive's position and corporate
office, Executive shall be entitled to annual vacations in accordance with the
Company's vacation policy in effect from time to time.
(d) The Company recognizes that, in connection with Executive's
performance of Executive's duties and obligations hereunder, Executive will
incur certain ordinary and necessary expenses of a business character. The
Company shall pay Executive for such business expenses on the presentation of
itemized statements of such expenses, provided their extent and nature are
approved in accordance with the policies and procedures of the Company.
3. RIGHT TO INSURE. The Company shall have the right to secure, in its own
name or otherwise and at its own expense, life, health, accident or other
insurance covering or otherwise insuring Executive, and Executive shall have no
right, title or interest in or to any such insurance or any of the proceeds or
benefits thereof. Executive shall fully assist and cooperate with the Company in
procuring any such insurance, including without limitation by submitting to such
examinations, and by signing such applications and other instruments, as may
reasonably be required by any insurance carrier to which application is made by
the Company for any such insurance.
4. Employment Exclusive. Except as provided herein, Executive shall not
perform services for any Person other than the Company during the Employment
Period without the prior written consent of the Company and will not during the
Employment Period engage in any activity which would interfere with the
performance of Executive's services hereunder, or become financially interested
in or associated with, directly or indirectly, any Media Business.
5. Interest in Other Corporations. Notwithstanding anything to the contrary
contained in Paragraph 4 hereof, Executive may own during the Employment Period
up to one percent (1%) of any class of any Person's outstanding securities which
are listed on any national securities exchange, registered under Section 12(g)
of the Securities Exchange Act of 1934 or otherwise publicly traded, provided
that the holdings of Executive of any such security of a Media Business or any
Person which does business with the Company or its Affiliates do not represent
more than 10% of the
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aggregate of Executive's investment portfolio at any time.
6. OWNERSHIP OF PROCEEDS OF EMPLOYMENT;
CONFIDENTIALITY OF INFORMATION; ETC.
(a) The Company shall be the sole and exclusive owner throughout the
universe in perpetuity of all of the results and proceeds of Executive's
services, work and labor during the Employment Period in connection with
Executive's employment by the Company, including without limitation all
Intellectual Property which Executive may develop, create, write or otherwise
produce during the Employment Period, free and clear of any and all claims,
liens or encumbrances. All results and proceeds of Executive's services, work
and labor during the Employment Period shall be deemed to be works-made-for-hire
for the Company within the meaning of the copyright laws of the United States
and the Company shall be deemed to be the sole author thereof in all territories
and for all purposes.
(b) All information, plans, documents, notes, memoranda and
Intellectual Property of any kind received, compiled, produced or otherwise made
available to Executive during or in connection with Executive's employment by
the Company, whether or not originated or developed by the Executive, relating
in any way to the business of the Company or of any of its Affiliates and which
has not been made available or confirmed to the public by the Company
("Confidential Information") shall be the sole and exclusive property of the
Company and shall in perpetuity (both during and after Executive's employment by
the Company) be maintained in utmost confidence by Executive and held by
Executive in trust for the benefit of the Company. Executive shall not during
the Employment Period or at any time thereafter directly or indirectly release
or disclose to any other Person, or use in any manner (whether for his own
benefit or for the benefit of any other Person), any Confidential Information,
except with the prior written consent of the Company and in furtherance of the
Company's business or as required by law. Executive acknowledges that the
Confidential Information is of substantial value to the Company and that the
Company could suffer substantial damage if it were disclosed or used without the
Company's prior written consent.
(c) Executive shall not (without the Company's consent), directly or
indirectly, at any time during the Employment Period or until Executive's
earlier termination (and, in the case of clause (i) below, for a period of
twelve (12) months thereafter), nor shall Executive during such time period
authorize or assist any other Person to, solicit, entice, persuade or induce any
Person to do any of the following:
(i) Terminate or refrain from extending or renewing (on the same
or different terms) such Person's employment by, or contractual or business
relationship with, the Company or any of its Affiliates; or
(ii) Become employed by, enter into contractual relationships
with, or make, create, produce or distribute any motion picture or other
Intellectual Property, or otherwise engage in any Media Business, for any Person
other than the Company or its Affiliates.
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(d) If the Executive has accepted the Equity Offer (and only if the
Executive has accepted the Equity Offer) in writing prior to his termination of
employment in accordance with the terms of the Agreement, Executive agrees that
he shall not, directly or indirectly, for a period of twelve (12) months
following termination of his employment, become employed by or otherwise
participate in the management of or have any financial interest in (other than
as permitted in Section 5 hereof) a Theatrical Business in any market in which
the Company or any of its subsidiaries conducts business or has, as of the date
of termination of his employment, developed plans and expended substantial
resources to commence business.
(e) If the Executive's employment is terminated for any reason,
Executive agrees that, unless the Company has failed to perform its obligations
under Section 5(b), 5(c), 5(d) or 6 of the Agreement, he shall not, directly or
indirectly, for a period of twelve (12) months following termination of his
employment, assist any Theatrical Business in the erection, development or
planning (or, to the extent having an adverse impact on the Company, operation)
of any motion picture theaters in Manhattan, except with the prior written
consent of the Company.
(f) The Company shall have the right to use the Executive's name,
approved biography (such approval not to be unreasonably withheld), and likeness
in connection with its business, including in advertising its products and
services, and may grant this right to others, but not for use as an endorsement.
7. Warranties and Covenants. Executive warrants, represents and covenants
to the Company as follows:
(a) Executive is free to enter into this Agreement and to perform the
services contemplated hereunder.
(b) Executive is not currently (and will not, to the best knowledge and
ability of Executive, at any time during the Employment Period be) subject to
any agreement, understanding, obligation, claim, litigation, condition or
disability which could adversely affect Executive's performance of any of
Executive's obligations hereunder or the Company's complete ownership and
enjoyment of all of the rights, powers and privileges granted to the Company
hereunder.
(c) No Intellectual Property written, composed, created or submitted by
Executive at any time during Executive's employment by the Company shall, to the
best of Executive's knowledge, violate the rights of privacy or publicity,
constitute a libel or slander or infringe upon the copyright, literary,
personal, private, civil, property or other rights of any Person.
8. Employment after Term. Executive's employment by the Company may be
continued beyond the Expiration Date by the express consent of both parties
(which consent each party shall have the right to grant or withhold in its sole
and absolute discretion), in which case, unless a new employment agreement is
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consummated, (i) the relationship between the Company and Executive shall be
that of employment-at-will which may be terminated by either the Company or
Executive at any time upon ten (10) days' written notice, with or without cause,
for any reason or for no reason, and without liability of any nature, and (ii)
Executive's employment by the Company, if any, after the Expiration Date shall
be governed by all of the terms and conditions of this Exhibit A, which shall
survive any termination of the Agreement and which shall not be inconsistent
with the at-will nature of such employment. Whether the termination of this
Agreement upon the Expiration Date shall entitle the Executive to a severance
payment(s) shall be governed by Sections 4(d) and 5 of the Agreement.
9. Immigration. In accordance with the Immigration Reform and Control Act
of 1986 and the regulations adopted thereunder (8 CFR, Parts 109 and 274a), the
obligations of the Company under this Agreement are subject to and conditioned
upon Executive verifying and delivering to the Company, within three (3)
business days of Executive's first date of employment, the Form I-9 prescribed
by the Immigration and Naturalization Service, and presenting to the officer of
the Company designated therefor the original documentation required under such
regulations to establish (i) the identity of Executive and (ii) that Executive
is lawfully authorized to work in the United States. If Executive is unable to
provide the documents required within the aforesaid three (3) business-day
period, Executive must (i) present to such designated officer within said three
(3) business days a receipt for the application for the documents prescribed and
(ii) the original documents required within twenty-one (21) days of Executive's
first date of employment. If Executive fails to verify and deliver the Form I-9
and present the required original documents within the stated time period, this
Agreement and Executive's employment hereunder shall cease and terminate as if
this Agreement had never been entered into and neither party shall have any
further right, duty or obligation to the other under this Agreement.
10. Equitable Relief. Executive acknowledges that the services to be
rendered by Executive under this Agreement, and the rights and privileges
granted by Executive to the Company hereunder, are of a special, unique,
extraordinary and intellectual character which gives them a peculiar and special
value, the loss of which cannot be reasonably or adequately compensated in
damages in an action at law, and a breach by Executive of any of the provisions
hereof will cause the Company great and irreparable injury. Executive
acknowledges that the Company shall, therefore, be entitled, in addition to any
other remedies which it may have under this Agreement or at law, to receive
injunctive and other equitable relief (including without limitation specific
performance) to enforce any of the rights and privileges of the Company or any
of the covenants or obligations of Executive hereunder, and no bond or other
security shall be required in connection therewith. Nothing contained herein,
and no exercise by the Company of any right or remedy, shall be construed as a
waiver by the Company of any other rights or remedies which the Company may
have. In the event that any court or tribunal shall at any time hereafter hold
any covenants or restrictions contained in this Agreement to be unenforceable or
unreasonable as to the scope, territory or period of time specified therein,
such court shall have the power, and is specifically requested by Executive and
the Company, to declare or determine the scope, territory or period of time
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which it deems to be reasonable or enforceable and to enforce the restrictions
contained therein to such extent.
11. Governing Law. The substantive laws (as distinguished from the choice
of law rules) of the State of New York shall govern (i) the validity and
interpretation of this Agreement, (ii) the performance by the parties hereto of
their respective duties and obligations hereunder and (iii) all other causes of
action (whether sounding in contract or in tort) arising out of or relating in
any fashion to Executive's employment by the Company or the termination of such
employment.
12. Notices. All notices, requests, demands or other communications in
connection with this Agreement shall be in writing and shall be deemed to have
been duly given if delivered in person, by telegram, by telecopier to the
applicable telecopier number listed below, or by United States mail, postage
prepaid, certified or registered, with return receipt requested, or otherwise
actually delivered:
If to Executive, to him at the address listed on page 1 of this Agreement.
If to the Company, to it at:
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Executive Officer
with a copy at the same address,
Attention: General Counsel
or such other addresses as Executive or the Company shall have designated by
written notice to the other party hereto. Any such notice, demand or other
communication shall be deemed to have been given on the date actually delivered
(or, in the case of telecopier, on the date actually sent by telecopier) or upon
the expiration of three (3) days after the date mailed, as the case may be.
13. Service as Expert Witness. Executive acknowledges that during the
Employment Period Executive will have access to confidential and proprietary
information concerning the Company, including, without limitation, access to
various proprietary and confidential contracts and financial data. Executive
agrees that Executive shall not at any time either during or after the term of
this Agreement serve as an "expert witness" or in any similar capacity in any
litigation or other proceeding to which the Company or any of its Affiliates or
subsidiaries is a party without the prior written consent of the Company or such
affiliate or subsidiary, as the case may be.
14. Miscellaneous.
(a) This Agreement and the exhibits hereto contain a complete statement
of all of the arrangements between the parties with respect to Executive's
15
employment by the Company, supersede all existing agreements between them
concerning Executive's employment and cannot be changed or terminated orally. No
provision of this Agreement shall be interpreted against any party because that
party or its legal representative drafted the provision. There are no
warranties, representations or covenants, oral or written, express or implied,
except as expressly set forth herein. Executive acknowledges that Executive does
not rely and has not relied upon any representation or statement made by the
Company or any of its representatives relating to the subject matter of this
Agreement except as set forth herein.
(b) If any provision of this Agreement or any portion thereof is
declared by any court of competent jurisdiction to be invalid, illegal or
incapable of being enforced, the remainder of such provision, and all of the
remaining provisions of this Agreement, shall continue in full force and effect
and no provision shall be deemed dependent on any other provision unless so
expressed herein.
(c) The failure of a party to insist on strict adherence to any term of
this Agreement shall not be considered a waiver of, or deprive that party of the
right thereafter to insist on strict adherence to, that term or any other term
of this Agreement.
(d) The headings in this Agreement (including the exhibits hereto) are
solely for convenience of reference and shall not affect its interpretation.
(e) The relationship between Executive and the Company is exclusively
that of employer and executive, and the Company's obligations to Executive
hereunder are exclusively contractual in nature.
(f) Executive shall, at the request of the Company, execute and deliver
to the Company all such documents as the Company may from time to time deem
necessary or desirable to evidence, protect, enforce or defend its right, title
and interest in or to any Confidential Information, Intellectual Property or
other items described in Paragraph 6 hereof. If Executive shall fail or refuse
to execute or deliver to the Company any such document upon request, the Company
shall have, and is granted, the power and authority to execute the same in
Executive's name, as Executive's attorney-in-fact, which power is coupled with
an interest and irrevocable.
(g) The Company may assign this Agreement, Executive's services
hereunder or any of the Company's interests herein (i) to any Person which is a
party to a merger or consolidation with the Company, (ii) to any Affiliate of
the Company or (iii) to any Person acquiring substantially all of the assets of
the Company or the unit of the Company for which Executive is rendering
services; and, provided that any such assignee assumes the Company's obligations
under this Agreement, the Company shall thereupon be relieved of any and all
liability hereunder. Executive shall not have the right to assign this Agreement
or to delegate any duties imposed upon Executive under this Agreement without
the written consent of the Company, and any such purported assignment or
delegation shall be void ab initio.
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