EXHIBIT 10.17
[LOGO APPEARS HERE]
As of June 1, 1998
Xxxxxx Xxxxxx Xxxxx, Xx.
c/o Metro-Xxxxxxx-Xxxxx Studios Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxxx, XX 00000
Dear Xx. Xxxxx:
Kindly refer to the Employment Agreement dated March 3, 1995 between you
("Employee") and Metro-Xxxxxxx-Xxxxx Inc., now known as Metro-Xxxxxxx-Xxxxx
Studios Inc., ("MGM") herein called the "Employment Agreement."
MGM and Employee mutually agree to amend the Employment Agreement effective
as of June 1, 1998 as follows:
1. The term of the Employment Agreement shall be extended for the three
(3) year period commencing on June 1, 1998 and terminating May 31,
2001 (the "Extended Term").
The word "Term" as used in the Employment Agreement shall be deemed to
include the Extended Term.
2. Employee's title shall be changed to Executive Vice President, or a
substantially equivalent title in the event of a corporate
reorganization. Employee's duties shall include, in addition to
responsibility for overseeing corporate legal affairs, responsibility
for corporate ventures and the development and structure of
acquisition, investment, financing, equity, joint venture and other
strategic alliance opportunities for Metro-Xxxxxxx-Xxxxx Inc. and its
subsidiaries.
3. Provided Employee shall fully perform all of his obligations under the
Employment Agreement, as amended hereby, MGM shall pay Employee a
salary during the Extended Term as follows:
(a) at the rate of Three Hundred Thousand Dollars ($300,000) per
annum during the first year of the Extended Term.
(b) at such rate as may be determined pursuant to a review on or
about June 1, 1999 for the second year of the Extended Term, but
in no event less than the salary then received.
(c) at such rate as may be determined pursuant to a review on or
about June 1, 2000 for the third year of the Extended Term, but
in no event less than the salary then received.
Such salary shall be payable in installments in accordance with MGM's
standard payment practices.
4. (a) Subject to subparagraph 4(c) below, in the event of a
Designated Change of Control or a Major Corporate Event,
Employee shall be entitled to receive a cash bonus equal to the
result obtained by calculating as of the Bonus Determination Date
(defined below) the difference between (a) the sum of (i) the
amount that would have been payable to Employee had he been a
participant in the Senior Management Bonus Plan who had been
granted as of October 10, 1996 an aggregate of 27,125 bonus
interests pursuant to the Bonus Interest Agreement and (ii) the
Gross Spread that would have been available to Employee had he
been granted an aggregate of 29,167 Series A Options and 29,167
Series B Options pursuant to the Executive Stock Option
Agreement; and (b) the Gross Spread available to Employee on all
stock options theretofore granted to him pursuant to the Employee
Stock Option Agreement, whether or not such stock options are
then fully vested and exercisable.
(b) The date on which the amount of such bonus shall be determined
(the "Bonus Determination Date") shall be (i) in the case of a
Designated Change of Control at a price per share of Metro-
Xxxxxxx-Xxxxx Inc. common stock (the "Trading Price") of greater
than $24.00 per share, the date of such Designated Change of
Control; (ii) in the case of a Designated Change of Control at a
Trading Price of $24.00 or less per share or in the case of a
Major Corporate Event, the next Determination Date (as such term
is defined in the Bonus Interest Agreement) which results in
participants in the Senior Management Bonus Plan as a group
receiving payments thereunder. Such bonus shall be payable in
each such case on the same date the corresponding payments are
made pursuant to the Bonus Interest Agreement.
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(c) It is understood and agreed that such bonus shall be payable only
if Employee is either rendering services to MGM at the time of
the announcement of such Designated Change of Control or Major
Corporate Event or, if not rendering services to the Company at
such time, shall have been terminated without Cause or resigned
for Good Reason within three (3) months prior thereto.
(d) As used herein, certain terms shall have the meanings ascribed to
them below:
"Designated Change of Control" has the meaning set forth in
Schedule 1 to the Metro-Xxxxxxx-Xxxxx Inc. Stock Option Agreement
Pursuant to the Amended and Restated 1996 Stock Incentive Plan.
"Major Corporate Event" means any merger, acquisition,
consolidation, joint venture or similar arrangement (not
constituting a Designated Change of Control) involving Metro-
Xxxxxxx-Xxxxx Inc. or any of its subsidiaries and having an
equity or similar value in excess of $500 million or any other
event designated as such by the Chairman or Vice Chairman of MGM.
"Senior Management Bonus Plan" means the Metro-Xxxxxxx-Xxxxx Inc.
and Metro-Xxxxxxx-Xxxxx Studios Inc. Senior Management Bonus Plan
as adopted by the Board of Directors of such companies on
November 7, 1997 and approved by the stockholders of Metro-
Xxxxxxx-Xxxxx Inc. on May 12, 1998.
"Bonus Interest Agreement" means the form of Metro-Xxxxxxx-Xxxxx
Inc. and Metro-Xxxxxxx-Xxxxx Studios Inc. Bonus Interest
Agreement Pursuant to the Senior Management Bonus Plan.
"Stock Incentive Plan" means the Amended and Restated 1996 Stock
Incentive Plan adopted by the Board of Directors and stockholders
of Metro-Xxxxxxx-Xxxxx Inc. on November 7, 1997.
"Executive Stock Option Agreement" means the form of Metro-
Xxxxxxx-Xxxxx Inc. Stock Option Agreement Pursuant to the Amended
and Restated 1996 Stock Incentive Plan.
"Employee Stock Option Agreement" means the form of Metro-
Xxxxxxx-Xxxxx Inc. Employee Non-Qualified Stock Option Agreement
Pursuant to the Amended and Restated 1996 Stock Incentive Plan.
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"Gross Spread" means the product of (a) the difference between
(i) the Trading Price of the Company's Common Stock on the Bonus
Determination Date and (ii) the exercise price of the stock
options in question and (b) the number of such stock options.
"Cause" and "Good Reason" have the respective meanings set forth
in Schedule A to the Employee Stock Option Agreement.
5. Metro-Xxxxxxx-Xxxxx Inc. presently maintains the Stock Incentive Plan
under which Employee has heretofore been granted options to purchase
15,600 shares of Metro-Xxxxxxx-Xxxxx Inc. Common Stock, $.01 par
value, pursuant to the Employee Stock Option Agreement ("Employee
Stock Options"). Management agrees to recommend to the Compensation
Committee of the Board of Directors of Metro-Xxxxxxx-Xxxxx Inc. that
Employee be granted an additional 10,400 Employee Stock Options which
additional options will be effective as of the date of grant and will
be exercisable in accordance with the terms and restrictions contained
in the Employee Stock Option Agreement.
6. Employee's car allowance set forth in paragraph 6 of the Employment
Agreement shall be increased to $1,000 per month in accordance with
MGM's current policy for comparable executives.
7. In the event of the termination of Employee's employment with MGM for
any reason and for a period of one (1) year thereafter:
(a) Employee shall not either alone or jointly, with or on behalf of
others, either directly or indirectly, whether as principal,
partner, agent, shareholder, director, employee, consultant or
otherwise, offer employment to, or solicit the employment or
engagement of, or otherwise entice away from the employment of
MGM, either for Employee's own account or for any other person,
firm or company, any employee of MGM at the level of Manager or
above; and
(b) Employee shall not make any public statement concerning MGM or
any of its affiliates or subsidiaries or relating to Employee's
employment with MGM unless previously approved by MGM, except as
may be required by law.
8. Except as herein specifically provided, the Employment Agreement shall
not be amended in any respect whatsoever and shall continue in full
force and effect.
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If the foregoing is in accordance with your understanding and agreement,
please so indicate by signing in the place for your signature below.
Very truly yours,
METRO-XXXXXXX-XXXXX STUDIOS INC.
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------
Senior Executive Vice President
AGREED:
/s/ Xxxxxx Xxxxxx Xxxxx, Xx.
----------------------------
XXXXXX XXXXXX XXXXX, XX.
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