EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement (this "AGREEMENT") is made and entered into as
of the 1st day of January, 1999, by and between Equity Marketing, Inc., a
Delaware corporation (the "COMPANY"), and Xxxxxx X. Xxxx ("EXECUTIVE").
1. ENGAGEMENT AND DUTIES.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, the Company hereby engages and employs Executive as an officer of
the Company, with the title and designation "Chairman of the Board and Chief
Executive Officer." Executive hereby accepts such engagement and employment.
(b) During the term of this Agreement, the Executive, as Chairman of
the Board and Chief Executive Officer of the Company, shall report only to
the Board, and his powers and authority shall be and remain superior to those
of any other officer or employee of the Company. The Company shall use its
best efforts to have the Executive elected as a Director of the Company and,
if elected, the Executive agrees to serve as a Director of the Company
without additional compensation. The Executive shall, subject to the
direction and control of the Board, have general and active supervision and
control of the business and affairs of the Company and active direction over
the conduct of its business and shall perform all duties and enjoy all powers
commonly incident to the positions of Chairman and Chief Executive Officer
and otherwise as may be delegated to him from time to time by the Board;
provided, however, that in no event shall the scope of the Executive's duties
or the extent of the Executive's responsibilities be substantially different
from the Executive's current duties and responsibilities.
(c) Executive agrees to devote his full-time business time, energy and
efforts to the business of the Company and will use his best efforts and
abilities faithfully and diligently to promote the Company's business
interests.
(d) For so long as Executive is employed by the Company or is receiving
severance under Section 5(a) or Section 5(c) of this Agreement, Executive
shall not, directly or indirectly, as owner, partner, joint venturer,
shareholder, employee, broker, agent, principal, trustee, corporate officer,
director, licensor, or in any capacity whatsoever engage in, become
financially interested in, be employed by, render any consultation or
business advice with respect to, or have any connection with, any business
engaged in the development, design, manufacture, sale, marketing, utilization
or exploitation of any products or services which are designed for the same
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purpose as, are similar to, or are otherwise competitive with, current,
proposed or anticipated products or services of the Company Group, in any
geographic area where, prior to or at the time of the termination of his
employment, the business of the Company Group was being conducted or was
proposed to be conducted in any manner whatsoever; provided, however, that
the Executive may own any securities of any corporation which is engaged in
such business and is publicly owned and traded but in an amount not to exceed
at any one time one percent (1%) of any class of stock or securities of such
corporation. Subject to the foregoing prohibition and provided such services
or investments do not violate any applicable law, regulation or order, or
interfere in any way with the faithful and diligent performance by Executive
of the services to the Company otherwise required or contemplated by this
Agreement or duly requested by the Board, the Company expressly acknowledges
that Executive may:
(i) make and manage personal business investments of Executive's
choice without consulting the Board;
(ii) serve in any capacity with any civic, educational, charitable
or trade organization; and
(iii) serve as a member of the board of directors of other
companies or businesses with the approval of the Board, which approval will
not be unreasonably withheld.
2. DEFINITIONS.
For the purposes of this Agreement, the following terms shall have the
meanings set forth below:
"BOARD" shall mean the Board of Directors of the Company, not including
Executive.
"CHANGE OF CONTROL" shall be deemed to have occurred if:
(a) any Person (other than the Executive, the Company, any trustee or
other fiduciary holding securities under an employee benefit plan of the
Company) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Securities Exchange Act of 1934, as amended), directly or indirectly, of
securities of the Company representing more than 50% of the combined voting
power of the Company's then outstanding voting securities;
(b) during any period of twenty-four (24) consecutive months,
individuals, who at the beginning of such period constitute the Board of
Directors of the Company, and any new director whose election by the Board of
Directors, or whose nomination for election by the Company's stockholders,
was approved by a vote of at least one-half (1/2) of the directors then in
office (other than in connection with a contested election), cease for any
reason to constitute at least
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one-half (1/2) of the Board of Directors;
(c) the stockholders of the Company approve (i) a plan of complete
liquidation of the Company; or (ii) the sale or other disposition by the
Company of all or substantially all of the Company's assets; or
(d) the consummation of a merger, consolidation or reorganization of
the Company with any other entity other than:
(i) a merger, consolidation or reorganization which results in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than 50% of
the combined voting power of the surviving entity's outstanding voting
securities immediately after such merger, consolidation or reorganization; or
(ii) a merger, consolidation or reorganization which would result
in the directors of the Company (who were directors immediately prior
thereto) continuing to constitute at least 50% of all directors of the
surviving entity immediately after such merger, consolidation or
reorganization.
In this paragraph (d), "surviving entity" shall mean only an entity in which
all of the Company's stockholders immediately before such merger,
consolidation or reorganization (determined without taking into account any
stockholder's properly exercising appraisal or similar rights) become
stockholders by the terms of such merger, consolidation or reorganization,
and the phrase "directors of the Company (who were directors immediately
prior thereto)" shall include only individuals who were directors of the
Company at the beginning of the twenty-four (24) consecutive month period
preceding the date of such merger, consolidation or reorganization.
"COMPANY GROUP" shall mean the Company, including all parent, subsidiary
and affiliated entities, and each Person with respect to which the Company
directly or indirectly has Control.
"COMPENSATION COMMITTEE" shall mean the members of the Board who have
been appointed by the Board to determine compensation issues relating to the
Company.
"CONSULTING PERIOD" shall mean that period of time following the
Employment Term during which Executive serves as a Consultant to the Company
and as specifically defined in the Consulting Agreement, which is attached
hereto as EXHIBIT "A".
"CONSUMER PRICE INDEX ADJUSTMENT" shall be determined as follows: the
Consumer Price Index for the Los Angeles - Riverside - Orange County, CA (All
Items), as published by
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the United States Department of Labor, Bureau of Labor Statistics
(1982-84=100) (the "INDEX") which is most recently available at the
commencement of the new year (the "NEW INDEX") shall be compared with the
Index most recently available twelve months prior to the New Index (the
"PREVIOUS INDEX"). If the New Index has increased over the Previous Index,
the Consumer Price Index Adjustment shall be set by multiplying the Base Rate
of the prior year by a fraction, the numerator of which is the New Index and
the denominator of which is the Previous Index; provided, however, that if
the Index is changed so that the base year used for the New Index differs
from that used for the Previous Index, the New Index shall be converted in
accordance with the conversion factor published by the United States
Department of Labor, Bureau of Labor Statistics.
"CONTROL" shall mean, with respect to any Person, (i) the beneficial
ownership of any of the outstanding voting securities of such Person, or (ii)
the power, directly or indirectly, by proxy, voting trust or otherwise, to
elect any of the outstanding directors, trustees or other managing persons of
such Person.
"EMPLOYMENT COMMENCEMENT DATE" shall mean January 1, 1999.
"EMPLOYMENT TERM" shall mean January 1, 1999 through December 31, 2002.
Upon the termination or expiration of this Agreement or termination by reason
of disability in circumstances in which Executive remains able to consult,
the Executive shall be retained by the Company as a consultant to the Company
for a period of three (3) years pursuant to the terms and conditions of the
Consulting Agreement that is attached to this Agreement as EXHIBIT "A";
provided, however, that if the employment is terminated Other Than For Cause
pursuant to Section 4(d) Executive may elect within 30 days of such
termination not to be engaged as a Consultant for the Company and in such
event, the provisions of the Consulting Agreement shall not be binding upon
either Executive or the Company.
"FOR CAUSE" shall mean, in the context of a basis for termination of
Executive's employment with the Company, that:
(a) Executive materially breaches any obligation, duty or
agreement under this Agreement, which breach is not cured or corrected within
15 days of written notice thereof from the Company (except for breaches of
Sections 1(d), 6 or 7 of this Agreement, which cannot be cured and for which
the Executive shall have no opportunity to cure);
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(b) Executive is grossly negligent in the course of providing
services to the Company, or commits any act of personal dishonesty, fraud or
breach of fiduciary duty or trust against the Company;
(c) Executive is convicted of, or pleads guilty or nolo
contendere with respect to, theft, fraud or felony under federal or
applicable state law;
(d) Executive commits any act or acts of personal conduct that,
following due investigation and determination by the Board of probable cause,
gives rise to a likelihood of liability under federal or applicable state law
for discrimination or sexual or other forms of harassment or other similar
liabilities with respect to subordinate employees; or
(e) Executive commits continued and repeated material violations
of specific directions of the Board, which directions are consistent with
past practices of the Board with respect to governance matters, with this
Agreement and with Executive's position as a chief executive officer, or
continued and repeated substantive failure to perform duties assigned by or
pursuant to this Agreement; provided that no termination shall be deemed For
Cause under this subsection (e) unless Executive first receives written
notice from the Company advising him of the specific acts or omissions
alleged to constitute violations of written directions or a material failure
to perform his duties, and such violations or material failure continue after
he shall have had a reasonable opportunity to correct the acts or omissions
so complained of.
"PERSON" shall mean an individual or a partnership, corporation, trust,
association, limited liability company, governmental authority or other
entity.
3. COMPENSATION; EXECUTIVE BENEFIT PLANS.
(a) BASE SALARY. The Company shall pay to Executive a base salary (the
"BASE SALARY") at an annual rate of $375,000 during the Employment Term. The
Base Salary shall be payable in installments throughout the year in the same
manner and at the same times the Company pays base salaries to other
executive officers of the Company. After 1999, the Base Salary shall be
adjusted upward annually in an amount at the sole discretion of the
Compensation Committee; provided, however, that such upward annual adjustment
shall be greater than or equal to the Consumer Price Index Adjustment.
(b) BONUS.
(i) ANNUAL FINANCIAL PERFORMANCE BONUS. Executive shall be
eligible to receive an annual financial incentive bonus no later than 90 days
after the end of each year that is included within the Employment Term. Such
bonus shall be based upon the budgeted, pre-
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bonus, pre-tax earnings of the Company as approved by the Board at the
beginning of the calendar year and as set forth in the Company's business or
operating plan for such year prepared in the ordinary course of business,
exclusive of extraordinary or nonrecurring items (as defined and approved by
the Board) (the "EARNINGS TARGET"). Such bonus shall be 50% of the Base
Salary for the applicable year if the Company's Operating Earnings equal or
exceed 140% of the Earnings Target. Such bonus shall be 25% of the Base
Salary for the applicable year if the Company's Operating Earnings are equal
to 100% of the Earnings Target. If the Operating Earnings are between 100%
and 140% of the Earnings Target, such bonus shall be prorated between 25% and
50% of the Base Salary. If the Operating Earnings are between 80% and 100%
of the Earnings Target, such bonus shall be prorated between 0% and 25% of
the Base Salary. Executive shall not receive such a bonus if the Operating
Earnings are equal to or less than 80% of the Earnings Target. For purposes
of this Agreement, "OPERATING EARNINGS" shall be defined as income from
operations before taxes, bonuses and extraordinary or nonrecurring items (as
approved and defined by the Board) in accordance with the Company's historic
and customary practice.
(ii) ANNUAL STRATEGIC PERFORMANCE BONUS. Subject to the sole
discretion of the Compensation Committee of the Board, the Company may pay
Executive an annual strategic performance bonus, after taking into account
the Company's long-term prospects and position and the accomplishment of
strategic goals as devised by mutual agreement of the Board and Executive.
Such annual bonus shall not exceed one-half of the Base Salary.
(iii) STOCK OPTIONS. On January 1, 1999, Executive shall receive a
grant of 50,000 options to purchase Common Stock ("OPTIONS") granted under
the Company's Stock Option Plan (the "PLAN") exercisable at $12.375 per
share. Thereafter, it shall be within the sole discretion of the
Compensation Committee of the Board, upon review at least annually, whether
to grant Executive Options under the Plan or any successor stock option plan
and, if granted, the number of shares subject to such Options.
(c) REIMBURSEMENT. Executive shall be entitled to reimbursement from
the Company for the reasonable costs and expenses that he incurs in
connection with the performance of his duties and obligations under this
Agreement in a manner consistent with the Company's practices and policies
for reimbursements for chief executive officers.
(d) ADDITIONAL REIMBURSEMENT. During the Term of this Agreement, the
Company shall reimburse Executive on a basis comparable to the current
practice of the Company, for
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leasing garage space, telephone and home office equipment for his use in
performing his employment duties and obligations under this Agreement.
(e) GROUP BENEFIT PLANS. Executive shall be eligible to participate in
the Company's group health, dental, life, disability, retirement (including
401(k)) and pension benefit plans, subject to the terms, conditions and
limitations contained in the applicable plan documents and insurance policies.
(f) VACATION. Executive shall be entitled to four weeks of paid
vacation each year during the term of this Agreement. Any vacation time
shall be scheduled to minimize interference with the exercise of Executive's
duties under this Agreement.
(g) INSURANCE. During the term of this Agreement, the Company shall
pay the Executive such additional amounts on an after-tax basis as are
required for the Executive to maintain and pay all premiums on (i)
supplemental disability insurance paying at least $20,625 per month, and (ii)
term life insurance having a face value payable on death of no less than $3
million, net of all loans or encumbrances, on the life of the Executive with
the Executive (or his estate) as beneficiary with a minimum 10-year term,
constant annual premiums.
(h) WITHHOLDING. The Company may deduct from any compensation payable
to Executive the minimum amounts sufficient to cover applicable federal,
state and/or local income tax withholding, old-age and survivors' and other
social security payments, state disability and other insurance premiums and
payments.
(i) FRINGE BENEFITS. Executive shall be entitled to an automobile
allowance of $1,600 per month through the date his employment is terminated.
The automobile allowance shall be paid in a manner consistent with the
Company's practices and policies therefor. During the Employment Term,
Executive shall also be entitled to reimbursement for expenses of first class
travel and hotel accommodations while travelling on Company business in
accordance with the policies of the Company as in effect from time to time.
4. TERMINATION OF EMPLOYMENT.
Executive's employment pursuant to this Agreement shall commence on the
Employment Commencement Date and shall terminate on the earliest to occur of
the following:
(a) upon the death of Executive;
(b) upon delivery to Executive of written notice of termination by the
Company if Executive shall suffer a physical or mental disability which
renders Executive unable to perform
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his duties and obligations under this Agreement for at least 120 days,
whether or not consecutive, in any 12-month period;
(c) upon delivery to Executive of written notice of termination by the
Company For Cause;
(d) upon delivery to Executive of written notice of termination by the
Company Other Than For Cause; or
(e) upon the earliest to occur of the end of the Employment Term or the
first anniversary of a Change of Control .
5. SEVERANCE COMPENSATION.
(a) If Executive's employment is terminated pursuant to Section 4(a)
(death) or Section 4(b) (disability), the Company shall pay to the Executive
or his estate his full Base Salary through the end of the month of
Executive's death or disability, and Executive or his estate shall be
entitled to a prorated share of any bonus or benefits as provided under
Section 3 hereof for the calendar year during which his death or disability
occurred. Notwithstanding the foregoing, if (i) Executive's employment is
terminated due to a disability, and (ii) Executive is denied all or some
disability benefits under the applicable disability policy, then Executive
shall be entitled to continue to receive his Base Salary from the Company in
accordance with Section 3(a) of this Agreement through the end of the
Employment Term, payable at the same time and in the same manner as if
Executive's employment had not terminated. Any disability benefits that
Executive does receive shall be offset against any amounts payable to
Executive pursuant to this Section. Executive agrees to cooperate fully with
the Company and the disability insurance carrier with respect to any claim
for disability benefits.
(b) If Executive's employment is terminated pursuant to Section 4(c)
(by the Company For Cause), Executive's Base Salary and all benefits under
Section 3 shall cease as of the date of termination, and Executive shall not
be entitled to any bonus for the calendar year during which his employment
shall be terminated or at any time thereafter. In the event of termination
of Executive's employment pursuant to Section 4(c) (by the Company For
Cause), and subject to applicable law and regulations, the Company shall be
entitled to offset against any payments due Executive the loss and damage, if
any, which shall have been suffered by the Company as a result of the acts or
omissions of Executive giving rise to termination under Section 4(c). The
foregoing shall not be construed to limit any cause of action, claim or other
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rights which the Company may have against Executive in connection with such
acts or omissions.
(c) If Executive's employment is terminated pursuant to Section 4(d)
(by the Company Other Than For Cause) prior to the end of the Employment
Term, Executive shall be entitled to continue to receive his Base Salary in
accordance with Section 3(a) of this Agreement and double the Annual
Financial Performance Bonus in accordance with Section 3(b)(i) of this
Agreement through the end of the Employment Term, payable at the same time
and in the same manner as if Executive's employment had not terminated.
Executive shall have no duty to seek other employment upon such termination,
and if Executive does so, any income therefrom, including any amounts payable
under the Consulting Agreement, shall not be credited against amounts due
hereunder.
(d) If Executive terminates his employment in breach of this Agreement
prior to the end of the Employment Term, Executive shall as of the date of
termination cease to be entitled to Base Salary, benefits or bonuses. In
addition, the Company shall be entitled to seek any other available remedies
pursuant to this Agreement or otherwise for such breach, and to offset
against any amounts due Executive any damages suffered as a result of such
breach.
(e) Executive acknowledges that the Company has the right to terminate
Executive's employment Other Than For Cause and that such termination shall
not be a breach of this Agreement or any other express or implied agreement
between the Company and Executive. Accordingly, in the event of such
termination, Executive shall be entitled only to the compensation and
benefits specifically provided for in this Agreement and the Consulting
Agreement, if applicable, in the event of such termination, and shall not
have any other rights to any compensation or damages from the Company for
breach of contract.
(f) Executive acknowledges that in the event of termination of his
employment for any reason, he shall not be entitled to any severance or other
compensation from the Company except as specifically provided in this Section
5 or in the Consulting Agreement. Without limitation on the generality of
the foregoing, this Section supersedes any plan or policy of the Company
which provides for severance to its officers or employees, and Executive
shall not be entitled to any benefits under any such plan or policy.
6. COVENANT NOT TO SOLICIT.
(a) During the Employment Term, any Consulting Period thereafter and
through the first anniversary of the end of the Employment Term or the
Consulting Period, if any, Executive
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will not directly or indirectly, either alone or by action in concert with
others: (i) induce any employee of any member of the Company Group to engage
in any activity in which Executive is prohibited from engaging by Section
1(d) of this Agreement or to terminate his or her employment with any member
of the Company Group; or (ii) employ or offer employment or induce any Person
to employ or offer employment to anyone who is or was within the 12 months
prior to the date of the proscribed action employed by any member of the
Company Group; or (iii) induce or attempt to induce any customer, supplier,
licensee or other business relationship of any member of the Company Group to
discontinue or reduce its business with any member of the Company Group, or
in any way interfere with the relationship between any such customer,
supplier, licensee or business relationship and any member of the Company
Group; or (iv) solicit or accept any business whatsoever from any of the
customers with which the Company did business during the Executive's
engagement or employment by the Company. The Company's current chief
executive officer shall have the authority to waive the provisions of Section
6(a)(ii) insofar as it relates to the personal assistant who was assigned to
Executive. (All of the provisions of this Section 6(a) shall continue to
apply through any Consulting Period following the Employment Term and through
the first anniversary of the end of the Employment Term or the Consulting
Period, as applicable (the "Post-Employment Period")).
(b) Executive acknowledges that the Company Group conducts business on
a world-wide basis, that its sales and marketing prospects are for continued
expansion into world markets and that, therefore, the territorial and time
limitations set forth in Section 1(d) and in this Section 6 are reasonable
and properly required for the adequate protection of the business of the
Company Group. In the event any such territorial or time limitation is
deemed to be unreasonable by a court of competent jurisdiction, Executive
agrees to the reduction of the territorial or time limitation to the area or
period which such court deems reasonable.
(c) If any portion of the restrictions set forth in Section 1(d) and in
this Section 6 should, for any reason whatsoever, be declared invalid by a
court of competent jurisdiction, the validity or enforceability of the
remainder of such restrictions shall not thereby be adversely affected.
(d) The existence of any claim or cause of action by Executive against
the Company shall not constitute a defense to the enforcement by the Company
of the restrictive covenants set forth in Section 1(d) and in this Section 6,
but such claim or cause of action shall be litigated separately.
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7. CONFIDENTIALITY.
Executive will not at any time (whether during or after his employment
with the Company) disclose or use for his own benefit or purposes or the
benefit or purposes of any other Person, other than any member of the Company
Group, any trade secrets, information, data, or other confidential
information relating to customers, development programs, costs, marketing,
trading, investment, sales activities, promotion, credit and financial data,
financial methods, plans, or the business and affairs of the Company Group
generally. Executive agrees that upon termination for any reason of this
Agreement, he will immediately return to the Company all memoranda, books,
papers, plans, information, letters and other data, and all copies thereof or
therefrom, in any way relating to the business of the Company Group;
provided, however, that Executive may retain such materials as in the
reasonable discretion of the Board are required to fulfill his duties under
the Consulting Agreement or as a director of the Company (retention being
permitted by Executive until such time as the Board requests the return of
such materials). Executive further agrees that he will not retain or use at
any time any trade name, trademark or other proprietary business designation
used or owned in connection with the business of any member of the Company
Group.
8. COPYRIGHT AND TRADEMARKS.
(a) All right, title and interest, of every kind whatsoever, in the
United States and throughout the world, in (i) any work, including the
copyright thereof (for the full terms and extensions thereof in every
jurisdiction), created by the Executive at any time during the term of this
Agreement, of the term of that certain Employment Agreement dated as of
October 1, 1993 or of the term of that certain Employment Agreement dated as
of January 1, 1997, and all material embodiments of the work subject to such
rights; and (ii) all inventions, ideas, discoveries, designs and
improvements, patentable or not, made or conceived by the Executive at any
time during the term of this Agreement, of the term of that certain
Employment Agreement dated as of October 1, 1993 or of the term of that
certain Employment Agreement dated as of January 1, 1997, shall be and remain
the sole property of the Company without payment of any further consideration
to the Executive or any other person than as set forth herein, and each such
work shall, for purposes of United States copyright law, be deemed created by
the Executive pursuant to his duties under this Agreement and within the
scope of his employment and shall be deemed a work made for hire; and
Executive agrees to assign, at the Company's expense, and the Executive does
hereby assign, all of his right, title and interest in and to all such works,
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copyrights, materials, inventions, ideas, discoveries, designs and improvements,
patentable or not, and any copyrights, letters patent, trademarks, trade
secrets, and similar rights, and the applications therefor, which may exist or
be issued with respect thereto. For the purposes of this Section 8, "WORKS"
shall include all materials created during the term of this Agreement, whether
or not ever used by or submitted to the Company, including, without limitation,
any work which may be the subject matter of a copyright under the United States
copyright law. In addition to its other rights, the Company may copyright any
such work in its name in the United States in accordance with the requirements
of the United States copyright law and the Universal Copyright Convention and
any other convention or treaty to which the United States is or may become a
party.
(b) Whenever the Company shall so request, whether during or after the
term of this Agreement, the Executive shall execute, acknowledge and deliver
all applications, assignments or other instruments; make or cause to be made
all rightful oaths; testify in all legal proceedings; communicate all known
facts which relate to such works, copyrights, inventions, ideas, discoveries,
designs and improvements; perform all lawful acts and otherwise render all
such assistance as the Company may deem necessary to apply for, obtain,
register, enforce and maintain any copyrights, letters patent and trademark
registrations of the United States or any foreign jurisdiction or under the
Universal Copyright Convention (or any other convention or treaty to which
the United States is or may become a party), or otherwise to protect the
Company's interests therein, including any which the Company shall deem
necessary in connection with any proceeding or litigation involving the same.
The Company shall reimburse the Executive for all reasonable out-of-pocket
costs incurred by the Executive in testifying at the Company's request or in
rendering any other assistance requested by the Company pursuant to this
Section 8. All registration and filing fees and similar expenses shall be
paid by the Company.
9. SPECIFIC PERFORMANCE.
Executive acknowledges and agrees that the Company's remedies at law for
a breach or threatened breach of any of the provisions of Sections 1(d), 6 or
7 would be inadequate and, in recognition of this fact, Executive agrees
that, in the event of such a breach or threatened breach, in addition to any
remedies at law, the Company shall be entitled to obtain equitable relief in
the form of specific performance, temporary restraining order, temporary or
permanent injunction or
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any other equitable remedy which may then be available. In addition, the
Executive recognizes that the services to be rendered by him under this
Agreement are of a special, unique, unusual, extraordinary and intellectual
character involving skill of the highest order and giving them peculiar
value, the loss of which cannot be adequately compensated in damages.
Consequently, in the event of a breach of this Agreement by the Executive,
the Company shall be entitled to injunctive relief or any other legal or
equitable remedies. The Executive agrees that the Company also may recover
by appropriate action the amount of the actual damage caused the Company by
any failure, refusal or neglect of the Executive to perform his agreements,
representations and warranties contained in this Agreement. The remedies
provided in this Agreement shall be deemed cumulative and the exercise of one
shall not preclude the exercise of any other remedy at law or in equity for
the same event or any other event.
10. RESOLUTION OF DISPUTES.
(a) Except as provided in subsection (c) below, any controversy or
claim between or among the parties, relating to Executive's employment with
the Company, including but not limited to those arising out of or relating to
this Agreement or any agreements or instruments relating hereto or delivered
in connection herewith and any claim based on or arising from an alleged
tort, shall at the request of any party be determined by arbitration. The
arbitration shall be conducted in Los Angeles, California, in accordance with
the United States Arbitration Act (Title 9 of the United States Code),
notwithstanding any choice of law provision in this Agreement, and under the
National Rules for the Resolution of Employment Disputes of the American
Arbitration Association ("AAA"). The parties shall have the right to review
and approve a panel of prospective arbitrators supplied by AAA, but the
arbitration shall be conducted by a single arbitrator selected from the
approved panel by AAA or by stipulation of the parties. The arbitrator shall
give effect to statutes of limitation in determining any claim. Any
controversy concerning whether an issue is arbitrable shall be determined by
the arbitrator. The arbitrator shall be entitled to order specific
performance of the obligations imposed by this Agreement. Judgment upon the
arbitration award may be entered in any court having jurisdiction.
(b) All decisions of the arbitrator shall be final, conclusive and
binding on all parties and shall not be subject to judicial review. All
costs of the arbitration shall be borne by the party which is not the
Prevailing Party (as defined in Section 11(h) of this Agreement). If
required,
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each party shall advance 50% of any costs of the arbitration required to be
advanced, subject to the right of the non-Prevailing Party to reimbursement.
(c) Subsection (a) above does not prohibit a party from seeking and
obtaining injunctive relief from a court of competent jurisdiction pending
the outcome of arbitration. A party bringing an action for injunctive relief
shall not be deemed to have waived its right to demand arbitration of all
disputes.
11. MISCELLANEOUS.
(a) NOTICES. All notices, requests, demands and other communications
(collectively, "NOTICES") given pursuant to this Agreement shall be in
writing, and shall be delivered by personal service, courier, facsimile
transmission or by United States first class, registered or certified mail,
addressed to the following addresses:
(i) If to the Company, to:
Equity Marketing, Inc.
000 X. Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000-0000
Attn: General Counsel
(ii) If to Executive, to:
Xxxxxx X. Xxxx
0000 Xxxxx Xxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
With a copy to:
Xxxxxxxxx Xxxxxx Xxxxxxxx Xxxxxxx & Xxxxxxxxxx
0000 Xxxxxxx Xxxx Xxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxx Xxxxxxxx or Xxxxxxxx Xxxxxxx
Any Notice, other than a Notice sent by registered or certified mail, shall
be effective when received; a Notice sent by registered or certified mail,
postage prepaid return receipt requested, shall be effective on the earlier
of when received or the third day following deposit in the United States
mails (or on the seventh day if sent to or from an address outside the United
States). Any party may from time to time change its address for further
Notices hereunder by giving notice to the other party in the manner
prescribed in this Section.
(b) ENTIRE AGREEMENT. This Agreement and the concurrently executed
Consulting Agreement that is attached hereto as EXHIBIT "A" (collectively,
the "Agreements") contain the
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sole and entire agreement and understanding of the parties with respect to
the entire subject matter of the Agreements, and any and all prior
discussions, negotiations, commitments and understandings, whether oral,
written or implied, related to the subject matter of the Agreements,
including but not limited to that certain Employment Agreement and that
certain Consulting Agreement dated as of October 1, 1993 and that certain
Employment Agreement and that certain Consulting Agreement dated as of
January 1, 1997, are hereby extinguished and superseded. No representations,
oral or otherwise, express or implied, other than those contained in the
Agreements have been relied upon by any party to the Agreements.
(c) SEVERABILITY. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason,
in whole or in part, the remaining provisions of this Agreement shall be
unaffected thereby and shall remain in full force and effect to the fullest
extent permitted by law.
(d) GOVERNING LAW. This Agreement has been made and entered into in
the State of California and shall be construed in accordance with the laws of
the State of California.
(e) CAPTIONS. The various captions of this Agreement are for reference
only and shall not be considered or referred to in resolving questions of
interpretation of this Agreement.
(f) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
(g) BUSINESS DAY. If the last day permissible for delivery of any
notice under any provision of this Agreement, or for the performance of any
obligation under this Agreement, shall be other than a business day, such
last day for such notice or performance shall be extended to the next
following business day (provided, however, under no circumstances shall this
provision be construed to extend the date of termination of this Agreement).
(h) ATTORNEYS' FEES. If any action, proceeding or arbitration is
brought to enforce or interpret any provision of this Agreement, the
Prevailing Party shall be entitled to recover as an element of its costs, and
not its damages, its reasonable attorneys' fees, costs and expenses. The
"PREVAILING PARTY" is the party who would have been entitled to recover its
costs under the California Code of Civil Procedure had the action been
maintained in the Superior Court of California regardless of whether there is
final judgment. A party not entitled to recover its costs may not recover
attorneys' fees. No sum for attorneys' fees shall be counted in calculating
the
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amount of a judgment for purposes of determining whether a party is entitled
to recover its costs or attorneys' fees.
(i) ADVICE FROM INDEPENDENT COUNSEL. The parties hereto understand
that this Agreement is legally binding and may affect such party's rights.
Each party represents to the other that it has received legal advice from
counsel of its choice regarding the meaning and legal significance of this
Agreement.
(j) INTERPRETATION. Should any provision of this Agreement require
interpretation, it is agreed that any court or arbitrator interpreting or
construing the same shall not apply a presumption that the terms hereof shall
be more strictly construed against any Person by reason of the rule of
construction that a document is to be construed more strictly against the
Person who itself or through its agent prepared the same, it being agreed
that all Parties have participated in the preparation of this Agreement.
(k) SURVIVAL. The termination of the Executive's employment hereunder
shall not affect the enforceability of Sections 1(d), 6, 7 and 8.
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(l) WAIVER OF JURY TRIAL. IF NOTWITHSTANDING THE AGREEMENT THAT ALL
DISPUTES BE SUBMITTED TO BINDING ARBITRATION, A DISPUTE IS SUBMITTED TO A
COURT, EACH PARTY HERETO WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY DISPUTE
IN CONNECTION WITH OR RELATING TO THIS AGREEMENT, ANY RELATED AGREEMENT OR
ANY MATTERS DESCRIBED OR CONTEMPLATED HEREIN OR THEREIN, AND AGREE TO TAKE
ANY AND ALL ACTION NECESSARY OR APPROPRIATE TO EFFECT SUCH WAIVER. IN THE
EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS WRITTEN CONSENT TO A
TRIAL BY THE COURT.
Company:
EQUITY MARKETING, INC.
/s/ Xxxxxx X. Xxxxx
----------------------
Xxxxxx X. Xxxxx
Senior Vice President, General Counsel and
Secretary
EXECUTIVE:
/s/ Xxxxxx X. Xxxx
----------------------
Xxxxxx X. Xxxx
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