EXHIBIT 10.31
Amended and Restated Employment Agreement
AMENDED AND RESTATED EMPLOYMENT AGREEMENT, dated as of May 9, 2003
between Panavision Inc., a Delaware corporation (the "Company") and Xxxx X.
Xxxxxx (the "Executive").
WHEREAS, the Company and the Executive are signatories to an Agreement
dated as of September 1, 2002 (with all Appendices and Amendments thereto, the
"Prior Agreement");
WHEREAS, the Company and the Executive desire to enter into a new
contractual arrangement whereby the Company will employ the Executive on the
terms and conditions set forth in this Agreement, such that the Prior Agreement
shall be superseded and of no further force and effect; and
WHEREAS, the Company wishes to employ the Executive, and the Executive
wishes to accept such employment, on the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, the Company and the Executive hereby agree as follows:
1. Employment, Duties and Acceptance.
1.1 Employment, Duties. The Company hereby employs the Executive for
the Term (as defined in Section 2.1), to render exclusive and full-time services
to the Company as Executive Vice President and General Counsel or in such other
executive position as may be mutually agreed upon by the Company and the
Executive, and to perform such other duties consistent with such position as may
be assigned to the Executive by the Board of Directors or any officer of the
Company senior to the Executive. The Executive will report jointly to the Chief
Executive Officer of Panavision and the General Counsel of Mafco Holdings Inc.
1.2 Acceptance. The Executive hereby accepts such employment and agrees
to render the services described above. During the Term, the Executive agrees to
serve the Company faithfully and to the best of the Executive's ability, to
devote the Executive's entire business time, energy and skill to such
employment, and to use the Executive's best efforts, skill and ability to
promote the Company's interests. The Executive further agrees to accept
election, and to serve during all or any part of the Term, as an officer or
director of the Company and of any subsidiary or affiliate of the Company,
without any compen-
sation therefor other than that specified in this Agreement, if elected to any
such position by the shareholders or by the Board of Directors of the Company or
of any subsidiary or affiliate, as the case may be. The Executive hereby
represents and warrants that the Executive is not subject to any other
agreement, including without limitation any agreement not to compete or
confidentiality agreement, which would be violated by the Executive's
performance of services hereunder.
1.3 Location. The duties to be performed by the Executive hereunder
shall be performed primarily at the office of the Company in Woodland Hills,
California, subject to reasonable travel requirements on behalf of the Company.
2. Term of Employment; Certain Post-Term Benefits.
2.1 The Term. The term of the Executive's employment under this
Agreement (the "Term") shall commence on September 1, 2002 and shall end on
August 31, 2005 or such later date to which the Term is extended pursuant to
Section 2.2.
2.2 End-of-Term Provisions. At any time on or after August 31, 2004 the
Company shall have the right to give written notice of non-renewal of the Term.
In the event the Company gives such notice of non-renewal, the Term
automatically shall be extended so that it ends twelve months after the last day
of the month in which the Company gives such notice. From and after August 31,
2005, unless and until the Company gives written notice of non-renewal as
provided in this Section 2.2, the Term automatically shall be extended
day-by-day; upon the giving of such notice by the Company, the Term
automatically shall be extended so that it ends twelve months after the last day
of the month in which the Company gives such notice.
2.3 Special Curtailment. The Term shall end earlier than the original
August 31, 2005 termination date provided in Section 2.1 or any extended
termination date provided in Section 2.2, in either case if sooner terminated
pursuant to Section 4. Non-extension of the Term shall not be deemed to be a
wrongful termination of the Term or this Agreement by the Company pursuant to
Section 4.4.
3. Compensation; Benefits.
3.1 Salary. As compensation for all ser-
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vices to be rendered pursuant to this Agreement, the Company agrees to pay the
Executive during the Term a base salary, payable semi-monthly in arrears, at the
annual rate of not less than $250,000, less such deductions or amounts to be
withheld as required by applicable law and regulations (the "Base Salary"). In
the event that the Company in its sole discretion from time to time determines
to further increase the Base Salary, such increased amount shall, from and after
the effective date of the increase, constitute "Base Salary" for purposes of
this Agreement.
3.2 Incentive Compensation. In addition to the amounts to be paid to
the Executive pursuant to Section 3.1, the Executive will be eligible to
participate in the Company's Executive Incentive Compensation Plan or any
successor incentive compensation plan from time to time maintained by the
Company for employees or officers generally (the "Bonus Plan"). The Executive
shall receive a bonus (a "Bonus") on account of service to the Company during
any calendar year pursuant to the Bonus Plan, to be paid in the next following
year on the earlier to occur of (a) March 15th and (b) the date on which the
Company pays bonuses to officers generally. For the period from September 1,
2002 through December 31, 2002, the Executive shall be paid a Bonus of $33,350.
For any subsequent period of less than a full calendar year during the Term or
the Damage Period, the Executive shall be paid a Bonus pursuant to the Bonus
Plan prorated for the number of full calendar months of service rendered by the
Executive during such year.
3.3 Equity Participation. In addition to the amounts to be paid to the
Executive pursuant to Section 3.1 and Section 3.2, the Executive shall be
entitled to receive a payment (the "Equity Participation Payment") at the time
and in an amount determined pursuant to this Section 3.3. The Equity
Participation Payment shall be made to the Executive within fifteen (15) days
following issuance of audited financial statements of the Company for the fiscal
year in which occurred the last day of the Term pursuant to Section 2.2 or the
last day on account of which the Company made a payment of Base Salary pursuant
to Section 4.4, as applicable (such fiscal year, the "Final Fiscal Year"). The
Equity Participation Payment shall be in an amount equal to one half percent
(0.5%) of (i) EBITDA for the Final Fiscal Year multiplied by 8.0, (ii) less the
sum of (A) $600 million and (B) any contributions to the capital of the Company
since September 30, 2002 and (iii)(A) less if an increase or (B) plus if a
decrease, the change in debt (reduced by any unrestricted cash) of the
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Company and its consolidated subsidiaries outstanding between September 30, 2002
and the last day of the Final Fiscal Year.
3.4 Business Expenses. The Company shall pay or reimburse the Executive
for all reasonable expenses actually incurred or paid by the Executive during
the Term in the performance of the Executive's services under this Agreement,
upon presentation of expense statements or vouchers or such other supporting
information as the Company customarily may require of its officers provided,
however, that the maximum amount available for such expenses during any period
may be fixed in advance by the Chairman of the Board of Directors or the
Executive Committee of the Board of Directors.
3.5 Vacation. The Executive shall be entitled to a vacation period in
accordance with the vacation policy of the Company during each year of the Term.
3.6 Fringe Benefits. During the Term, the Executive shall be entitled
to all benefits for which the Executive shall be eligible under any qualified
pension plan, 401(k) plan, group insurance or other so-called "fringe" benefit
plan which the Company provides to its employees and officers generally.
3.7 Additional Benefits. During the Term, the Executive shall be
entitled to such other benefits as are specified in Appendix I to this
Agreement.
3.8 Signing Bonus. The Executive shall be paid a signing bonus of
$25,000 on the first regular payroll date that occurs during the Term.
4. Termination.
4.1 Death. If the Executive shall die during the Term, the Term shall
terminate and no further amounts or benefits shall be payable hereunder, except
that the Executive's legal representatives shall be entitled to receive
continued payments in an amount equal to 60% of the Base Salary, in the manner
specified in Section 3.1, until the end of the Term (as in effect immediately
prior to the Executive's death) or, if the Company has not then given written
notice of non-renewal pursuant to Section 2.2, for a period of twelve months
after the last day of the month in which termination described in this Section
4.1 occurred, whichever is longer.
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4.2 Disability. If during the Term the Executive shall become
physically or mentally disabled, whether totally or partially, such that the
Executive is unable to perform the Executive's services hereunder for (i) a
period of six consecutive months or (ii) for shorter periods aggregating six
months during any twelve month period, the Company may at any time after the
last day of the six consecutive months of disability or the day on which the
shorter periods of disability shall have equalled an aggregate of six months, by
written notice to the Executive (but before the Executive has recovered from
such disability), terminate the Term and no further amounts or benefits shall be
payable hereunder, except that the Executive shall be entitled to receive
continued payments in an amount equal to 60% of the Base Salary, in the manner
specified in Section 3.1, until the end of the Term (as in effect immediately
prior to such termination) or, if the Company has not then given notice of
non-renewal pursuant to Section 2.2, for a period of twelve months after the
last day of the month in which termination described in this Section 4.2
occurred. If the Executive shall die before receiving all payments to be made by
the Company in accordance with the foregoing, such payments shall be made to a
beneficiary designated by the Executive on a form prescribed for such purpose by
the Company, or in the absence of such designation to the Executive's legal
representative.
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4.3 Cause. In the event (i) of gross neglect by the Executive of the
Executive's duties hereunder, (ii) conviction of the Executive of any felony,
(iii) conviction of the Executive of any lesser crime or offense involving the
property of the Company or any of its subsidiaries or affiliates, (iv) willful
misconduct by the Executive in connection with the performance of any material
portion of the Executive's duties hereunder, (v) breach by the Executive of any
material provision of this Agreement, (vi) breach by the Executive of the
Company's official written Code of Conduct as in effect from time to time or
(vii) any other conduct on the part of the Executive which would make the
Executive's continued employment by the Company materially prejudicial to the
best interests of the Company, the Company may at any time by written notice to
the Executive terminate the Term, provided, however, that in the case of any
matter covered by clauses (i), (iv), (v) or (vii), the Company shall first have
given the Executive written notice of the conduct (or lack thereof) at issue and
30 days within which to cure. Upon such termination, this Agreement shall
terminate and the Executive shall be entitled to receive no further amounts or
benefits hereunder, except Base Salary and benefits as shall have been earned to
the date of such termination.
4.4 Company Breach. In the event of the breach of any material
provision of this Agreement by the Company, the Executive shall be entitled to
terminate the Term upon 60 days' prior written notice to the Company. Upon such
termination, or in the event the Company terminates the Term or this Agreement
other than pursuant to the provisions of Sections 4.2 or 4.3, the Company shall
continue to provide the Executive (i) payments of (A) Base Salary, in the manner
and amount specified in Section 3.1, (B) Bonus in the manner and amount
specified in Section 3.2 and (C) Equity Participation Payment in the manner and
amount specified in Section 3.3 and (ii) fringe benefits and additional benefits
in the manner and amounts specified in Sections 3.5 and 3.6 until the end of the
Term (as in effect immediately prior to such termination) or, if the Company has
not then given written notice of non-renewal pursuant to Section 2.2, for a
period of twelve months after the last day of the month in which termination
described in this Section 4.4 occurred, whichever is longer (the "Damage
Period"). The Company's obligations pursuant to this Section 4.4 are subject to
the Executive's duty to mitigate damages by seeking other employment provided,
however, that the Executive shall not be required to accept a position of lesser
importance or of substantially different character than the position held with
the Company immediately prior to the effective date of termination or in a
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location outside of the Los Angeles County, California area. The Company
acknowledges that the non-competition obligation imposed on the Executive
pursuant to Section 5.2 may reduce substantially the ability of the Executive to
mitigate damages pursuant to this Section 4.4 and, accordingly, agrees that the
Executive's failure to mitigate damages as a consequence of the restrictions
imposed on him by Section 5.2 will be deemed an excuse for such failure on the
Executive's part. To the extent that the Executive shall earn compensation
during the Damage Period (without regard to when such compensation is paid), the
Base Salary and Bonus payments to be made by the Company pursuant to this
Section 4.4 shall be correspondingly reduced. All payments and benefits
(including service credit for benefit plan purposes and stock option vesting
purposes) to be received by the Executive under this Section 4.4 will be treated
for the Executive's benefit in the same manner as that customarily accorded
full-time employees of the Company.
4.5 Litigation Expenses. Except as provided for in Section 5.7, if the
Company and the Executive become involved in any action, suit or proceeding
relating to the alleged breach of this Agreement by the Company or the
Executive, and if a judgment in such action, suit or proceeding is rendered in
favor of the Executive, the Company shall reimburse the Executive for all
expenses (including reasonable attorneys' fees) incurred by the Executive in
connection with such action, suit or proceeding.
5. Protection of Confidential Information; Non-Competition.
5.1 In view of the fact that the Executive's work for the Company will
bring the Executive into close contact with many confidential affairs of the
Company, its subsidiaries and affiliates not readily available to the public,
and plans for future developments, the Executive agrees:
5.1.1 To keep and retain in the strictest confidence all confidential
matters of the Company, its subsidiaries and affiliates, including, without
limitation, "know how", trade secrets, customer lists, pricing policies,
operational methods, technical processes, formulae, inventions and research
projects, other business affairs of the Company, its subsidiaries and
affiliates, and any information whatsoever concerning any director, officer,
employee or agent of the Company, its subsidiaries and affiliates or their
respective family members learned by
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the Executive heretofore or hereafter, and not to disclose them to anyone
outside of the Company, either during or after the Executive's employment with
the Company, except in the course of performing the Executive's duties hereunder
or with the Company's express written consent. The foregoing prohibitions shall
include, without limitation, directly or indirectly publishing (or causing,
participating in, assisting or providing any statement, opinion or information
in connection with the publication of) any diary, memoir, letter, story,
photograph, interview, article, essay, account or description (whether
fictionalized or not) concerning any of the foregoing, publication being deemed
to include any presentation or reproduction of any written, verbal or visual
material in any communication medium, including any book, magazine, newspaper,
theatrical production or movie, or television or radio programming or
commercial; and
5.1.2 To deliver promptly to the Company on termination of the
Executive's employment by the Company, or at any time the Company may so
request, all memoranda, notes, records, reports, manuals, drawings, blueprints
and other documents (and all copies thereof), including data stored in computer
memories or on other media used for electronic storage or retrieval, relating to
the Company's business, or the business of its subsidiaries or affiliates, and
all property associated therewith, which the Executive may then possess or have
under the Executive's control.
5.2 During the Term and for a period of twenty-four months thereafter,
the Executive shall not, directly or indirectly, enter the employ of, or render
any services to, any person, firm or corporation engaged in any business
competitive with the business of the Company or of any of its subsidiaries or
affiliates; the Executive shall not engage in such business on the Executive's
own account; and the Executive shall not become interested in any such business,
directly or indirectly, as an individual, partner, shareholder, director,
officer, principal, agent, employee, trustee, consultant, or in any other
relationship or capacity provided, however, that nothing contained in this
Section 5.2 shall be deemed to prohibit the Executive from acquiring, solely as
an investment, up to five percent (5%) of the outstanding shares of capital
stock of any public corporation. In addition, during the Term and for a period
of twenty-four months thereafter, the Executive shall not solicit or encourage
any person who, within six (6) months prior to the expiration or earlier
termination of the Term, was an employee of the Company or any of its
subsidiaries or affiliates to (i) terminate his or her
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employment with the Company or any such subsidiary or affiliate or (ii) engage
in any activity prohibited to the Executive by the first sentence of this
Section 5.2.
5.3 If the Executive commits a breach, or threatens to commit a breach,
of any of the provisions of Sections 5.1 or 5.2 hereof, the Company shall have
the following rights and remedies:
5.3.1 The right and remedy to have the provisions of this Agreement
specifically enforced by any court having equity jurisdiction, it being
acknowledged and agreed that any such breach or threatened breach will cause
irreparable injury to the Company and that money damages will not provide an
adequate remedy to the Company; and
5.3.2 The right and remedy to require the Executive to account for and
pay over to the Company all compensation, profits, monies, accruals, increments
or other benefits (collectively "Benefits") derived or received by the Executive
as the result of any transactions constituting a breach of any of the provisions
of Sections 5.1 or 5.2, and the Executive hereby agrees to account for and pay
over such Benefits to the Company.
Each of the rights and remedies enumerated above shall be independent of the
other, and shall be severally enforceable, and all of such rights and remedies
shall be in addition to, and not in lieu of, any other rights and remedies
available to the Company under law or in equity.
5.4 If any of the covenants contained in Sections 5.1 or 5.2, or any
part thereof, hereafter are construed to be invalid or unenforceable, the same
shall not affect the remainder of the covenant or covenants, which shall be
given full effect, without regard to the invalid portions.
5.5 If any of the covenants contained in Sections 5.1 or 5.2, or any
part thereof, are held to be unenforceable because of the duration of such
provision or the area covered thereby, the parties agree that the court making
such determination shall have the power to reduce the duration and/or area of
such provision and, in its reduced form, said provision shall then be
enforceable.
5.6 The parties hereto intend to and hereby confer jurisdiction to
enforce the covenants contained in Sections 5.1 and 5.2 upon the courts of any
state within the geographical scope of such covenants. In the event that the
courts of any one or more of such states shall
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hold such covenants wholly unenforceable by reason of the breadth of such
covenants or otherwise, it is the intention of the parties hereto that such
determination not bar or in any way affect the Company's right to the relief
provided above in the courts of any other states within the geographical scope
of such covenants as to breaches of such covenants in such other respective
jurisdictions, the above covenants as they relate to each state being for this
purpose severable into diverse and independent covenants.
5.7 In the event that any action, suit or other proceeding in law or in
equity is brought to enforce the covenants contained in Sections 5.1 and 5.2 or
to obtain money damages for the breach thereof, and such action results in the
award of a judgment for money damages or in the granting of any injunction in
favor of the Company, all expenses (including reasonable attorneys' fees) of the
Company in such action, suit or other proceeding shall (on demand of the
Company) be paid by the Executive. In the event the Company fails to obtain a
judgment for money damages or an injunction in favor of the Company, all
expenses (including reasonable attorneys' fees) of the Executive in such action,
suit or other proceeding shall (on demand of the Executive) be paid by the
Company.
6. Inventions and Patents.
6.1 The Executive agrees that all processes, technologies and
inventions (collectively, "Inventions"), including new contributions,
improvements, ideas and discoveries, whether patentable or not, conceived,
developed, invented or made by him during the Term shall belong to the Company,
provided that such Inventions grew out of the Executive's work with the Company
or any of its subsidiaries or affiliates, are related in any manner to the
business (commercial or experimental) of the Company or any of its subsidiaries
or affiliates or are conceived or made on the Company's time or with the use of
the Company's facilities or materials. The Executive shall further: (a) promptly
disclose such Inventions to the Company; (b) assign to the Company, without
additional compensation, all patent and other rights to such Inventions for the
United States and foreign countries; (c) sign all papers necessary to carry out
the foregoing; and (d) give testimony in support of the Executive's
inventorship.
6.2 If any Invention is described in a patent application or is
disclosed to third parties, directly or indirectly, by the Executive within two
years after the termination of the Executive's employment by the Company, it is
to be presumed that the Invention was con-
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ceived or made during the Term.
6.3 The Executive agrees that the Executive will not assert any rights
to any Invention as having been made or acquired by the Executive prior to the
date of this Agreement, except for Inventions, if any, disclosed to the Company
in writing prior to the date hereof.
7. Intellectual Property.
The Company shall be the sole owner of all the products and proceeds of
the Executive's services hereunder, including, but not limited to, all
materials, ideas, concepts, formats, suggestions, developments, arrangements,
packages, programs and other intellectual properties that the Executive may
acquire, obtain, develop or create in connection with and during the Term, free
and clear of any claims by the Executive (or anyone claiming under the
Executive) of any kind or character whatsoever (other than the Executive's right
to receive payments hereunder). The Executive shall, at the request of the
Company, execute such assignments, certificates or other instruments as the
Company may from time to time deem necessary or desirable to evidence,
establish, maintain, perfect, protect, enforce or defend its right, title or
interest in or to any such properties.
8. Indemnification.
The Company will indemnify the Executive, to the maximum extent
permitted by applicable law, against all costs, charges and expenses incurred or
sustained by the Executive in connection with any action, suit or proceeding to
which the Executive may be made a party by reason of the Executive being an
officer, director or employee of the Company or of any subsidiary or affiliate
of the Company.
9. Notices.
All notices, requests, consents and other communications required or
permitted to be given hereunder shall be in writing and shall be deemed to have
been duly given if delivered personally, sent by overnight courier or mailed
first class, postage prepaid, by registered or certified mail (notices mailed
shall be deemed to have been given on the date mailed), as follows (or to such
other address as either party shall designate by notice in writing to the other
in accordance herewith):
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If to the Company, to:
Panavision Inc.
0000 Xx Xxxx Xxxxxx
Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
with a copy to:
MacAndrews & Forbes Holdings Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
If to the Executive, to:
Xxxx X. Xxxxxx
0000 Xxxxxx Xxxxx
XxXxxx, Xxxxxxxx 00000
10. General.
10.1 This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York applicable to agreements made
and to be performed entirely in New York.
10.2 The section headings contained herein are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
10.3 This Agreement sets forth the entire agreement and understanding
of the parties relating to the subject matter hereof, and supersedes all prior
agreements, arrangements and understandings, written or oral, relating to the
subject matter hereof. No representation, promise or inducement has been made by
either party that is not embodied in this Agreement, and neither party shall be
bound by or liable for any alleged representation, promise or inducement not so
set forth.
10.4 This Agreement, and the Executive's rights and obligations
hereunder, may not be assigned by the Executive. The Company may assign its
rights, together with its obligations, hereunder (i) to any affiliate or (ii) to
third parties in connection with any sale, transfer or other disposition of all
or substantially all of its
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business or assets; in any event the obligations of the Company hereunder shall
be binding on its successors or assigns, whether by merger, consolidation or
acquisition of all or substantially all of its business or assets.
10.5 This Agreement may be amended, modified, superseded, canceled,
renewed or extended and the terms or covenants hereof may be waived, only by a
written instrument executed by both of the parties hereto, or in the case of a
waiver, by the party waiving compliance. The failure of either party at any time
or times to require performance of any provision hereof shall in no manner
affect the right at a later time to enforce the same. No waiver by either party
of the breach of any term or covenant contained in this Agreement, whether by
conduct or otherwise, in any one or more instances, shall be deemed to be, or
construed as, a further or continuing waiver of any such breach, or a waiver of
the breach of any other term or covenant contained in this Agreement.
11. Subsidiaries and Affiliates.
11.1 As used herein, the term "subsidiary" shall mean any corporation
or other business entity controlled directly or indirectly by the corporation or
other business entity in question, and the term "affiliate" shall mean and
include any corporation or other business entity directly or indirectly
controlling, controlled by or under common control with the corporation or other
business entity in question.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
PANAVISION INC.
By: /S/ XXXXX X. XXXXXXXX
---------------------------
Xxxxx X. Xxxxxxxx
Executive Vice President and
General Counsel
/S/ XXXX X. XXXXXX
----------------------------
Xxxx X. Xxxxxx
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APPENDIX I
Additional Benefits:
1. Medical Examination. The Executive shall be reimbursed by the Company
for the reasonable cost of one annual medical examination upon presentation of
an expense statement.
2. Automobile. The Company shall afford the Executive the right to use an
automobile on a continuing basis and shall provide garaging near the Executive's
residence, all on the following basis. The Company shall pay, upon presentation
of an expense statement, all reasonable expenses associated with the operation
of such automobile and the rental of such garage space in the same manner as is,
from time to time, in effect with respect to executive officers of the Company
generally, including, without limitation, all reasonable maintenance and
insurance expenses. The automobile furnished by the Company shall be a late
model top-of-the-line BMW530 or like vehicle to be reasonably selected by the
Executive. Upon the expiration of the Term, the Executive promptly shall return
the automobile to the Company.
3. Insurance. The Company agrees to provide the Executive with additional
term life insurance coverage with a face amount of twice the then current Base
Salary, subject to the insurer's satisfaction with the results of any required
medical examination to which the Executive hereby agrees to submit, on the
following basis. The Executive may select a plan of his choice and may designate
the beneficiary of such plan. The Company shall pay, upon presentation of an
expense statement, the periodic premiums relating to such additional term life
insurance payable during the Term.
4. Relocation. The Company acknowledges that the Executive will relocate
his family and principal residence from Washington, D.C. to Woodland Hills,
California. The Company shall provide the Executive with the following payments
and benefits:
(i) During the period from September 1, 2002 through December 31, 2002, the
Company shall pay the lesser of (A) the cost of business class commercial
airline transportation for the Executive to commute weekly between the Company's
offices and Washington, D.C. and (B) the
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actual cost incurred by the Executive for such commutation.
(ii) During the period from September 1, 2002 through December 31, 2002,
the Company shall pay the lesser of (A) the cost of coach class commercial
airline transportation for the Executive's wife and two children to make three
round trips between Woodland Hills, California and Washington, D.C. and (B) the
actual cost incurred by the Executive's wife and children for such trips.
(iii) During the period from September 1, 2002 through December 31, 2002,
the Company shall pay the rental and related costs of a suitable short term
furnished corporate apartment in the Woodland Hills, California vicinity for the
Executive's use.
(iv) The Company shall pay the actual and reasonable expenses of relocating
the Executive and his family from the Washington, D.C. metropolitan area to the
Woodland Hills, California vicinity.
(v) The Company shall reimburse to the Executive, upon presentation of
reasonable supporting documentation, any loss on disposition of his principal
residence in the Washington, D.C. metropolitan area. For purposes of determining
loss on disposition for purposes of this clause (v), there shall be added to the
cost basis of the Executive's existing principal residence closing costs on
Executive's purchase thereof and selling costs on Executive's disposition
thereof. The Executive's right to reimbursement for loss on sale pursuant to
this clause (v) is subject to the following limitations: (A) the Executive's
principal residence shall have become subject to a contract for sale no later
than August 31, 2003 and the closing shall have occurred no later than November
30, 2003 and (B) the Company shall have the right to reject the selling price as
being too low provided that, if the Company does so, it shall purchase the home
from the Executive at a price which results in neither gain nor loss (as
determined pursuant to the preceding sentence) to the Executive.
(vi) Should any of the benefits described in clauses (i), (ii), (iii) or
(iv) above, or any payment by the Company described in clause (v) above, require
income to be imputed to the Executive, the Company shall "gross up" the income
imputed to the Executive under federal and any applicable state income tax laws
on account of such benefits and payment, such that the Executive effectively
suffers no personal cost for such benefits or payment.
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5. Airline Club. The Company shall pay the cost of membership for the
Executive in an "executive" or similar commercial airline "club" or preferred
passenger program.
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