DREAMWORKS ANIMATION, INC.
0000 XXXXXX XXXXXX
XXXXXXXX, XX 00000
--------- , 2004
Mr. Xxxxxx Xxxxxxxxx
c/o Gang, Tyre, Xxxxx & Brown, Inc.
000 Xxxxx Xxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000-0000
Attn: Xxxxx Xxxxx
Dear Xxxxxx:
Upon the date ("Effective Date") of the closing of the DreamWorks
Animation L.L.C. initial public offering ("Closing"), DreamWorks Animation, Inc.
("Studio") agrees to employ you and you agree to accept such employment upon the
terms and conditions set forth below. In the event the Closing fails to occur
for any reason by June 28, 2005, then this agreement ("Agreement") shall be null
and void.
1. TERM. The term of your employment hereunder shall commence on the
Effective Date and shall continue until the earlier of (a) for a period of three
(3) years thereafter, or (b) your earlier termination (if applicable) of the
"New Term" (as defined in that certain employment agreement [the "DW LLC
Agreement"] between you and DreamWorks LLC ["DW LLC"] dated as of July 16, 2004)
pursuant to the terms of the Studio Agreement. This period shall hereinafter be
referred to as the "Employment Term".
2. DUTIES/RESPONSIBILITIES/REPORTING.
a. General. You shall consult with Xxxxxxx Xxxxxxxxxx (or his
replacement as designated by the Board of Directors of Studio) at his request
with respect to the overall creative direction and projects of the Studio.
b. Services. You may elect to render services from whatever
location(s) you determine in your absolute discretion. No casual or inadvertent
failure to render such services shall be a breach hereof, and in all events your
services hereunder are subject to your rights and obligations under the Studio
Agreement.
3. EXCLUSIVITY. Your personal professional services shall be non-exclusive
to Studio, and subject in all events to your availability as you determine in
your absolute discretion. Reference is made to Exhibit 1 hereto, which is
incorporated herein. To the extent any activities,
October 10, 2004
investments, business arrangements, etc. encompassed in Exhibit 1 are or could
be inconsistent with your services or otherwise hereunder, such Exhibit 1 shall
be deemed exceptions to such conflicting provisions. For the avoidance of doubt,
any inconsistency or ambiguity in construing this Agreement together with
Exhibit 1 shall be resolved in favor of the terms of Exhibit 1.
4. COMPENSATION. For all services rendered under this Agreement, Studio
will pay you base salary at an annual rate of One Dollar ($1.00), payable in
accordance with Studio's applicable payroll practices ("Base Salary").
5. BUSINESS EXPENSES. During the Employment Term, you shall be reimbursed
for such reasonable travel and other expenses incurred in the performance of
your duties hereunder as are customarily reimbursed for executives of major
motion picture and television companies. Studio shall reimburse all of your
costs and expenses (including reasonable legal fees) in connection with entering
into this Agreement. All Studio business-related air travel by you shall be by
private jet. You shall be entitled to take guests on such trips at Studio
expense, to attend a premiere or industry function, or, for such other
business-related travel as you determine necessary. You shall be entitled to
limousine transportation and to first class private business travel expenses,
including hotels and per diems (as you determine) in accordance with Studio's
policy for its senior-most executives. You shall be entitled to the services of
such reasonable security personnel as you request. In addition to the foregoing,
you shall be entitled to industry-customary perks as are normally made available
to entertainment industry executives and in all cases to treatment no less
favorable than accorded Xxxxxx or Xxxxxxxxxx. To the extent any such business
expenses are duplicative with the business expenses provided you under your
agreement with DreamWorks, L.L.C. ("DW"), you shall not be entitled to such
expense reimbursement hereunder.
6. INDEMNIFICATION. You shall be fully indemnified and held harmless by
Studio to the fullest extent required by law from any claim, liability, loss,
cost or expense of any nature (including attorney's fees of counsel selected by
you, judgments, fines, any amounts paid or to be paid in any settlement, and all
costs of any nature) incurred by you (all such indemnification to be on an
"after tax" or "gross-up" basis) which arises in whole or in part out of any
alleged or actual action or conduct on your part in or in connection with or
related in any manner to your services (whether as an employee, agent, officer,
corporate director, member, manager, shareholder, partner, or in any other
capacity) to Studio or any entity owned or controlled by Studio, or which owns
or controls Studio, or as to which you are providing services on behalf of
Studio or which may be doing business with Studio. Notwithstanding the foregoing
to the extent allowed by California law, you shall not be entitled to
indemnification as to costs and damages directly resulting from your action(s)
which have been determined by final judicial decision would otherwise entitle
Studio to terminate this Agreement under Paragraph 10 below. To the maximum
extent allowed by California law all amounts to be indemnified hereunder
including reasonable attorneys' fees shall be advanced by Studio until such
time, if ever, as it is determined by final judicial decision that you are not
entitled to indemnification hereunder
October 10, 2004
pursuant to the preceding sentence (whereupon you shall reimburse Studio for all
sums theretofore advanced).
7. COVENANTS.
a. Non-Competition. Except as specifically permitted hereunder or
under your DW LLC Agreement, during the earlier of (i) expiration of the
Employment Term (including any renewals thereof) or (ii) to the extent permitted
by California law if you are terminated for cause under paragraph 10 below, for
one (1) year after the termination date, you shall not directly or indirectly
engage in or participate as an officer, employee, corporate director, agent of
or consultant for or provide services in any other capacity to, any animated
business directly competitive with that of Studio unless otherwise provided by
California law. For purposes of this paragraph, an animation business directly
competitive with that of Studio shall mean an entity whose primary business and
purpose is the development and production of animated product such as Pixar, but
would not include a motion picture studio that produced live action product or a
combination of live action and animation product (e.g., Sony and Disney).
b. Confidential Information. You agree that you shall not, during
the Employment Term or at any time thereafter; use for your own purposes, or
disclose to or for any benefit of any third party, any trade secret or other
confidential information of Studio or any of its affiliates (except as may be
required by law or in the performance of your duties hereunder consistent with
Studio's policies) and that you will comply with any confidentiality obligations
of Studio known by you to a third party, whether under agreement or otherwise.
Notwithstanding the foregoing, confidential information shall be deemed not to
include information which (i) is or becomes generally available to the public
other than as a result of a disclosure by you or any other person who directly
or indirectly receives such information from you or at your direction unless
such disclosure was permitted hereunder), (ii) is or becomes available to you on
a non-confidential basis from a source which you reasonably believe is entitled
to disclose it to you; or (iii) pertains to any project other than those you are
not entitled to pursue elsewhere under your DW LLC Agreement, or (iv) as
required by legal process (provided that, in this case, you will use good-faith
efforts to notify Studio of such process so that Studio may attempt in its own
behalf, and at its own expense, to protect the confidentiality of the
information in question).
c. Studio Ownership. Except as otherwise herein provided, the
results and proceeds of your services hereunder, including, without limitation,
any works of authorship resulting from your services during your employment and
any works in progress, shall be works-made-for-hire and Studio shall be deemed
the sole owner throughout the universe of any and all rights of whatsoever
nature therein, whether or not now or hereafter known, existing, contemplated,
recognized or developed, with the right to use the same in perpetuity in any
manner Studio determines in its sole discretion without any further payment to
you whatsoever. If, for any reason, any of such results and proceeds shall not
legally be a work-for-hire and/or there are any rights which do not accrue to
Studio under the preceding sentence, then you hereby
October 10, 2004
irrevocably quitclaim and agree to quitclaim any and all of your right, title
and interest thereto, including, without limitation, any and all copyrights,
patents, trade secrets, trademarks and/or other rights of whatsoever nature
therein, whether or not now or hereafter known, existing, contemplated,
recognized or developed by Studio, and Studio shall have the right to use the
same in perpetuity throughout the universe in any manner Studio may deem useful
or desirable to establish or document Studio's exclusive ownership of any and
all rights in any such results and proceeds, including, without limitation, the
execution of appropriate copyright and/or patent applications or assignments. To
the extent you have any rights in the results and proceeds of your services that
cannot be assigned in the manner described above, you unconditionally and
irrevocably waive the enforcement of such rights. This Paragraph 7(c) is subject
to, and shall not be deemed to limit, restrict, or constitute any waiver by
Studio of any rights of ownership to which Studio may be entitled by operation
of law by virtue of Studio or any of its affiliates being your employer.
d. Return of Property. All documents, data, recordings, or other
property, whether tangible or intangible, including all information stored in
electronic form, obtained or prepared by or for you and utilized by you in the
course of your employment hereunder with Studio or any of its affiliates shall
remain the exclusive property of Studio. In the event of the termination of your
employment for any reason, and subject to any other provisions hereof, Studio
reserves the right, to the extent permitted by law and in addition to any other
remedy Studio may have, to deduct from any monies otherwise payable to you the
following: (i) the full amount of any specifically determined debt you owe to
Studio or any of .its affiliates at the time of or subsequent to the termination
of your employment with Studio, and (ii) the value of the Studio property which
you retain in your possession after the termination of your employment with
Studio following Studio's written request for such item(s) return and your
failure to return such items within thirty (30) days of receiving such notice.
In the event that the law of any state or other jurisdiction requires the
consent of an employee for such deductions, this Agreement shall serve as such
consent.
e. Promise Not To Solicit. You will not during the period of the
Employment Term or for the period ending one (1) year after the earlier of
expiration of the Employment Term or your termination hereunder, induce or
attempt to induce any employees, consultants, contractors or representatives of
the Studio (or those of any of its affiliates) to stop working for, contracting
with or representing the Studio or any of its affiliates or to work for,
contract with or represent any of the Studio's (or its affiliates') competitors.
8. INCAPACITY. In the event you become totally medically disabled and
cannot substantially perform your duties at any time during the Employment Term,
the Board of Directors may at any time after such disability has continued for
ninety (90) consecutive days require Studio to give you written notice that it
intends subject to applicable state and federal law to suspend this Agreement.
Upon receipt of such notice, prior to any suspension hereunder, you shall be
entitled to an expedited arbitration to determine whether or not you are
medically
October 10, 2004
disabled and have been disabled for at least ninety (90) consecutive days,
provided that you request such arbitration within ten (10) business days of
receipt of such notice from Studio. If you do not so request such an
arbitration, or if the arbitrator rules that you are so disabled, you shall be
placed on a "medical payroll". You will first receive your Base Salary (and all
other payments and benefits) for the first twenty-six (26) weeks of consecutive
absence commencing at the end of the later of the ten (10) day period or upon
the conclusion of the arbitration. Thereafter, if you are not able to resume
your duties hereunder, you shall remain entitled to receive 50% of Base Salary
for the remainder of the then current Employment Term. Notwithstanding the
foregoing, you shall be entitled to reinstate this Agreement and to resume your
duties hereunder if subsequent to your disability you recover the ability to so
perform.
9. DEATH. If you die prior to the end of the Employment Term this
Agreement shall be terminated as of the date of death and your beneficiary or
estate shall be entitled to receive your Base Salary up to the date on which the
death occurs and for 12 months thereafter, but not to exceed the end of the then
current Employment Term.
10. TERMINATION FOR CAUSE. Studio may, at its option and upon resolution
of the Board of Directors, terminate this Agreement forthwith for "cause",
including, without limitation, any obligation to pay Base Salary under this
Agreement (except to the extent accrued to the date of termination). For
purposes of this Agreement, termination of this Agreement for "cause" shall mean
only: (i) conviction of a felony or a crime involving moral turpitude or for
embezzlement or the misappropriation of corporate assets, in any case, after the
exhaustion of all possible appeals; or (ii) your material breach of Paragraphs 2
or 7 hereof. Anything herein to the contrary notwithstanding, Studio will give
you written notice prior to terminating this Agreement for your material breach
under clause (ii), setting forth the exact nature of any alleged breach and the
conduct required to cure such breach. You shall have thirty (30) days from the
giving of such notice within which to cure.
11. INVOLUNTARY TERMINATION. Studio may terminate your employment other
than for cause or on account of incapacity, in which case you will receive
continuation of Base Salary as specified herein, until the end of the Employment
Term. You agree that you will have no rights or remedies in the event of your
termination without cause other than those set forth in the Agreement to the
maximum extent allowed by law.
12. TERMINATION FOR GOOD REASON. You shall be entitled to terminate
employment for good reason, for the purpose of this Paragraph 12, in the event
of a material breach of this Agreement by Studio. If, in the event of any of the
foregoing, such circumstance is not remedied within 30 days after receipt of
written notice from you specifically delineating each act giving rise to good
reason and setting forth your intention to terminate your employment if such
breach is not duly remedied, provided that if the specified circumstance cannot
reasonably be remedied within said 30-day period and the Studio commences
reasonable steps within said 30-day period to remedy said breach and diligently
continues such steps thereafter until a remedy is effected,
October 10, 2004
such circumstance will not constitute good reason. In the event of your
voluntary termination for good reason, you shall be entitled to the payments
provided under Paragraph 11 for involuntary termination without cause.
13. NO MITIGATION. In the event this Agreement is terminated for any
reason prior to its expiration, you shall not be required to mitigate your
damages hereunder, nor shall Studio be entitled to offset from any sums owing to
you hereunder any amounts received by you from any third party.
14. SECTION 317 AND 508 OF THE FEDERAL COMMUNICATIONS ACT. You represent
that you have not accepted or given nor will you accept or give, directly or
indirectly, any money, services or other valuable consideration from or to
anyone other than Studio for the inclusion of any matter as part of any film,
television program or other production produced, distributed and/or developed by
Studio and/or any of its affiliates.
15. EQUAL OPPORTUNITY EMPLOYER. You acknowledge that Studio is an equal
opportunity employer. You agree that you will comply with Studio policies
regarding employment practices and with applicable federal, state and local laws
prohibiting discrimination or harassment.
16. NOTICES. All notices required to be given hereunder shall be given in
writing, by personal delivery or by mail and confirmed by fax at the respective
addresses of the parties hereto set forth above, or at such address as may be
designated in writing by either party, and in the case of Studio, to the
attention of the General Counsel of Studio. A courtesy copy of any notice to you
hereunder shall be sent to Gang, Tyre, Xxxxx & Brown, Inc., 000 Xxxxx Xxxxx
Xxxxx, Xxxxxxx Xxxxx, XX 00000-0000, fax (000) 000-0000, Attn. Xxxxx X. Xxxxx,
Esq., and Xxxxxx X. Xxxxx, Esq. Any notice given by mail shall be deemed to have
been given three (3) business days following such mailing.
17. ASSIGNMENT. This is an Agreement for the performance of personal
services by you and may not be assigned by you (other than the right to receive
payments which may be assigned to a company, trust or foundation owned or
controlled by you) and any purported assignment in violation of the foregoing
shall be deemed null and void. Studio shall have the right to assign this
Agreement and your services hereunder only to an entity acquiring all or
substantially all of the assets of Studio.
18. CALIFORNIA LAW. This Agreement and all matters or issues collateral
thereto shall be governed by the laws of the State of California applicable to
contracts entered into and performed entirely therein.
19. NO IMPLIED CONTRACT. The parties intend to be bound only upon
execution of this Agreement and no negotiation, exchange or draft or partial
performance shall be deemed
October 10, 2004
to imply an agreement. Neither the continuation of employment or any other
conduct shall be deemed to imply a continuing agreement upon the expiration of
this Agreement.
20. ENTIRE UNDERSTANDING. This Agreement contains the entire understanding
of the parties hereto relating to the subject matter herein contained, and can
be changed only by a writing signed by both parties hereto.
21. VOID PROVISIONS. If any provision of this Agreement, as applied to
either party or to any circumstances, shall be adjudged by a court to be void or
unenforceable, the same shall be deemed stricken from this Agreement and shall
in no way affect any other provision of this Agreement or the validity or
enforceability of this Agreement. In the event any such provision (the
"Applicable Provision") is so adjudged void or unenforceable, you and Studio
shall take the following actions in the following order: (i) seek judicial
reformation of the Applicable Provision; (ii) negotiate in good faith with each
other to replace the Applicable Provision with a lawful provision; and (iii)
have an arbitration as provided in Paragraph 23 hereof determine a lawful
replacement provision for the Applicable Provision; provided, however, that no
such action pursuant to either of clauses (i) or (iii) above shall increase in
any respect your obligations pursuant to the Applicable Provision.
22. SURVIVALS MODIFICATION OF TERMS. Your obligations under Paragraph 7
hereof shall remain in full force and effect for the entire period provided
therein notwithstanding the termination of the Employment Term pursuant to
Paragraph 10 hereof or otherwise. Studio's obligations under Paragraphs 5 (with
respect to expenses theretofore incurred) and 6 hereof shall survive
indefinitely the termination of this Agreement regardless of the reason for such
termination.
23. ARBITRATION OF DISPUTES. Any controversy or claim by you against
Studio or any of its parent companies, subsidiaries, affiliates (and/or
officers, directors, employees, representatives or agents of Studio and such
parent companies, subsidiaries and/or affiliates), including any controversy or
claim arising from, out of or relating to this Agreement, the breach thereof, or
the employment or termination thereof of you by Studio which would give rise to
a claim under federal, state or local law (including, but not limited to, claims
based in tort or contract, claims for discrimination under state or federal law,
and/or claims for violation of any federal, state or local law, statute or
regulation), or any claim against you by Studio (individually and/or
collectively, "Claim[s]") shall be submitted to an impartial mediator
("Mediator") selected jointly by the parties. Both parties shall attend a
mediation conference in Los Angeles County, California and attempt to resolve
any and all Claims. If the parties are not able to resolve all Claims, then upon
written demand for arbitration to the other party, which demand shall be made
within a reasonable time after the Claim has arisen, any unresolved Claims shall
be determined by final and binding arbitration in Los Angeles, California, in
accordance with the Model Employment Procedures of the American Arbitration
Association (collectively, "Rules") by a neutral arbitrator experienced in
employment law, licensed to practice law in California, in
October 10, 2004
accordance with the Rules, except as herein specified. In no event shall the
demand for arbitration be made after the date when the institution of legal
and/or equitable proceedings based upon such Claim would be barred by the
applicable statute of limitations. Each party to the arbitration will be
entitled to be represented by counsel and will have the opportunity to take
depositions in Los Angeles, California of any opposing party or witnesses
selected by such party and/or request production of documents by the opposing
party before the arbitration hearing. By mutual agreement of the parties,
additional depositions may be taken at other locations. In addition, upon a
party's showing of need for additional discovery, the arbitrator shall have
discretion to order such additional discovery. You acknowledge and agree that
you are familiar with and fully understand the need for preserving the
confidentiality of Studio's agreements with third parties and compensation of
Studio's employees. Accordingly, you hereby agree that to the extent the
arbitrator determines that documents, correspondence or other writings (or
portions thereof) whether internal or from any third party, relating in any way
to your agreements with third parties and/or compensation of other employees are
necessary to the determination of any Claim, you and/or your representatives may
discover and examine such documents, correspondence or other writings only after
execution of an appropriate confidentiality agreement. Each party shall have the
right to subpoena witnesses and documents for the arbitration hearing. A court
reporter shall record all arbitration proceedings. With respect to any Claim
brought to arbitration hereunder, either party may be entitled to recover
whatever damages would otherwise be available to that party in any legal
proceeding based upon the federal and/or state law applicable to the matter. The
arbitrator shall issue a written decision setting forth the award and the
findings and/or conclusions upon which such award is based. The decision of the
arbitrator may be entered and enforced in any court of competent jurisdiction by
either Studio or you. Notwithstanding the foregoing, the result of any such
arbitration shall be binding but shall not be made public (including by filing a
petition to confirm the arbitration award), unless necessary to confirm such
arbitration award after non-payment of the award for a period of at least
fifteen (15) days after notice to Studio of the arbitrator's decision. Each
party shall pay the fees of their respective attorneys (except as otherwise
awarded by the arbitrator), the expenses of their witnesses, and all other
expenses connected with presenting their Claims or defense(s). Other costs of
arbitration shall be borne by Studio. Except as set forth below, should you or
Studio pursue any Claim covered by this Paragraph 23 by any method other than
said arbitration, the responding party shall be entitled to recover from the
other party all damages, costs, expenses, and reasonable outside attorneys' fees
incurred as a result of such action. The provisions contained in this Paragraph
23 shall survive the termination of your employment with Studio. Notwithstanding
anything set forth above, you agree that any breach or threatened breach of this
Agreement (particularly, but without limitation, with respect to Paragraph 7,
above) may result in irreparable injury to the Studio, and therefore, in
addition to the procedures set forth above, Studio may be entitled to file suit
in a court of competent jurisdiction to seek a Temporary Restraining Order
and/or preliminary or permanent injunction or other equitable relief to prevent
a breach or contemplated breach of such provisions.
If the foregoing correctly sets forth your understanding, please sign one
copy of
October 10, 2004
this letter and return it to the undersigned, whereupon this letter shall
constitute a binding agreement between us.
Very truly yours,
DREAMWORKS ANIMATION, INC.
By:
-----------------------------------
ACCEPTED AND AGREED AS OF THE
DATE FIRST ABOVE WRITTEN:
----------------------------
XXXXXX XXXXXXXXX
October 10, 2004
EXHIBIT 1
SPECIAL PROVISIONS RELATING TO XXXXXX XXXXXXXXX
1. Without limiting any of Xxxxxxxxx'x other rights under the DW LLC
Agreement, it is expressly acknowledged that Xxxxxxxxx is free to enter into
agreements to render Directing Services for any party as set forth in Exhibit 1
of the DW LLC Agreement; it being understood that your services hereunder will
be subject to any such permitted directing services.
2. Other than pursuant to that certain Theme Park Agreement between DW LLC
and MCA, Inc. dated as of July 31, 1995 (as assigned from time to time by MCA
Inc. and its successors in interest), Studio shall not engage in "theme park
activities" for as long as Xxxxxxxxx is a consultant to Studio hereunder, and
all theme park activities are excluded from the exclusivity requirement
hereunder. No services from Xxxxxxxxx in connection with theme park activities
shall be required or rendered at any time, nor may there be any use of
Xxxxxxxxx'x name in or in connection with any theme park activity. For purposes
of this Paragraph, theme park activities are any activities in the field of
theme, amusement, tour and/or similar tourist park attractions. This restriction
will cease to apply if Xxxxxxxxx confirms to Studio in writing that, in his
absolute determination and in his absolute discretion, he has ceased to maintain
exclusive theme park arrangement(s) with third parties. Nothing herein limits
any obligations to Xxxxxxxxx under any other agreement.
October 10, 2004
