Exhibit 2.4
EXHIBIT 2.4 - CPC MANAGEMENT SERVICES AGREEMENT
December 20, 2002
Personal & Confidential
TO: CPC Communications Inc.
Dear Sirs:
Re: Management Services
This letter agreement sets out the terms and conditions upon which you will
be engaged by Peace Arch Entertainment Group Inc. ("PA") commencing on the date
hereof. Your representative for the provision of your services hereunder shall
be Xxxx Xxxxxx, who shall be personally bound by the Standard Conditions of
Engagement attached.
PA and its subsidiaries from time to time are referred to collectively as
the "Corporations".
1. General
You agree to be bound by the Standard Conditions of Engagement attached.
You will devote such of your time, attention and ability to the business
and affairs of the Corporations as is consistent with their requirements for
your services. You will well and faithfully serve the Corporations during the
continuance of your engagement hereunder and you will use your best efforts to
promote the interests of the Corporations.
You will be engaged on behalf of the Corporations to discharge the most
senior executive functions. The Corporations will allocate as between them from
time to time as to the sharing of your services. As such, after January 31,
2003, your representatives will be assigned such executive titles as is
appropriate in the circumstances (whether Chairman, President, or Chief
Executive Officer) for each of the Corporations. Until January 31, 2003 your
representative shall be assigned the title, Chief Executive Officer. Until
January 31, 2003, you will not have the authority to bind the Company, with the
exception of GFT Entertainment Inc., without prior approval of the Board of
Directors of PA or its designate.
You will report to the board of directors of the Corporations. The scope of
your authority, duties and responsibility will be those generally performed by
the most senior executive officer.
2. Specific Terms
(a) You will be entitled to:
(i) A fee at the rate of $12,500 per month for the year ended December 31,
2003, $13,750 per month for the year ended December 31, 2004 and, $15,000 per
month for the year ended December 31, 2005. The fee will be payable in
semi-monthly instalments in arrears;
(ii) commencing January 1, 2003, a car allowance of $800 per month;
(iii) such benefits as are made available to senior executives of the
Corporations generally.
(b) You will be reimbursed for all expenses incurred by you on behalf of
the Corporations provided you substantiate the same in the ordinary course.
12
(c) During the term of your engagement you (or, if designated by you, your
representative) will be entitled to participate in the PA Amended Share Option
Plan dated February 22, 2001 (the "Plan"). You will be granted options to
acquire Class B Subordinate Voting Shares of PA under the Plan at the market
price at the time of granting as of the commencement of your engagement and
thereafter from time to time, subject to stock exchange rules and regulations,
securities legislation and the terms of the Plan.
3. Bonus Plan
3.1 Your specific goal shall be to enhance shareholder value for all
shareholders of PA. As such, you shall be entitled to a bonus determined and
payable as may hereafter within one year be negotiated in good faith.
4. Term
The term of engagement commences on the date hereof. You agree to serve
under this agreement for an initial term of 36 months from the date your
engagement commences. In the event that the proposed acquisition transaction
between PA and CPC Communications Inc. has not closed by January 31, 2003 or in
the event that the Board of Directors of PA, immediately after the closing of
such acquisition, does not ratify this agreement, this agreement will terminate
without notice and without any cost, other than salary up to January 31, 2003,
to PA. PA may terminate this agreement by written notice to you for the greater
of 24 months or the term remaining under this agreement (the "Notice Period") or
upon payment to you of fees in lieu of notice for the Notice Period as a lump
sum payable on termination at the rate per month set out in section 2(a)(i)
(except and to the extent such fee rate as specified in section 2(a)(i) may be
changed by mutual agreement).
For this purpose, after January 31, 2003, you may in your discretion elect
to treat a change in control (in fact or in law) of PA during the term of this
agreement as constituting termination by PA without just cause. You may elect to
exercise this option by notice in writing to PA within 60 days of your being
aware of the change of control.
Upon termination of this agreement, all bonuses accrued and unpaid under
section 3 shall be paid in full in cash.
5. Vacation
For the period of your engagement hereunder, you will be entitled to
vacation of four weeks per year at such times as may be appropriate recognizing
the demands of the business, plus the days between Christmas and New Year's in
each year. Additional salary will not be paid in lieu of vacation.
6. Notice
Any notice required or permitted to be given hereunder shall be
sufficiently given if delivered personally or sent by fax to the
recipient's then current fax number or, where no fax is available, mailed
by registered mail. In the case of PA notice shall be sufficiently mailed
if mailed to the then current registered office of PA and, in your case,
notice shall be sufficiently mailed if mailed to you at your residence
address then currently showing in PA's records.
7. Acceptance
You may accept this offer by signing at the space provided below.
Yours very truly,
PEACE ARCH ENTERTAINMENT GROUP INC.
By: /s/ Xxxxxx Xxxxx
---------------------
ACCEPTED as of the 20th day of December, 2002.
CPC COMMUNICATIONS INC.
By: /s/ Xxxx Xxxxxx
-------------------
Xxxx Xxxxxx
13
PEACH ARCH ENTERTAINMENT GROUP INC.
STANDARD CONDITIONS OF ENGAGEMENT
14
1. This supplements the terms and conditions of the Contractor's engagement
with Peace Arch Entertainment Group Inc. ("PA"). These terms may not be amended
except by written instrument executed by the Contractor and PA. The term
"Corporations" means PA and its subsidiaries.
2. Confidentiality
The Contractor acknowledges that as a consequence of its engagement with
the Corporations the Contractor will have access to confidential and proprietary
information and knowledge relating to the business of the Corporations and the
affairs of clients, prospective clients, suppliers and other persons engaging in
business with the Corporations (collectively "Confidential Information").
Confidential Information comprises an important and valuable asset of the
Corporations and any removal, disclosure or other unauthorized use of any such
information or knowledge by the Contractor will cause damage to the
Corporations. The Contractor agrees that, except in the pursuit of the business
and affairs of the Corporations, the Contractor will not, either during the term
of its engagement or at any time thereafter, directly or indirectly, use or
disclose to any person, firm or corporation any Confidential Information.
3. Non-solicitation
During the engagement of the Contractor with PA, and for a period of one
year thereafter, the Contractor shall not, either individually or in
partnership or in conjunction with any person, firm, association, company
or corporation, as principal, Contractor, shareholder, consultant, agent,
director, investor or in any other manner whatsoever, directly or
indirectly, in any manner whatever solicit, interfere with, or endeavour to
entice away from any of the Corporations, any of its clients, customers,
suppliers or Contractors, if such soliciting, interference or enticement
assists or is related to any business competitive with the Corporations'
business.
4. Projects
PA shall have a right of first negotiation/right of first refusal on all
projects, innovations, inventions, or improvements in or relating to the
business of PA now held or made by the Contractor during the term of the
Contractor's engagement. The Contractor shall immediately and confidentially
disclose them to PA and shall do all such acts and things as may be necessary or
desirable to vest them in the Corporations designated by PA if the Corporations
elect to acquire them.
15
