EXHIBIT 10.12
PRIVILEGED AND
CONFIDENTIAL
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is entered into as of
August 1, 1997 between Metro-Xxxxxxx-Xxxxx Inc., a Delaware corporation (the
"Company"), and Xxxxxx X. Xxxxxx ("Executive").
The parties agree as follows:
1. Employment and Title. Effective as of August 1, 1997, the Company employs
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Executive as, and Executive accepts employment to serve as, Executive Vice
President, Corporate Finance, all upon the terms and conditions set forth in
this Agreement, including the powers and authority set forth in Paragraph 2
below.
2. Powers and Authority.
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(a) During the Term, as defined in Paragraph 6 below, Executive
shall be Executive Vice President, Corporate Finance, and shall have such duties
and responsibilities as may be assigned to Executive by the Senior Executive
Vice President and Chief Financial Officer (the "CFO"), the Vice Chairman of the
Company (the "VC") or the Chief Executive Officer of the Company (the "CEO"),
which duties and responsibilities shall include primary
responsibility for treasury, taxation and internal audits, as well as special
projects at the discretion of the CFO, VC or CEO.
(b) Executive's services shall be exclusive to the Company and its
subsidiaries. Executive shall devote Executive's best efforts and Executive's
full business time (except as provided in the following sentence) to the
services to be performed hereunder. Executive may serve on the boards of
directors of (but in no other capacity for) other companies and non-profit
organizations, may manage the investment of Executive's personal assets, and may
make new investments of Executive's personal assets in other companies so long
as such activities do not materially interfere with Executive's duties hereunder
and (other than investments not to exceed 1% of the total outstanding in
publicly traded securities) such companies do not directly compete with the
Company.
(c) Executive agrees to comply with the Company's policies and
procedures applicable to employees of Executive's seniority, salary and title as
in effect from time to time to the extent that such policies are furnished to
Executive.
3. Location. The location of Executive's principal place of
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employment shall be in the Company's principal executive offices in the greater
Los Angeles, California area; provided, however, that Executive shall perform
such occasional services outside of Los Angeles as are, in the reasonable
determination of the Executive, the CFO, the CEO or the VC, reasonably required
for the proper performance of Executive's duties under this Agreement.
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4. Reporting. Executive shall report directly to the CFO.
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5. Availability. Each party represents and warrants to the other
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that it has the full power and authority to enter into and perform its
obligations under this Agreement and that its execution of and performance under
this Agreement shall not constitute a default under or breach of the terms of
any other agreement or order of any court or governmental authority to which it
is a party or under which it is bound. Each party shall defend and hold
harmless the other for any and all claims, demands, losses or damages (including
reasonable attorneys' fees) arising from any action against any such party due
to a breach of any representation and warranty contained in this Paragraph or
based upon any allegations of interference with contractual obligations or the
like relating to the negotiation or execution of this Agreement.
6. Term. Subject to the provisions for earlier termination set
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forth in Paragraph 11, the term of Executive's employment hereunder shall
commence on August 1, 1997, and continue for five years from and including such
date (the "Term"). Neither the Company nor Executive will have any obligation
to renew or extend this Agreement beyond the Term.
7. Compensation.
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(a) Salary and Bonus. In full consideration for the services
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to be rendered by Executive, and in full discharge of the Company's salary
obligations, Company shall pay to Executive and Executive shall accept:
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(i) an annualized base salary of $400,000 during the first
twelve month period of the Term and an amount during each of the subsequent
twelve month periods to be determined by the Company after a good faith
review of Executive's base salary and performance prior to the beginning of
each such period, but in no event less than the annualized base salary
being paid to Executive as of the date of such good faith review (each
amount less tax withholdings required by law and other voluntary deductions
authorized by Executive), payable bi-weekly in arrears commencing on the
first regular bi-weekly payment date; and
(ii) an annual guaranteed bonus of $100,000 during each twelve
month period of the Term, and pro rated for any periods less than twelve
months (less tax withholdings required by law and other voluntary
deductions authorized by Executive), payable on or before January 10
following the expiration of each calendar year and payable at the end of
the Term for the last year of the Term; and
(iii) an annual discretionary bonus, or such applicable prorated
portion thereof for any partial Company fiscal year during the Term (less
tax withholdings required by law and other voluntary deductions authorized
by Executive), to be determined in the sole discretion of the CEO, payable
on the first day of the second month following the completion of each
Company fiscal year ending in the Term (and within forty-five days
following the end of the Term with respect to the last partial Company
fiscal year); and
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(iv) participation in the P&F Acquisition Corp. and Metro-
Xxxxxxx-Xxxxx Inc. 1996 Management Stock Option and Bonus Plan(s) (the
"Plan") in the amounts designated on page A-9 of Exhibit A thereto (i.e.,
1,433 Series A Options (and Bonus Interests) and 1,573 Series B Options).
(b) Other Benefits. Executive shall be entitled to the following
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additional benefits: first-class air travel, a car allowance and vacation time,
all in accordance with Company policy applicable to employees of Executive's
seniority, salary and title.
(c) Business Expenses. During the Term, the Company shall pay or
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reimburse Executive promptly for all reasonable business expenses incurred by
Executive in the performance of Executive's duties under this Agreement if
properly substantiated and in accordance with the Company's policies and
procedures applicable to employees of Executive's seniority, salary and title.
(d) Insurance. During the Term, Executive shall be entitled to and
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shall be accorded all rights and benefits under any life insurance, disability
insurance, health and major medical insurance policy or policies which the
Company provides for its officers or employees generally. Nothing in this
paragraph shall require the Company to retain any particular policy or plan, but
a reasonable insurance benefit package shall be maintained.
(e) Employee Benefit Plans. Executive shall be entitled to
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participate in and/or receive all other employee benefits under any 401(k) plan,
savings plan, pension plan
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and any other similar plan or program which the Company provides for its senior
officers or employees generally, all subject to the terms and conditions of the
various benefit plans. To the extent any such benefit plan or program permits
crediting for periods of prior employment with the Company (including for
purposes of determining vacation time, but excluding for any purpose the Plan),
Executive's commencement date hereunder shall be deemed to be March 4, 1992.
8. Compensation in the Event of Termination.
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(a) If the Agreement is terminated under Paragraph 11(a),
Executive or his estate shall receive the compensation provided in Paragraphs
7(a)(i), 7(a)(ii) and 7(a)(iii), if any, prorated to the date of termination,
and all amounts accrued under benefit plans in which Executive is a participant
as of such termination date, including without limitation the benefits provided
in Paragraph 7(a)(iv) in accordance with the provisions of the Plan.
(b) If the Agreement is terminated under Paragraph 11(b),
Executive shall receive the same compensation and benefits set forth in
Paragraph 8(a), except that the benefits provided in Paragraph 7(d) shall
continue for what would be the remainder of the Term but for such termination
(the "Full Term") in accordance with the terms of each respective policy or plan
(provided, however, that if prior to the expiration of the Full Term Executive
receives any of the types of benefits specified in Paragraph 7(d) from a
subsequent employer, the Company shall immediately cease to provide such types
of benefits received from the subsequent employer).
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(c) If the Agreement is terminated under Paragraph 11(c) or
11(e) below, or expires pursuant to its terms, Executive shall receive the net
present value of the compensation provided in Paragraphs 7(a)(i) and 7(a)(ii)
through the Full Term, discounted at the 30-day LIBOR rate in effect at the date
of termination and the compensation provided in Paragraph 7(a)(iii), if any, pro
rated as specified therein, the benefits provided in Paragraph 7(a)(iv) in
accordance with the provisions of the Plan, and the benefits provided in
Paragraph 7(d) for the Full Term in accordance with the terms of each respective
policy or plan (provided, however, that if prior to the expiration of the Full
Term Executive receives any of the types of benefits specified in Paragraph 7(d)
from a subsequent employer, the Company shall immediately cease to provide such
types of benefits received from the subsequent employer).
(d) If the Agreement is terminated under Paragraph 11(d),
Executive shall not be entitled to receive any payment or benefits following the
date of termination, except as may be accrued to the date of termination, or
vested under the Plan, or any other plan or policies of the Company.
9. Property Rights.
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(a) Executive agrees that all results and proceeds of
Executive's services, including any ideas, programs, formats, plans and
arrangements, composed, conceived or created by Executive during the period of
this employment, solely or in collaboration with others (collectively, the
"Creations"), whether or not same is made at the request or suggestion of the
Company, or during or outside regular hours of work, shall at all times be and
remain the
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sole and exclusive property of the Company. Executive further agrees that
Executive will, at the request of the Company, execute and deliver to the
Company, in form satisfactory to the Company, documents evidencing the Company's
ownership to the foregoing; but notwithstanding that no such documents are
executed, the Company, as Executive's employer, shall be deemed the owner
thereof immediately upon creation. Anything in this Agreement to the contrary
notwithstanding, the provisions of this paragraph shall survive the termination,
for any reason, of this Agreement.
(b) Notwithstanding Paragraph 9(a) above, the Company shall not
own any Creations created by Executive prior to the Term or solely during
Executive's leisure hours during the Term, which Creation is not related in any
manner to, or derived in any manner from, any projects, concepts and/or
intellectual property of any nature of the Company or any of its affiliates.
Notwithstanding the foregoing, Executive agrees to submit to the Company any
such Creation which Executive desires to commercially exploit, and the Company
will notify Executive within ten (10) business days of receipt if the Company
desires to start negotiations for rights thereto. If no agreement is reached
within thirty (30) days after the start of negotiations, then Executive will
make an offer to the Company for such rights and if the Company does not accept,
Executive may negotiate elsewhere the rights so offered.
10. Intentionally omitted.
11. Termination. Executive's employment and this Agreement (other
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than those provisions set forth in Paragraph 14(j) below) shall terminate:
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(a) Upon the death of Executive.
(b) At the option of the Company, if Executive is disabled.
Disability shall mean Executive's inability to substantially perform his duties
hereunder due to a medically determinable physical or mental impairment that can
reasonably be expected to result in death within twelve (12) months or which has
lasted or can be expected to last for a continuous period of not less than
twelve (12) months.
(c) After thirty (30) days written notice by the Company to
Executive without "Cause".
(d) Upon written notice by the Company to Executive for "Cause"
which shall include only:
(i) the continued failure of Executive to substantially
perform Executive's duties with the Company, or any subsidiary of the
Company (other than any such failure resulting from illness, temporary
absence, legal incapacity or disability) for thirty (30) days after a
demand for substantial performance is delivered in writing to Executive by
the Company which specifically identifies the manner in which Executive has
not substantially performed his duties;
(ii) Executive's continued failure to follow reasonable and
lawful directives (consistent with the terms of this Agreement) of the
Board of Directors of the Company (or, if applicable, the CEO, VC or CFO)
for thirty (30) days after a demand for Executive to follow such directives
is delivered in writing to Executive by the Company
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that specifically identifies the manner in which Executive has not followed
such directives;
(iii) the engaging by Executive in willful, reckless or grossly
negligent misconduct in connection with his employment, unless Executive
ceases such misconduct within ten (10) days and remedies the adverse effect
of such misconduct within thirty (30) days, after a demand to cease
engaging in such misconduct is delivered in writing to Executive by Company
that specifically identifies such misconduct;
(iv) Executive's conviction of an offense involving moral
turpitude or a felony (it being understood that the first conviction of
Executive, if any, after commencement of the Term, for driving under the
influence of alcohol shall not constitute Cause hereunder); or
(v) material breach by Executive of this Agreement and failure
to cure such breach within thirty (30) days of delivery of a written notice
to Executive by the Company that specifically identifies the breach.
If the remedy, cure or cessation of an act or omission which is the
subject of a notice under this Paragraph 11(d) would reasonably require more
than thirty (30) days to complete and Executive commences such remedy, cure or
cessation within thirty (30) days after receipt of such notice and diligently
pursues the same to completion, said act or omission shall not constitute
"Cause." Cause shall continue to exist with respect to Executive only for a
period of ninety (90) days after the event or action (and the expiration of any
notice or cure period specified) giving rise to Cause.
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(e) Upon thirty (30) days written notice by Executive to the
Company for "Good Reason" which shall include:
(i) a substantial and adverse change in Executive's status or
position with the Company as the same existed on the commencement of the
Term hereof which is not cured within thirty (30) days after written notice
thereof to the Company from Executive;
(ii) a reduction (other than for Cause) by the Company of
Executive's aggregate compensation under Paragraphs 7(a)(i) and 7(a)(ii)
above as in effect on the commencement of the Term hereof or as in effect
thereafter if such compensation has been increased, unless such reduction
is restated retroactively not later than thirty (30) days after written
notice thereof to the Company from Executive;
(iii) a material reduction by the Company in the overall value
of benefits provided to the Executive as in effect on the commencement of
the Term hereof or as in effect thereafter if such benefits have been
increased (as used in the preceding clause, "benefits" shall include all
profit-sharing, retirement, pension, health, medical, dental, disability
insurance, automobile and similar benefits), unless such reduction is
restated retroactively not later than thirty (30) days after written notice
thereof to the Company from Executive;
(iv) a relocation of Executive's principal place of employment
to any place outside the greater Los Angeles area, except for reasonable
amounts of required travel by the Executive on the Company's business; or
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(v) any material breach by the Company of any provision of
this Agreement which is not cured within thirty (30) days after written
notice thereof to the Company from Executive; or
(f) At the expiration of the Term.
12. No Mitigation; No Right of Offset. Except as provided in
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Paragraphs 8(b) and 8(c) regarding benefits provided by a subsequent employer,
and without limiting any other provision hereof, any income and any other
employment benefits received by Executive from any and all sources other than
the Company before or after the expiration or termination of this Agreement for
any reason whatsoever shall in no way reduce or otherwise affect the Company's
obligation to make payments and afford benefits hereunder. In the event this
Agreement or Executive's employment is terminated for any reason, Executive
shall have no duty to mitigate damages or seek employment, and (except as
provided in the first sentence of this Paragraph 12) the Company shall have no
right to offset against monies or other items it may owe Executive any sums that
Executive may earn during what would otherwise have been the Full Term hereof.
13. Confidential Material.
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(a) Disclosure. Executive acknowledges that, in the
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performance of duties on behalf of the Company, Executive shall have access to,
receive and be entrusted with confidential information, including but in no way
limited to development, marketing, organizational, financial, management,
administrative, production, distribution and sales information, data,
specifications and processes presently owned or at any time in the future
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developed by, the Company or its agents or consultants, or used presently or at
any time in the future in the course of its business that is not otherwise part
of the public domain (collectively, the "Confidential Material"). All such
Confidential Material is considered secret and will be available to Executive in
confidence. Except in the performance of Executive's duties on behalf of the
Company or as required by law, Executive shall not, directly or indirectly for
any reason whatsoever, either during the time Executive is employed by the
Company or at any time thereafter, disclose or use any such Confidential
Material, unless such Confidential Material ceases (through no fault of
Executive's) to be confidential because it has become publicly available. All
records, files, drawings, documents, equipment and other tangible items,
wherever located, relating in any way to the Confidential Material or otherwise
to the Company's business, which Executive prepares, uses, or encounters, shall
be and remain the Company's sole and exclusive property and shall be included in
the Confidential Material. Upon termination of this Agreement by any means, or
whenever requested by the Company, Executive shall promptly deliver to the
Company any and all of the Confidential Material not previously delivered to the
Company that may be or at any previous time has been in Executive's possession
or under Executive's control; provided, however, Executive may keep Executive's
rolodex or other personal list of addresses and telephone numbers.
(b) Unfair Competition. Executive hereby acknowledges that the
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sale or unauthorized use or disclosure of any of the Company's Confidential
Material by Executive by any means whatsoever (except as provided in Paragraph
13(a) above) at any time before, during or after Executive's employment with the
Company shall constitute "Unfair Competition".
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(c) Other. In the event of the termination of Executive's
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employment for any reason, Executive (and any corporation or entity of which
Executive is a director, officer, employee or greater than five percent (5%)
shareholder) shall not, for a period of one (1) year:
(i) solicit for employment and then employ any employee of the
Company or any of its affiliates or subsidiaries (except Executive's
secretary or secretaries and personal assistant(s)); or
(ii) make any public statement concerning the Company, any of its
affiliates or subsidiaries, or Executive's employment unless previously
approved by the Company, except (aa) as may be required by law, or (bb) any
primarily personal publicity issued by Executive that includes incidental,
non-derogatory reference to the Company or its affiliates and/or
Executive's employment thereby.
Notwithstanding the foregoing, it shall not be a breach of this Paragraph 13(c)
by Executive if an entity which Executive does not own (i.e., over 50% equity
ownership) or control violates such Paragraph and Executive is not materially
involved in such violation.
14. Miscellaneous.
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(a) Arbitration.
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(i) Any and all disputes between Executive and the Company,
however significant, arising out of, relating in any way to or in
connection with this Agreement (including the validity, scope and
enforceability of this arbitration clause) shall be solely settled by an
arbitration conducted in accordance with the rules of the
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American Arbitration Association or any similar successor body and to be
held in Los Angeles, California.
(ii) Any arbitration hereunder shall be held before a single
arbitrator mutually agreed to by the parties thereto, except that, if the
parties shall fail to agree to such an arbitrator within twenty (20) days
from the date on which the claimant's request for arbitration is delivered
to the other party to the arbitration, such arbitration shall be held
before an arbitrator appointed by the American Arbitration Association.
(iii) Discovery may be taken in the arbitration proceedings
pursuant to the provisions of California Code of Civil Procedure Section
1283.05, which are incorporated herein by reference and made applicable to
any arbitration held pursuant to this Paragraph.
(iv) The award of the arbitrator shall be made within ninety
(90) days from the date on which the arbitrator is selected. The award of
the arbitrator shall be final, and the parties agree to waive their right
to any form of appeal, to the greatest extent allowed by law. The
arbitrator shall award costs and fees, including the fees of the arbitrator
and reasonable attorneys' fees, to the prevailing party. Judgment upon any
award of the arbitrator may be entered in any court having jurisdiction or
application may be made to such court for the judicial acceptance of the
award and for order of enforcement.
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(b) Applicable Law and Venue. This Agreement and any disputes
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or claims arising hereunder shall be construed in accordance with, governed by
and enforced under the laws of the State of California without regard for any
rules of conflicts of law. The arbitrator appointed as described above located
in Los Angeles, California shall be the sole fora for any action for relief
arising out of or pursuant to, or to enforce or interpret, this Agreement. Each
party to this Agreement consents to the personal jurisdiction and arbitration in
such fora and courts and each party hereto covenants not to, and waives any
right to, seek a transfer of venue from such jurisdiction on any grounds.
(c) Interpretation. The provisions of this Agreement were
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negotiated by each of the parties hereto and this Agreement shall be deemed to
have been drafted by each party.
(d) Representations of the Company. The Company represents and
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warrants that this Agreement is validly binding on the Company and enforceable
in accordance with its terms.
(e) No Waivers. The failure of either party to enforce any
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provision of this Agreement shall not be construed as a waiver of any such
provision, nor prevent such party thereafter from enforcing such provision or
any other provision of this Agreement. Rights granted the parties hereto herein
are cumulative and the election of one shall not constitute a waiver of such
party's right to assert all other legal remedies available under the
circumstances.
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(f) Notices. Any notice to be given under the terms of this
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Agreement shall be in writing and may be delivered personally, by telecopy,
telex or other form of written electronic transmission, by overnight courier or
by registered or certified mail, postage prepaid, and shall be addressed as
follows:
TO THE COMPANY:
Metro-Xxxxxxx-Xxxxx Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000-0000
Attention: Director of Human Resources
WITH A COPY TO:
Metro-Xxxxxxx-Xxxxx Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000-0000
Attention: Legal Department
TO THE EXECUTIVE:
Xx. Xxxxxx X. Xxxxxx
Metro-Xxxxxxx-Xxxxx Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000-0000
WITH A COPY TO:
Xx. Xxxxxx X. Xxxxxx
0000 Xxxxxxx Xxxxx
Xxxxxxxxx Xxxxx, Xxxxxxxxxx 00000
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Either party may hereafter notify the other in writing of any change in address.
Any notice hereunder shall be deemed duly given when received by the person to
whom it was sent.
(g) Severability. The provisions of this Agreement are severable and
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if any provision of this Agreement shall be held to be invalid or otherwise
unenforceable, in whole or in part, the remainder of the provisions, or
enforceable parts thereof, shall not be affected thereby unless as a result of
such severing the remaining provisions or enforceable parts do not substantially
reflect the intention of the parties in entering into this Agreement.
(h) Successors and Assigns. The rights and obligations of the
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parties under this Agreement shall inure to the benefit of and be binding upon
their successors and assigns, including the survivor upon any merger,
consolidation or combination of the Company with any other entity.
(i) Entire Agreement. This Agreement supersedes all prior agreements
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and understandings between the parties hereto, oral or written, and may not be
modified or terminated orally. No modification, termination or attempted waiver
shall be valid unless in writing, signed by the party against whom such
modification, termination or waiver is sought to be enforced.
(j) Survival. The provisions of Paragraphs 8, 9, 10, 11, 12, 13, and
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14 of this Agreement shall survive the Term, it being understood that the
foregoing shall not limit Executive's rights with respect to amounts due him and
unpaid at the expiration of the Term.
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(k) Confidentiality and Publicity. This Agreement shall remain
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confidential and the terms shall not be divulged to any person (other than
Executive's professional advisors and family) except to the extent required by
law or legal process. Any press release or announcement of or relating to this
Agreement and the timing of any such announcement shall only be made with the
agreement of Executive and the Company.
(l) Attorneys. Each party may be represented by counsel of its
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choice even though such counsel may have represented the other party in matters
related to the business of the Company, and each party agrees to execute an
appropriate waiver to effectuate this clause.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
METRO-XXXXXXX-XXXXX INC.
By /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
Senior Executive Vice President
and Chief Executive Officer
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
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