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EXHIBIT 10.29
EMPLOYMENT AGREEMENT
THIS AGREEMENT by and among THE PRODUCERS ENTERTAINMENT GROUP LTD. (the
"Company"), a Delaware corporation, and XXXXXXXX X. XXXXXXXX ("Executive"),
dated as of the ____ day of October, 1997.
W I T N E S S E T H
WHEREAS, the Company wishes to employ the Executive for the period
provided in this Agreement, and the Executive is willing to serve in the employ
of the Company on the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants herein contained, the parties agree as follows:
1. Employment. The Company hereby agrees to continue to employ the
Executive, and the Executive hereby agrees to continue his employment with the
Company, on the terms and subject to the conditions set forth herein.
2. Term of Employment. The term of the Executive's employment under
this Agreement (the "Employment Period") shall commence as of October 20, 1997
and shall end on October 31, 2002 unless terminated earlier in accordance with
Section 5 (the "Term").
3. Titles and Responsibilities.
(a) Titles. During the Employment Period, the Executive shall
serve as the President of the Company. The Executive shall report and be
responsible to the Board of Directors of the Company (the "Board").
(b) Responsibilities. Company hereby engages Executive to provide
his exclusive services to supervise the development and production of motion
pictures and television programs for the Company and the exploitation and sale
of such motion pictures and television programs to financiers, distributors,
television networks, syndicator, cable systems, motion picture studios and other
buyers or licensees of such product throughout the world. Pursuant to the terms
and conditions hereof, Executive hereby accepts such engagement. Executive shall
render all services usually and customarily rendered by and required of
executives similarly employed in the entertainment industry. Executive shall
report only to the Board of Directors of the Company.
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(c) Place of Performance. During the Employment Period, the
Executive's office shall be located at the offices of the Company, which shall
be in the New York and Los Angeles metropolitan areas, except for required
business travel consistent with the Executive's position. The Company shall
provide the Executive with an office reasonably acceptable to him, and other
support reasonably appropriate to his duties.
(d) Business Time. During the Employment Period, the Executive
agrees to devote his full business time during normal business hours to the
business and affairs of the Company and to use his best efforts to perform
faithfully, diligently and competently the responsibilities assigned to him
hereunder, to the extent necessary to discharge such responsibilities, except
for (i) time spent serving on corporate, civic or charitable boards or
committees only if and to the extent not substantially interfering with the
performance of such responsibilities, (ii) periods of vacation, disability and
sick leave to which he is entitled, and (iii) reasonable activities having a
charitable, educational or other public interest purpose.
4. Compensation.
(a) Base Salary. During the Employment Period, the Executive shall
receive an annual base salary ("Base Salary") equal to $50,000.00 , payable in
accordance with the customary payroll procedures as in effect from time to time
for senior executives of the Company.
(b) Vacation. During the Employment Period, the Executive shall be
entitled to four (4) weeks paid vacation per year, to be accrued and taken in
accordance with the Company's vacation policy.
(c) Expenses. During the Employment Period, the Executive shall be
entitled to receive prompt reimbursement for all reasonable and required
business-related expenses incurred by the Executive in accordance with the
policies and procedures of the Company as applicable to its senior executives.
(d) Other Executive Benefits. Without limiting the foregoing
provisions of this Section 4, during the Employment Period the Executive shall
be entitled to participate in or be covered under all compensation, bonus,
pension, retirement and welfare and fringe benefit plans, programs and policies
of the Company applicable to senior executives of the Company.
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5. Termination.
(a) Death or Disability. The Executive's employment pursuant to
this Agreement shall terminate automatically upon the Executive's death. The
Company may terminate the Executive's employment for Disability by giving to the
Executive notice of its intention in accordance with Section 5(e) unless
Executive returns to the performance of the essential functions of his
employment within 30 days after receipt of such notice. For purposes of this
Agreement, "Disability" means any physical or mental condition that renders the
Executive unable to perform the essential functions of his employment for 90
consecutive days or for a total of 180 days in any period of 360 consecutive
days.
(b) Voluntary Termination After Change in Control. Notwithstanding
anything in this Agreement to the contrary, the Executive may voluntarily
terminate his employment at any time, after a Change in Control, (i) for any
reason upon six months' written notice to the Company, or (ii) if termination is
for Good Reason or on account of the Executive's serious illness, upon written
notice pursuant to Section 5(e) but without any notice period. In the event of
any termination pursuant to this Section 5(b), the Executive shall have no
further obligation to the Company under this Agreement, except as provided in
Section 9.
(c) Cause. The Company may terminate the Executive's employment
for Cause. For purposes of this Agreement, "Cause" means:
Executive's engaging in gross misconduct materially and demonstrably injurious
to the Company; material failure to perform the services required hereunder
after written notice and an opportunity to cure, if curable; or conviction by
final judgment of a felony constituting fraud, theft, embezzlement or homicide.
(d) Good Reason. The Executive may terminate his employment for
Good Reason. For purposes of this Agreement, "Good Reason" means (i) a material
reduction in the nature or scope of the Executive's position, title, status,
authority, duties, powers or functions on the date of this Agreement; (ii) the
assignment to the Executive of any material duties which are not commensurate
with or at least as prestigious as the Executive's duties and responsibilities
as contemplated by this Agreement; (iii) a material breach by the Company of any
of the provisions of this Agreement; or (iv) the failure by the Company to
obtain an agreement, reasonably satisfactory to the Executive, from any
successor to assume and agree to perform this Agreement, as contemplated by
Section 12(b). After a Change in Control, in addition to items (i) through (iv),
"Good Reason" shall include (v) a determination by the Executive, in his sole
discretion, during the 30-day period commencing 180 days following a Change in
Control, that due to the Change in Control he can no longer effectively perform
his duties.
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(e) Notice of Termination. Any termination by the Company for
Cause or Disability or by the Executive for Good Reason shall be communicated by
a written notice (a "Notice of Termination") to the other party hereto given in
accordance with Section 13(d). A "Notice of Termination" shall set forth in
reasonable detail the events giving rise to such termination.
(f) Date of Termination. For purposes of this Agreement, the term
"Date of Termination" means (i) in the case of termination for Disability, 30
days after Notice of Termination is given (provided that the Executive shall not
have returned to the full-time performance of his duties during such 30-day
period); (ii) in the case of termination for Cause, a date specified in the
Notice of Termination (which shall not be less than 30 days nor more than 60
days from the date such Notice of Termination is given); (iii) in the case of
any other termination for which a Notice of Termination is required, the date of
receipt of such Notice of Termination or, if later, the date specified therein,
as the case may be; and (iv) in all other cases, the actual date on which the
Executive's employment terminates during the Employment Period.
6. Obligations of the Company Upon Termination.
(a) Death, Disability, Cause and Voluntary Termination. If at any
time before or after a Change in Control the Executive's employment is
terminated by the Company during the Employment Period by reason of the
Executive's death, Disability or for Cause, or is voluntarily terminated by the
Executive (other than for Good Reason), the Company shall have no further
obligation to the Executive or the Executive's legal representatives other than
(i) those obligations earned for Base Salary and payments under any Company
bonus plan which may have accrued at the Date of Termination (the "Accrued
Obligations"), (ii) those obligations expressly provided under any of the plans
referred to in Section 4(e) (the "Benefit Rights") and (iii) upon a termination
of the Executive's employment by reason of his death, the payment provided in
Section 6(a)(iii), if applicable, shall be paid to the Executive or the
Executive's estate, as the case may be, in a lump sum in cash within 15 days of
the Date of Termination.
(b) Prior to Change in Control, Termination by the Company other
than for Cause or Disability and Termination by the Executive
for Good Reason.
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(i) Lump Sum Payments. If during the Employment Period and
prior to a Change in Control, the Company terminates the Executive's employment
other than for Cause or Disability, or the Executive terminates his employment
for Good Reason, the Company shall provide the Benefit Rights and shall pay to
the Executive in a lump sum in cash within 15 days of the Date of Termination
the sum of the following amounts: (A) the Accrued Obligations; plus (B) an
amount equal to the product of (1) one-twelfth times (2) the sum of the
Executive's Base
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Salary plus the Executive's average bonus which was received for the three years
ended before the Date of Termination, times (3) the number full or partial of
months remaining in the unexpired term of the Employment Period, but in no event
less than twelve months (such period being the "Severance Period").
(ii) Welfare Benefits. The Company shall provide or cause to
be provided to the Executive and his family for the Severance Period continued
life, medical and dental and disability insurance benefits at least equal to
those which the Executive was receiving or entitled to receive immediately prior
to the termination of employment described in Section 6(b)(i).
(iii) Office. For the Severance Period, the Company shall
provide the Executive with an office reasonably acceptable to him.
(iv) Discharge of the Company's Obligations. The Company
shall have no further obligations to the Executive in respect of any termination
described in this Section 6(b).
(c) Following Change in Control, Termination by the Company other
than for Cause or Disability and Termination by the Executive
for Good Reason.
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(i) Lump Sum Payments. If during the Employment Period and
following a Change in Control, the Company terminates the Executive's employment
other than for Cause or Disability, or the Executive terminates his employment
for Good Reason, the Company shall provide the Benefits Rights and shall pay to
the Executive in a lump sum in cash within 15 days of the Date of Termination
the sum of the following amounts: (a) the Accrued Obligations; and (B) an amount
equal to 2.99 times the sum of the amounts described in clause (2) of Section
6(b)(i)(B).
(ii) Welfare Benefits. The Company shall provide or cause to
be provided to the Executive and his family for a period of 36 months following
such termination continued life, medical and dental and disability insurance
benefits at least equal to those which the Executive was receiving or entitled
to receive immediately prior to the termination of employment described in
Section 6(c)(i).
(iii) Office. For a period of 36 months following such
termination, the Company shall provide the Executive with an office and an
executive secretary reasonably acceptable to him and other support services
reasonably appropriate to an executive of a public corporation.
(iv) Discharge of the Company's Obligations. The Company
shall have no
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further obligations to the Executive in respect of any termination described in
this Section 6(c).
(d) Change in Control. A Change in Control shall be deemed to have
occurred:
(1) the shareholders of the Company shall approve (i) any merger,
consolidation or recapitalization of the Company (or, if the
capital stock of the Company is affected, any subsidiary of
the Company) or any sale, lease, or other transfer (in one
transaction or a series of transactions contemplated or
arranged by any party as a single plan) of all or
substantially all of the assets of the Company (each of the
foregoing being an "Acquisition Transaction") where (x) the
shareholders of the Company immediately prior to such
Acquisition Transaction would not immediately after such
Acquisition Transaction beneficially own, directly or
indirectly, shares representing in the aggregate more than 65%
of (A) the then outstanding common stock of the corporation
surviving or resulting from such merger, consolidation or
recapitalization or acquiring such assets of the Company, as
the case may be (the "Surviving Corporation") (or of its
ultimate parent corporation, if --------------------- any) and
(B) the Combined Voting Power (as defined below) of the then
outstanding Voting Securities (as defined below) of the
Surviving Corporation (or of its ultimate parent corporation,
if any) or (y) the Incumbent Directors at the time of the
initial approval of such Acquisition Transaction would not
immediately after such Acquisition Transaction constitute a
majority of the Board of Directors of the Surviving
Corporation (or of its ultimate parent corporation, if any) or
(ii) any plan or proposal for the liquidation or dissolution
of the Company; or
(2) any Person (as defined below) shall become the beneficial
owner (as defined in Rule 13d-3 and 13-d-5 under the Exchange
Act), directly or indirectly, of securities of the Company
representing in the aggregate 20% or more of either (i) the
then outstanding shares of Stock, or (ii) the Combined Voting
Power of all then outstanding Voting Securities of the
Company; provided; however that notwithstanding the foregoing,
a Change in Control of the Company shall not be deemed to have
occurred for purposes of this subsection (2) solely as the
result of:
(i) an acquisition of securities by the Company which, by
reducing the number of shares of Stock or other Voting
Securities outstanding, increases (i) the proportionate
number of shares of Stock beneficially owned by any
Person to 20% or more of the shares of Stock then
outstanding or (ii) the proportionate voting power
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represented by the Voting Securities beneficially owned
by any Person to 20% or more of the Combined Voting
Power of all then outstanding Voting Securities; or
(ii) an acquisition of securities directly from the Company
except that this subsection (ii) shall not apply to:
(A) any conversion of a security that was not acquired
directly from the Company; or
(B) any acquisition of securities if the Incumbent
Directors at the time of the initial approval of
such acquisition would not immediately after (or
otherwise as a result of) such acquisition
constitute a majority of the Board;
provided, however, that if any Person referred to in
subsections (i) or (ii) of this clause (2) shall
thereafter become the beneficial owner of any additional
shares of Stock or other Voting Securities of the
Company (other than pursuant to a stock split, stock
dividend or similar transaction or an acquisition exempt
under such subsection (ii), then a Change in Control
shall be deemed to have occurred for purposes of this
clause (2). For purposes of this Agreement:
(A) "Person" shall mean any individual, entity
(including, without limitation, any corporation,
partnership, trust, joint venture, association or
governmental body and any successor to any such
entity) or group (as defined in Sections 13(d)(3)
or 14(d)(2) of the Exchange Act and the rules and
regulations thereunder); provided, however, that
Person shall not include Executive, the Company,
any of its majority-owned subsidiaries, any
executive benefit plan of the Company or any of
its majority-owned subsidiaries or
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any entity organized, appointed or established by
Executive, the Company or any of its
majority-owned subsidiaries for or pursuant to the
terms of any such plan, or any of their
affiliates;
(B) "Voting Securities" shall mean all securities of a
corporation having the right under ordinary
circumstances to vote in an election of the board
of directors of such corporation; and
(C) "Combined Voting Power" shall mean the aggregate
votes entitled to be cast generally in the
election of directors of a corporation by holders
of then outstanding Voting Securities of such
corporation.
7. No Mitigation: No Offset. In no event shall the Executive be
obligated to seek other employment by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement. Any amounts that
may be earned by the Executive other than from the Company after the Date of
Termination shall not reduce the Company's obligation to make any payments
hereunder. The amounts payable by the Company hereunder shall not be subject to
any right of set-off that the Company may assert against the Executive.
8. Noncompetition.
(a) Scope. In the case of the Executive's termination of
employment, including due to the expiration of the Employment Period, the
Executive shall not, during the Employment Period and for one year following the
Date of Termination (collectively, "Executive Restricted Period"), (a) divert to
any competitor of the Company in the business conducted by the Company (the
"Designated Industry") any active project of the Company; or (b) solicit or
encourage any officer, employee or consultant of the Company to leave their
employ for employment by or with any competitor of the Company in the Designated
Industry. If at any time the provisions of this Section 8
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shall be determined to be invalid or unenforceable, by reason of being vague or
unreasonable as to area, duration or scope of activity, this Section 8 shall be
considered divisible and shall become and be immediately amended to apply only
to such area, duration and scope of activity as shall be determined to be
reasonable and enforceable by the court or other body having jurisdiction over
the matter; Employee agrees that this Section 8 as so amended shall be valid and
binding as though any invalid or unenforceable provision had not been included
herein. Nothing in this Section 8 shall prevent or restrict Employee from
engaging in any business or industry in the Designated Industry in any capacity.
(b) Irreparable Harm. The Executive agrees that the remedy at law
for any breach of this Section 8 shall be inadequate and that the Company shall
be entitled to injunctive relief.
(c) Covenant Regarding Confidentiality. All information about the
business and affairs of the Company which is not generally available to the
public or disclosed by the Company, and any information about the Company which
becomes generally available to the public as a result of a breach by any person
of any confidentiality obligation to the Company (including, without limitation,
its secrets and information about its business, financial condition and
performance, prospects, products, technology, know-how, merchandising and
advertising programs and plans, and the names of its suppliers, customers and
lenders and the nature of its dealings with them) constitute "Confidential
Information." Executive acknowledges that he will have access to, and knowledge
of, Confidential Information, and that improper use or revelation of same by
Executive, whether during or after the termination of his employment by the
Company, could cause serious injury to the business of the Company. Accordingly,
Executive agrees that, except as required to perform his duties under this
Agreement, or as required by law, rule, regulation or pre-existing contract, he
will forever keep secret and inviolate, and will not at any time, reveal,
divulge or make known, any Confidential Information, whether or not such
Confidential Information was developed, devised or otherwise created in whole or
in party by the efforts of Executive. Executive further agrees that he will not
use any Confidential Information for his own benefit or directly or indirectly
for the benefit or any person or organization other than the Company or its
affiliates.
(d) Covenant Regarding Canadian Corporations. Through the third
(3rd) anniversary of the Effective Time (as such term is defined in the certain
Merger Agreement dated as of ________) or such other period that the Executive
remains employed by Company or any of its subsidiaries, the Executive shall not
directly or indirectly divert any television, video or other film production,
distribution or related business activities or operations of 1037300 Ontario
Limited, or any successor or assignee thereof, to any other corporation or other
entity in Canada.
Furthermore, in the event of a termination of this Agreement, and/or the
Production Agreement between Xxxxxxxx Xxxxxxxx Associates, Inc. ("LJA") and the
Company, dated as of the same date, the Executive shall not engage in any act
which may have the effect of disrupting, frustrating or otherwise interfering
with the development, production or distribution of any
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project of the Company or any project in which the Company participates or
benefits by, for a period of not less than three (3) years following the
termination of the aforementioned agreement(s) . Additionally, the Company shall
have the continued and uninterrupted right to produce or participate in the
production of any projects, including, without limitation, projects involving
1037300 Ontario Limited or any other Canadian corporation or entity, which were
developed or produced during the term of the aforementioned agreements or those
projects for which the Company entered into license, production or distribution
agreements with third parties whereby the Company is required, or may be
required, to render continuous services based on its ability to provide
programming which was intended to be produced by the Executive or LJA .
9. Indemnification. The Company shall indemnify and hold harmless the
Executive, his heirs and personal representatives to the fullest extent
permitted by applicable law, as now or hereafter in effect, with respect to any
acts, omissions or events that occurred while the Executive is or was an
employee of the Company or serves or served the Company or any other corporation
or other enterprise of any kind in any capacity at the request of the Company
(an "Enterprise"). Without limiting the generality of the foregoing, the Company
shall promptly pay, or reimburse the Executive for, or advance to the Executive
amounts for the payment of (a) all of the Executive's reasonable expenses,
including attorneys' fees and court costs, actually and reasonably incurred in
connection with the defense of any action, suit or proceeding, including any
suit seeking recovery under any Company director's and officer's liability
policy, or in connection with any appeal thereof, to which the Executive may be
a party by reason of any action taken or failure to act under or in connection
with his service for the Company or an Enterprise; and (b) all amounts required
to be paid in settlement of or in satisfaction of a judgment in connection with
any such action, suit or proceeding; provided, however, that the Company shall
not be required to indemnify or hold harmless the Executive, his heirs or
personal representatives in any manner whatsoever in the event and to the extent
there is a final and nonappealable judgment by a court of competent jurisdiction
that the liability incurred by the Executive resulted from his gross negligence,
fraud or willful malfeasance.
10. Arbitration. If a dispute arises between the parties respecting the
terms of this Agreement or Executive's employment with the Company, including,
without limitation, any dispute with respect to the validity of this Agreement
or this arbitration clause, such dispute shall be finally resolved by binding
arbitration as follows. Any party may require that the dispute be submitted to
binding arbitration, and in such event the dispute shall be settled by
arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association. If a matter is submitted to arbitration, each of the
parties shall choose one arbitrator. The arbitrators selected by the two parties
shall choose a third arbitrator who shall act as chairman and shall be an
attorney and a member of the panel of the American Arbitration Association. Each
party shall agree to a speedy hearing upon the matter in dispute and the
judgment upon the award rendered by the arbitrators may be entered in any court
having jurisdiction thereof. The place of
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arbitration shall be Los Angeles, California. Notwithstanding anything to the
contrary contained herein, no discovery shall be permitted in the arbitration
proceeding.
11. Successors.
(a) This Agreement is personal to the Executive and, without the
prior written consent of the Company, shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Executive's legal
representatives.
(b) This Agreement shall inure to the benefit of and be binding
upon the Company and its successors. The Company shall require any successor to
all or substantially all of the business and/or assets of the Company, whether
direct or indirect, by an agreement in form and substance reasonably
satisfactory to the Executive, expressly to assume and agree to perform this
Agreement.
12. Miscellaneous.
(a) Withholding. Any payments provided for hereunder shall be paid
net of any applicable withholding required under federal, state or local law and
any additional withholding to which the Executive has agreed.
(b) Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of California, applied without reference
to principles of conflict of laws.
(c) Amendments. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.
(d) Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given when delivered or
mailed to the other party by registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Executive:
Xxxxxxxx Xxxxxxxx
000 Xxxxx Xxx., 00xx Xxxxx
Xxx Xxxx, XX 00000
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If to the Company:
The Producers Entertainment Group Ltd.
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
or to such other address as either party shall have furnished to the other in
writing in accordance herewith, except that notice of change of address shall be
effective only when actually received by the addressee.
(e) Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
(f) Waiver. Waiver by any party hereto of any breach or default by
any other party of any of the terms of this Agreement shall not operate as a
waiver of any other breach or default, whether similar to or different from the
breach or default waived.
(g) Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto with respect to the matters referred to
herein, and no other agreement, verbal or otherwise, shall be binding as between
the parties unless it is in writing and signed by the party against whom
enforcement is sought. All prior and contemporaneous agreements and
understandings between the parties with respect to the subject matter of this
Agreement are superseded by this Agreement.
(h) Survival. The respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations.
(i) Captions and References. The captions of this Agreement are
not part of the provisions hereof and shall have no force or effect. References
in this Agreement to a section number are references to sections of the
Agreement unless otherwise specified.
(j) Consent to Jurisdiction. Each of the parties to this Agreement
hereby submits to the exclusive jurisdiction of the courts of the State of
California and the Federal courts of the United States of America located in
such state solely in respect of the interpretation and enforcement of the
provisions of this Agreement, and hereby waives, and agrees not to assert, as a
defense in any action, suit or proceeding for the interpretation and enforcement
of this Agreement, that it is not subject thereto; that such action, suit or
proceeding may not be brought
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or is not maintainable in said courts; that this Agreement may not be enforced
in or by said courts; that its property is exempt or immune from execution; that
the suit, action or proceeding is brought in an inconvenient forum; or that the
venue of the suit, action or proceeding is improper. Each of the parties agrees
that service of process in any such action, suit or proceeding shall be deemed
in every respect effective service of process upon it if given in the manner set
forth in Section 13(d).
IN WITNESS WHEREOF, the Executive has hereunto set his hand and the
Company has caused this Agreement to be executed in its name on its behalf all
as of the day and year first above written.
THE PRODUCERS ENTERTAINMENT GROUP LTD.
By: _________________________________
Its: ________________________________
XXXXXXXX XXXXXXXX
______________________________________
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