EXHIBIT 10.32
Amended and Restated Employment Agreement
AMENDED AND RESTATED EMPLOYMENT AGREEMENT, dated as of May 9, 2003 between
Panavision Inc., a Delaware corporation (the "Company") and Xxxxx X. Xxxxxxx
(the "Executive").
WHEREAS, the Company and the Executive are signatories to an Agreement
dated as of October 15, 2002 (with all Appendices and Amendments thereto, the
"Prior Agreement");
WHEREAS, the Company and the Executive desire to enter into a new
contractual arrangement whereby the Company will employ the Executive on the
terms and conditions set forth in this Agreement, such that the Prior Agreement
shall be superseded and of no further force and effect; and
WHEREAS, the Company wishes to employ the Executive, and the Executive
wishes to accept such employment, on the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, the Company and the Executive hereby agree as follows:
1. Employment, Duties and Acceptance.
1.1 Employment, Duties. The Company hereby employs the Executive for
the Term (as defined in Section 2.1), to render exclusive and full-time services
to the Company as Executive Vice President and Chief Financial Officer or in
such other executive position as may be mutually agreed upon by the Company and
the Executive, and to perform such other duties consistent with such position as
may be assigned to the Executive by the Board of Directors or any officer of the
Company senior to the Executive. The Executive will report jointly to the Chief
Executive Officer of Panavision and the Vice Chairman and Chief Administrative
Officer of Mafco Holdings Inc.
1.2 Acceptance. The Executive hereby accepts such employment and
agrees to render the services described above. During the Term, the Executive
agrees to serve the Company faithfully and to the best of the Executive's
ability, to devote the Executive's entire business time, energy and skill to
such employment, and to use the Executive's best efforts, skill and ability to
promote the Company's interests. The Executive further agrees to accept
election, and to serve during all or any part of the Term, as an officer or
director of the Company and of any subsidiary or affiliate of the Company,
without any compen-
sation therefor other than that specified in this Agreement, if elected to any
such position by the shareholders or by the Board of Directors of the Company or
of any subsidiary or affiliate, as the case may be. The Executive hereby
represents and warrants that the Executive is not subject to any other
agreement, including without limitation any agreement not to compete or
confidentiality agreement, which would be violated by the Executive's
performance of services hereunder.
1.3 Location. The duties to be performed by the Executive hereunder
shall be performed primarily at the office of the Company in Woodland Hills,
California, subject to reasonable travel requirements on behalf of the Company.
2. Term of Employment; Certain Post-Term Benefits.
2.1 The Term. The term of the Executive's employment under this
Agreement (the "Term") shall commence on October 15, 2002 and shall end on
December 31, 2005 or such later date to which the Term is extended pursuant to
Section 2.2.
2.2 End-of-Term Provisions. At any time on or after December 31, 2003
the Company shall have the right to give written notice of non-renewal of the
Term. In the event the Company gives such notice of non-renewal, the Term
automatically shall be extended so that it ends twenty-four months after the
last day of the month in which the Company gives such notice. From and after
December 31, 2005, unless and until the Company gives written notice of
non-renewal as provided in this Section 2.2, the Term automatically shall be
extended day-by-day; upon the giving of such notice by the Company, the Term
automatically shall be extended so that it ends twenty-four months after the
last day of the month in which the Company gives such notice.
2.3 Special Curtailment. The Term shall end earlier than the original
December 31, 2005 termination date provided in Section 2.1 or any extended
termination date provided in Section 2.2, in either case if sooner terminated
pursuant to Section 4. Non-extension of the Term shall not be deemed to be a
wrongful termination of the Term or this Agreement by the Company pursuant to
Section 4.4.
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3. Compensation; Benefits.
3.1 Salary. As compensation for all services to be rendered pursuant
to this Agreement, the Company agrees to pay the Executive during the Term a
base salary, payable semi-monthly in arrears, at the annual rate of not less
than $475,000, less such deductions or amounts to be withheld as required by
applicable law and regulations (the "Base Salary"). In the event that the
Company in its sole discretion from time to time determines to further increase
the Base Salary, such increased amount shall, from and after the effective date
of the increase, constitute "Base Salary" for purposes of this Agreement.
3.2 Incentive Compensation. In addition to the amounts to be paid to
the Executive pursuant to Section 3.1, the Executive will be eligible to
participate in the Company's Executive Incentive Compensation Plan or any
successor incentive compensation plan from time to time maintained by the
Company for employees or officers generally (the "Bonus Plan"). The Executive
shall receive a bonus (a "Bonus") on account of service to the Company during
any calendar year commencing with 2003 pursuant to the Bonus Plan, to be paid in
the next following year on the earlier to occur of (A) March 15th and (B) the
date on which the Company pays bonuses to officers generally. For any period of
less than a full calendar year commencing with 2003 during the Term or the
Damage Period, as applicable, the Executive shall be paid a Bonus pursuant to
the Bonus Plan prorated for the number of full calendar months of service
rendered by the Executive during such year.
3.3 Equity Participation. In addition to the amounts to be paid to the
Executive pursuant to Section 3.1 and Section 3.2, the Executive shall be
entitled to receive a payment (the "Equity Participation Payment") at the time
and in an amount determined pursuant to this Section 3.3. The Equity
Participation Payment shall be made to the Executive within fifteen (15) days
following issuance of audited financial statements of the Company for the fiscal
year in which occurred the last day of the Term pursuant to Section 2.2 or the
last day on account of which the Company made a payment of Base Salary pursuant
to Section 4.4, as applicable (such fiscal year, the "Final Fiscal Year"). The
Equity Participation Payment shall be in an amount equal to one percent (1%) of
(i) EBITDA for the Final Fiscal Year multiplied by 8.0, (ii) less the sum of (A)
$600 million and (B) any contributions to the capital of the Company since
September 30, 2002 and (iii)(A) less if an increase or (B) plus if a decrease,
the change in debt (reduced by any unrestricted cash) of the
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Company and its consolidated subsidiaries outstanding between September 30, 2002
and the last day of the Final Fiscal Year.
3.4 Business Expenses. The Company shall pay or reimburse the
Executive for all reasonable expenses actually incurred or paid by the Executive
during the Term in the performance of the Executive's services under this
Agreement, upon presentation of expense statements or vouchers or such other
supporting information as the Company customarily may require of its officers
provided, however, that the maximum amount available for such expenses during
any period may be fixed in advance by the Chairman of the Board of Directors or
the Executive Committee of the Board of Directors.
3.5 Vacation. The Executive shall be entitled to a vacation period in
accordance with the vacation policy of the Company during each year of the Term.
3.6 Fringe Benefits. During the Term, the Executive shall be entitled
to all benefits for which the Executive shall be eligible under any qualified
pension plan, 401(k) plan, group insurance or other so-called "fringe" benefit
plan which the Company provides to its employees and officers generally.
3.7 Additional Benefits. During the Term, the Executive shall be
entitled to such other benefits as are specified in Appendix I to this
Agreement.
4. Termination.
4.1 Death. If the Executive shall die during the Term, the Term shall
terminate and no further amounts or benefits shall be payable hereunder, except
that the Executive's legal representatives shall be entitled to receive
continued payments in an amount equal to 60% of the Base Salary, in the manner
specified in Section 3.1, until the end of the Term (as in effect immediately
prior to the Executive's death) or, if the Company has not then given written
notice of non-renewal pursuant to Section 2.2, for a period of twenty-four
months after the last day of the month in which termination described in this
Section 4.1 occurred, whichever is longer.
4.2 Disability. If during the Term the Executive shall become
physically or mentally disabled, whether totally or partially, such that the
Executive is unable to perform the Executive's services hereunder for
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(i) a period of six consecutive months or (ii) for shorter periods aggregating
six months during any twelve month period, the Company may at any time after the
last day of the six consecutive months of disability or the day on which the
shorter periods of disability shall have equaled an aggregate of six months, by
written notice to the Executive (but before the Executive has recovered from
such disability), terminate the Term and no further amounts or benefits shall be
payable hereunder, except that the Executive shall be entitled to receive
continued payments in an amount equal to 60% of the Base Salary, in the manner
specified in Section 3.1, until the end of the Term (as in effect immediately
prior to such termination) or, if the Company has not then given notice of
non-renewal pursuant to Section 2.2, for a period of twenty-four months after
the last day of the month in which termination described in this Section 4.2
occurred. If the Executive shall die before receiving all payments to be made by
the Company in accordance with the foregoing, such payments shall be made to a
beneficiary designated by the Executive on a form prescribed for such purpose by
the Company, or in the absence of such designation to the Executive's legal
representative.
4.3 Cause. In the event (i) of gross neglect by the Executive of the
Executive's duties hereunder, (ii) conviction of the Executive of any felony,
(iii) conviction of the Executive of any lesser crime or offense involving the
property of the Company or any of its subsidiaries or affiliates, (iv) willful
misconduct by the Executive in connection with the performance of any material
portion of the Executive's duties hereunder, (v) breach by the Executive of any
material provision of this Agreement, (vi) breach by the Executive of the
Company's official written Code of Conduct as in effect from time to time or
(vii) any other conduct on the part of the Executive which would make the
Executive's continued employment by the Company materially prejudicial to the
best interests of the Company, the Company may at any time by written notice to
the Executive terminate the Term, provided, however, that in the case of any
matter covered by clauses (i), (iv), (v) or (vii), the Company shall first have
given the Executive written notice of the conduct (or lack thereof) at issue and
30 days within which to cure. Upon such termination, this Agreement shall
terminate and the Executive shall be entitled to receive no further amounts or
benefits hereunder, except Base Salary and benefits as shall have been earned to
the date of such termination.
4.4 Company Breach. In the event of the breach of any material
provision of this Agreement by the
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Company, the Executive shall be entitled to terminate the Term upon 60 days'
prior written notice to the Company. Upon such termination, or in the event the
Company terminates the Term or this Agreement other than pursuant to the
provisions of Sections 4.2 or 4.3, the Company shall continue to provide the
Executive (i) payments of (A) Base Salary, in the manner and amount specified in
Section 3.1, (B) Bonus in the manner and amount specified in Section 3.2 and (C)
Equity Participation Payment in the manner and amount specified in Section 3.3
and (ii) fringe benefits and additional benefits in the manner and amounts
specified in Sections 3.6 and 3.7 until the end of the Term (as in effect
immediately prior to such termination) or, if the Company has not then given
written notice of non-renewal pursuant to Section 2.2, for a period of
twenty-four months after the last day of the month in which termination
described in this Section 4.4 occurred, whichever is longer (the "Damage
Period"). The Company's obligations pursuant to this Section 4.4 are subject to
the Executive's duty to mitigate damages by seeking other employment provided,
however, that the Executive shall not be required to accept a position of lesser
importance or of substantially different character than the position held with
the Company immediately prior to the effective date of termination or in a
location outside of the Los Angeles County, California area. The Company
acknowledges that the non-competition obligation imposed on the Executive
pursuant to Section 5.2 may reduce substantially the ability of the Executive to
mitigate damages pursuant to this Section 4.4 and, accordingly, agrees that the
Executive's failure to mitigate damages as a consequence of the restrictions
imposed on him by Section 5.2 will be deemed an excuse for such failure on the
Executive's part. To the extent that the Executive shall earn compensation
during the Damage Period (without regard to when such compensation is paid), the
Base Salary, Bonus and Equity Participation payments to be made by the Company
pursuant to this Section 4.4 shall be correspondingly reduced. All payments and
benefits (including service credit for benefit plan purposes and stock option
vesting purposes) to be received by the Executive under this Section 4.4 will be
treated for the Executive's benefit in the same manner as that customarily
accorded full-time employees of the Company.
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4.5 Litigation Expenses. Except as provided for in Section 5.7, if the
Company and the Executive become involved in any action, suit or proceeding
relating to the alleged breach of this Agreement by the Company or the
Executive, and if a judgment in such action, suit or proceeding is rendered in
favor of the Executive, the Company shall reimburse the Executive for all
expenses (including reasonable attorneys' fees) incurred by the Executive in
connection with such action, suit or proceeding.
5. Protection of Confidential Information; Non-Competition.
5.1 In view of the fact that the Executive's work for the Company will
bring the Executive into close contact with many confidential affairs of the
Company, its subsidiaries and affiliates not readily available to the public,
and plans for future developments, the Executive agrees:
5.1.1 To keep and retain in the strictest confidence all confidential
matters of the Company, its subsidiaries and affiliates, including, without
limitation, "know how", trade secrets, customer lists, pricing policies,
operational methods, technical processes, formulae, inventions and research
projects, other business affairs of the Company, its subsidiaries and
affiliates, and any information whatsoever concerning any director, officer,
employee or agent of the Company, its subsidiaries and affiliates or their
respective family members learned by the Executive heretofore or hereafter, and
not to disclose them to anyone outside of the Company, either during or after
the Executive's employment with the Company, except in the course of performing
the Executive's duties hereunder or with the Company's express written consent.
The foregoing prohibitions shall include, without limitation, directly or
indirectly publishing (or causing, participating in, assisting or providing any
statement, opinion or information in connection with the publication of) any
diary, memoir, letter, story, photograph, interview, article, essay, account or
description (whether fictionalized or not) concerning any of the foregoing,
publication being deemed to include any presentation or reproduction of any
written, verbal or visual material in any communication medium, including any
book, magazine, newspaper, theatrical production or movie, or television or
radio programming or commercial; and
5.1.2 To deliver promptly to the Company on termination of the
Executive's employment by the Company,
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or at any time the Company may so request, all memoranda, notes, records,
reports, manuals, drawings, blueprints and other documents (and all copies
thereof), including data stored in computer memories or on other media used for
electronic storage or retrieval, relating to the Company's business, or the
business of its subsidiaries or affiliates, and all property associated
therewith, which the Executive may then possess or have under the Executive's
control.
5.2 During the Term and for a period of twenty-four months thereafter,
the Executive shall not, directly or indirectly, enter the employ of, or render
any services to, any person, firm or corporation engaged in any business
competitive with the business of the Company or of any of its subsidiaries or
affiliates; the Executive shall not engage in such business on the Executive's
own account; and the Executive shall not become interested in any such business,
directly or indirectly, as an individual, partner, shareholder, director,
officer, principal, agent, employee, trustee, consultant, or in any other
relationship or capacity provided, however, that nothing contained in this
Section 5.2 shall be deemed to prohibit the Executive from acquiring, solely as
an investment, up to five percent (5%) of the outstanding shares of capital
stock of any public corporation. In addition, during the Term and for a period
of twenty-four months thereafter, the Executive shall not solicit or encourage
any person who, within six (6) months prior to the expiration or earlier
termination of the Term, was an employee of the Company or any of its
subsidiaries or affiliates to (i) terminate his or her employment with the
Company or any such subsidiary or affiliate or (ii) engage in any activity
prohibited to the Executive by the first sentence of this Section 5.2.
5.3 If the Executive commits a breach, or threatens to commit a
breach, of any of the provisions of Sections 5.1 or 5.2 hereof, the Company
shall have the following rights and remedies:
5.3.1 The right and remedy to have the provisions of this Agreement
specifically enforced by any court having equity jurisdiction, it being
acknowledged and agreed that any such breach or threatened breach will cause
irreparable injury to the Company and that money damages will not provide an
adequate remedy to the Company; and
5.3.2 The right and remedy to require the Executive to account for and
pay over to the Company all compensation, profits, monies, accruals, increments
or other benefits (collectively "Benefits") derived or re-
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ceived by the Executive as the result of any transactions constituting a breach
of any of the provisions of Sections 5.1 or 5.2, and the Executive hereby agrees
to account for and pay over such Benefits to the Company.
Each of the rights and remedies enumerated above shall be independent of the
other, and shall be severally enforceable, and all of such rights and remedies
shall be in addition to, and not in lieu of, any other rights and remedies
available to the Company under law or in equity.
5.4 If any of the covenants contained in Sections 5.1 or 5.2, or any
part thereof, hereafter are construed to be invalid or unenforceable, the same
shall not affect the remainder of the covenant or covenants, which shall be
given full effect, without regard to the invalid portions.
5.5 If any of the covenants contained in Sections 5.1 or 5.2, or any
part thereof, are held to be unenforceable because of the duration of such
provision or the area covered thereby, the parties agree that the court making
such determination shall have the power to reduce the duration and/or area of
such provision and, in its reduced form, said provision shall then be
enforceable.
5.6 The parties hereto intend to and hereby confer jurisdiction to
enforce the covenants contained in Sections 5.1 and 5.2 upon the courts of any
state within the geographical scope of such covenants. In the event that the
courts of any one or more of such states shall hold such covenants wholly
unenforceable by reason of the breadth of such covenants or otherwise, it is the
intention of the parties hereto that such determination not bar or in any way
affect the Company's right to the relief provided above in the courts of any
other states within the geographical scope of such covenants as to breaches of
such covenants in such other respective jurisdictions, the above covenants as
they relate to each state being for this purpose severable into diverse and
independent covenants.
5.7 In the event that any action, suit or other proceeding in law or
in equity is brought to enforce the covenants contained in Sections 5.1 and 5.2
or to obtain money damages for the breach thereof, and such action results in
the award of a judgment for money damages or in the granting of any injunction
in favor of the Company, all expenses (including reasonable attorneys' fees) of
the Company in such action, suit or other proceeding shall (on demand of the
Company) be paid by the Executive. In the event the Company fails to obtain a
judgment for money
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damages or an injunction in favor of the Company, all expenses (including
reasonable attorneys' fees) of the Executive in such action, suit or other
proceeding shall (on demand of the Executive) be paid by the Company.
6. Inventions and Patents.
6.1 The Executive agrees that all processes, technologies and
inventions (collectively, "Inventions"), including new contributions,
improvements, ideas and discoveries, whether patentable or not, conceived,
developed, invented or made by him during the Term shall belong to the Company,
provided that such Inventions grew out of the Executive's work with the Company
or any of its subsidiaries or affiliates, are related in any manner to the
business (commercial or experimental) of the Company or any of its subsidiaries
or affiliates or are conceived or made on the Company's time or with the use of
the Company's facilities or materials. The Executive shall further: (a) promptly
disclose such Inventions to the Company; (b) assign to the Company, without
additional compensation, all patent and other rights to such Inventions for the
United States and foreign countries; (c) sign all papers necessary to carry out
the foregoing; and (d) give testimony in support of the Executive's
inventorship.
6.2 If any Invention is described in a patent application or is
disclosed to third parties, directly or indirectly, by the Executive within two
years after the termination of the Executive's employment by the Company, it is
to be presumed that the Invention was conceived or made during the Term.
6.3 The Executive agrees that the Executive will not assert any rights
to any Invention as having been made or acquired by the Executive prior to the
date of this Agreement, except for Inventions, if any, disclosed to the Company
in writing prior to the date hereof.
7. Intellectual Property.
The Company shall be the sole owner of all the products and proceeds of the
Executive's services hereunder, including, but not limited to, all materials,
ideas, concepts, formats, suggestions, developments, arrangements, packages,
programs and other intellectual properties that the Executive may acquire,
obtain, develop or create in connection with and during the Term, free and clear
of any claims by the Executive (or anyone claiming under the Executive) of any
kind or character whatsoever (other than the Executive's right to receive
payments hereunder). The
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Executive shall, at the request of the Company, execute such assignments,
certificates or other instruments as the Company may from time to time deem
necessary or desirable to evidence, establish, maintain, perfect, protect,
enforce or defend its right, title or interest in or to any such properties.
8. Indemnification.
The Company will indemnify the Executive, to the maximum extent permitted
by applicable law, against all costs, charges and expenses incurred or sustained
by the Executive in connection with any action, suit or proceeding to which the
Executive may be made a party by reason of the Executive being an officer,
director or employee of the Company or of any subsidiary or affiliate of the
Company.
9. Notices.
All notices, requests, consents and other communications required or
permitted to be given hereunder shall be in writing and shall be deemed to have
been duly given if delivered personally, sent by overnight courier or mailed
first class, postage prepaid, by registered or certified mail (notices mailed
shall be deemed to have been given on the date mailed), as follows (or to such
other address as either party shall designate by notice in writing to the other
in accordance herewith):
If to the Company, to:
Panavision Inc.
0000 Xx Xxxx Xxxxxx
Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
with a copy to:
MacAndrews & Forbes Holdings Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
If to the Executive, to:
Xxxxx X. Xxxxxxx
0000 Xxxxxxx Xxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
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10. General.
10.1 This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York applicable to agreements made
and to be performed entirely in New York.
10.2 The section headings contained herein are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
10.3 This Agreement sets forth the entire agreement and understanding
of the parties relating to the subject matter hereof, and supersedes all prior
agreements, arrangements and understandings, written or oral, relating to the
subject matter hereof. No representation, promise or inducement has been made by
either party that is not embodied in this Agreement, and neither party shall be
bound by or liable for any alleged representation, promise or inducement not so
set forth.
10.4 This Agreement, and the Executive's rights and obligations
hereunder, may not be assigned by the Executive. The Company may assign its
rights, together with its obligations, hereunder (i) to any affiliate or (ii) to
third parties in connection with any sale, transfer or other disposition of all
or substantially all of its business or assets; in any event the obligations of
the Company hereunder shall be binding on its successors or assigns, whether by
merger, consolidation or acquisition of all or substantially all of its business
or assets.
10.5 This Agreement may be amended, modified, superseded, canceled,
renewed or extended and the terms or covenants hereof may be waived, only by a
written instrument executed by both of the parties hereto, or in the case of a
waiver, by the party waiving compliance. The failure of either party at any time
or times to require performance of any provision hereof shall in no manner
affect the right at a later time to enforce the same. No waiver by either party
of the breach of any term or covenant contained in this Agreement, whether by
conduct or otherwise, in any one or more instances, shall be deemed to be, or
construed as, a further or continuing waiver of any such breach, or a waiver of
the breach of any other term or covenant contained in this Agreement.
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11. Subsidiaries and Affiliates.
11.1 As used herein, the term "subsidiary" shall mean any corporation
or other business entity controlled directly or indirectly by the corporation or
other business entity in question, and the term "affiliate" shall mean and
include any corporation or other business entity directly or indirectly
controlling, controlled by or under common control with the corporation or other
business entity in question.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
PANAVISION INC.
By: /S/ XXXXX X. XXXXXXXX
---------------------------
Xxxxx X. Xxxxxxxx
Executive Vice President
/S/ XXXXX X. XXXXXXX
------------------------------------
Xxxxx X. Xxxxxxx
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APPENDIX I
Additional Benefits:
1. Medical Examination. The Executive shall be reimbursed by the Company
for the reasonable cost of one annual medical examination upon presentation of
an expense statement.
2. Automobile. The Company shall afford the Executive the right to use an
automobile on a continuing basis and shall provide garaging near the Executive's
residence, all on the following basis. The Company shall pay, upon presentation
of an expense statement, all reasonable expenses associated with the operation
of such automobile and the rental of such garage space in the same manner as is,
from time to time, in effect with respect to executive officers of the Company
generally, including, without limitation, all reasonable maintenance and
insurance expenses. The automobile furnished by the Company shall be a late
model top-of-the-line BMW530 or like vehicle to be reasonably selected by the
Executive. Upon the expiration of the Term, the Executive promptly shall return
the automobile to the Company. Alternatively, the Executive shall have the right
to elect to forego the use of a Company-provided automobile and receive from the
Company instead a monthly cash payment in an amount equal to what would have
been the direct out-of-pocket cost to the Company of providing to the Executive
the benefit described in this paragraph.
3. Insurance. The Company agrees to provide the Executive with additional
term life insurance coverage with a face amount of twice the then current Base
Salary, subject to the insurer's satisfaction with the results of any required
medical examination to which the Executive hereby agrees to submit, on the
following basis. The Executive may select a plan of his choice and may designate
the beneficiary of such plan. The Company shall pay, or reimburse to the
Executive if the Executive purchases term life insurance coverage himself, upon
presentation of an expense statement, the periodic premiums relating to such
additional term life insurance payable during the Term.
4. Relocation. The Company acknowledges that the Executive will relocate
his family and principal residence from Boca Raton, Florida to Woodland Hills,
California. The Company shall provide the Executive with
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the following payments and benefits:
(i) During the period from October 15, 2002 through December 31, 2002, the
Company shall pay the lesser of (A) the cost of business class commercial
airline transportation for the Executive to commute weekly between the Company's
offices and Boca Raton, Florida and (B) the actual cost incurred by the
Executive for such commutation.
(ii) During the period from October 15, 2002 through December 31, 2002, the
Company shall pay the lesser of (A) the cost of business class commercial
airline transportation for the Executive's wife and three children to make three
round trips between Woodland Hills, California and Boca Raton, Florida and (B)
the actual cost incurred by the Executive's wife and children for such trips.
(iii) During the period from October 15, 2002 through December 31, 2002,
the Company shall pay the rental and related costs of a suitable short term
furnished corporate apartment in the Woodland Hills, California vicinity for the
Executive's use.
(iv) The Company shall pay the actual and reasonable expenses of relocating
the Executive and his family from the Boca Raton, Florida area to the Woodland
Hills, California vicinity. Should the executive rent a residence in the
Woodland Hills vicinity and subsequently purchase a principal residence,
relocation expenses shall include the cost of storage of personal belongings
while the Executive and his family reside in the rented premises, as well as the
expenses of moving from the rented premises to the principal residence.
(v) Upon expiration or termination of the Term for any reason other than
pursuant to Section 4.3 or other than as a consequence of the Executive's
voluntarily quitting, the Company shall reimburse to the Executive, upon
presentation of reasonable supporting documentation, any loss on disposition of
the principal residence he purchases in the Woodland Hills, California vicinity.
For purposes of determining loss on disposition for purposes of this clause (v),
there shall be added to the cost basis of the Executive's principal residence in
the Woodland Hills, California vicinity closing costs on Executive's purchase
thereof and selling costs on Executive's disposition thereof. The Executive's
right to reimbursement for loss on sale pursuant to this clause (v) is subject
to the following limitations: (A) the Executive's principal residence shall have
become subject to a contract for sale
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no later than one (1) year after expiration or termination of the Term and the
closing shall have occurred no later than ninety (90) days thereafter and (B)
the Company shall have the right to reject the selling price as being too low
provided that, if the Company does so, it shall purchase the home from the
Executive at a price which results in neither gain nor loss (as determined
pursuant to the preceding sentence) to the Executive.
(vi) Upon expiration or termination of the Term for any reason other than
pursuant to Section 4.3 or other than as a consequence of the Executive's
voluntarily quitting, the Company shall pay the actual and reasonable expenses
of relocating the Executive and his family from the Woodland Hills, California
vicinity to a locale in the continental United States of the Executive's choice.
Should the Executive rent a residence in the locale to which he and his family
relocate and subsequently purchase a principal residence in that locale,
relocation expenses shall include the cost of storage of personal belongings
while the Executive and his family reside in the rented premises, as well as the
expenses of moving from the rented premises to the principal residence. The
Executive's right to have relocation expenses paid pursuant to this clause (vi)
is subject to the limitation that the Executive and his family have relocated no
later than the earlier to occur of (i) ten (10) days following the sale of the
Executive's principal residence in the Woodland Hills, California vicinity and
(ii) fifteen(15) months following expiration or termination of the Term as
described above in this clause (vi).
(vii) Should any of the benefits described in clauses (i), (ii), (iii),
(iv) or (vi) above, or any payment by the Company described in clause (v) above,
require income to be imputed to the Executive, the Company shall "gross up" the
income imputed to the Executive under federal and any applicable state income
tax laws on account of such benefits and payment, such that the Executive
effectively suffers no personal cost for such benefits or payment.
5. Airline Club. The Company shall pay the cost of membership for the
Executive in an "executive" or similar commercial airline "club" or preferred
passenger program.
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