Exhibit 8
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of August 26, 1997, by and between
Video Services Corporation, a Delaware corporation (formerly known
as International Post Limited), with its principal office at 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Company"), and Xxxxxx
X. Xxxx with an address at 0 Xxxxxxxx Xxxxx, Xxxxxxx Xxxx, Xxx
Xxxxxx 00000 (the "Employee").
INTRODUCTION
The parties hereto desire to provide for the employment
of the Employee with the Company. In order to accomplish such
purpose, and in consideration of the terms, covenants and
conditions hereinafter set forth, the parties hereby enter into
this employment agreement.
ARTICLE I
EMPLOYMENT; TERM; DUTIES
1.01 Employment. Upon the terms and conditions
hereinafter set forth, the Company hereby employs the Employee, and
the Employee hereby accepts employment, as Vice President of the
Company.
1.02 Term. Unless sooner terminated as provided in
Article IV hereof, the Employee's employment hereunder shall be for
a term commencing on the date hereof and ending on the later of (i)
the close of business on the third anniversary of the date hereof
and (ii) the date which is twelve months after either party hereto
gives written notice to the other that it desires to terminate this
Agreement. The actual term of employment hereunder, giving effect
to any early termination of employment under Article IV hereof, is
referred to as the "Term".
1.03 Duties. During the Term, the Employee shall
perform such executive duties for the Company and for its
subsidiaries, consistent with his position hereunder, as may be
assigned to him from time to time by the President or Chief
Executive Officer of the Company. The Employee shall perform his
duties hereunder on a full time basis, provided, however that he
shall not be prohibited from engaging in: (i) the activities
specified on Schedule B hereto; (ii) volunteer or charitable
activities; or (iii) management or ownership of passive
investments, so long as they do not interfere with the foregoing
obligations.
1.04 Exclusive Agreement. The Employee represents and
warrants to the Company that he is not a party to any agreement or
arrangement, whether written or oral, in effect which would prevent
the Employee from rendering service to the Company during the Term.
ARTICLE II
COMPENSATION
2.01 Base Salary. For all services rendered by the
Employee hereunder and all covenants and conditions undertaken by
him pursuant to this Agreement, the Company shall pay the Employee
an annual base salary ("Base Salary") during the Term or the
Scheduled Term (as defined in Section 4.02), as the case may be, in
equal bi-weekly installments, of $175,000 per year. The Base
Salary payable to the Employee hereunder shall be reviewed
annually, and may be increased but not decreased, by the
Compensation Committee of the Board of Directors of the Company.
In the event of any such increase, the salary so determined shall
thereafter constitute the Base Salary. In addition, the
Compensation Committee of the Board of Directors of the Company
shall consider, on an annual basis, the payment of a discretionary
bonus by the Company to the Employee in addition to the Incentive
Compensation referred to in Section 2.02 hereof..
If the first or last month of the Term or the Scheduled
Term, as the case may be, is not a full calendar month, then any
calculation of Base Salary for such period shall be prorated for
the number of days employed in such months.
2.02 Incentive Compensation. Promptly following the
date hereof, the parties hereto shall negotiate and agree to a
reasonable, equitable, incentive compensation arrangement
("Incentive Compensation") to apply during the Term.
2.03 Deductions. The Company shall deduct from the
compensation described in Sections 2.01 and 2.02 any Federal, state
or city withholding taxes, social security contributions and any
other amounts which may be required to be deducted or withheld by
the Company pursuant to any Federal, state or city laws, rules or
regulations.
2.04 Disability Adjustments. Any compensation otherwise
payable to the Employee pursuant to Section 2.01 in respect of any
period during which the Employee is disabled (as contemplated in
Section 4.03) shall be reduced by any amounts paid to the Employee
for loss of earnings or the like under any insurance plan or policy
the premiums for which are paid for in their entirety by the
Company. In addition, the Employee shall be entitled to
participate in, and the Company shall continue to maintain and pay
for at its expense, upon the same terms, the life insurance
policies specified on Schedule A attached hereto and the disability
insurance policies currently provided to him by Video Services
Corporation.
ARTICLE III
BENEFITS; EXPENSES
3.01 Benefits. During the Term, the Employee shall be
entitled to participate in and receive such benefits, services,
equipment, compensation and incentive plans and group life, health,
accident, disability and hospitalization insurance plans, pension
plans and retirement plans as the Company may make available to its
executive employees.
3.02 Expenses. The Company agrees that the Employee is
authorized to incur reasonable expenses in the performance of his
duties hereunder, and upon presentation of a reasonably itemized
account thereof, the Company shall promptly pay or reimburse the
Employee for such reasonable expenses so incurred by the Employee.
3.03 Vacations. During each full year of the Term, the
Employee shall be entitled to four (4) weeks of paid vacation to be
taken at times determined by the Employee which do not unreasonably
interfere with the performance of his duties hereunder, provided,
that any such vacation time not taken during any year shall be
forfeited and that no single vacation shall exceed two (2)
consecutive weeks.
3.04 Domicile. During the Term, the Employee (except
for reasonable business travel required by the Company) shall
conduct his activities hereunder at a Company office located in the
New York metropolitan area.
ARTICLE IV
TERMINATION; DEATH; DISABILITY
4.01 Termination of Employment With Cause. In addition
to any other remedies available to it at law, in equity or as set
forth in this Agreement, the Company shall have the right, upon
written notice to the Employee, to immediately terminate his
employment hereunder if the Employee (a) breaches in any material
respect any material provision of this Agreement and such breach is
not remedied within thirty (30) days after written notice thereof
from the Board of Directors of the Company setting forth in
reasonable detail the matters constituting such breach; or (b)
willfully fails or refuses in any material respect to perform such
duties as may be reasonably assigned to him, consistent with his
title and general area of responsibility, from time to time by the
Board of Directors of the Company and fails to cure such failure or
refusal within thirty (30) days after receipt of notice from the
Board of Directors of the Company stating with specificity the
nature of such failure or refusal; or (c) has been convicted of a
felony; or (d) has committed any act of fraud, misappropriation of
funds or embezzlement in connection with his employment hereunder
((a) through (d) above to mean "Cause", and termination as a result
of (a) through (d) above to mean "Termination With Cause"). The
date of any termination of employment under this Section 4.01 or
under Section 4.02, 4.03 or 4.04 is referred to herein as the
"Termination Date". In the event of a Termination With Cause, the
Company shall pay the Employee as follows:
(a) within ten (10) days following the
Termination Date, any accrued but unpaid Base Salary as of the
Termination Date;
(b) within ten (10) days following the
Termination Date, the Employee's Base Salary on a daily basis
(computed on a 365-day year) in effect on the Termination Date,
multiplied by the number of accrued and unused vacation days at the
Termination Date:
(c) within ten (10) days following the
Termination Date, any accrued but unpaid expenses incurred by the
Employee as of the Termination Date in accordance with Section 3.02
hereof;
(d) within ten (10) days following the
Termination Date, any accrued and unpaid benefits to which the
Employee may be entitled pursuant to Section 3.01 hereof;
(e) within ten (10) days after the date of the
Company's receipt of its year end financial statements for the year
in which the Termination Date occurs, an amount equal to (x) the
amount of Incentive Compensation, if any, that would have been
payable to the Employee with respect to the fiscal year during
which the Termination Date occurred had the Termination Date not
occurred multiplied by (y) a fraction, the numerator of which is
the number of days in such fiscal year which expired prior to the
Termination Date and the denominator of which is 365;
(f) within ten (10) days following the
Termination Date, any other accrued and unpaid compensation payable
to the Employee as of the Termination Date, the amount of which has
already been calculated as of the Termination Date in accordance
with the terms hereof; and
(g) within ten (10) days following the date
after the Termination Date as of which it is calculated in
accordance with the terms hereof, any other accrued and unpaid
compensation payable to the Employee as of the Termination Date.
4.02 Termination of Employment Without Cause.
Notwithstanding any provision to the contrary herein, the Company
may at any time upon written notice to the Employee, in its sole
and absolute discretion and for any or no reason, terminate the
employment of the Employee hereunder without Cause; provided, that
if such termination is not a Termination With Cause, the Company
shall pay the Employee as follows:
(a) within ten (10) days following the
Termination Date, any accrued but unpaid Base Salary as of the
Termination Date;
(b) the Employee's Base Salary until the end
of the Scheduled Term (as hereinafter defined) as and when such
Base Salary would have been paid had the termination of employment
not taken place;
(c) the Employee's Incentive Compensation
until the end of the Scheduled Term (if any would have been due and
payable to him under Section 2.02), as and when such Incentive
Compensation would have been paid had the termination of employment
not taken place;
(d) within ten (10) days following the
Termination Date, a cash payment equal to the Employee's Base
Salary on a daily basis (computed on a 365-day year) in effect on
the Termination Date, multiplied by the number of accrued and
unused vacation days at the Termination Date;
(e) within ten (10) days following the
Termination Date, any accrued but unpaid expenses incurred by the
Employee as of the Termination Date in accordance with Section 3.02
hereof;
(f) within ten (10) days following the
Termination Date, any accrued and unpaid benefits to which the
Employee may be entitled pursuant to Section 3.01 hereof;
(g) within ten (10) days following the
Termination Date, any other accrued and unpaid compensation payable
to the Employee as of the Termination Date, the amount of which has
already been calculated as of the Termination Date in accordance
with the terms hereof; and
(h) within ten (10) days following the date
after the Termination Date as of which it is calculated in
accordance with the terms hereof, any other accrued and unpaid
compensation payable to the Employee as of the Termination Date.
For purposes of this Agreement, "Scheduled Term" shall
mean (x) if the employment of the Employee is terminated under any
provision of Article IV (other than Section 4.01) prior to the
close of business on the third anniversary of the date hereof, the
period ending at the close of business on the third anniversary of
the date hereof and (y) if the employment of the Employee is
terminated under any provision of Article IV (other than Section
4.01) on or after the close of business on the third anniversary of
the date hereof, the period ending at the close of business on the
date which is twelve months after the date on which the employment
of the Employee is so terminated.
In the event that the Employee terminates his employment
following an uncured material breach of this Agreement by the
Company, then such termination by the Employee shall be deemed for
all purposes (including, without limitation, the Plan) to be a
termination by the Company of the employment of the Employee
hereunder without Cause pursuant to this Section 4.02. The
Company shall have thirty (30) days following written notice by the
Employee to the Company of such breach, setting forth in reasonable
detail the matters constituting such breach, to cure such breach.
The Employee acknowledges that the payments referred to
in Section 4.01 and this Section 4.02 constitute the only payments
which the Employee shall be entitled to receive from the Company
under this Agreement in the event of any termination of his
employment pursuant to Section 4.01 and this Section 4.02, and that
except for such payments the Company shall have no further
liability or obligation to him under this Agreement.
4.03 Death; Disability. The Employee's employment
hereunder shall terminate upon his death or, at the election of the
Company by written notice to the Employee, if the Employee becomes
Disabled (as such term is hereinafter defined). In the event of a
termination of the Employee's employment for death or Disability,
the Company shall pay the Employee (or his legal representatives,
as the case may be), as follows:
(a) within ten (10) days following death or
such notice, any accrued but unpaid Base Salary as of the
Termination Date;
(b) the Employee's Base Salary until the
expiration of 12 months from the date of death or termination for
Disability (the "Extension Period"), such Base Salary to be paid as
and when such Base Salary would have been paid had the employment
of the Employee continued through the Extension Period;
(c) within ten (10) days after the next
Financial Statement Receipt Date to occur, an amount equal to (x)
the amount of Incentive Compensation, if any, that would have been
payable to the Employee with respect to the fiscal year during
which the Termination Date occurred had the Termination Date not
occurred multiplied by (y) a fraction, the numerator of which is
the number of days in such fiscal year which expired prior to the
Termination Date and the denominator of which is 365;
(d) within ten (10) days following the
Termination Date, a cash payment equal to the Employee's Base
Salary on a daily basis (computed on a 365-day year) in effect on
the Termination Date, multiplied by the number of accrued and
unused vacation days at the Termination Date;
(e) within ten (10) days following the
Termination Date, any accrued but unpaid expenses incurred by the
Employee as of the Termination Date in accordance with Section 3.02
hereof;
(f) within ten (10) days following the
Termination Date, any accrued and unpaid benefits to which the
Employee may be entitled pursuant to Section 3.01 hereof;
(g) within ten (10) days following the
Termination Date, any other accrued and unpaid compensation payable
to the Employee as of the Termination Date, the amount of which has
already been calculated as of the Termination Date in accordance
with the terms hereof; and
(h) within ten (10) days following the date
after the Termination Date as of which it is calculated in
accordance with the terms hereof, any other accrued and unpaid
compensation payable to the Employee as of the Termination Date.
For the purposes of this Agreement, the Employee shall be
deemed to be "Disabled" or have a "Disability" if as a result of
the occurrence of mental or physical disability during the Term he
has been unable to perform his duties hereunder for three (3)
consecutive months or ninety (90) days in any twelve (12)
consecutive month period, as determined in good faith by the Board
of Directors of the Company.
The Employee acknowledges that the payments referred to
in this Section 4.03 constitute the only payments to which the
Employee (or his legal representatives, as the case may be) shall
be entitled to receive from the Company under this Agreement in the
event of a termination of his employment for death or Disability,
and that except for such payments the Company shall have no further
liability or obligation to him (or his legal representatives, as
the case may be) under this Agreement.
4.04 Change of Control. The Employee may, at any time
during the six (6) month period following a Change of Control (as
defined in the International Post Limited 1993 Long Term Incentive
Plan), by delivery of written notice to the Company, terminate his
employment hereunder in the event that during such period the
compensation, benefits, authority, responsibilities, privileges,
duties and/or status or title of the Employee are materially
diminished (individually or in the aggregate). Any such permitted
termination by the Employee shall be deemed to constitute a
termination without Cause by the Company under Section 4.02 hereof
for all purposes.
ARTICLE V
INVENTIONS; NON-DISCLOSURE; NON-COMPETITION
5.01 Inventions. All processes, technologies and
inventions (collectively, "Inventions"), including new
contributions, improvements, discoveries, trademarks and trade
names, conceived, developed, invented, made or found by the
Employee, alone or with others, during his employment by the
Company or within six months after the termination thereof, whether
or not patentable and whether or not conceived, developed,
invented, made or found on the Company's time or with the use of
the Company's facilities or materials and which relate to the post-production
business, shall be the property of the Company and shall be promptly and
fully disclosed by the Employee to the Company. The Employee shall perform
all necessary acts (including, without limitation, executing and delivering
any confirmatory assignments, documents or instruments requested by the
Company) to vest title to any such Invention in the Company and to enable
the Company, at its expense, to secure and maintain domestic and/or foreign
patents or any other rights for such Inventions.
5.02 Non-Disclosure. The Employee shall not, at any
time during the Term or thereafter, directly or indirectly,
disclose or furnish to any other person, firm or corporation except
in the course of the proper performance of his duties hereunder (a)
any information relating to any process, technique or procedure
used by the Company: or (b) any information relating to the
operations or financial status of the Company (including, without
limitation, all financial data), which information is not
specifically a matter of public record; or (c) any information of
a confidential nature obtained as a result of his present or future
relationship with the Company, which information is not
specifically a matter of public record; or (d) the name, address or
other information relating to any customer or supplier of the
Company; or (e) any other trade secrets of the Company, except that
the Employee shall not be liable under the terms of this Section
5.02 for disclosing or furnishing any of the foregoing which (1)
are or become generally available to the public other than as a
result of a disclosure in violation of this Agreement, or (2) are
generally known in any industry in which the Company is or may
become involved or (3) is required to be disclosed by the Employee
pursuant to law or the order of a court of competent jurisdiction,
or other legal process or authority, it being understood, however,
that the Employee will provide the Company with prompt notice of
the requirement for such disclosure as soon as practical after the
Employee is notified thereof and prior to its disclosure thereof so
as to enable the Company to challenge the order compelling such
disclosure if the Company so desires. Promptly upon the expiration
or termination of the Employee's employment hereunder for any
reason, the Employee shall surrender to the Company all documents,
drawings, work papers, lists, V memoranda, records and other data
(including all copies) constituting or pertaining in any way to any
of the foregoing information.
5.03 Non-Competition. The Employee agrees that during
the Non-Competition Term (as hereinafter defined) he will not in
any manner, directly or indirectly, except where specifically
contemplated by the terms of his employment or this Employment
Agreement, (a) be employed by, engaged in or participate in the
ownership, management, operation or control of, or act in any
advisory or other capacity for, any Competing Entity which conducts
its business within the Territory (as the terms Competing Entity
and Territory are hereinafter defined); provided, however, that
notwithstanding the foregoing, the Employee may make solely passive
investments in any Competing Entity the common stock of which is
"publicly held" and of which the Employee shall not own or control,
directly or indirectly, in the aggregate securities which
constitute 5% or more of the voting rights or equity ownership of
such Competing Entity; or (b) solicit or divert any business or any
customer from the Company or assist any person, firm or corporation
in doing so or attempting to do so; or (c) cause or seek to cause
any person, firm or corporation to refrain from dealing or doing
business with the Company or assist any person, firm or corporation
in doing so; or (d) hire or seek to hire any person who at the time
so hired, or within 12 months prior to such date, was an employee
of the Company on the date hereof or during such Non-Competition
Term or assist any person, firm or corporation in doing so or
attempting to do so; provided, however, that the foregoing shall
not prohibit the Employee from engaging in the activities and
investments set forth on Schedule B hereto both during and after
the Term.
For purposes of this Section 5.03, (i) the term "Non-Competition Term"
shall mean (x) the Term of this Agreement plus two (2) years, in the event
of a termination of employment pursuant to Section 4.01 and (y) the Scheduled
Term (as long as the Company is in compliance with its obligations under
Article IV), in the event of a termination of employment pursuant to any
provision of Article IV other than Section 4.01; (ii) the term "Competing
Entity" shall mean any entity which presently or hereafter during
the Non-Competition Term engages in any business activity in which
the Company or its successor is engaged during the Non-Competition
Term; and (iii) the term "Territory" shall mean any greater
metropolitan area in which the Company is engaged in business while
the Employee is employed by the Company or within six months of the
Termination Date.
5.04 Breach of Provisions. In the event that the
Employee shall breach any of the provisions of this Article V, or
in the event that any such breach is threatened by the Employee, in
addition to and without limiting or waiving any other remedies
available to the Company at law or in equity, the Company shall be
entitled to immediate injunctive relief in any court, domestic or
foreign, having the capacity to grant such relief, to restrain any
such breach or threatened breach and to enforce the provisions of
this Article V. The Employee acknowledges and agrees that there is
no adequate remedy at law for any such breach or threatened breach
and, in the event that any action or proceeding is brought seeking
injunctive relief, the Employee shall not use as a defense thereto
that there is an adequate remedy at law.
5.05 Reasonable Restrictions. The parties acknowledge
that (a) the agreements in this Article V are essential to protect
the business and goodwill of the Company, and (b) the foregoing
restrictions are under all of the circumstances reasonable and
necessary for the protection of the Company and its business.
5.06 Definitions. For purposes of this Agreement, the
term "Company" shall be deemed to include any subsidiary of the
Company.
ARTICLE VI
MISCELLANEOUS
6.01 Binding Effect. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their
respective legal representatives, heirs, distributees and
successors; provided, that the rights and obligations of the
Employee under this Agreement shall not be assignable by him.
6.02 Notices. All notices and other communications
hereunder and all legal process in regard hereto shall be validly
given, made or served if in writing, when delivered personally (by
courier service or otherwise), or when actually received when
mailed by first-class certified or registered United States mail,
postage-prepaid and return receipt requested, to the address of the
party to receive such notice or other communication set forth
below, or at such other address as any party hereto may from time
to time advise the other party pursuant to this Section:
If to the Company:
Video Services Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chairman of the Board of Directors
If to the Employee:
Xxxxxx X. Xxxx
0 Xxxxxxxx Xxxxx
Xxxxxxx Xxxx, Xxx Xxxxxx 00000
6.03 Severability. If any provision of this Agreement,
or portion thereof, shall be held invalid or unenforceable by a
court of competent jurisdiction, such invalidity or
unenforceability shall attach only to such provision or portion
thereof, and shall not in any manner affect or render invalid or
unenforceable any other provision of this Agreement or portion
thereof, and this Agreement shall be carried out as if any such
invalid or unenforceable provision or portion thereof were not
contained herein. In addition, any such invalid or unenforceable
provision or portion thereof shall be deemed, without further
action on the part of the parties hereto, modified, amended or
limited to the extent necessary to render the same valid and
enforceable.
6.04 Waiver. No waiver by a party hereto of a breach
or default hereunder by the other party shall be considered valid,
unless in writing signed by such first party, and no such waiver
shall be deemed a waiver of any subsequent breach or default of the
same or any other nature.
6.05 Entire Agreement. This Agreement sets forth the
entire agreement between the parties with respect to the subject
matter hereof, and supersedes any and all prior agreements between
the Company and the Employee, whether written or oral, relating to
any or all matters covered by and contained or otherwise dealt with
in this Agreement. No representation, warranty, undertaking or
covenant is made by either party hereto except as provided herein
and any representations, warranties, undertakings or covenants not
set forth herein are specifically disclaimed. This Agreement does
not constitute a commitment of the Company with regard to the
Employee's employment, express or implied, other than to the extent
expressly provided for herein.
6.06 Amendment. No modification, change or amendment
of this Agreement or any of its provisions shall be valid, unless
in writing and signed by the party against whom such claimed
modification, change or amendment is sought to be enforced.
6.07 Authority. The parties each represent and warrant
that they have the power, authority and right to enter into this
Agreement and to carry out and perform the terms, covenants and
conditions hereof.
6.08 Titles. The titles of the Articles and Sections
of this Agreement are inserted merely for convenience and ease of
reference and shall not affect or modify the meaning of any of the
terms, covenants or conditions of this Agreement.
6.09 Applicable Law. This Agreement, and all of the
rights and obligations of the parties in connection with the
employment relationship established hereby, shall be governed by
and construed in accordance with the internal laws of the State of
New York without giving effect to principles relating to conflicts
of law.
6.10 Directors' and Officers' Liability Coverage. The
Company will provide the Employee with appropriate directors and
officers liability insurance coverage throughout the Term. The
Employee shall be entitled to indemnification and advance of
expenses by the Company to the fullest extent available under
Delaware law.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
VIDEO SERVICES CORPORATION
/s/ Xxxxxx X. Xxxx
By: Xxxxxx X. Xxxx
SCHEDULE A
Life Insurance Policies
Policy Number Issue Date
9741383 4/19/94
6196938 4/1/80
9756296 7/11/94
[FN] All of the above life insurance policies are with
Massachusetts Mutual Life Insurance Company.
SCHEDULE B
The direct or indirect ownership and disposition of
investments in, and the exercise, as a stockholder, of the rights
of a stockholder with respect to: Cassette Dub, Inc., a New Jersey
corporation, VSC Post Production, Inc., a New York corporation,
Xxxxxx Audio/Video Corporation, a Delaware corporation, Nova
Manufacturing, Inc., a New Jersey corporation, Video Dub, Inc., a
New Jersey corporation, Videotape Distributors, Inc., a New Jersey
corporation, VSC Communications, Inc., a New Jersey corporation and
E-Magine, a New York limited liability company.
