EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of July 1, 1997, (as from time to time
amended, this "Agreement") between xxxx xxxxx productions, inc., a Delaware
corporation (the "Company"), and Xx. Xxxxxxx X. Xxxxxxxx (the "Executive").
The Executive is currently the Vice President-Finance and Chief
Financial Officer of the Company and has served in that capacity pursuant to an
Employment Agreement dated as of July 1, 1994 (the "Prior Agreement"). The
Company intends to continue the Executive's employment with the Company subject
to the terms, provisions and conditions set forth in this Agreement.
Therefore, upon the mutual premises set forth herein, and other
consideration, the Company and the Executive hereby agree as follows:
1. Employment.
(a) The Company hereby employs the Executive for the Term
(as hereinafter defined) of this Agreement, subject to earlier termination as
hereinafter provided, and the Executive hereby accepts such employment as herein
provided and agrees to serve the Company, as its Vice President - Chief
Financial Officer, with such duties and responsibilities as are normally
associated with those positions and such other duties as may from time to time
be assigned to the Executive by the President and Chief Operating Officer of the
Company or the Board of Directors of the Company. The Executive shall devote his
best efforts and substantially all of his business time to the performance of
his duties and obligations under this Agreement and shall perform them
faithfully, diligently, competently and to the best of his ability. The
Executive shall report directly to the President and Chief Operating Officer of
the Company.
(b) The Executive shall not, directly or indirectly,
engage in any outside activities, whether or not during regular business hours,
if such activities would detract from the
performance of his duties and obligations hereunder. Notwithstanding anything to
the contrary contained in the immediately preceding sentence, the Executive may
devote a portion of his business time to serving as an officer of companies a
majority of whose equity is owned by Xx. Xxxxxxx X. Xxxxx on the date of this
Agreement and companies a majority of whose equity is owned by Xx. Xxxxxxx X.
Xxxxx after the date of this Agreement (collectively, the "Xxxxx Affiliates")
and to Xx. Xxxxx directly; provided however, that providing services to the
Xxxxx Affiliates or Xx. Xxxxx'x directly does not compete with any business or
activity conducted by the Company (unless such activities were presented to the
Company and the Board of Directors of the Company determined not to engage in
such activities); and provided further, that such activities do not materially
interfere with the Executive's performance of his duties and obligations under
this Agreement.
2. Term of Employment.
The Executive's employment by the Company pursuant to this
Agreement shall commence as of the date of this Agreement and, subject to
earlier termination pursuant to Section 5 or 7 hereof, shall terminate on June
30, 1998 (the "Term").
3. Compensation.
(a) As full compensation for all services rendered by the
Executive to the Company under this Agreement, the Company shall pay to the
Executive (i) a base salary at an annual rate of $152,761, payable in equal
installments (once every two weeks or as otherwise is consistent with the
Company's regular payroll practices) in accordance with the Company's customary
payroll practices for its senior executives, and (ii) subject to the
discretionary nature thereof, a bonus determined in accordance with Section 3(b)
hereof. The Company shall be entitled to make and deduct from any amounts
payable to the Executive hereunder all withholdings for federal, state and local
taxes and any other withholdings that are required pursuant to applicable law or
regulation or are otherwise consistent with the Company's practices for its
senior executives.
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(b) The Company may, in its sole and absolute discretion,
pay an annual bonus to the Executive for the completed fiscal year of the
Company ending June 30, 1998. The bonus shall be based upon such criteria as the
President of the Company and Chief Operating Officer, in his discretion,
considers appropriate. The Executive acknowledges that no representation or
warranty has been made by the Company or any of the members of the Board of
Directors of the Company that any bonus will be paid to the Executive pursuant
to this Agreement to the Executive.
4. Fringe Benefits; Expenses, etc.
(a) The Executive shall be entitled to receive all health
and pension benefits provided by the Company to its senior executives as a group
and shall also be entitled to participate in all other benefit plans provided by
the Company to its senior executives as a group.
(b) The Company shall reimburse the Executive for all
reasonable, necessary and ordinary out-of-pocket expenses incurred by him in
connection with the performance of his services for the Company pursuant to this
Agreement; provided, however, that each such reimbursement shall be upon
submission of vouchers and receipts in accordance with the Company's customary
policies and procedures from time to time in effect.
(c) The Executive shall be entitled to four (4) weeks
vacation time annually, to be taken at times selected by him, subject to the
concurrence of the President and Chief Operating Officer of the Company, which
are consistent with the proper performance of the Executive's duties under this
Agreement. One week of vacation shall accrue for each quarter of employment
during the Term.
5. Disability or Death.
(a) If, as the result of any physical or mental
disability, the Executive shall have failed or been unable to perform his duties
for a period of one hundred twenty (120)
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consecutive days or greater than one hundred eighty (180) days during the twelve
(12) month period of the Term, the Company may, by notice to the Executive
subsequent thereto, terminate the Executive's employment under this Agreement,
effective as of the date of the notice, and the Company shall not be required to
make any further payment or to furnish any benefit to the Executive under this
Agreement (other than accrued and unpaid base salary pursuant to Section 3(a)
hereof and expenses pursuant to Section 4(b) hereof and the benefits which have
accrued pursuant to any plan pursuant to Section 4(a) hereof or by applicable
law).
(b) The Executive's employment under this Agreement shall
automatically terminate upon his death and the Company shall not be required to
make any further payment or the furnish any benefit to the Executive under this
Agreement (other than accrued and unpaid salary pursuant to Section 3(a) hereof
and expenses pursuant to Section 4(b) hereof and benefits which have accrued
pursuant to any plan pursuant to Section 4(a) hereof or by applicable law).
6. Non-Competition; Confidential Agreement.
(a) During the period of the Executive's employment under
this Agreement, the Executive shall not, directly or indirectly, engage or be
interested (as a stockholder, director, officer, agent, broker, partner,
individual proprietor, joint venturer, lender or otherwise), individually or in
any representative capacity, in any other business which is competitive with any
business conducted by or contemplated to be conducted by the Company or any
Xxxxx Affiliate, except that the Executive may own not more than 5% of the
outstanding securities of any class of any publicly held company.
(b) The Executive shall not, directly or indirectly,
either during the term of the Executive's employment under this Agreement or
thereafter, disclose to any person or entity (except in the regular course of
the Company's business during the period of the Executive's employment hereunder
or as required by applicable law), or use in competition with the Company or any
Xxxxx Affiliate, any information of any nature whatsoever acquired by the
Executive during
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his employment by the Company or during the period that the Executive provides
services to such Xxxxx Affiliate, with respect to any confidential, secret,
non-public or proprietary aspect of the Company's or such Xxxxx Affiliate's
operations, business affairs, financial condition, customers, clients, trade
secrets, business strategies or plans or other confidential information, unless
such information has become known to the general public, other than by reason of
any action (direct or indirect) on the part of the Executive.
(c) The Executive shall not, directly or indirectly,
either during the term of the Executive's employment under this Agreement or for
a period of one (1) year thereafter, solicit the services of any person who was
a full-time employee of the Company or any Xxxxx Affiliate (other than employees
employed for limited periods of time in connection with the production of
particular television or motion picture programming and the Executive's
executive assistant) during the last twelve (12) months of the period of the
Executive's employment with the Company.
(d) The Executive acknowledges that the remedy at law for
breach of any of his covenants or obligations under this Section 6 will be
inadequate and, accordingly, in the event of any breach or threatened breach by
the Executive of the provision of this Section 6, the Company shall be entitled,
in addition to all other rights and remedies to obtain an injunctive or other
equitable relief restraining any such breach or threatened breach (without
posting any bond or other security and without the necessity of demonstrating
actual damages). The equitable remedies described in this Section 6(d) shall not
be the exclusive remedy available to the Company and shall be cumulative with
all other rights and remedies available to the Company at law, in equity or
otherwise.
7. Termination.
(a) The Company shall have the right to terminate the
Executive's employment with the Company (i) "for cause" or (ii) "without cause".
For purposes of this Agreement, termination "for cause" shall mean termination
of the Executive's employment based
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upon (i) any material breach of the Executive's covenants or obligations under
Section 6 of this Agreement which is not cured within thirty (30) days after
written notice to the Executive by the Company; (ii) conviction of an act of
fraud or theft or gross malfeasance on the part of the Executive, including,
without limitation, conduct of a felonious or criminal nature, embezzlement or
misappropriation of assets; (iii) the chronic addiction of the Executive to
drugs or alcohol; (iv) violation by the Executive of his duties or obligations
to the Company or any Xxxxx Affiliate, including, without limitation, conduct
which is inconsistent with the Executive's position and which results or is
reasonably likely to result (in the opinion of the President and Chief Operating
Officer of the Company) in an adverse effect (financial or otherwise) on the
business of the Company or any Xxxxx Affiliate, as the case may be, and such
violation is not cured within fifteen (15) days after written notice to the
Executive by the Company; (v) the Executive's failure, refusal or neglect to
perform his duties hereunder within a reasonable period, under the
circumstances, after written notice from the Board of Directors or the President
and Chief Operating Officer of the Company (specifically identifying the manner
in which the Board of Directors or the President and Chief Operating Officer of
the Company believes that the Executive has failed, refused or neglected his
duties. A termination of the Executive's employment with the Company for any
reason other than those enumerated in the immediately preceding sentence or as
provided in Section 5 hereof shall be, for purposes of this Agreement, deemed to
be a termination of the Executive's employment with the Company "without cause".
If the employment of the Executive is terminated "for cause", the Company shall
not be obligated to make any further payment to the Executive (other than
accrued and unpaid base salary pursuant to Section 3(a) hereof and expenses
pursuant to Section 4(b) hereof incurred prior to the date of termination), or
continue to provide any benefit (other the benefits which have accrued under any
plan pursuant to Section 4(a) hereof or by applicable law) to the Executive
under this Agreement prior to the date of termination.
(b) If the employment of the Executive is terminated
"without cause", the Company shall pay to the Executive all of his base salary
pursuant to Section 3(a) hereof for the remainder of the term of this Agreement,
as if the employment of the Executive hereunder had not been terminated
regardless of the amount of compensation the Executive may earn or be able
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to earn with respect to any other employment (subject to Section 6(a) hereof) he
may obtain or be able to obtain (i.e. the Executive shall have no duty to
mitigate and the Company shall have no right to offset), but the Company shall
not be obligated to continue to provide any other benefit (other than the
benefits under any plan pursuant to Section 4(a) hereof through June 30, 1998,
unless such benefits are available to the Executive in connection with other
employment obtained by the Executive) to the Executive under this Agreement
which case the Company shall have no further obligation to provide such
benefits.
(c) If the Executive's employment is terminated prior to
the end of the Term, to the extent permitted by applicable law, the Company
shall be entitled to deduct any amounts owing to the Company by the Executive
from the amounts payable to the Executive.
8. Miscellaneous.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF CALIFORNIA APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED IN CALIFORNIA. THIS AGREEMENT SHALL BE INTERPRETED AND
CONSTRUED WITHOUT ANY PRESUMPTION AGAINST THE PARTY CAUSING THIS AGREEMENT TO BE
DRAFTED.
(b) This Agreement contains a complete statement of all
the agreements and understandings between the Company and the Executive with
respect to its subject matter, supersedes all previous and contemporaneous
agreements and understandings among them relating such subject matter (whether
written or oral) including, without limitation, the Prior Agreement, all of
which are mereged herein. This Agreement cannot be modified, amended or
terminated orally and may only be modified or amended by an instrument in
writing signed by each of the parties hereto. There are no representations,
warranties or promises between the parties with respect to the subject matter
hereof, except as expressly set forth herein.
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(c) Any notice or other communication under or relating to
this Agreement shall be in writing and shall be considered given when received
by the intended recipient and shall be delivered personally or mailed by
certified mail, return receipt requested or by an overnight courier service, to
the parties at their respective addresses set forth below (or at such other
address as a party may specify by notice to the other):
If to the Company, to it at:
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn: President and Chief Operating Officer
with a copy to:
Xxxxxx Xxxxxx Flattau & Klimpl, LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxx Xxxxxxxx, Esq.
If to the Executive to him at:
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
(d) The failure of a party to insist upon strict adherence
to any term or provision of this Agreement on any one occasion shall not be
considered a waiver or deprive that party of the right thereafter to insist upon
strict adherence to that term or provision or any other term or provision of
this Agreement on any other occasion. Any waiver must be in writing and signed
by each of the parties. All rights and remedies of the parties hereunder are
cumulative and may be exercised separately or concurrently. Any waiver of any
term or provision hereof shall be effective for the specific instance in which
given and it shall not be construed as a waiver of any other term or provision.
(e) The invalidity or unenforceability of any term or
provision of this Agreement shall not affect the validity or enforceability of
the remaining terms or provisions of
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this Agreement which shall remain in full force and effect and any such invalid
or unenforceable term or provision shall be given full effect as far as possible
pursuant to applicable law. If any term or provision of this Agreement is
invalid or unenforceable in any one jurisdiction, it shall not affect the
validity or enforceability of that term or provision in any other jurisdiction.
It is the intention of the parties that this Agreement be enforced by any court
of competent jurisdiction to the fullest extent permitted by applicable law and
that the Agreement may be reformed and amended by a court of competent
jurisdiction in connection with its enforcement.
(f) This Agreement is not assignable by either party,
except that it shall inure to the benefit of and be binding upon any successor
to the Company by merger or consolidation or any assignee of the Company upon
the acquisition of all or substantially all of the Company's assets by such
assignee; provided such successor assumes all of the obligations of the Company
hereunder; and this Agreement shall inure to the benefit of the heirs, estate
and legal representatives of the Executive.
(g) The section headings are inserted herein for
convenience of reference only and shall not be taken into account in the
interpretation or construction of this Agreement.
xxxx xxxxx productions, inc.
By: /s/
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Name:
Title:
/s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
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