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EXHIBIT 10.27
SECOND AMENDED AND RESTATED AGREEMENT
This Agreement is made as of the 1st day of November, 1998, executed
the seventh day of May, 1999, by and between GC COMPANIES, INC. (the "Company")
and XXXX X. DEL XXXXX (the "Executive").
WITNESSETH:
WHEREAS, the Executive is employed by the Company as Chairman of its
wholly owned subsidiary, General Cinema International, Inc. ("General Cinema");
and
WHEREAS, the Executive and the Company were parties to an Agreement
dated as of December 14, 1993, pursuant to which the Executive is continuing his
employment with the Company, which was amended and restated as of November 1,
1997 (the "Original Agreement"); and
WHEREAS, General Cinema and Hoyts Cinemas Limited have formed a joint
venture in South America known as Hoyts General Cinema South America, Inc.
("HGCSA"); and
WHEREAS, the Company and the Executive desire that the Executive be
assigned to HGCSA as Chairman and to perform such other duties for the Company
as contemplated herein; and
WHEREAS, the Company wishes to provide for the continued employment of
the Executive and to provide an incentive for him to stay with the Company; and
WHEREAS, the parties have agreed to renegotiate the terms of the
Executive's employment and to set forth those terms in this Agreement, which
amends and restates in its entirety the Original Agreement between the parties
with respect thereto.
NOW, THEREFORE, in consideration of the parties, and for other good and
lawful consideration, the receipt of which is hereby acknowledged, the parties
agree as follows:
1. EMPLOYMENT.
a. The Company hereby employs the Executive, as Chairman
of General Cinema International, Inc., through
October 31, 2003. The Executive shall be assigned to
HGCSA as Chairman thereof, and shall spend at least
75% of his time on HGCSA business from the date
hereof through October 31, 2003. With respect to all
matters relating to HGCSA, the Executive shall report
to the Board of Directors of HGCSA.
b. In connection with matters not involving HGCSA, which
shall not exceed 25% of the Executive's time through
October 31, 2003, the Executive shall report directly
to the Company's President, shall participate in the
management of the Company's affairs as directed by
the President of the Company, it being intended that
the Executive participate in or manage General
Cinema's other international activities, and shall
have such other and additional duties of an executive
nature as may be specified from time to time by the
President of the Company.
c. The Executive will be based in Boston, Massachusetts.
However, until HGCSA employs a Chief Executive
Officer in Buenos Aires, Argentina, the Executive
will be required to spend a substantial portion of
his time in South America and traveling within the
United States and elsewhere on behalf of HGCSA. The
Executive acknowledges that the time spent in South
America and traveling on behalf of HGCSA will require
a minimum of 80 days per contract year.
2. TERM. The Executive's employment under this Agreement shall
commence on November 1, 1998, and shall continue until October
31, 2003. This Agreement may otherwise be terminated only in
accordance with the
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provisions of Section 7 of this Agreement.
3. DUTIES. The Executive shall serve the Company and HGCSA and
act in all respects as a "good employee" and representative of
the affairs of the Company and HGCSA. The Executive agrees to
use his best efforts to promote and advance the interests of
the Company and HGCSA, and, in particular, to increase the
profits and value thereof.
4. COMPENSATION.
a. For services rendered under this Agreement, the
Executive's salary shall be $375,000 ("Base Salary")
per annum through October 31, 2000. From November 1,
2000 through October 31, 2002, the Executive's salary
shall be $237,500 ("Base Salary") per annum for 1,000
hours ("Base Hours") of work per year. If the Company
requires the Executive to work in excess of 1,000
hours during either such year, the Executive shall
perform additional hours of work as requested and the
Company shall pay to the Executive additional salary
for such year at a rate equal to $600 per hour for
each hour worked for the first 208 hours in excess of
the Base Hours, and then $300 per hour thereafter
during such year. The Executive's salary shall be
$150,000 per annum from November 1, 2002 through the
end of the term hereof (the "Final Year"); provided,
however, that the parties agree to negotiate in good
faith a new base salary for such Final Year if the
Company requests the Executive to work substantially
more hours than in the prior year. All salary shall
be payable in equal installments paid not less than
twice monthly during the term of this Agreement with
any additional compensation owed for work in excess
of the Base Hours payable at the end of each fiscal
quarter in which such excess hours were incurred.
b. In addition to the above salary, the Executive shall
be eligible in each year during the term of this
Agreement, other than the Final Year, to receive
annual bonuses in each year during the term of this
Agreement, of up to fifty percent (50%) of Base
Salary based on performance against specific
assessment criteria established by the Board of
Directors of HGCSA, with 50% of bonus potential tied
to meeting specific financial objectives of HGCSA and
50% of bonus potential tied to specific individual
goals and objectives established by the Board of
Directors of HGCSA. A key goal of the initial
individual portion of the bonus will be tied to
identifying and hiring a Chief Executive Officer for
HGCSA within the time frame established by the HGCSA
Board of Directors.
5. LONG TERM INCENTIVE COMPENSATION. In addition to the above
salary and bonus, the Executive shall participate in a Long
Term Incentive Compensation Plan (the "LTIP") to be
established by the Board of Directors of HGCSA outlined in
Schedule 1, it being understood that the obligation with
respect to this Long Term Incentive Compensation Plan is
solely an obligation of HGCSA and not the Company, and that
the terms and conditions thereof are solely governed by the
terms of such Plan, notwithstanding any other provision of
this Agreement.
6. ADDITIONAL ARRANGEMENTS; FRINGE BENEFITS. In addition to the
salary and bonus referred to under Section 4 hereof, the
Company will provide the following for and on behalf of the
Executive:
a. The Executive shall not be eligible for stock option
grants by the Company;
b. Upon the Executive's retirement, the Executive shall
be entitled to retirement benefits under the
Company's Retirement Plan in a lump sum or monthly
benefit amounts, at the Executive's option based upon
the Executive's age at retirement in accordance with
the provisions of such plan;
c. In lieu of benefits that the Executive is now
entitled to or would become entitled to through the
term hereof under the Company's Supplemental
Executive Retirement Plan, as of November 1, 1998 and
on each October 31 thereafter through October 31,
2002, the Company shall pay $181,500 per year (less
any applicable withholding taxes that the Company is
required by law to withhold) to an irrevocable trust
created by the Executive for the benefit of such
beneficiaries as he shall determine;
d. Up to age 65, the Executive will receive family
health insurance coverage pursuant to the Company's
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Executive Medical insurance plan or plans maintained
by the Company. Through October 31, 2003, the
Executive shall receive Group Term Life Insurance
coverage in accordance with the Company's basic plan
(which currently provides a death benefit equal to
one and one-half times base salary). Throughout the
term hereof, the Executive may participate in the
Company's Key Executive Deferred Compensation Plan in
accordance with its terms, and the Executive shall be
entitled to all other employee fringe benefits
generally afforded to a Vice President of the
Company.
7. EXPENSE REIMBURSEMENT. The Executive shall be reimbursed for
all reasonable travel and other expenses actually and properly
incurred by him with respect to his duties hereunder and in
accordance with any policies adopted by the Company's or
HGCSA's Board of Directors, as applicable, as required by such
policy.
8. TERMINATION.
a. The Executive's employment shall be terminated by the
Company prior to the expiration of the term of this
Agreement, only upon the occurrence of one of the
following events:
i. the death of the Executive;
ii. the Total Disability of the Executive; or
iii. for Cause.
b. The Executive's employment shall be terminated by the
Executive prior to the expiration of the term of this
Agreement, only upon the occurrence of one of the
following events:
i. the voluntary retirement, resignation or
termination of this Agreement by the
Executive, upon thirty (30) days written
notice to the Company; or
ii. Upon a Change in Control of the Company.
c. The following definitions shall apply to this
Agreement:
i. "Total Disability" means that as of the date
of termination, the Executive was unable to
perform his duties in the normal and regular
manner for either (a) 80% or more of the
normal working days during the six full
consecutive calendar months most recently
ended; or (b) 50% or more of the normal
working days during the 12 full consecutive
calendar months most recently ended.
ii. "Change in Control" means the occurrence of
any of the events described in (1) or (2)
below, if, as a result thereof, persons who,
as of the effective date hereof, constituted
the Company's Board of Directors (the
"Incumbent Board") cease for any reason,
including without limitation as a result of
a tender offer, proxy contest, merger or
similar transaction, to constitute at least
a majority of the Board of Directors,
provided that any persons becoming a
director of the Company subsequent to the
Effective Date whose nomination or election
was approved by at least a majority of the
directors then comprising the Incumbent
Board shall, for purposes of this Agreement,
be considered a member of the Incumbent
Board:
(1) Any "person" as such term is used in
Sections 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934, as
amended, (the "Act")) becomes a
"beneficial owner" (as such terms is
defined in Rule 13d-3 promulgated
under the Act) (other than the Xxxxx
Family Group (as described in the
most recent proxy statement filed by
the Company with the Securities and
Exchange Commission)) directly or
indirectly, of securities of the
Company representing more than the
greater of (a) twenty percent (20%)
of the combined voting power of the
Company's then outstanding
securities; or (b) the
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percentage of the combined voting
power of the Company's then
outstanding securities as to which
the Xxxxx Family Group is the
beneficial owner; or
(2) The Xxxxx Family Group becomes the
beneficial owner of less than twenty
percent (20%) of the combined voting
power of the Company's then
outstanding securities.
iii. "Cause" means in the good faith judgment of
the Company or HGCSA,
(1) the Executive failed to devote his
time, loyalty, best efforts, skills,
knowledge and ability to the
performance of his duties as
required hereunder;
(2) committed an act of malfeasance or
failed to render services
exclusively to the Company and HGCSA
as required hereunder;
(3) engaged in the course of his
employment in acts involving fraud,
acts of dishonesty, acts of moral
turpitude; or
(4) repeated insubordination or failure
to follow policies established by
the Board of Directors of the
Company or HGCSA, or otherwise
detrimental to the interests of the
Company or HGCSA; or
(5) conviction of a felony.
9. EFFECT OF TERMINATION.
a. i. In the event the Executive's employment
is terminated prior to the end of the term
by the Company due to Total Disability or by
the Executive due to a Change in Control,
the Executive shall receive a lump sum
payment equal to all unpaid amounts payable
hereunder for salary and bonus under
paragraph 4(a) and (b) and continuation of
all benefits provided under paragraph 6 in
accordance with the terms thereof.
ii. In the event the Executive's employment is
terminated prior to the end of the term by
the Executive under paragraph 8.b.i., or in
the event that the Executive's employment is
terminated by the Company or HGCSA for
Cause, the Executive shall receive no
continuing salary or bonus under paragraph
7, and all amounts payable and benefits
hereunder shall terminate, except for
pension benefits provided under paragraph
6.b. and payments to the trust described
under paragraph 6.c. hereof, which shall
continue in accordance with the terms
thereof.
iii. In the event the Executive' employment is
terminated prior to the end of the term due
to death, the Executive shall receive no
continuing salary or bonus under paragraph
4, and all amounts payable and benefits
hereunder shall terminate, except for
pension benefits provided under paragraph
6.b., payments to the trust described under
paragraph 6.c. hereof, and family health
insurance coverage described in the first
sentence of paragraph 6.d. hereof, which
shall continue in accordance with the terms
thereof.
b. In the event the parties dispute the Executive's
entitlement to the compensation provided under this
Section, the parties agree that the issue shall be
submitted to binding arbitration under the auspices
of the American Arbitration Association in Boston,
Massachusetts. Costs of the arbitration shall be
borne by the non-prevailing party. The parties agree
to be bound by the outcome of such arbitration, and
that the final award of arbitration shall be final,
binding and nonappealable.
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10. NON-COMPETITION; NON-SOLICITATION.
a. During the course of the Executive's employment with
the Company and HGCSA, and solely by reason of his
employment relationship with the Company, he will
have access to and have and will continue to gain
knowledge of financial and statistical information,
business plans and programs, processes, pricing,
costs, expansion plans, methods, techniques,
marketing and other data relating to customers and
suppliers, designs, know-how and business practices
of the Company and HGCSA, its subsidiaries and
affiliates, and other information which is not
generally available to the public (collectively,
"Confidential Information"). The Executive
acknowledges that the Confidential Information has
been developed by the Company and HGCSA at
considerable expense. The Executive realizes that the
unauthorized disclosure or misuse of Confidential
Information could cause irreparable damage to the
Company and HGCSA, including the loss of valuable
customers. Therefore, the Executive agrees that
except in the furtherance of the performance of his
duties as an employee of the Company and HGCSA, the
Executive will not at any time disclose or
communicate to any third party other than employees
of the Company and HGCSA authorized to use such
information, or use to the detriment of the Company
and HGCSA, or for his personal benefit or the benefit
of any third party outside of the scope of his
employment with the Company and HGCSA, any
Confidential Information. The Executive further
agrees that he will not remove from the offices of
the Company and HGCSA or retain without the written
consent of the Company and HGCSA any document, record
or any other materials constituting or containing
Confidential Information, except as may be reasonably
necessary for the performance of his duties as an
employee of the Company and HGCSA. Upon the voluntary
or involuntary termination of his employment with the
Company and HGCSA, he shall return to the Company and
HGCSA all documents, records and other materials
constituting or containing Confidential Information
which he has in his possession.
b. Throughout the term hereof and during the eighteen
(18) month period immediately following termination
of the Executive's employment with the Company or
HGCSA , he shall not directly solicit any employee of
the Company or HGCSA.
c. (i) Throughout the term hereof, or in the case
of termination of the Executive's employment with the
Company prior to the end of the term for Cause or due
to the voluntary termination of this Agreement by
Executive, the Executive shall not, directly or
indirectly, within the United States and any country
in which the Company or HGCSA or any of their
subsidiaries or affiliates then engages directly or
indirectly in such a business, engage in or own,
manage, operate, join, control, be employed by, or
participate in the management, operation or control
of, or be connected in any manner with any motion
picture exhibition business
(ii)(A) For eighteen (18) months after the
termination hereof unless subparagraph (i)
applies due to termination for Cause or the
voluntary termination by the Executive, the
Executive shall not, directly or indirectly
within the United States engage in or own,
manage, operate, join, control, be employed
by, or participate in the management,
operation or control of, or be connected in
any manner with any motion picture
exhibition business.
(B) For eighteen (18) months after the
termination hereof unless subparagraph (i)
applies due to termination for Cause or the
voluntary termination by the Executive, the
Executive shall not directly or indirectly
within any market area outside of the United
States in which the Company, HGCSA or any of
their subsidiaries or affiliates engages
directly or indirectly in such business,
engage in or own, manage, operate, join,
control, be employed by, or participate in
the management, operation or control of, or
be connected in any manner with any motion
picture exhibition business. For purposes of
this subparagraph, "market area" means any
city outside the United States in which the
Company or HGCSA or any of their
subsidiaries or affiliates engages in the
motion picture exhibition business, plus a
ten (10) mile radius from any theatre
location of the Company or HGCSA or any of
their subsidiaries or affiliates located
outside of the United States at which
operations have commenced, or which commence
within eighteen months from
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such termination.
(iii) The foregoing provisions shall not prohibit
the Executive from owning a minority
interest of not more than one percent (1%),
including stock options, in such a
corporation whose stock is publicly traded.
d. The Executive acknowledges that in the event of a
breach of the foregoing provisions by the Executive,
the Company or HGCSA is not able to be adequately
compensated at law and that the provisions hereof
shall be specifically enforceable by court order in
addition to all other rights and remedies at law or
in equity available to the Company or HGCSA for the
breach or threatened breach hereof.
e. The Executive acknowledges that he has carefully
considered the foregoing provisions and having done
so, agrees that the restrictions set forth
hereinabove, including, but not limited to the time
restrictions and the restrictions on his activities,
are reasonably required for the protection of the
interests of the Company and HGCSA. Notwithstanding
the foregoing, if any of the foregoing provisions
would be enforceable except for the fact that it is
too broad to protect the reasonable interests of the
Company and HGCSA, such provisions shall be
enforceable only to the extent deemed reasonable by a
court of competent jurisdiction to protect the
interests of the Company and HGCSA. In the event any
of the foregoing provisions shall be modified or
reformed, or held to be invalid or unenforceable by a
court of competent jurisdiction, the remaining
provisions hereof shall nevertheless continue to be
valid and enforceable as though the invalid or
unenforceable parts had not been included therein.
11. NOTICES. All notices by any party to any other party shall be
in writing and shall be deemed to be properly given and
delivered if served personally or sent by registered mail
addressed to the parties at such place or to such other party
or person as may from time to time be designated by written
notice.
12. MISCELLANEOUS. This Agreement shall be governed by the laws of
the Commonwealth of Massachusetts. This Agreement shall be
binding upon and shall inure to the benefit of the legal
representative, successors, heirs and assigns of the parties
hereto (provided, however, that the Executive shall not have
the right to assign this Agreement in view of its personal
nature). All headings and subtitles contained in this
Agreement are for the convenience of reference only and are
not of substantive effect. This Agreement constitutes the
entire agreement among the parties with respect to the subject
matter of this Agreement and supersedes all prior negotiations
and understandings (or any part thereof), written or oral,
with respect to the subject matter of this Agreement,
including the Original Agreement. There are no oral agreements
in connection with this Agreement. Neither this Agreement nor
any provision of this Agreement may be waived, terminated,
modified or amended orally or by any course of conduct but
only by an agreement in writing duly executed by all of the
parties. If any article, section, portion, subsection or
subportion of this Agreement shall be determined to be
unenforceable or invalid, then such article, section, portion,
subsection or subportion shall be modified in the letter and
spirit of this Agreement to the extent permitted by applicable
law so as to be rendered valid, and any such determination
shall not affect the remainder of this Agreement, which shall
be and shall remain binding and effective as against all
parties. The word "Agreement" as used in this Agreement shall
be deemed to include any and all renewals of this Agreement.
HGCSA shall be deemed a third party beneficiary of the
provisions of this Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.
GC COMPANIES, INC.
By:
Xxxxxx X. Xxxxx
President and Chief Operating Officer
Xxxx X. Del Rossi
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