EXHIBIT 10.9
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is entered into as of
July 1, 1997 between Metro-Goldwyn Mayer Inc., a Delaware corporation (the
"Company"), and Xxxxxxx X. Xxxxxxxx ("Executive").
The parties agree as follows:
1. Employment and Title. Effective as of the Commencement Date (as
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defined below), the Company employs Executive as, and Executive accepts
employment to serve as, Senior Executive Vice President and Chief Financial
Officer, all upon the terms and conditions set forth in this Agreement,
including the powers and authority set forth in Paragraph 2 below.
2. Powers and Authority.
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(a) During the Term, as defined in Paragraph 6 below, Executive
shall be Senior Executive Vice President and Chief Financial Officer, and shall
have such duties and responsibilities as may be assigned to Executive by the
Chief Executive Officer of
the Company (the "CEO"), which duties and responsibilities shall include
responsibility for and authority over finance, accounting, MIS, tax and business
planning functions of the Company.
(b) Executive's services shall be exclusive to the Company and its
subsidiaries. Executive shall devote Executive's best efforts and Executive's
full business time (except as provided in the following sentence) to the
services to be performed hereunder. Executive may serve on the boards of
directors of (but in no other capacity for) other companies and non-profit
organizations, may manage the investment of Executive's personal asset, and may
make new investments of Executive's personal assets in other companies so long
as such activities do not materially interfere with Executive's duties hereunder
and (other than investments not to exceed 1% of the total outstanding in
publicly traded securities) such companies do not directly compete with the
Company.
(c) Executive agrees to comply with the Company's policies and
procedures as in effect from time to time to the extent that such policies are
furnished to Executive.
3. Location. The location of Executive's principal place of employment
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shall be in the Company's principal executive offices in the greater Los
Angeles, California area; provided, however, that Executive shall perform such
occasional services outside of Los Angeles as are, in the reasonable
determination of the Executive, the CEO or the Vice
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Chairman of the Company (the "VC"), reasonably required for the proper
performance of Executive's duties under this Agreement.
4. Reporting. Executive shall report jointly to the CEO and the VC.
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5. Availability. Each party represents and warrants to the other
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that it has the full power and authority to enter into and perform its
obligations under this Agreement and that its execution of and performance under
this Agreement shall not constitute a default under or breach of the terms of
any other agreement or order of any court or governmental authority to which it
is a party or under which it is bound. Each party shall defend and hold
harmless the other for any and all claims, demands, losses or damages (including
reasonable attorney's fees) arising from any action against any such party due
to a breach of any representation and warranty contained in this Paragraph or
based upon any allegations of interference with contractual obligations or the
like relating to the negotiation or execution of this Agreement.
6. Term. Subject to the provisions for earlier termination set
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forth in Paragraph 11, the term of Executive's employment hereunder shall
commence on July 1, 1997 or such other date on or before August 1, 1997 as the
parties shall mutually agree (the "Commencement Date") and continue for five
years from and including such date (the "Term"). Neither the Company nor
Executive will have any obligation to renew or extend this Agreement beyond the
Term.
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7. Compensation.
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(a) Salary and Bonus. In full consideration for the services to
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be rendered by Executive, and in full discharge of the Company's salary
obligations. Company shall pay to Executive and Executive shall accept:
(i) an annualized base salary of $700,000 during each of
the five twelve month periods of the Term (each amount less tax
withholdings required by law and other voluntary deductions authorized
by Executive), payable bi-weekly in arrears commencing on the first
regular bi-weekly payment date; and
(ii) intentionally omitted;
(iii) an annual discretionary bonus, or such applicable
prorated portion thereof for any partial Company fiscal year during
the Term (less tax withholdings required by law and other voluntary
deductions authorized by Executive), to be determined in the sole
discretion of the CEO, payable on the first day of the second month
following the completion of each Company fiscal year ending in the
Term (and within forthy-five days following the end of the Term with
respect to the last partial Company fiscal year); and
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(iv) participation in the P&F Acquisition Corp. and Metro-
Xxxxxxx-Xxxxx Inc. 1996 Management Stock Option and Bonus Plan(s) (the
"Plan") in the amounts designated on page A-9 of Exhibit A thereto (i.e.,
2,150 Series A Options (and Bonus Interests) and 2,360 Series B Options).
(b) Other Benefits. Executive shall be entitled to the
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following additional benefits: a car allowance and vacation time in accordance
with Company policy applicable to employees of Executive's seniority, salary and
title; first-class air travel for Executive and Executive's spouse when
accompanying Executive on travel to the extent, in Executive's reasonable
judgment, the presence of Executive's spouse is required or advisable in the
Company's interest in the discharge of Executive's duties.
(c) Business Expenses. During the Term, the Company shall pay
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or reimburse Executive promptly for all reasonable business expenses incurred by
Executive in the performance of Executive's duties under this Agreement if
property substantiated and in accordance with the Company's policies and
procedures applicable to employees of Executive's seniority, salary and title.
(d) Insurance. During the Term, Executive shall be entitled to
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and shall be accorded all rights and benefits under any disability insurance,
health and major medical insurance policy or policies which the Company provides
for its senior officers or employees generally. Nothing in this paragraph shall
require the Company to retain any
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particular policy or plan, but a reasonable insurance benefit package shall be
maintained (i.e., a package which in the aggregate provides for substantially
equivalent coverage as that existing on the Commencement Date). Executive shall
also be included in the Company's director's and officers' liability insurance
policy.
(e) Employee Benefit Plans. Executive shall be entitled to
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participate in and/or receive all other employee benefits under any 401(k) plan,
savings plan, pension plan and other similar plan or program which the Company
provides for its senior officers or employees generally, all subject to the
terms and conditions of the various benefit plans.
8. Compensation in the Event of Termination.
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(a) If the Agreement is terminated under Paragraph 11(a),
Executive or his estate shall receive the compensation provided in Paragraphs
7(a)(i) and 7(a)(iii), if any, prorated to the date of termination, and all
amounts accrued under benefit plan in which Executive is a participant as of
such termination date, including without limitation the benefits provided in
Paragraph 7(a)(iv) in accordance with the provisions of the Plan.
(b) If the Agreement is terminated under Paragraph 11(b),
Executive shall receive the same compensation and benefits set forth in
Paragraph 8(a), except that the benefits provided in Paragraph 7(d) shall
continue for what would be the
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remainder of the Term but for such termination (the "Full Term") in accordance
with the terms of each respective policy or plan (provided, however, that if
prior to the expiration of the Full Term Executive receives any of the types of
benefits specified in Paragraphs 7(d) from a subsequent employer, the Company
shall immediately cease to provide such types of benefits received from the
subsequent employer).
(c) If the Agreement is terminated under Paragraph 11(c) or 11(e)
below, or expires pursuant to its terms, Executive shall receive the net present
value of the compensation provided in Paragraph 7(a)(i) through the Full Term,
discounted at the 30-day LIBOR rate in effect at the date of termination and the
compensation provided in Paragraph 7(a)(iii), if any, pro rated as specified
therein, the benefits provided in Paragraph 7(a)(iv) in accordance with the
provisions of the Plan, and the benefits provided in Paragraph 7(d) for the Full
Term in accordance with the terms of each respective policy or plan (provided,
however, that if prior to the expiration of the Full Term Executive receives any
of the types of benefits specified in Paragraph 7(d) from a subsequent employer,
the Company shall immediately cease to provide such types of benefits received
from the subsequent employer).
(d) If the Agreement is terminated under Paragraph 11(d), Executive
shall not be entitled to receive any payment or benefits following the date of
termination, except as may be accrued to the date of termination, or vested
under the Plan, or any other plan or policies of the Company.
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9. Property Rights.
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(a) Executive agrees that all results and proceeds of his
services, including any ideas, programs, formats, plans and arrangements,
composed, conceived or created by him during the period of this employment,
solely or in collaboration with others (collectively, the "Creations"), whether
or not same is made at the request or suggestion of the Company, or during or
outside regular hours of work, shall at all times be and remain the sole and
exclusive property of the Company. Executive further agrees that he will, at
the request of the Company, execute and deliver to the Company, in form
satisfactory to the Company, documents evidencing the Company's ownership to the
foregoing; but notwithstanding that no such documents are executed, the Company,
as Executive's employer, shall be deemed the owner thereof immediately upon
creation. Anything in this Agreement to the contrary notwithstanding, the
provisions of this paragraph shall survive the termination for any reason, of
this Agreement.
(b) Notwithstanding Paragraph 9(a) above, the Company shall not
own any Creations created by Executive prior to the Term or solely during
Executive's leisure hours during the Term, which Creation is not related in any
manner to, or derived in any manner from, any projects, concepts and/or
intellectual property of any nature of the Company or any of its affiliates.
Notwithstanding the foregoing, Executive agrees to submit to the Company any
such Creation which Executive desires to commercially exploit, and the Company
with notify Executive within ten (10) business days of receipt if the Company
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desires to start negotiations for rights thereto. If no agreement is reached
within thirty (30) days after the start of negotiations, then Executive will
make an offer to the Company for such rights and if the Company does not
accept, Executive may negotiate elsewhere the rights so offered.
10. Intentionally omitted.
11. Termination. Executive's employment shall terminate:
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(a) Upon the death of Executive.
(b) At the option of the Company, if Executive is disabled.
Disability shall mean Executive's inability to substantially perform his duties
hereunder due to a medically determinable physical or mental impairment that can
reasonably be expected to result in death within twelve (12) months or which has
lasted or can be expected to last for a continuous period of not less than
twelve (12) months.
(c) After thirty (30) days written notice by the Company to
Executive without "Cause".
(d) Upon written notice by the Company to Executive for "Cause"
which shall include only:
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(i) the continued failure of Executive to substantially
perform his duties with the Company or any subsidiary of the Company (other than
any such failure resulting from illness, temporary absence, legal incapacity or
disability) for thirty (30) days after a demand for substantial performance is
delivered in writing to Executive by the Company which specifically identifies
the manner in which Executive has not substantially performed his duties:
(ii) Executive's continued failure to follow reasonable and
lawful directives (consistent with the terms of this Agreement) of the Board of
Directors of the Company (or, if applicable, the CEO) for thirty (30) days after
a demand for Executive to follow such directives is delivered in writing to
Executive by the Company that specifically identifies the manner in which
Executive has not followed such directives:
(iii) the engaging by Executive in willful, reckless or grossly
negligent misconduct in connection with his employment, unless Executive ceases
such misconduct within ten (10) days and remedies the adverse effect of such
misconduct within thirty (30) days, after a demand to cease engaging in such
misconduct is delivered in writing to Executive by Company that specifically
identifies such misconduct;
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(iv) Executive's conviction of an offense involving moral turpitude
or a felony (it being understood that the first conviction of Executive, if
any, after commencement of the Term, for driving under the influence of
alcohol shall not constitute Cause hereunder); or
(v) material breach by Executive of this Agreement and failure to
cure such breach within thirty (30) days of delivery of a written notice
to Executive by the Company that specifically identifies the breach.
If the remedy, cure or cessation of an act or omission which is the subject
of a notice under this Paragraph 11(d) would reasonably require more than thirty
(30) days to complete and Executive commences such remedy, cure or cessation
within thirty (30) days after receipt of such notice and diligently pursues the
same to completion, said act or omission shall not constitute "Cause." Cause
shall continue to exist with respect to Executive only for a period of ninety
(90) days after the event or action (and the expiration of any notice or cure
period specified) giving rise to Cause.
(e) Upon thirty (30) days written notice by Executive to the Company
for "Good Reason" which shall include:
(i) a substantial and adverse change in Executive's status or
position with the Company as the same existed on the commencement of
the Term
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hereof which is not cured within thirty (30) days aft written notice
thereof to the Company from Executive;
(ii) a reduction (other than for Cause) by the Company of
Executive's aggregate compensation under Paragraph 7(a)(i) above as in
effect on the commencement of the Term hereof or as in effect
thereafter if such compensation has been increased, unless such
reduction is restated retroactively not later than thirty (30) days
after written notice thereof to the Comany from Executive;
(iii) a material reduction by the Company in the overall value
of benefits provided to the Executive as in effect thereafter if such
benefits have been increased (as used in the preceding clause,
"benefits" shall include all profit-sharing, retirement, pension,
health, medical, dental, disability insurance, automobile and similar
benefits), unless such reduction is restated retroactively not later
than thirty (30) days after written notice thereof to the Company from
Executive;
(iv) a relocation of Executive's principal place of employment
to any place outside the greater Los Angeles area, except for
reasonable amounts of requierd travel by the Executive on the
Company's business;
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(v) any material breach by the Company of any provision of this
Agreement which is not cured within thirty (30) days after written notice
thereof to the Company from Executive; or
(f) At the expiration of the Term.
12. No Mitigation. Except as provided in Paragraphs 8(b) and 8(c)
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regarding benefits provided by a subsequent employer, and without limiting any
other provision hereof, any income and any other employment benefits received by
Executive from any and all sources other than the Company before or after the
expiration or termination of this Agreement for any reason whatsoever shall in
no way reduce or otherwise affect the Company's obligation to make payments and
afford benefits hereunder. Executive shall have no duty to seek employment. No
claim the Company has against Executive shall be used to offset the Company's
obligation hereunder.
13. Confidential Material.
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(a) Disclosure. Executive acknowledges that, in the performance of
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duties on behalf of the Company, Executive shall have access to, receive and be
entrusted with confidential information, including but in no way limited to
development, marketing, organizational, financial, management, administrative,
production, distribution and sales information, data, specifications and
processes presently owned or at any time in the future
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developed by, the Company or its agents or consultants, or used presently or at
any time in the future in the course of its business that is not otherwise part
of the public domain (collectively, the "Confidential Material"). All such
Confidential Material is considered secret and will be available to Executive in
confidence. Except in the performance of Executive's duties on behalf of the
Company, Executive shall not, directly or indirectly for any reason whatsoever,
disclose or use any such Confidential Material, unless such Confidential
Material ceases (through no fault of Executive's) to be confidential because it
has become part of the public domain or as may be required by law or court
order. All records, files, drawings, documents, equipment and other tangible
items, wherever located, relating in any way to the Confidential Material or
otherwise to the Company's business, which Executive prepares, uses, or
encounters, shall be and remain the Company's sole and exclusive property and
shall be included in the Confidential Material. Upon termination of this
Agreement by any means, or whenever requested by the Company, Executive shall
promptly deliver to the Company any and all of the Confidential Material not
previously delivered to the Company that may be or at any previous time has been
in Executive's possession or under Executive's control; provided, however,
Executive may keep Executive's rolodex or other personal list of addresses and
telephone numbers.
(b) Unfair Competition. Executive hereby acknowledges that the sale or
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unauthorized use or disclosure of any of the Company's Confidential Material by
Executive by any means whatsoever at any time before, during or after
Executive's employment with the Company, except as provided in Paragraph 13(a),
shall constitute "Unfair Competition". Executive agrees that
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Executive shall not engage in Unfair Competition either during the time
Executive is employed by the Company or at any time thereafter.
(c) Other. In the event of the termination of Executive's employment for
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any reason, Executive (and any corporation or entity of which Executive is a
director, officer, employee or greater than five percent (5%) shareholder)
shall not, for a period of one (1) year:
(i) solicit for employment and then employ any employee of the
Company or any of its affiliates or subsidiaries: or
(ii) make any public statement concerning the Company, any of its
affiliates or subsidiaries, or Executive's employment unless previously
approved by the Company, except as may be required by law.
Notwithstanding the foregoing, it shall not be a breach of this Paragraph 13(c)
by Executive if an entity which Executive does not own (i.e., over 50% equity
ownership) or control violates such Paragraph and Executive is not materially
involved in such violation.
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14. Miscellaneous.
(a) Arbitration.
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(i) Any and all disputes between Executive and the Company,
however significant, arising out of, relating in any way to or in
connection with this Agreement (including the validity, scope and
enforceability of this arbitration clause) shall be solely settled by
an arbitration conducted in accordance with the rules of the American
Arbitration Association or any similar successor body and to be held
in Los Angeles, California.
(ii) Any arbitration hereunder shall be held before a single
arbitrator mutually agreed to by the parties thereto, except that, if
the parties shall fail to agree to such an arbitrator within (20) days
from the date on which the claimant's request for arbitration is
delivered to the other party to the arbitration, such arbitration
shall be held before an arbitrator appointed by the American
Arbitration Association.
(iii) Discovery may be taken in the arbitration proceedings
pursuant to the provisions of California Code of Civil Procedure
Section 1283.05, which are incorporated herein by reference and made
applicable to any arbitration held pursuant to this Paragraph.
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(iv) The award of the arbitrator shall be made within ninety
(90) days from the date on which the arbitrator is selected. The award
of the arbitrator shall be final, and the parties agree to waive their
right to any form of appeal, to the greatest extent allowed by law.
The arbitrator shall award costs and fees, including the fees of the
arbitrator and reasonable attorneys' fees, to the prevailing party.
Judgment upon any award of the arbitrator may be entered in any court
having jurisdiction or application may be made to such court for the
judicial acceptance of the award and for order of enforcement.
(b) Applicable Law and Venue. This Agreement and any disputes
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or claims arising hereunder shall be construed in accordance with, governed by
and enforced under the laws of the State of California without regard for any
rules of conflicts of law. The arbitrator appointed as described above located
in Los Angeles, California shall be the sole fora for any action for relief
arising out of or pursuant to, or to enforce or interpret, this Agreement. Each
party to this Agreement consents to the personal jurisdiction and arbitration in
such fora and courts and each party hereto covenants not to, and waives any
right to, seek a transfer of venue from such jurisdiction on any grounds.
(c) Interpretation. The provisions of this Agreement were
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negotiated by each of the parties hereto and this Agreement shall be deemed to
have been drafted by each party.
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(d) Representations of the Company. The Company represents and
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warrants that this Agreement is validly binding on the Company and enforceable
in accordance with its terms.
(e) No Waivers. The failure of either party to enforce any
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provision of this Agreement shall not be construed as a waiver of any such
provision, nor prevent such party thereafter from enforcing such provision or
any other provision of this Agreement. Rights granted the parties hereto herein
are cumulative and the election of one shall not constitute a waiver of such
party's right to assert all other legal remedies available under the
circumstances.
(f) Notices. Any notice to be given under the terms of this
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Agreement shall be in writing and may be delivered personally, by telecopy,
telex or other form of written electronic transmission, by overnight courier or
by registered or certified mail, postage prepaid, and shall be addressed as
follows:
TO THE COMPANY:
Metro-Xxxxxxx-Xxxxx Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000-0000
Attention: Director of Human Resources
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WITH A COPY TO:
Metro-Xxxxxxx-Xxxxx Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000-0000
Attention: Legal Department
TO THE EXECUTIVE:
Xx. Xxxxxxx X. Xxxxxxxx
Metro-Xxxxxxx-Xxxxx Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000-0000
Either party may hereafter notify the other in writing of any change in address.
Any notice hereunder shall be deemed duly given when received by the person to
whom it was sent.
(g) Severability. The provisions of this Agreement are severable
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and if any provision of this Agreement shall be held to be invalid or otherwise
unenforceable, in whole or in part, the remainder of the provisions, or
enforceable parts thereof, shall not be affected thereby unless as a result of
such severing the remaining provisions or enforceable parts do not substantially
reflect the intention of the parties in entering into this Agreement.
(h) Successors and Assigns. The rights and obligations of the
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parties under this Agreement shall inure to the benefit of and be binding upon
their successors and assigns, including the survivor upon any merger,
consolidation or combination of the Company with any other entity.
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(i) Entire Agreement. This Agreement supersedes all prior
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agreements and understandings between the parties hereto, oral or written, and
may not be modified or terminated orally. No modification, termination or
attempted waiver shall be valid unless in writing, signed by the party
against whom such modification, termination or waiver is sought to be enforced.
(j) Survival. The provisions of Paragraphs 8, 9, 10, 11, 12, 13,
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and 14 of this Agreement shall survive the Term, it being understood that the
foregoing shall not limit Executive's rights with respect to amounts due him and
unpaid at the expiration of the Term.
(k) Confidentiality and Publicity. This Agreement shall remain
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confidential and the terms shall not be divulged to any person (other than
Executive's professional advisors and family) except to the extent required by
law or legal process. Any press release or announcement of or relating to this
Agreement and the timing of any such announcement shall only be made with the
agreement of Executive and the Company.
(l) Attorneys. Each party may be represented by counsel of its
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choice even though such counsel may have represented the other party in matters
related to the business of the Company, and each party agrees to execute an
appropriate waiver to effectuate this clause.
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(m) Indemnification. The Company shall indemnify Executive through
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its Certificate of Incorporation, By-laws, indemnification agreements or
otherwise to the fullest extent permitted by the Delaware General Corporation
Law (including the reimbursement of defense costs as incurred), as the same
exists and may hereafter be amended.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
METRO-XXXXXXX-XXXXX INC.
By: /s/ XXXXXX XXXXXX
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Its: Vice Chairman
/s/ XXXXXXX X. XXXXXXXX
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Xxxxxxx X. Xxxxxxxx
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