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EXHIBIT 10.43
[EXECUTION COPY]
EMPLOYMENT AGREEMENT
This Employment Agreement is entered into as of February 27,
1998, by and between THE XXXXXX ENTERTAINMENT COMPANY, a California corporation
("Company"), and DON GOLD ("Executive").
RECITALS
WHEREAS, Company and Executive desire to enter into this
Agreement to assure Company of the exclusive services of Executive as the Senior
Vice President - Xxxxxx Home Entertainment and to set forth the rights and
duties of the parties hereto.
NOW THEREFORE, in consideration of the promises and the mutual
covenants set forth herein, the parties hereto agree as follows:
1. REPRESENTATIONS AND WARRANTIES
Executive represents and warrants that there are no agreements or
arrangements, whether written or oral, that would be breached by Executive upon
execution of this Agreement or that would prevent or impair Executive from
rendering exclusive services to Company during the term hereof.
2. TERMS OF EMPLOYMENT
(a) Subject to the provisions for termination set forth
herein, the initial term of Executive's employment hereunder shall continue from
March 16, 1998 until March 16, 2000 (the "Initial Term"). At the end of the
Initial Term, Company shall have the option to extend this Agreement for two
additional years by giving notice to the Executive of the foregoing at least 60
but not more than 120 days before the end of the Initial Term (as so determined,
the "Term").
(b) Executive shall act as Company's Senior Vice President
- Xxxxxx Home Entertainment and shall report to Company's Executive Vice
President with respect to budgeting, finances, revenues and other economic
considerations, and to Company's Chief Executive Officer as to creative and
artistic decisions. Executive shall be responsible for overseeing the domestic
marketing and distribution of home videos and other home entertainment products
of the Company. Executive shall comply with all of the reasonable and customary
employment policies of Company and its affiliates. The services to be rendered
herein shall generally be performed at the principal offices of Company,
currently in Century City, California. In addition, the services may be
performed by Executive, from time to time, on a temporary travel basis at such
other locations as Company shall reasonably request consistent with its
reasonable business needs. Executive agrees to perform his services hereunder in
a competent and professional manner, consistent with the skills to be possessed
by a senior
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employee of Company.
3. RESTRICTIONS ON OUTSIDE BUSINESS ACTIVITIES/CONFIDENTIAL
INFORMATION
(a) Except as set forth below, during the Term of this
Agreement, Executive shall devote his exclusive energies, interests, abilities
and productive business time to perform all the duties required of and from his
pursuant to the terms of this Agreement. During the Term of this Agreement and
of the Executive's employment by Company, Executive shall not, directly or
indirectly, engage in any business for his own account which is competitive with
the business of Company or Company's affiliates or enter into the employ of or
render any services to any persons engaged in businesses competitive with that
of Company, or acquire any interest in any business competitive with the
businesses of Company in any capacity, whether as an employee, consultant,
investor, agent, principal, trustee, shareholder or director, or induce any
customer or supplier of Company to terminate its relationship with Company.
Notwithstanding the foregoing, Executive may acquire, solely as an investment,
ownership of securities of publicly traded companies which may be competitive
with Company's business provided, however, that Executive may own no more than
one percent (1%) of such competitive company's publicly traded securities.
Executive agrees that his services hereunder are of a special, unique, unusual,
extraordinary and intellectual character which gives them particular value, the
loss of which cannot be reasonably or adequately compensated in an action of law
for damages. Executive further agrees that any breach hereunder, including the
breach of Executive's obligation of non-competition, will cause Company
irreparable injury and, therefore, Executive agrees that Company is entitled to
seek injunctive and other equitable relief to prevent a breach or threatened
breach of this Agreement which shall be in addition to any other rights or
remedies to which Company may be entitled. Executive may continue the activities
set forth on Exhibit B hereto (the "Permitted Activities"), provided, however,
that Executive shall at all times perform his obligations under this Agreement
before engaging in the Permitted Activities. At such time that Company gives
notice to Executive that the Permitted Activities are interfering with
Executive's obligations under this Agreement, Executive shall cease the
Permitted Activities immediately.
(b) Executive with keep secret all material confidential
matters of Company and its Affiliates which are not otherwise in the public
domain and will not intentionally disclose them to anyone outside of Company or
its Affiliates, either during or after the Term, except with Company's written
consent and except for such disclosure as is necessary in the performance of
Executive's duties during the Term.
(c) Executive will deliver promptly to Company on
termination of the Term or at any other time Company may so request, at
Company's expense, all confidential memoranda, notes, records, reports and other
documents (and all copies thereof) relating to Company's and its Affiliates'
business, which Executive obtained while employed by, or otherwise serving or
acting on behalf of, Company, or which Executive may then possess or have
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under his control.
4. COMPENSATION AND BENEFITS
(a) Company shall pay a "Basic Salary" to Executive at the
rate of One Hundred Fifty Thousand Dollars ($150,000) for the first year of the
Initial Term and One Hundred Sixty Five Thousand Dollars ($165,000) for the
second year of the Initial Term. If the Term extends beyond the Initial Term
pursuant to Section 2(a) hereunder, the parties shall negotiate an increase in
the Basic Salary for such additional years which shall be no less than 10% of
the Basic Salary in the final year of the Initial Term. The Basic Salary shall
be payable in equal bi-monthly installments for the Term subject to the terms
and conditions contained herein.
(b) In addition to this Basic Salary, Executive shall
receive (i) a one-time signing bonus of Twenty Thousand Dollars ($20,000) upon
executing this Agreement, (ii) in the first year of the Initial Term a bonus
equal to three percent (3%) of the amount by which Net Profits exceed
$3,000,000, (iii) in the second year of the Initial Term a bonus equal to four
percent (4%) of the amount by which Net Profits exceed $3,000,000, and (iv) if
the Term is extended beyond the Initial Term, for each additional year of
employment a bonus equal to a percentage to be negotiated in good faith by the
parties of the amount by which Net Profits for such year exceed $3,000,000,
provided, however, that such percentage shall not be less than four percent
(4%). Bonuses to be paid pursuant to (ii), (iii) and (iv) above shall be paid on
or around February 15 of the year following the year upon which the bonus is
based. If Net Profits from the Company's domestic home entertainment business
activities under the direction and supervision of Executive which accrue during
any year of Executive's employment under this Agreement are less than or equal
to $3,000,000, Executive shall not receive any bonus for that year under this
Section 4(b). "Net Profits" shall mean the gross profits from sales of Company's
entertainment programming sold for viewing on home video devices developed under
the direction and supervision of Executive which accrue and are recognized
during the Term of Executive's employment under this Agreement on a yearly basis
("Gross Profits") (as determined according to generally accepted accounting
principles ("GAAP")) less any and all expenses incurred during each such year
associated with or relating to the generation of such Gross Profits and the
operation of the Company's domestic home video business including, but not
limited to, Executive's salary, the salary of other staff in Company's domestic
home video business division, and an allocable portion of general corporate
overhead expenses (e.g., legal, accounting, rent, utilities, copying, word
processing), development costs and production costs (as determined according to
GAAP). Gross Profits and Net Profits shall be determined by the senior financial
officer of the Company and such determination shall be conclusive and binding
absent a showing of manifest error. All disputes between Executive and Company
arising in connection with this Section 4(b) shall be finally settled by
arbitration in Los Angeles, California in accordance with the rules of the
American Arbitration Association ("Rules") by one or more arbitrator(s)
appointed in accordance with the Rules. The expense of such arbitration shall be
borne in accordance with the award of the arbitrator(s). Any such award rendered
pursuant to this arbitration provision shall be final and binding upon the
parties to such arbitration, and may be
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entered in any court having jurisdiction.
(c) Subject to the Board's approval to be sought in March
1998, Executive shall receive options to purchase 20,000 shares of Company
Common Stock at a market price equal to the closing price on the date of
approval. Ten thousand (10,000) shares shall vest, subject to continued
employment, on each of the first and second anniversary hereof and shall be
subject to and issued in accordance with the terms of the Stock Option Agreement
attached hereto as Exhibit A.
(d) Executive shall be entitled to health, dental and all
other insurance benefits which are made generally available to senior employees
and their families of Company. In addition, Executive shall be entitled to
participate in Company's profit sharing and pension plan on the same terms as
other senior employees of Company. These benefits and plans may change from time
to time in accordance with Company policies and procedures.
(e) Executive shall be entitled to three weeks (15 days)
of paid vacation per year during the Term, such vacation to accrue at the rate
of 1-1/4th days per month. Vacation may only be taken after consultation with
Company's Executive Vice President at times convenient to Company's reasonable
business needs.
(f) During the Term, Executive shall receive Seven Hundred
Dollars ($700) per month for the reasonable business cost of leasing or
purchasing an automobile, gas and maintenance plus Company shall reimburse
Executive for his annual car insurance and registration expenses. Executive
shall add Company to Executive's automobile insurance policy as an additional
insured. Executive shall provide Company with appropriate documentation
respecting Executive's business use of his automobile and his annual car
insurance and registration expenses, and acknowledges that Executive may be
determined to have received compensation income with respect to that portion of
Executive's automobile allowance and expense reimbursement not attributable to
business use.
(g) Notwithstanding any other provisions herein, the
Maximum Total Compensation of Executive in the first year of the Initial Term
shall be Three Hundred Thousand Dollars ($300,000); in the second year of the
Initial Term shall be Three Hundred Fifty Thousand Dollars ($350,000); if the
Initial Term is extended, in the third year of the Term shall be Four Hundred
Thousand Dollars ($400,000); and, if the Initial Term is extended, in the fourth
year of the Term shall be Four Hundred Fifty Thousand Dollars ($450,000).
"Maximum Total Compensation" for a given year shall include Basic Salary,
bonuses and automobile allowance in such year.
(h) Company shall reimburse Executive for expenses which
are business-related such as his cellular phone expenses upon receipt from
Executive of documentation evidencing such expenses.
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(i) Executive shall be entitled to travel in "business
class" when he is required to travel by airplane for the Company.
(j) Upon Company's receipt of documentation of such legal
fees, Company will pay to Executive's attorney the sum of no more than $2,000
for reviewing and negotiating this Agreement.
5. CONTINUATION OF COMPENSATION
All compensation, as well as any other employment benefits which
Executive may otherwise receive from Company during Term of this Agreement,
shall be paid less income tax withholding and other normal employee deductions.
Except as set forth herein, Company shall have no continuing obligation to make
any compensation payments after the termination of Executive's employment with
Company.
6. TERMINATION FOR CAUSE
This Agreement, the employment of Executive, and any future
obligation of Company to make salary or other future payments hereunder, may be
terminated by Company "for cause" upon any of the following events:
6.1 Executive has committed fraud, defalcation,
misappropriation or any similar act;
6.2 Executive is in default in the performance of
Executive's obligations, services or duties hereunder, which shall include,
without limitation, Executive's disregarding the instruction from Company's
Executive Vice President or Company's Chief Executive Officer concerning the
conduct of his duties hereunder, Executive's abuse of expense accounts,
Executive's acting in a manner inconsistent with the policies of Company, its
Chief Executive Officer or its Board of Directors, or if Executive has breached
any material provision of this Agreement;
6.3 Executive is grossly negligent or engages in willful
misconduct in the performance of his duties hereunder;
6.4 Executive has engaged in illegal activities which have
an adverse impact on Company, other than de minimis violations of civil law
which can be cured without material adverse impact to Company, unless such
violations indicate a pattern of conduct which, in the aggregate, materially
adversely impact Company;
6.5 Executive has developed or pursued interest materially
adverse to those of Company or any of its affiliates; or
6.6 Executive has contributed to Company's financial
condition
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undergoing or having undergone any material adverse change.
7. TERMINATION WITHOUT CAUSE
The employment of Executive and, except as otherwise provided in
Section 7.1(c) hereof, any future obligation of Company to make salary or other
payments hereunder, may be terminated "without cause" as follows:
7.1 by mutual agreement of the parties hereto;
7.2 by Company, pursuant to the provisions of Section 9 of
this Agreement (Illness or Incapacity);
7.3 automatically, on Executive's death or disability; or
7.4 upon the expiration of the Term of this Agreement.
8. EFFECT OF TERMINATION
If Executive's employment is terminated by Company for cause or
by Executive without cause as described in Paragraphs 6 and 7 above or in
Paragraph 9 below, Executive shall be entitled to accrued salary, a pro rata
portion of any bonus (which shall be paid at the times set forth in Paragraph
4(c) above), vacation accrued through the date of termination and unreimbursed
business expenses accrued through the date of termination and the obligations of
Company under the terms of the Agreement shall be of no further force and
effect. If Executive's employment is terminated by Company for reasons other
than as specified hereinabove, Executive shall receive (i) a lump-sum payment
equal to the Basic Salary, without increase that Executive would have earned
through the remainder of the Term of this Agreement if this Agreement had not
been terminated (paid within thirty (30) days after the date of termination),
(ii) any bonus pursuant to Section 4(b) that Executive would have earned through
the remainder of the Term of this Agreement if this Agreement had not been
terminated (paid on or around February 15th of each year an amount is due as
provided in Section 4(b)) and (iii) the car allowance that Executive would have
earned through the remainder of the Term of this Agreement if this Agreement had
not been terminated (paid on a monthly basis) (such lump-sum payment, bonus
payments and car allowance payments being called the "Mitigation Amount") plus
unreimbursed business expenses, vacation and bonus accrued through the date of
termination. The Mitigation Amount owed by Company pursuant to this Section 8
shall be reduced by any and all compensation or other amounts that Executive
receives after termination in connection with his rendering of services to any
third party.
9. ILLNESS OR INCAPACITY
If during the Term of this Agreement, Executive shall be unable
to perform his duties hereunder for a period exceeding twelve (12) consecutive
weeks or sixteen (16) weeks in
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the aggregate out of any fifty-two (52) consecutive weeks by reason of illness
or incapacity; this Agreement may be terminated by Company at its election
pursuant to the provisions of Section 7 hereof.
10. CONFIDENTIAL INFORMATION
Because of his employment by Company, Executive will have access
to trade secrets and confidential information about Company, its products, its
customers, and its methods of doing business. Executive agrees that he will not
disclose any confidential information of or concerning Company during the Term
and after termination of this Agreement.
11. OWNERSHIP OF INTANGIBLES
All processes, inventions, patents, copyrights, trademarks, and
other intangible rights that may be conceived or developed by Executive either
alone or with others, during the Term of Executive's employment, whether or not
conceived during working hours shall be the sole property of Company and
Executive shall execute such further instruments as may be necessary to reflect
the foregoing.
12. INDEMNIFICATION
Company shall indemnify, defend and hold Executive harmless from
and against any and all damages, deficiencies, claims, demands, suits, actions,
judgments, liabilities, losses, expenses and costs (including attorneys' fees),
and amounts paid in any settlement, incurred or suffered by Executive, arising
out of or in connection with Executive's duties or services for or on behalf of
Company, or any affiliate of Company, pursuant to this Agreement or by reason of
the fact that Executive is or was an agent of Company, provided that Executive
acted in good faith and in a manner Executive reasonably believed to be in the
best interests of Company. Company shall advance to Executive all costs and
expenses incurred by Executive and/or his agents in advance of the final
disposition of any proceeding for which indemnification is required hereunder.
The indemnification provided herein shall not in any manner limit or restrict
other indemnification provisions provided in Company's Articles of Incorporation
or Bylaws, and shall survive termination of this Agreement with respect to
claims from or relating to acts or omissions alleged to have occurred during the
Term.
13. CHOICE OF LAW
The formation, construction and performance of this Agreement
shall be construed in accordance with the law of the State of California.
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14. INTEGRATION
This Agreement contains the entire agreement between Executive
and Company and supersedes all prior oral and written agreements,
understandings, commitments, and practices between the parties and their
affiliates.
15. NOTICES
Any notice or other communication required or permitted hereunder
shall be in writing and shall be delivered personally, telegraphed, telexed,
sent by facsimile transmission or sent by certified, registered or express mail,
postage prepaid. Any such notice shall be deemed given when so delivered
personally, telegraphed, telexed or sent by facsimile transmission or, if
mailed, two days after the deposit in the United States mails, as follows:
if to Executive, to: with a copy to:
Don Gold Xxxxx Xxxxxxxx, Esq.
c/o Xxxxx Xxxxxxxx, Esq. Xxxxxx, Xxxxx & Xxxxxxxx, LLP
Xxxxxx, Xxxxx & Xxxxxxxx, LLP 0000 Xxxxxx Xxxxxxxxx
9200 Sunset Blvd., Penthouse 25 Penthouse 25
Xxx Xxxxxxx, Xxxxxxxxxx 00000 Xxx Xxxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000 Fax: (000) 000-0000
if to Company, to: with a copy to:
The Xxxxxx Entertainment Company Xxxx X. Xxxxx, Esq.
0000 Xxxxxx xx xxx Xxxxx Xxxxxx & Xxxxxx
Xxxxx 0000 555 West 5th St., Suite 4000
Xxx Xxxxxxx, Xxxxxxxxxx 00000 Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
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16. EXECUTION
Executed by the parties and effective as of the day and year
first above written.
THE XXXXXX ENTERTAINMENT COMPANY
By:_____________________________ _____________________________
Xxxxxxx X. Xxxxxx Don Gold
Vice President
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EXHIBIT A
STOCK OPTION AGREEMENT
This Stock Option Agreement (the "Agreement") dated as of February __,
1998 entered into between THE XXXXXX ENTERTAINMENT COMPANY, a California
corporation ("Company"), and DON GOLD ("Optionee"). [This Option is granted
under, and is governed by, The Xxxxxx Entertainment Company 1997 Stock Option
Plan (the "Plan")].
1. GRANT OF OPTION. The Company hereby grants to Optionee the option
("Option") to purchase upon, and subject to, the terms and conditions set forth
herein, all or any part of 20,000 shares of Company's common stock ("Common
Stock") at a price of $____ per share. The Option granted hereunder is not
intended to qualify as an "Incentive Stock Option" within the meaning of Section
422A of the Internal Revenue Code of 1986, as amended.
2. TERM AND EXERCISABILITY.
(a) The term of the Option granted hereunder shall commence as of
the date hereof and shall terminate on the tenth anniversary hereof (the
"Expiration Date"), unless sooner terminated in accordance with the provisions
set forth herein or in the Plan;
(b) The Option shall vest over a two-year period in accordance
with the following schedule: (i) on the first anniversary hereof with respect to
one-half of the number of shares of Stock subject to the Option, (ii) on the
second anniversary hereof with respect to an additional one-half of the number
of shares of Stock subject to the Option, and (iii) as otherwise provided
pursuant to Sections 2(c) hereof;
(c) The Option shall vest in its entirety and be immediately
exercisable upon the consummation of a merger, consolidation or other
reorganization of the Company, completion of a tender offer for more than 50% of
the Company's outstanding capital stock or sale of all or substantially all of
the assets of the Company to any person other than AKAUSA Limited and its
affiliates (a "Change of Control"). On a Change of Control, the following
provisions shall apply:
(i) In the event of a Change of Control in which the
consideration received by the Company's shareholders in exchange
for their shares of the Company's Common Stock consists solely
of cash, the Option shall be deemed to have been exercised in
full immediately prior to the consummation of such Change of
Control and, in connection with such exercise, Optionee shall
receive a cash amount equal to the difference between the
exercise price of the Option and the price per share of Common
Stock received by the holders of the Company's Common Stock
pursuant to such Change of Control.
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(ii) In the event of a Change of Control in which the
consideration received by the Company's shareholders in exchange
for their shares of the Company's Common Stock does not consist
solely of cash, the Option shall thereafter be exercisable for
the number of shares of stock or other securities and the amount
of cash or other property, if any, that Optionee would have
received pursuant to such Change of Control in respect of the
shares of Common Stock underlying the Option had the Option been
exercised immediately prior thereto.
(d) If the Optionee's employment by the Company terminates for
any reason other than good cause, death or disability, the Option shall be
exercisable only to the extent it is exercisable on the effective date of the
Optionee's termination of employment and may thereafter be exercised by the
Optionee until and including the earliest to occur of (i) the date which is
three (3) months after the effective date of the Optionee's termination of
employment and (ii) the Expiration Date of the Options.
(e) If the Optionee's employment by the Company terminates by
reason of death or disability, the Option shall be exercisable only to the
extent it is exercisable on the date of death or disability and may thereafter
be exercised by the Optionee until and including the earliest to occur of (i)
the date which is one (1) year after the date of death or disability and (ii)
the Expiration Date.
(f) If the Optionee's employment by the Company terminates for
good cause, the Option shall terminate automatically on the effective date of
the Optionee's termination of employment.
(g) If the Optionee dies during the period set forth in Section
2(e) following termination of employment by reason of disability, or if the
Optionee dies during the period set forth in Section 2(d) following termination
of employment for other than good cause, the Option shall be exercisable only to
the extent it is exercisable on the date of death and may thereafter be
exercised by the Optionee's Legal Representative or Permitted Transferees, as
the case may be, until and including the earliest to occur of (i) the date which
is one (1) year after the date of death and (ii) the Expiration Date. After
death, such Option may, to the extent that it remains unexercised (but
exercisable by the Optionee according to such Option's terms) upon the date of
such death, be exercised by the person or persons to whom the Optionee rights
under the Option shall pass by the Optionee's will or by the laws of descent and
distribution.
3. EXERCISE OF OPTION.
3.1 NOTICE. The Option shall be exercised by written notice
delivered to the Company stating the number of shares with respect to which the
Option is being exercised, together with the form of payment allowed in the
Plan. If the Option is being exercised by any person(s) other than Optionee,
notice shall be accompanied by proof, satisfactory to counsel for
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the Company, of the right of the applicable person(s) to exercise the Option.
Not less than one hundred (100) shares may be purchased at any one time unless
the number purchased is the total number which may be purchased under the Option
and in no event may the Option be exercised with respect to fractional shares.
3.2 WITHHOLDING TAX. Optionee may not exercise all or any portion
of the Option granted hereunder unless and until Optionee shall have made all
arrangements which the Company and its counsel shall deem necessary to satisfy
the Company's federal and state income tax withholding obligations, including
paying to the Company the amount of any taxes which the Company may be required
to withhold with respect thereto, as provided in the Plan.
4. NONTRANSFERABILITY; DISABILITY OR DEATH OF OPTIONEE. The Option shall
not be transferable except by will or by the laws of descent and distribution
and shall be exercisable only by Optionee or the Optionee's guardian or legal
representative during his lifetime. After death, the persons to whom Optionee's
rights under the Option shall have passed by order of a court of competent
jurisdiction, by will or by the applicable laws of descent and distribution or
the executor or administrator of Optionee's estate, shall have the right to
exercise the Option, pursuant to the terms of this Agreement and the Plan.
Except as permitted by the preceding sentence, no option granted hereunder may
be transferred. assigned, pledged, hypothecated or otherwise disposed of
(whether by operation of law or otherwise) or be subject to execution,
attachment or similar process. Upon any attempt to so transfer, assign, pledge,
hypothecate or otherwise dispose of any option granted hereunder. such option
and all rights thereunder shall immediately become null and void.
5. PRIVILEGES OF STOCK OWNERSHIP. Optionee shall have no rights as a
stockholder with respect to the Common Stock until the date of issuance of stock
certificates to Optionee. No adjustment will be made for dividends or other
rights for which the record date is prior to the date the stock certificates are
issued.
6. NOTIFICATION OF SALE. Subject to Section 7 hereof, Optionee agrees
that Optionee, or any person acquiring shares upon exercise of the Option, will
notify the Company not more than five (5) days after any sale or other
disposition of such shares.
7. HOLDING OF STOCK AFTER EXERCISE OF OPTION. Optionee hereby represents
and covenants that (a) any share of Stock purchased upon exercise of the Option
will be purchased for investment and not with a view to the distribution thereof
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act"), unless such purchase has been registered under the Securities Act or
applicable state securities law; (b) any subsequent sale of any such shares
shall be made either pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws, or pursuant to an
exemption from registration under the Securities Act and such state securities
laws; and (c) if requested by the Company, Optionee shall submit a written
statement, in form satisfactory to counsel for the Company, to the effect that
such representation (x) is true and correct as of the date of purchase
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of any shares hereunder, or (y) is true and correct as of the date of any sale
of any such shares, as applicable. A legend to the foregoing effect shall be
placed upon any shares received upon exercise of this Option. As a further
condition precedent to any exercise of the Option, Optionee shall comply with
all regulations and requirements of any regulatory authority having control of
or supervision over the issuance of the shares and, in connection therewith,
shall execute any documents which the Board or any committee authorized by the
Board shall in its sole discretion deem necessary or advisable.
8. DELIVERY OF CERTIFICATES.
Upon the exercise of the Option in whole or in part, the Company
shall deliver one or more certificates representing the number of shares
purchased against full payment therefor. The Company shall pay all original
issue or transfer taxes and all fees and expenses incident to such delivery,
except as otherwise provided in Section 3.2.
9. ADJUSTMENTS.
In the event of any change in the outstanding Common Stock by
reason of any stock split, stock dividend, recapitalization, reorganization,
merger, consolidation, combination, exchange of shares, liquidation, spin-off or
other similar change in capitalization, or any distribution to holders of Common
Stock other than a cash dividend, the number and class of shares available under
this Plan, the number and class of shares under each outstanding option and the
purchase price per share, shall be appropriately adjusted by the Committee, such
adjustments to be made in the case of outstanding options without a change in
the aggregate purchase price.
10. SUCCESSORS. This Agreement shall be binding upon and inure to the
benefit of any successor or successors of the Company and any person or persons
who shall, upon the death of Optionee, acquire any rights hereunder.
11. NOTICES. Any notice to the Company provided for in this Agreement
shall be addressed to it in care of its Chief Financial Officer as its main
office, and any notice to Optionee shall be addressed to Optionee's address on
file with the Company or a subsidiary corporation, or to such other address as
either may designate to the other in writing. Any notice shall be deemed to be
duly given if and when enclosed in a properly sealed enveloped and addressed as
stated above, and deposited. postage prepaid, in a post office or branch post
office regularly maintained by the United States government. In lieu of giving
notice by mail as aforesaid, any written notice under this Agreement may be
given to Optionee in person, and to the Company by personal delivery to its
Chief Financial Officer.
12. GOVERNING LAW. This Agreement shall be governed by, and interpreted
in accordance with, the internal laws of the State of California.
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13. COUNTERPARTS. This Agreement may be executed in counterparts each of
which shall be deemed an original and which together shall constitute one and
the same instrument.
Please confirm your agreement to the foregoing by signing below where
indicated.
THE XXXXXX ENTERTAINMENT COMPANY,
a California corporation
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------
Name:
Title:
AGREED AND ACCEPTED:
/s/ Don Gold
-------------------------------
DON GOLD
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EXHIBIT B
PERMITTED ACTIVITIES
None.
