10.11 EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of September 1, 2000 (as from
time to time amended, this "Agreement"), by and between xxxx xxxxx productions,
inc., a Delaware corporation (the "Company"), and Xx. Xxxxxxx X. Xxxxx (the
"Executive").
The Executive is currently the Vice President of Finance,
Treasurer and Chief Financial Officer of the Company and has served in that
capacity since August 12, 1998. In order for the Company to secure the continued
employment services of the Executive, and in order for the Executive to have the
security of continued employment with the Company, the Company and the Executive
desire 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 promises set forth herein, and
other good and valuable consideration, the receipt and legal sufficiency of
which is hereby acknowledged, the Company and the Executive hereby agree as
follows:
1. Employment.
-----------
(a) The Company hereby employs the Executive for the
Employment Term (as such term is hereinafter defined) of this Agreement, subject
to earlier termination as provided for herein, as the Company's Vice President
of Finance, Treasurer and Chief Financial Officer, and the Executive hereby
accepts such employment and agrees to serve the Company in that capacity. As the
Company's Vice President of Finance, Treasurer and Chief Financial Officer, the
Executive shall have 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. At
the request of the Audit Committee of the Board of Directors of the Company, the
Executive shall meet with, and respond to the inquires of, the Audit Committee
of the Board of Directors and furnish the Audit Committee of the Board of
Directors with such financial information as it may require.
(b) The Executive shall not, directly or indirectly, engage in
any business, civil or charitable enterprise, whether or not during regular
business hours, other than for the benefit of the Company or, in the case of
civil or charitable enterprises, if doing so would interfere with performance of
any of the Executive's duties or obligations under this Agreement.
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 (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 interfere with the Executive's performance of any of his
duties or obligations under this Agreement. The Executive shall comply with all
written policies and procedures of the Company, as from time to time in effect.
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 shall terminate on
August 31, 2003, unless earlier terminated pursuant to Sections 6 or 9 hereof
(the "Employment Term").
3. Compensation.
-------------
(a) As full compensation for all services rendered by the
Executive to the Company under this Agreement during the Employment Term, the
Company shall pay to the Executive a base salary as follows: (i) at an annual
rate of $190,000 for the period September 1, 2000 through August 31, 2001; (ii)
at an annual rate of
$200,000 for the period September 1, 2001 through August 31, 2002; and (iii) at
an annual rate of $210,000 for the period September 1, 2002 through August 31,
2003. The base salary payable to the Executive pursuant to this Section 3(a)
shall be payable in equal installments (once every two weeks or as is otherwise
consistent with the Company's regular payroll practices) in accordance with the
Company's customary payroll practices for its senior executives. 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.
(b) The Company shall pay the Executive a bonus of $35,000 for
the Company's fiscal year ended June 30, 2000.
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 any 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. The Executive shall be
entitled to travel "Business Class" on all transcontinental and international
airplane travel taken at the request of the Company, all other airplane travel
shall be economy class.
(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. Subject to Company policy, vacation shall accrue and any unused
vacation shall be able to be utilized in accordance with the Company's policy.
5. Options.
--------
(a) The Company shall grant to the Executive, as of the date
of this Agreement, options to purchase 20,000 shares of the Company's common
stock, par value of $0.01 per share (the "Common Stock"), of the Company (the
"Options"). The Options shall vest and be exercisable equally as to 6,667 shares
of Common Stock on September 1, 2001 and September 1, 2002 and as to 6,666
shares of Common Stock on September 1, 2003; provided that on such date, the
Executive remains in the employ of the Company. The Options shall be "incentive
stock options" and shall be issued pursuant to, and governed by, the terms and
provisions of the Company's 1996 Stock Option Plan (the "Plan"). The Options
shall have an exercise price on the date this grant is ratified and approved by
the Stock Option Committee of the Company's Board of Directors.
(b) The Options and all other stock options with respect to
Company Common Stock previously granted to the Executive shall automatically
vest and be exercisable upon a Change of Control (as such term is hereinafter
defined).
(c) For purposes of this Agreement the term "Change of
Control" shall mean Xx. Xxxxxxx X. Xxxxx and/or Xx. Xxxxxxx X. Xx Xxxxx either
together or alone, directly or indirectly, do not control, either through direct
or beneficial ownership or by contract or otherwise shares of capital stock of
the Company, which in the aggregate are sufficient to elect a majority of the
Board of Directors of the Company.
(d) The Options shall be subject to the terms and provisions
of the Plan.
6. 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 material duties or
responsibilities to the Company for a period of one hundred twenty (120)
consecutive days or for more than one hundred eighty (180) days during any
twelve (12) month period during the Employment Term, the Company may, by written
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 as of the effective date of termination 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).
7. Non-Competition; Confidential Agreement.
----------------------------------------
(a) The Executive acknowledges that by virtue of the
Executive's position and involvement with the business and affairs of the
Company and its subsidiaries, the Executive will develop substantial expertise
and knowledge with respect to all aspects of their business, affairs and
operations and will have access to all significant aspects of the business and
operations of the Company and its subsidiaries and to their confidential and
proprietary information. The Executive acknowledges that the Company will be
irreparably damaged if the Executive were to enter into, or be involved with any
business or activity which competes with any business or activity engaged in by
the Company or any of its subsidiaries in contravention of this Agreement or if
the Executive were to disclose or make unauthorized use of any of the Company's
confidential and proprietary information. Accordingly, the Executive expressly
acknowledges and agrees that the Executive is voluntarily entering into this
Agreement and that the terms, provisions and conditions of this Section 7 are
fair and reasonable and necessary to protect the Company and its business
interests.
(b) The Executive acknowledges and agrees that by virtue of
the Executive's position and involvement with the business and affairs of the
Company, the Executive will develop substantial expertise and knowledge with
respect to all aspects of the Company's business, affairs and operations and
will have access to all significant aspects of the business and operations of
the Company and to Confidential and Proprietary Information. Accordingly, the
Executive agrees as follows:
(i) The Executive hereby covenants and agrees that,
during the Employment Term and thereafter the Executive shall not, directly or
indirectly, under any circumstance: (A) disclose to any other Person (other than
in the regular course of business of the Company) any Confidential and
Proprietary Information, other than pursuant to applicable law, regulation or
subpoena or with the prior written consent of the Company; provided that the
Executive will give the Company prompt written notice of any intended disclosure
pursuant to such law, regulation or subpoena; provided, further, that if the
Company intends to seek a protective order in connection with any such permitted
disclosure, the Executive will cooperate with the Company; (B) act or fail to
act so as to impair the confidential or proprietary nature of any Confidential
and Proprietary Information; (C) use any Confidential and Proprietary
Information other than for the sole and exclusive benefit of the Company; or (D)
offer or agree to, or cause or assist in the inception or continuation of, any
such disclosure, impairment or use of any Confidential and Proprietary
Information.
(ii) The Executive will deliver promptly to the
Company or its designee at the termination of the Executive's employment, or at
any other time the Company may so request, all memoranda, notes, records,
reports, and other documents (including, without limitation, drafts, whole or
partial copies, and information stored or maintained electronically,
magnetically, in a computer, or through any other medium invented in the future)
relating
to the Company's business, which the Executive obtained while employed by, or
otherwise serving or acting on behalf of, the Company and which the Executive
may then possess or have under the Executive's control.
(iii) During the Employment Term, the Executive may
adopt or implement additional policies, procedures, or requirements connected
with the Company's business, and any such policies, procedures, or requirements
will supplement this Section 7(b).
(c) During the period of the Executive's employment under this
Agreement, the Executive shall not, directly or indirectly, engage or be
interested in (as a stockholder, director, officer, employee, 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 of its subsidiaries or any Xxxxx Affiliate; provided that the
Executive may own not more than 5% of the outstanding securities of any class of
securities of any publicly held company.
(d) The Executive shall not, directly or indirectly, either
during the period 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
of its subsidiaries or any Xxxxx Affiliate, any information of any nature
whatsoever acquired by the Executive during 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 operations, business affairs, financial condition, customers, clients, trade
secrets, business strategies or plans or other confidential information of the
Company or any of its subsidiaries or any Xxxxx Affiliate, as applicable, unless
such information has become known to the general public, other than by reason of
any action, directly or indirectly, on the part of the Executive.
(e) The Executive shall not, directly or indirectly, either
during the period 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 of its subsidiaries 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.
(f) Following the termination of the Executive's employment
with the Company, the Executive shall return to the Company (i) all documents,
records and other items containing any information regarding the Company or any
of its subsidiaries or any of their respective businesses or operations
(regardless of the medium in which maintained or stored), without retaining any
copies, notes or excerpts thereof, or at the request of the Company, shall
destroy such documents, records and items (any such destruction to be certified
by the Executive to the Company in writing); and (ii) any and all Company
property which is in the Executive's possession or was previously given to the
Executive.
(g) The parties agree that nothing in this Agreement shall be
construed to limit or negate the common law of torts, confidentiality, trade
secrets, fiduciary duty and obligations where such laws provide the Company with
any broader, further or other remedy or protection than those provided herein.
(h) The Executive acknowledges that the remedy at law for any
breach of any of his covenants or obligations under this Section 7 will be
inadequate and, accordingly, in the event of any breach or threatened breach by
the Executive of any of the provisions of this Section 7, the Company shall be
entitled, in addition to all other rights and remedies at law or otherwise, to
obtain an injunction or other equitable relief restraining any such breach or
threatened breach (without the Company being required to post a bond or other
security and without the necessity of the Company being required to demonstrate
any actual damages). The equitable remedies described in this Section 7(h) 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.
8. Work for Hire.
--------------
Any inventions, ideas, concepts or copyrightable works
originated or conceived by the Executive as part of his employment by the
Company or with the use or assistance of the facilities, materials or personnel
of the Company or any of its subsidiaries, either solely or jointly with others,
during the period of the Executive's employment with the Company shall be the
sole and exclusive property of the Company and shall be deemed to be "work for
hire". The Executive hereby irrevocably assigns, conveys and transfers to the
Company and agrees to transfer and assign to the Company all of his right, title
and interest in and to all inventions, ideas, concepts or copyrightable works,
and to applications for patents, copyrights, trademarks, service marks, trade
names and service names and patents granted upon such inventions, ideas,
concepts or copyrightable works. The Executive agrees for himself an his heirs
and personal representatives, upon the request of the Company and at the
Company's expense, to take such actions, to execute such documents and
instruments and to participate in such legal proceedings as from time to time
may be necessary, required or useful in the Company's sole opinion to apply for,
secure, maintain, reissue, extend or defend the worldwide rights of the Company
in such inventions, ideas, concepts or copyrightable works. The Executive hereby
designates and appoints the Company as the agent and attorney-in-fact of the
Executive for purposes of taking such actions to execute such documents and to
participate in such proceedings. Such designation and appointment is irrevocable
and coupled with an interest.
9. 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 upon (i) any material breach of the
Executive's covenants or obligations under this Agreement, which breach 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 the assets of the Company
or any of its subsidiaries; (iii) the usurpation of any corporate opportunity
belonging to the Company or any of its subsidiaries; (iv) the chronic addiction
of the Executive to drugs or alcohol; (v) violation by the Executive of his
duties or obligations to the Company or any of its subsidiaries 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 of
its subsidiaries 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; (vi) the Executive's failure, refusal or neglect to perform his
duties hereunder within a reasonable period, under the circumstances, or the
Executive's failure to comply with the written policies of the Company after
written notice from the Board of Directors or the President and Chief Operating
Officer of the Company (which notice shall 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 or failed to comply with such policies). 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 6 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 a period equal to the longer of (x) twelve (12)
months from the date of termination "without cause" and (y) the remaining
portion of the Employment Term; provided that the Company shall not be obligated
to continue to provide any other benefits under this Agreement, other than
health and medical benefits pursuant to Section 4(a) hereof. In addition, all
unvested Options previously granted to the Executive shall automatically vest if
the Executive's employment with the Company is terminated "without cause".
(c) The Executive acknowledges and agrees that each of the
factors which comprise the definition of the term "cause" constitutes, on an
individual basis, adequate and sufficient grounds for termination of the
Executive's employment with the Company.
(d) If the Executive's employment is terminated prior to the
end of the Employment Term, to the extent permitted by applicable law, the
Company shall be entitled to deduct any amounts owing to the Company or any
Xxxxx Affiliate by the Executive from the amounts payable to the Executive, if
any.
10. 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 WITHOUT REGARD TO ITS CONFLICTS OF LAW
PRINCIPLES. THIS AGREEMENT SHALL BE INTERPRETED AND CONSTRUED WITHOUT ANY
PRESUMPTION AGAINST THE PARTY CAUSING THIS AGREEMENT TO BE DRAFTED. EACH OF THE
PARTIES UNCONDITIONALLY AND IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION
OF THE COURTS OF THE STATE OF CALIFORNIA LOCATED IN LOS ANGELES COUNTY AND THE
FEDERAL DISTRICT COURT FOR THE SOUTHERN DISTRICT OF CALIFORNIA WITH RESPECT TO
ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND
EACH OF THE PARTIES UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY RIGHT TO CONTEST
THE VENUE OF SAID COURTS OR TO CLAIM THAT SAID COURTS CONSTITUTE AN INCONVENIENT
FORUM. EACH OF THE PARTIES UNCONDITIONALLY AND IRREVOCABLY WAIVES THE RIGHT TO A
TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT.
(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/or contemporaneous agreements
and understandings among them relating such subject matter (whether written or
oral) all of which are merged herein (including, without limitation, that
certain Employment Agreement dated as of September 1, 1998, between the
Executive and the Company). 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.
(c) Any notice, consent 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 (all postage prepaid) or by
an overnight courier service (if such courier service has a recognized
reputation and all costs have been prepaid), 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 in accordance with this Section 10(c)):
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 LLP
The Chrysler Building
000 Xxxxxxxxx Xxxxxx
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 of any term or provision hereof
in order to be effective 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 only for the specific instance in which given and it shall
not be construed as a waiver of any other term or provision of this Agreement.
(e) The invalidity, illegality or unenforceability of any term
or provision of this Agreement shall not affect the validity, legality or
enforceability of the remaining terms or provisions of this Agreement which
shall remain in full force and effect and any such invalid or unenforceable term
or provision shall be modified and amended so that it is given full effect as
far as possible pursuant to applicable law. If any term or provision of this
Agreement is invalid, illegal or unenforceable in any one jurisdiction, it shall
not affect the validity, legality 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 any court of competent jurisdiction in connection with its enforcement to the
extent contemplated by this Section 10(e).
(f) This Agreement is not assignable by either party, except
that the Company may assign this Agreement to any successor to the Company by
merger, purchase of stock, consolidation, recapitalization or other similar
transaction 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 or assignee assumes all of the obligations of the Company hereunder,
whereupon this Agreement shall be binding upon and inure to the benefit of any
such successor or assignee. This Agreement shall inure to the benefit of the
heirs, estate and legal representatives of the Executive. The Executive may not
delegate any of the Executive's duties or obligations hereunder. Except as
expressly provided by this Section 10(f), there are not third party
beneficiaries of this Agreement.
(g) The section headings contained herein 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/ XXXXXXX X. XX XXXXX
-------------------------
Name: Xxxxxxx X. Xx Xxxxx
Title: President
/s/ XXXXXXX X. XXXXX
-------------------------
Xxxxxxx X. Xxxxx
