LIVE FILM AND MEDIAWORKS INC.
00000 XXXXXXX XXX
XXXXX 000
XXX XXXX, XXXXXXXXXX 00000
DATE: As of August 15, 1996
Xx. Xxxx X. Xxxxxx
c/o LIVE FILM AND MEDIAWORKS INC.
00000 Xxxxxxx Xxx
Xxxxx 000
Xxx Xxxx, Xxxxxxxxxx 00000
Re: Employment Agreement
Dear Xx. Xxxxxx:
When executed by you ("Employee") and by a duly authorized
representative of LIVE FILM AND MEDIAWORKS INC., a Delaware
corporation ("Company"), this letter will set forth the terms and
conditions of Employee's employment.
1. Services
1.1 Employment. Company employs Employee during the Term
(as hereinafter defined) to serve as Executive Vice
President/Production and Acquisitions of Company, and to render
such other services ("Services") as Company or corporations
controlled by, under common control with or controlling, directly
or indirectly, Company ("Company's Affiliates"), may from time to
time reasonably request which are consistent with the duties
Employee is to perform and Employee's stature and experience.
Employee shall comply with all of the reasonable and customary
employment policies of Company and its Affiliates. The Services
shall be generally performed at the principal offices of Company,
currently in Van Nuys, California. In addition, the Services may
be performed by Employee from time to time on a temporary travel
basis at such other locations as Company shall reasonably request
consistent with its reasonable business needs. Employee agrees
to perform such Services in a competent and professional manner,
consistent with the skills to be possessed by a senior executive
officer in Company's business.
1.2. Duties; Reporting Requirements. Among the duties that
Employee shall perform in connection with the Services is that
Employee shall do and perform all services, acts or things
reasonably necessary or advisable to manage and conduct the
programming business of Company and all of Company's employees in
such area of Company's business shall report to Employee or his
designates. For purposes of this Agreement, "programming" shall
be deemed to mean the include acquisition, development and
production of programs distributed by Company. The above
statement of Employee's duties shall not be deemed exclusive, and
Employee's duties hereunder shall be those which are identified
by Company from time to time, as modified by Company from time to
time. In performing his duties hereunder, Employee shall report
to the Chief Executive Officer of Company or his successor(s).
1.3 Ownership of Properties. Company, as employer, shall
own, and Employee hereby transfers and assigns to Company, all
rights in and to any material and/or ideas written, suggested or
submitted by Employee during the Term and all other results and
proceeds of the Services ("Properties"). Company and its licensees
and assigns shall have the right to adapt, change, revise,
delete from, add to and/or rearrange the Properties or any part
thereof written or submitted by Employee and to combine the same
with other works to any extent, and to change or substitute the
title thereof and in this connection Employee hereby waives any
so-called "moral rights" of authors. Employee agrees to execute
and deliver to Company such assignments or other instruments as
Company may require from time to time to evidence its ownership
of the results and proceeds of Employee's services; provided,
however, that nothing in this Section 1.3 shall be deemed in any
manner to restrict or qualify Employee's ownership or right to
exploit Employee's personal memoirs.
1.4 Term/Exclusivity
1.4.1 The Term of this Agreement shall commence and
this Agreement shall become effective on the above referenced
date through and including December 31, 1999 (the "Term"). If
neither party shall have given notice to the other, on or before
three months before December 31, 1999, of such party's intent not
to extend this Agreement, this Agreement shall automatically be
extended for an additional year to December 31, 2000.
1.4.2 The Services shall be rendered on a full time
basis during normal working hours and all services of Employee
shall be exclusive to Company; provided, however, that Employee
may engage in other business activities with Company's prior
written consent which consent shall not be unreasonably withheld
provided that such other business activities shall not constitute
a Competitive Business (as defined in Section 1.4.3 hereof), and
shall not adversely affect the performance of Employee's Services
hereunder. Employee acknowledges that Employee's performances
and services hereunder are of a special, unique, unusual,
extraordinary and intellectual character which gives them
peculiar value, the loss of which cannot be reasonably or
adequately compensated in an action at law for damages and that a
breach by Employee of the terms hereof (including without
limitation this Section 1.4 and Section 1.5) will cause Company
irreparable injury. Employee 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.
1.4.3 During the term of Employee's employment by
Company (the "Restricted Period"), Employee shall not, directly
or indirectly, (I) engage in any business for his own account
which is competitive with the businesses of Company or Company's
Affiliates (collectively, "Competitive Business") so long as
Company or Company's Affiliates (as the case may be) continue to
engage in such business; (ii) enter the employ of, or render any
services to, any person engaged in a Competitive Business; (iii)
become interested in a Competitive Business in any capacity,
including, without limitation, as an individual, partner,
shareholder, officer, director, principal, agent, trustee or
consultant; or (iv) induce any customer or supplier of Company or
Company's Affiliates to terminate its relationship with Company
or Company's Affiliates (as the case may be). Notwithstanding
anything to the contrary, Employee may acquire and/or retain,
solely as an investment, and take customary actions to maintain
and preserve Employee's ownership of:
A. securities of any corporation which are
registered under Sections 12(b) or 12(g) of the Securities
Exchange Act of 1934, as amended, and which are publicly traded,
as long as Employee is not part of any control group of such
corporation; and
B. any securities of a partnership, trust,
corporation or other person so long as Employee remains a passive
investor in that entity and does not become part of any control
group thereof (except in a passive capacity) and so long as such
entity is not, directly or indirectly, in competition with
Company or its Affiliates.
1.5 Confidentiality. Employee acknowledges that his
Services will, throughout the Term, bring Employee into close
contact with many confidential affairs of Company and its Affiliates,
including information about costs, profits, markets, sales,
products, key personnel, pricing policies, operational methods,
technical processes and other business affairs and methods and
other information not readily available to the public, and plans
for future development. Employee further acknowledges that the
businesses of Company and its Affiliates are international in
scope, that their products are marketed throughout the world,
that Company and its Affiliates compete in nearly all of their
business activities with other organizations which are or could
be located in nearly any part of the world and that the nature of
Employee's Services, position and expertise are such that he is
capable of competing with Company and its Affiliates from nearly
any location in the world. In recognition of the foregoing,
Employee covenants and agrees:
1.5.1 that Employee will keep secret all material
confidential matters of Company and its Affiliates which are not
otherwise in the public domain and will not intentionally dis-
close 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 Employee's duties during the Term; and
1.5.2 that Employee 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 Employee obtained while employed by, or otherwise serving
or acting on behalf of, Company, or which Employee may then
possess or have under his control. Notwithstanding the
foregoing, Employee shall be entitled to retain a copy of his
rolodex (address and phone number) files.
1.6 Indemnification. Employee shall be entitled throughout
the Term to the benefit of the indemnification provisions
contained on the date hereof in the Bylaws of Company notwithstanding
any future changes therein, to the extent permitted by
applicable law at the time of the assertion of any liability
against Employee, and to the most favorable indemnification
provisions or agreements available to any other senior executive
of Company.
2. Compensation
As compensation and consideration for all Services provided
by Employee during the Term pursuant to this Agreement, Company
agrees to pay to Employee the compensation set forth below.
2.1 Fixed Annual Compensation. Employee's Fixed Annual
Compensation shall be payable in equal installments on Company's
regular pay dates following commencement of the Term and in
accordance with the following schedule.
August 15, 1996 through December 31, 1996 - $ 85,673
January 1, 1997 through December 31, 1997 - $280,000
January 1, 1998 through December 31, 1998 - $300,000
January 1, 1999 through December 31, 1999 - $325,000
2.2 Incentive Compensation. Employee shall be eligible to
participate in Company's discretionary Corporate Bonus Program,
as determined, modified and published by Company from time to
time ("Incentive Compensation").
2.3 LIVE Entertainment Inc. Stock Options. Employee hereby
confirms that Company has granted to Employee options to acquire
12,000 shares of Company's common stock at the closing price of
Company's Nasdaq Small Cap Market on March 6, 1995 ("Options"),
with such Options to vest as follows:
(i) 6,000 Options vested on March 6, 1996; and
(ii) 6,000 Options will vest on March 6, 1997
Employee hereby also confirms that Company has granted to
Employee options to acquire 8,000 shares of Company's common
stock at the closing price of Company's Nasdaq Small Cap Market
on February 7, 1996 (2/96 Options"), with such 2/96 Options to
vest as follows:
(i) 2,667 Options will vest on February 7, 1997
(ii) 2,667 Options will vest on February 7, 1998
(iii) 2,666 Options will vest on February 7, 1999
In addition, upon (a) approval by the Stock Option Committee of
the Board of Directors of Company, (b) the occurence of the
Effective Date, and (c) Employee's execution of the stock option
agreement referred to hereinafter in this Section 2.3, as a
special inducement to Employee, Company will grant to Employee
options to acquire 20,000 shares of Company's common stock on the
Nasdaq National Market at the closing price of the market on
September 12, 1996 ("9/96 Options"), with such Options to vest as
follows:
(i) 6,667 Options will vest on September 12, 1997
(ii) 6,667 Options will vest on September 12, 1998
(iii) 6,666 Options will vest on September 12, 1999
The Options will be subject to such additional terms and
conditions as may be set forth in LIVE's 1988 Stock Option and
Stock Appreciation Rights Plan, as amended (the "Option Plan"),
as well as the form of stock option agreement as may be adopted
by LIVE's Board of Directors from time to time pursuant to the
Plan.
2.4 Special Inducements. As a special inducement to
Employee to enter into this Agreement, during the Term, Company
agrees as follows:
2.4.1 During each year of the Term, Employee shall
be entitled to a vacation of three (3) weeks, without deduction
of salary. Such vacations shall be taken at such time or times
during the applicable year as may be determined by Employee
subject to Company's business needs. Employee shall be entitled
to take any unused portion of his paid vacation in any subsequent
year of the Term, subject to the Company's business needs and
policy and consistent with applicable laws ("Vacation Benefits").
Notwithstanding the foregoing, Employee shall at no time have
more than six (6) weeks of accrued vacation. Any additional
vacation period shall be determined by Company consistent with
the general customs and practices of the Company applicable to
its executives.
2.4.2 From and after the Effective Date and until
Employee becomes eligible for coverage under Company's group
health insurance plan, Company shall pay all COBRA payments
required to be made by Employee to his former employer to retain
health insurance coverage under such prior employer's group
health plan.
2.5 Additional Benefits. Without limiting any other
provision hereof, Employee shall be entitled to participate in
any profit-sharing, pension, health, vacation, insurance or other
plans, benefits or policies available to all executives of
Company of similar stature and seniority on the terms generally
applicable to such executives and will be entitled to
reimbursement of his reasonable and customary business expenses
incurred on behalf of Company or Company's Affiliates
("Additional Benefits"). Employee acknowledges that such
benefits can change from time to time without notice to Employee,
and Employee shall retain no residual rights in any superseded
benefit plan.
3. Termination
3.1 Termination by Company.
3.1.1 Employee Material Breach. Company shall have
the right, at its election, to terminate the Term, by written
notice to Employee to that effect, only for "good cause" defined
for this purpose to mean (I) material and repeated instances of
misconduct or habitual inability to perform the Services, or
violation of Company's published policies or procedures, (ii) a
single act so grievous as to constitute the equivalent of such
repeated instances (including, without limitation, theft,
misappropriation of Company's assets, or sexual harassment), (iii)
unauthorized disclosure of confidential information related to
customers, employees or general business strategies, or (iv) a
material breach of any covenant, condition, agreement or term of
this Agreement ("Employee's Material Breach") and only if Company
shall have given written notice to Employee specifying the
claimed cause or breach and, provided such breach is curable,
Employee fails to correct the claimed breach or fails to alter
the objectionable pattern of conduct specified in the applicable
written notice as soon as practical thereafter but no later than
thirty (30) days after receipt of the applicable notice or such
longer time as may be reasonably required by the nature of the
claimed breach. However, in no event shall a material breach of
the provisions of Section 1.3, 1.5 or 3.1.1(I), (ii) or (iii) be
subject to cure.
3.1.2 Effect of Termination by Company. Should the
Term be terminated by Company by reason of Employee's Material
Breach, Employee shall have no right to any further Fixed Annual
Compensation from and after termination, or to any Incentive
Compensation, Automobile Benefits, or Additional Benefits
accruing for the fiscal year of termination or thereafter.
3.2 Termination by Employee.
3.2.1 Company's Material Breach. Employee shall
have the right, at his election, to terminate the Term by written
notice to Company to that effect if Company shall have failed to
substantially perform a material condition or covenant of this
Agreement, or if Company shall terminate Employee's employment or
materially reduce Employee's job duties or responsibilities in
the absence of Employee's Material Breach ("Company's Material
Breach"); provided that, if such breach is curable, termination
for Company's Material Breach will not be effective until
Employee shall have given written notice specifying the claimed
breach and Company fails to correct the claimed breach within
thirty (30) days after the receipt of the applicable notice or
such longer time as may be reasonably required by the nature of
the claimed breach (but within ten (10) days, if the failure to
perform is a failure to pay monies when due under the terms of
this Agreement).
3.2.2 Effect of Termination by Employee. Subject
to the provisions of Section 3.4 below, should Employee terminate
the Term due to Company's Material Breach, Company shall pay to
Employee or provide Employee with:
(I) Employee's Fixed Annual Compensation for the
remainder of the Term, paid in equal installments
on Company's regular pay dates during the Term,
and
(ii) Health insurance for the remainder of the Term.
In addition, all Options shall vest on the date of termination.
Employee shall also receive such Incentive Compensation and
Vacation Benefits accrued through the date of termination. All
other benefits shall cease on the date of termination of
employment.
Except with regard to a termination of the Term by
reason of Employee's Death or Disability (as both terms are
defined in Section 3.3), should Employee terminate the Term other
than for Company's Material Breach, such termination shall be
treated as a termination by Company for Employee's Material
Breach.
3.3 Employee's Death or Disability.
3.3.1 Death. The Term shall immediately terminate
upon Employee's death as certified in accordance with the
provisions of California law ("Death").
3.3.2 Disability. In the event that during the
Term Employee becomes unable to perform the Services as a result
of his permanent or temporary, total or partial, physical or
mental disability (as defined in Company's disability insurance
policy, if any) ("Disability"):
3.3.2.1 the Fixed Annual Compensation otherwise
payable during the Disability Period (as herein defined) shall
nevertheless be payable on the terms set forth herein to Employee
as a disability benefit ("Disability Benefit");
3.3.2.2 any disability insurance proceeds
actually received by Employee during the Disability Period with
respect to such Disability shall reduce on a dollar-for-dollar
basis the Disability Benefit otherwise payable by Company during
the Disability Period pursuant to this Section 3; and
3.3.2.3 Company shall not have the right
(notwithstanding any other provision of this Agreement to the
contrary) to terminate the Term due to such Disability prior to
the expiration of the Disability Period.
As used herein, the term "Disability Period" shall have such
meaning as shall be defined in Company's disability insurance
policy in effect as of the date hereof, and if no such policy is
in effect it shall mean the period commencing on the first day of
the calendar month following the month during which such
Disability occurs and ending on the first to occur of the
following: (I) the expiration of the Term; (ii) if the Disability
is continuous throughout the six (6) consecutive months following
the month during which the Disability occurs, then the last day
of such sixth consecutive calendar month; and (iii) if the
Disability is intermittent and shall exist throughout each of any
twelve (12) calendar months following the month during which the
Disability occurs, then the last day of such twelfth calendar
month. Company shall have the right to terminate the Term at the
expiration of the Disability Period if and only if the Disability
of Employee is then continuing.
3.3.3 Effect of Death or Disability.
(a) Fixed Annual Compensation and Additional
Benefits: Should the Term be terminated in accordance with the
provisions of Sections 3.3.1 or 3.3.2 by reason of Employee's
Death or Disability, Employee or his estate (as the case may be)
shall have no right to any further Fixed Annual Compensation, any
Additional Benefits or any other sums or benefits accruing to
Employee hereunder; provided, however, that the sums identified
in Section 3.3.2 hereof shall be paid to Employee on the terms
set forth therein.
(b) Incentive Compensation and Options: Should
the Term be terminated in accordance with the provisions of
Sections 3.3.1 or 3.3.2 by reason of Employee's Death or
Disability, Employee or his estate (as the case may be) shall be
entitled to receive such Incentive Compensation that shall have
accrued during that portion of the fiscal year prior to such
Death or Disability. All Options shall vest on the date of
termination by reason of Employee's Death or Disability, and
Employee's estate shall be entitled to exercise all Options which
have vested on or prior to the date of termination by reason of
Employee's Death.
3.4 Mitigation. Employee agrees that if Employee furnishes
his services for other engagements or employment after
termination hereunder, the total compensation actually earned by
Employee together with any welfare or other benefits earned by
Employee shall reduce any amounts and benefits which Company
would otherwise be required to pay or provide to Employee.
Employee agrees that he shall give written notice to Company
(promptly after accepting employment or furnishing his services
after termination of his employment with Company) of any amounts
earned (or to be earned) by Employee and any benefits provided
(or to be provided) to Employee pursuant to his new employment
arrangement.
4. General
4.1 Applicable Law Controls. Nothing contained in this
Agreement shall be construed to require the commission of any act
contrary to law and wherever there is any conflict between any
provisions of this Agreement and any material statute, law,
ordinance or regulation contrary to which the parties have no
legal right to contract, then the latter shall prevail; provided,
however, that in any such event the provisions of this Agreement
so affected shall be curtailed and limited only to the extent
necessary to bring them within applicable legal requirements, and
provided further that if any obligation to pay the Fixed Annual
Compensation or any other amount due Employee hereunder is so
curtailed, then such compensation or amount shall be paid as soon
thereafter, either during or subsequent to the Term, as
permissible.
4.2 Waiver/Estoppel. Either party hereto may waive the
benefit of any term, condition or covenant in this Agreement or
any right or remedy at law or in equity to which either party may
be entitled but only by an instrument in writing signed by the
party to be charged. No estoppel may be raised against either
party except to the extent the other party relies on an
instrument in writing, signed by the party to be charged,
specifically reciting that the other party may rely thereon. The
parties' rights and remedies under and pursuant to this Agreement
or at law or in equity shall be cumulative and the exercise of
any rights or remedies under one provision hereof or rights or
remedies at law or in equity shall not be deemed an election of
remedies; and any waiver or forbearance of any breach of this
Agreement or remedy granted hereunder or at law or in equity
shall not be deemed a waiver of any preceding or succeeding
breach of the same or any other provision hereof or of the
opportunity to exercise such right or remedy or any other right
or remedy, whether or not similar, at any preceding or subsequent
time.
4.3 Notices. Any notice which Company is required or may
desire to give to Employee hereunder shall be in writing and may
be served by delivering it to Employee, or by sending it to
Employee by mail, telex or telegraph, at the address set forth on
page 1 hereof, or such substitute address as Employee may from
time to time designate by notice to Company. Any notice which
Employee is required or may desire to serve upon Company
hereunder shall be served in writing and may be served by
delivering it personally or by sending it by mail, telex or telegraph
to the address set forth on page 1 hereof, attention of the Chief
Executive Officer, or such other substitute address as Company
may from time to time designate by notice to Employee.
4.4 Governing Law. This Agreement shall be governed by,
construed and enforced and the legality and validity of each term
and condition shall be determined in accordance with the internal,
substantive laws of the State of California applicable to
agreements fully executed and performed entirely in California.
4.5 Captions. The section headings contained herein are
for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.
4.6 No Joint Venture. Nothing herein contained shall
constitute a partnership between or joint venture by the parties
hereto or appoint either party the agent of the other party.
Neither party shall hold itself out contrary to the terms of this
Section and, except as otherwise specifically provided herein,
neither party shall become liable for the representation, act or
omission of the other party. This Agreement is not for the
benefit of any third party who is not referred to herein and
shall not be deemed to give any right or remedy to any such third
party.
4.7 Modification/Entire Agreement. This Agreement may not
be altered, modified or amended except by an instrument in
writing signed by both of the parties hereto. No person, whether
or not an officer, agent, employee or representative of either
party, has made or has any authority to make for or on behalf of
that party any agreement, representation, warranty, statement,
promise, arrangement or understanding not expressly set forth in
this Agreement or in any other document executed by the parties
concurrently herewith ("Parol Agreements"). This Agreement and
all other documents executed by the parties concurrently herewith
constitute the entire agreement between the parties and supersede
all express or implied, prior or concurrent, Parol Agreements and
prior written agreements with respect to the subject matter
hereof. The parties acknowledge that in entering into this
Agreement, they have not relied and will not in any way rely upon
any Parol Agreements.
5. Arbitration Of All Disputes
Employee and the Company each acknowledge and agree that,
any controversy or claim arising out of or relating to this Employment
Agreement shall be settled by final and binding arbitration in accordance
with the National Rules for the Resolution of Employment Disputes of
The American Arbitration Association ( AAA ) to the extent that such
Rules do not conflict with any provisions of this Employment Agreement.
Any arbitration proceeding hereunder must be instituted within one year
after the controversy of claim arose. Failure to institute an arbitration
proceeding within such period shall constitute an absolute bar to the
institution of any proceedings respecting such controversy or claim, and
a waiver thereof. The arbitrator shall interpret the Employment Agreement
in accordance with the laws of California. Any award, order of judgment
pursuant to such arbitration shall be deemed final and binding and may be
entered and enforced in any state or federal court of competent jurisdiction.
Each party agrees to submit to the jurisdiction of any such court for purposes
of the enforcement of any such award, order of judgment. All costs of the
arbitration shall be borne equally by the parties.
* * * *
Please confirm your agreement to the foregoing by
signing below where indicated.
Dated as of August 15, 1996 Very truly yours,
LIVE FILM AND MEDIAWORKS INC.
a Delaware corporation
By: ____________________________
Xxxxx X. Xxxxxxx
Chief Executive Officer
and Chairman
AGREED AND ACCEPTED
this ___ day of August 1996
XXXX X. XXXXXX
