AMENDMENT
TO
RESTATED EMPLOYMENT AGREEMENT
This Amendment to Restated Employment Agreement (the "Amendment") is dated
as of January 1, 1997 by and between Cinergi Pictures Entertainment Inc., a
Delaware corporation ("Company"), and Xxxxxx Xxxxxxxxx (the "Executive") and is
made with reference to that certain Restated Employment Agreement between the
Company (then known as "Cinergi Productions Inc.") and Executive dated as of
January 1, 1994, as amended by that certain letter agreement, dated as of
December 16, 1994, by and between Company and Executive (as so amended, the
"Employment Agreement"). Capitalized terms used herein without definition shall
have the respective meanings assigned such terms in the Employment Agreement.
WHEREAS, Executive has been Chief Operating Officer, Executive Vice
President and Chief Financial Officer of the Company since March 1990; and
WHEREAS, during all of the period commencing from the above date, Executive
has been a loyal and dedicated officer and employee of the Company, devoting his
time and energies to the success of the Company; and
WHEREAS, Executive and the Company formalized their relationship by
entering into the Employment Agreement which expires December 31, 1997; and
WHEREAS, the Company is conducting a strategic review of the Company's
business strategy and goals, which includes discussions with third parties
regarding the sale of a partial interest in the Company or the entire Company;
and
WHEREAS, Executive possesses special skills, knowledge, abilities and
experience unique to the Company's business and possesses an intimate knowledge
of the operations of the Company which the Company deems valuable and desires to
maintain; and
WHEREAS, the Board of Directors of the Company recognizes that the
expiration of the Employment Agreement at the end of 1997, as well as the
possibility of a sale of a partial interest in the Company or the entire
Company, may raise uncertainty and questions for Executive, and may result in
the distraction of Executive to the detriment of the Company and its
stockholders; and
WHEREAS, the Board of Directors of the Company has determined that it is in
the best interests of the Company to xxxxxx and encourage the continued
attention and dedication of Executive to his assigned duties, without
distraction, and to secure for the Company the continued services of Executive
for an additional period of time; and
WHEREAS, the Company and Executive have mutually agreed to extend
Executive's term of employment to secure to the Company the continued valuable
services of Executive, all on the terms and conditions hereinafter set forth.
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NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto hereby agree to amend the Employment
Agreement as follows:
1. AMENDMENT TO SECTION 1.4.1 OF THE EMPLOYMENT AGREEMENT. Section 1.4.1
of the Employment Agreement is hereby deleted in its entirety and replaced as
follows:
1.4.1 The Term of this Agreement shall commence and this
Agreement shall be effective as of the date first written
above and shall end on December 31, 1999 unless extended or
sooner terminated in accordance with the provisions of this
Agreement (the "Term").
2. AMENDMENT TO SECTION 2.1 OF THE EMPLOYMENT AGREEMENT. Section 2.1 of
the Employment Agreement is hereby deleted in its entirety and replaced as
follows:
2.1 FIXED ANNUAL COMPENSATION. Executive shall receive
Fixed Annual Compensation as follows: Four Hundred Sixty-
Five Thousand Dollars ($465,000) for the period from the
effective date hereof and ending December 31, 1994; Five
Hundred Eight Thousand Dollars ($508,000) for a period of
January 1, 1995 through December 31, 1995; Five Hundred
Thirty-One Thousand Dollars ($531,000) for the period of
January 1, 1996 through December 31, 1996; Five Hundred
Fifty-Six Thousand Dollars ($556,000) for the period of
January 1, 1997 through December 31, 1997; Five Hundred
Eighty-Four Thousand Dollars ($584,000) for the period of
January 1, 1998 through December 31, 1998; and Six Hundred
Thirteen Thousand Dollars ($613,000) for the period of
January 1, 1999 through December 31, 1999. Executive's
Fixed Annual Compensation shall be payable in equal
installments on Company's regular pay dates following
commencement of the Term.
3. AMENDMENT TO SECTION 3.4 OF THE EMPLOYMENT AGREEMENT. Section 3.4 of
the Employment Agreement is hereby deleted in its entirety and replaced as
follows:
3.4 NO MITIGATION. Executive shall not be required to
mitigate the amount of any payment or benefit to Executive
provided for in Section 3.2.2 due to Company's Material
Breach (each, a "Company Breach Benefit") by seeking other
employment or otherwise, nor shall the amount of any Company
Breach Benefit be reduced by any compensation earned by
Executive as the result of employment by another employer or
by retirement benefits after the date of termination. The
Company shall not be entitled to any rights to offset,
mitigate or otherwise reduce the Company Breach Benefits
owing to Executive by virtue of Section 3.2.2 with respect
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to any rights, claims or damages that the Company or its affiliates
may have against Executive, including, without limitation, any claims
by reason of any breach or alleged breach of this Agreement by
Executive.
4. SIGNING BONUS. In order to induce Executive to enter into this
Amendment and extend the Term of the Employment Agreement for two years, the
Company hereby agrees to pay to Executive a signing bonus of $600,000 (the
"Signing Bonus") immediately upon the signing of this Amendment. Executive and
the Company agree that Executive shall use a portion of the Signing Bonus to
immediately repay in full the Executive Loan and the Second Executive Loan.
Upon payment of such loans, the Company hereby agrees to indicate in its
accounting records that such loans have been repaid in full.
5. MISCELLANEOUS.
5.1 Executive has been advised of the desirability for him to obtain
legal counsel to advise him of his rights under this Amendment. Executive
acknowledges that he has read and understands the terms of this Amendment and
that he enters into this Amendment knowingly and intelligently of his own free
will, free of any undue influence.
5.2 This Amendment shall be effective as of the date set forth above.
This Amendment may be executed in one or more counterparts, each of which shall
be deemed an original, and it shall not be necessary in making proof of the
Amendment to produce or account for more than one such counterpart.
5.3 On and after the date hereof, each reference in the Employment
Agreement to "this Agreement," "hereunder," "hereof," "herein" or words of like
import referring to the Employment Agreement shall mean and be a reference to
the Employment Agreement as amended by this Amendment.
5.4 It is hereby agreed that, except as specifically provided herein,
this Amendment does not in any way affect or impair the terms and conditions of
the Employment Agreement, and all terms and conditions of the Employment
Agreement are to remain in full force and effect unless otherwise specifically
amended, waived or changed pursuant to the terms and conditions of this
Amendment.
5.5 Subject to Section 4.5 of the Employment Agreement, this
Amendment 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.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as
of the date first written above.
"Company"
CINERGI PICTURES ENTERTAINMENT INC.
By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
Title: Chief Executive Officer
"Executive"
/s/ Xxxxxx Xxxxxxxxx
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XXXXXX XXXXXXXXX
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