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Exhibit 10.73
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of August 26, 1997, by and between Video
Services Corporation, a Delaware corporation (formerly known as International
Post Limited), with its principal office at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (the "Company"), and Xxxxxx X. Xxxx with an address at 0 Xxxxxxxx Xxxxx,
Xxxxxxx Xxxx, Xxx Xxxxxx 00000 (the "Employee").
INTRODUCTION
The parties hereto desire to provide for the employment of the
Employee with the Company. In order to accomplish such purpose, and in
consideration of the terms, covenants and conditions hereinafter set forth, the
parties hereby enter into this employment agreement.
ARTICLE I
EMPLOYMENT; TERM; DUTIES
1.01 Employment. Upon the terms and conditions hereinafter set
forth, the Company hereby employs the Employee, and the Employee hereby accepts
employment, as Vice President of the Company.
1.02 Term. Unless sooner terminated as provided in Article IV
hereof, the Employee's employment hereunder shall be for a term commencing on
the date hereof and ending on the later of (i) the close of business on the
third anniversary of the date hereof and (ii) the date which is twelve months
after either party hereto gives written notice to the other that it desires to
terminate this Agreement. The actual term of employment hereunder, giving effect
to any early termination of employment under Article IV hereof, is referred to
as the "Term".
1.03 Duties. During the Term, the Employee shall perform such
executive duties for the Company and for its subsidiaries, consistent with his
position hereunder, as may be assigned to him from time to time by the President
or Chief Executive Officer of the Company. The Employee shall perform his duties
hereunder on a full time basis, provided, however that he shall not be
prohibited from engaging in: (i) the activities specified on Schedule B hereto;
(ii) volunteer or charitable activities; or (iii) management or ownership of
passive
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investments, so long as they do not interfere with the foregoing obligations.
1.04 Exclusive Agreement. The Employee represents and warrants
to the Company that he is not a party to any agreement or arrangement, whether
written or oral, in effect which would prevent the Employee from rendering
service to the Company during the Term.
ARTICLE II
COMPENSATION
2.01 Base Salary. For all services rendered by the Employee
hereunder and all covenants and conditions undertaken by him pursuant to this
Agreement, the Company shall pay the Employee an annual base salary ("Base
Salary") during the Term or the Scheduled Term (as defined in Section 4.02), as
the case may be, in equal bi-weekly installments, of $175,000 per year. The Base
Salary payable to the Employee hereunder shall be reviewed annually, and may be
increased but not decreased, by the Compensation Committee of the Board of
Directors of the Company. In the event of any such increase, the salary so
determined shall thereafter constitute the Base Salary. In addition, the
Compensation Committee of the Board of Directors of the Company shall consider,
on an annual basis, the payment of a discretionary bonus by the Company to the
Employee in addition to the Incentive Compensation referred to in Section 2.02
hereof.
If the first or last month of the Term or the Scheduled Term,
as the case may be, is not a full calendar month, then any calculation of Base
Salary for such period shall be prorated for the number of days employed in such
months.
2.02 Incentive Compensation. Promptly following the date
hereof, the parties hereto shall negotiate and agree to a reasonable, equitable,
incentive compensation arrangement ("Incentive Compensation") to apply during
the Term.
2.03 Deductions. The Company shall deduct from the
compensation described in Sections 2.01 and 2.02 any Federal, state or city
withholding taxes, social security contributions and any other amounts which may
be required to be deducted or withheld by the Company pursuant to any Federal,
state or city laws, rules or regulations.
2.04 Disability Adjustments. Any compensation otherwise
payable to the Employee pursuant to Section 2.01 in respect of any period during
which the Employee is disabled (as contemplated in Section 4.03) shall be
reduced by any amounts
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paid to the Employee for loss of earnings or the like under any insurance plan
or policy the premiums for which are paid for in their entirety by the Company.
In addition, the Employee shall be entitled to participate in, and the Company
shall continue to maintain and pay for at its expense, upon the same terms, the
life insurance policies specified on Schedule A attached hereto and the
disability insurance policies currently provided to him by Video Services
Corporation.
ARTICLE III
BENEFITS; EXPENSES
3.01 Benefits. During the Term, the Employee shall be entitled
to participate in and receive such benefits, services, equipment, compensation
and incentive plans and group life, health, accident, disability and
hospitalization insurance plans, pension plans and retirement plans as the
Company may make available to its executive employees.
3.02 Expenses. The Company agrees that the Employee is
authorized to incur reasonable expenses in the performance of his duties
hereunder, and upon presentation of a reasonably itemized account thereof, the
Company shall promptly pay or reimburse the Employee for such reasonable
expenses so incurred by the Employee.
3.03 Vacations. During each full year of the Term, the
Employee shall be entitled to four (4) weeks of paid vacation to be taken at
times determined by the Employee which do not unreasonably interfere with the
performance of his duties hereunder, provided, that any such vacation time not
taken during any year shall be forfeited and that no single vacation shall
exceed two (2) consecutive weeks.
3.04 Domicile. During the Term, the Employee (except for
reasonable business travel required by the Company) shall conduct his activities
hereunder at a Company office located in the New York metropolitan area.
ARTICLE IV
TERMINATION; DEATH; DISABILITY
4.01 Termination of Employment With Cause. In addition to any
other remedies available to it at law, in equity or as set forth in this
Agreement, the Company shall have the right, upon written notice to the
Employee, to immediately terminate his employment hereunder if the Employee (a)
breaches
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in any material respect any material provision of this Agreement and such breach
is not remedied within thirty (30) days after written notice thereof from the
Board of Directors of the Company setting forth in reasonable detail the matters
constituting such breach; or (b) willfully fails or refuses in any material
respect to perform such duties as may be reasonably assigned to him, consistent
with his title and general area of responsibility, from time to time by the
Board of Directors of the Company and fails to cure such failure or refusal
within thirty (30) days after receipt of notice from the Board of Directors of
the Company stating with specificity the nature of such failure or refusal; or
(c) has been convicted of a felony; or (d) has committed any act of fraud,
misappropriation of funds or embezzlement in connection with his employment
hereunder ((a) through (d) above to mean "Cause", and termination as a result of
(a) through (d) above to mean "Termination With Cause"). The date of any
termination of employment under this Section 4.01 or under Section 4.02, 4.03 or
4.04 is referred to herein as the "Termination Date". In the event of a
Termination With Cause, the Company shall pay the Employee as follows:
(a) within ten (10) days following the Termination Date, any
accrued but unpaid Base Salary as of the Termination Date;
(b) within ten (10) days following the Termination Date, the
Employee's Base Salary on a daily basis (computed on a 365-day year) in effect
on the Termination Date, multiplied by the number of accrued and unused vacation
days at the Termination Date:
(c) within ten (10) days following the Termination Date, any
accrued but unpaid expenses incurred by the Employee as of the Termination Date
in accordance with Section 3.02 hereof;
(d) within ten (10) days following the Termination Date, any
accrued and unpaid benefits to which the Employee may be entitled pursuant to
Section 3.01 hereof;
(e) within ten (10) days after the date of the Company's
receipt of its year end financial statements for the year in which the
Termination Date occurs, an amount equal to (x) the amount of Incentive
Compensation, if any, that would have been payable to the Employee with respect
to the fiscal year during which the Termination Date occurred had the
Termination Date not occurred multiplied by (y) a fraction, the numerator of
which is the number of days in such fiscal year which expired prior to the
Termination Date and the denominator of which is 365;
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(f) within ten (10) days following the Termination
Date, any other accrued and unpaid compensation payable to the Employee as of
the Termination Date, the amount of which has already been calculated as of the
Termination Date in accordance with the terms hereof; and
(g) within ten (10) days following the date after
the Termination Date as of which it is calculated in accordance with the terms
hereof, any other accrued and unpaid compensation payable to the Employee as of
the Termination Date.
4.02 Termination of Employment Without Cause. Notwithstanding
any provision to the contrary herein, the Company may at any time upon written
notice to the Employee, in its sole and absolute discretion and for any or no
reason, terminate the employment of the Employee hereunder without Cause;
provided, that if such termination is not a Termination With Cause, the Company
shall pay the Employee as follows:
(a) within ten (10) days following the Termination
Date, any accrued but unpaid Base Salary as of the Termination Date;
(b) the Employee's Base Salary until the end of the
Scheduled Term (as hereinafter defined) as and when such Base Salary would have
been paid had the termination of employment not taken place;
(c) the Employee's Incentive Compensation until the
end of the Scheduled Term (if any would have been due and payable to him under
Section 2.02), as and when such Incentive Compensation would have been paid had
the termination of employment not taken place;
(d) within ten (10) days following the Termination
Date, a cash payment equal to the Employee's Base Salary on a daily basis
(computed on a 365-day year) in effect on the Termination Date, multiplied by
the number of accrued and unused vacation days at the Termination Date;
(e) within ten (10) days following the Termination
Date, any accrued but unpaid expenses incurred by the Employee as of the
Termination Date in accordance with Section 3.02 hereof;
(f) within ten (10) days following the Termination
Date, any accrued and unpaid benefits to which the Employee may be entitled
pursuant to Section 3.01 hereof;
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(g) within ten (10) days following the Termination
Date, any other accrued and unpaid compensation payable to the Employee as of
the Termination Date, the amount of which has already been calculated as of the
Termination Date in accordance with the terms hereof; and
(h) within ten (10) days following the date after
the Termination Date as of which it is calculated in accordance with the terms
hereof, any other accrued and unpaid compensation payable to the Employee as of
the Termination Date.
For purposes of this Agreement, "Scheduled Term" shall mean
(x) if the employment of the Employee is terminated under any provision of
Article IV (other than Section 4.01) prior to the close of business on the third
anniversary of the date hereof, the period ending at the close of business on
the third anniversary of the date hereof and (y) if the employment of the
Employee is terminated under any provision of Article IV (other than Section
4.01) on or after the close of business on the third anniversary of the date
hereof, the period ending at the close of business on the date which is twelve
months after the date on which the employment of the Employee is so terminated.
In the event that the Employee terminates his employment
following an uncured material breach of this Agreement by the Company, then such
termination by the Employee shall be deemed for all purposes (including, without
limitation, the Plan) to be a termination by the Company of the employment of
the Employee hereunder without Cause pursuant to this Section 4.02. The Company
shall have thirty (30) days following written notice by the Employee to the
Company of such breach, setting forth in reasonable detail the matters
constituting such breach, to cure such breach.
The Employee acknowledges that the payments referred to in
Section 4.01 and this Section 4.02 constitute the only payments which the
Employee shall be entitled to receive from the Company under this Agreement in
the event of any termination of his employment pursuant to Section 4.01 and this
Section 4.02, and that except for such payments the Company shall have no
further liability or obligation to him under this Agreement.
4.03 Death; Disability. The Employee's employment hereunder
shall terminate upon his death or, at the election of the Company by written
notice to the Employee, if the Employee becomes Disabled (as such term is
hereinafter defined). In the event of a termination of the Employee's employment
for death or Disability, the Company shall pay the Employee (or his legal
representatives, as the case may be), as follows:
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(a) within ten (10) days following death or such
notice, any accrued but unpaid Base Salary as of the Termination Date;
(b) the Employee's Base Salary until the expiration
of 12 months from the date of death or termination for Disability (the
"Extension Period"), such Base Salary to be paid as and when such Base Salary
would have been paid had the employment of the Employee continued through the
Extension Period;
(c) within ten (10) days after the next Financial
Statement Receipt Date to occur, an amount equal to (x) the amount of Incentive
Compensation, if any, that would have been payable to the Employee with respect
to the fiscal year during which the Termination Date occurred had the
Termination Date not occurred multiplied by (y) a fraction, the numerator of
which is the number of days in such fiscal year which expired prior to the
Termination Date and the denominator of which is 365;
(d) within ten (10) days following the Termination
Date, a cash payment equal to the Employee's Base Salary on a daily basis
(computed on a 365-day year) in effect on the Termination Date, multiplied by
the number of accrued and unused vacation days at the Termination Date;
(e) within ten (10) days following the Termination
Date, any accrued but unpaid expenses incurred by the Employee as of the
Termination Date in accordance with Section 3.02 hereof;
(f) within ten (10) days following the Termination
Date, any accrued and unpaid benefits to which the Employee may be entitled
pursuant to Section 3.01 hereof;
(g) within ten (10) days following the Termination
Date, any other accrued and unpaid compensation payable to the Employee as of
the Termination Date, the amount of which has already been calculated as of the
Termination Date in accordance with the terms hereof; and
(h) within ten (10) days following the date after
the Termination Date as of which it is calculated in accordance with the terms
hereof, any other accrued and unpaid compensation payable to the Employee as of
the Termination Date.
For the purposes of this Agreement, the Employee shall be
deemed to be "Disabled" or have a "Disability" if as a result of the occurrence
of mental or physical disability
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during the Term he has been unable to perform his duties hereunder for three (3)
consecutive months or ninety (90) days in any twelve (12) consecutive month
period, as determined in good faith by the Board of Directors of the Company.
The Employee acknowledges that the payments referred to in
this Section 4.03 constitute the only payments to which the Employee (or his
legal representatives, as the case may be) shall be entitled to receive from the
Company under this Agreement in the event of a termination of his employment for
death or Disability, and that except for such payments the Company shall have no
further liability or obligation to him (or his legal representatives, as the
case may be) under this Agreement.
4.04 Change of Control. The Employee may, at any time during
the six (6) month period following a Change of Control (as defined in the
International Post Limited 1993 Long Term Incentive Plan), by delivery of
written notice to the Company, terminate his employment hereunder in the event
that during such period the compensation, benefits, authority, responsibilities,
privileges, duties and/or status or title of the Employee are materially
diminished (individually or in the aggregate). Any such permitted termination by
the Employee shall be deemed to constitute a termination without Cause by the
Company under Section 4.02 hereof for all purposes.
ARTICLE V
INVENTIONS; NON-DISCLOSURE; NON-COMPETITION
5.01 Inventions. All processes, technologies and inventions
(collectively, "Inventions"), including new contributions, improvements,
discoveries, trademarks and trade names, conceived, developed, invented, made or
found by the Employee, alone or with others, during his employment by the
Company or within six months after the termination thereof, whether or not
patentable and whether or not conceived, developed, invented, made or found on
the Company's time or with the use of the Company's facilities or materials and
which relate to the post-production business, shall be the property of the
Company and shall be promptly and fully disclosed by the Employee to the
Company. The Employee shall perform all necessary acts (including, without
limitation, executing and delivering any confirmatory assignments, documents or
instruments requested by the Company) to vest title to any such Invention in the
Company and to enable the Company, at its expense, to secure and maintain
domestic and/or foreign patents or any other rights for such Inventions.
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5.02 Non-Disclosure. The Employee shall not, at any time
during the Term or thereafter, directly or indirectly, disclose or furnish to
any other person, firm or corporation except in the course of the proper
performance of his duties hereunder (a) any information relating to any process,
technique or procedure used by the Company: or (b) any information relating to
the operations or financial status of the Company (including, without
limitation, all financial data), which information is not specifically a matter
of public record; or (c) any information of a confidential nature obtained as a
result of his present or future relationship with the Company, which information
is not specifically a matter of public record; or (d) the name, address or other
information relating to any customer or supplier of the Company; or (e) any
other trade secrets of the Company, except that the Employee shall not be liable
under the terms of this Section 5.02 for disclosing or furnishing any of the
foregoing which (1) are or become generally available to the public other than
as a result of a disclosure in violation of this Agreement, or (2) are generally
known in any industry in which the Company is or may become involved or (3) is
required to be disclosed by the Employee pursuant to law or the order of a court
of competent jurisdiction, or other legal process or authority, it being
understood, however, that the Employee will provide the Company with prompt
notice of the requirement for such disclosure as soon as practical after the
Employee is notified thereof and prior to its disclosure thereof so as to enable
the Company to challenge the order compelling such disclosure if the Company so
desires. Promptly upon the expiration or termination of the Employee's
employment hereunder for any reason, the Employee shall surrender to the Company
all documents, drawings, work papers, lists, V memoranda, records and other data
(including all copies) constituting or pertaining in any way to any of the
foregoing information.
5.03 Non-Competition. The Employee agrees that during the
Non-Competition Term (as hereinafter defined) he will not in any manner,
directly or indirectly, except where specifically contemplated by the terms of
his employment or this Employment Agreement, (a) be employed by, engaged in or
participate in the ownership, management, operation or control of, or act in any
advisory or other capacity for, any Competing Entity which conducts its business
within the Territory (as the terms Competing Entity and Territory are
hereinafter defined); provided, however, that notwithstanding the foregoing, the
Employee may make solely passive investments in any Competing Entity the common
stock of which is "publicly held" and of which the Employee shall not own or
control, directly or indirectly, in the aggregate securities which constitute 5%
or more of the
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voting rights or equity ownership of such Competing Entity; or (b) solicit or
divert any business or any customer from the Company or assist any person, firm
or corporation in doing so or attempting to do so; or (c) cause or seek to cause
any person, firm or corporation to refrain from dealing or doing business with
the Company or assist any person, firm or corporation in doing so; or (d) hire
or seek to hire any person who at the time so hired, or within 12 months prior
to such date, was an employee of the Company on the date hereof or during such
Non-Competition Term or assist any person, firm or corporation in doing so or
attempting to do so; provided, however, that the foregoing shall not prohibit
the Employee from engaging in the activities and investments set forth on
Schedule B hereto both during and after the Term.
For purposes of this Section 5.03, (i) the term
"Non-Competition Term" shall mean (x) the Term of this Agreement plus two (2)
years, in the event of a termination of employment pursuant to Section 4.01 and
(y) the Scheduled Term (as long as the Company is in compliance with its
obligations under Article IV), in the event of a termination of employment
pursuant to any provision of Article IV other than Section 4.01; (ii) the term
"Competing Entity" shall mean any entity which presently or hereafter during the
Non-Competition Term engages in any business activity in which the Company or
its successor is engaged during the Non-Competition Term; and (iii) the term
"Territory" shall mean any greater metropolitan area in which the Company is
engaged in business while the Employee is employed by the Company or within six
months of the Termination Date.
5.04 Breach of Provisions. In the event that the Employee
shall breach any of the provisions of this Article V, or in the event that any
such breach is threatened by the Employee, in addition to and without limiting
or waiving any other remedies available to the Company at law or in equity, the
Company shall be entitled to immediate injunctive relief in any court, domestic
or foreign, having the capacity to grant such relief, to restrain any such
breach or threatened breach and to enforce the provisions of this Article V. The
Employee acknowledges and agrees that there is no adequate remedy at law for any
such breach or threatened breach and, in the event that any action or proceeding
is brought seeking injunctive relief, the Employee shall not use as a defense
thereto that there is an adequate remedy at law.
5.05 Reasonable Restrictions. The parties acknowledge that (a)
the agreements in this Article V are essential to protect the business and
goodwill of the Company, and (b) the foregoing restrictions are under all of the
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circumstances reasonable and necessary for the protection of the Company and its
business.
5.06 Definitions. For purposes of this Agreement, the term
"Company" shall be deemed to include any subsidiary of the Company.
ARTICLE VI
MISCELLANEOUS
6.01 Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective legal
representatives, heirs, distributees and successors; provided, that the rights
and obligations of the Employee under this Agreement shall not be assignable by
him.
6.02 Notices. All notices and other communications hereunder
and all legal process in regard hereto shall be validly given, made or served if
in writing, when delivered personally (by courier service or otherwise), or when
actually received when mailed by first-class certified or registered United
States mail, postage-prepaid and return receipt requested, to the address of the
party to receive such notice or other communication set forth below, or at such
other address as any party hereto may from time to time advise the other party
pursuant to this Section:
If to the Company:
Video Services Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chairman of the Board of Directors
If to the Employee:
Xxxxxx X. Xxxx
0 Xxxxxxxx Xxxxx
Xxxxxxx Xxxx, Xxx Xxxxxx 00000
6.03 Severability. If any provision of this Agreement, or
portion thereof, shall be held invalid or unenforceable by a court of competent
jurisdiction, such invalidity or unenforceability shall attach only to such
provision or portion thereof, and shall not in any manner affect or render
invalid or unenforceable any other provision of this Agreement or portion
thereof, and this Agreement shall be carried out as if any such invalid or
unenforceable provision or portion
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thereof were not contained herein. In addition, any such invalid or
unenforceable provision or portion thereof shall be deemed, without further
action on the part of the parties hereto, modified, amended or limited to the
extent necessary to render the same valid and enforceable.
6.04 Waiver. No waiver by a party hereto of a breach or
default hereunder by the other party shall be considered valid, unless in
writing signed by such first party, and no such waiver shall be deemed a waiver
of any subsequent breach or default of the same or any other nature.
6.05 Entire Agreement. This Agreement sets forth the entire
agreement between the parties with respect to the subject matter hereof, and
supersedes any and all prior agreements between the Company and the Employee,
whether written or oral, relating to any or all matters covered by and contained
or otherwise dealt with in this Agreement. No representation, warranty,
undertaking or covenant is made by either party hereto except as provided herein
and any representations, warranties, undertakings or covenants not set forth
herein are specifically disclaimed. This Agreement does not constitute a
commitment of the Company with regard to the Employee's employment, express or
implied, other than to the extent expressly provided for herein.
6.06 Amendment. No modification, change or amendment of this
Agreement or any of its provisions shall be valid, unless in writing and signed
by the party against whom such claimed modification, change or amendment is
sought to be enforced.
6.07 Authority. The parties each represent and warrant that
they have the power, authority and right to enter into this Agreement and to
carry out and perform the terms, covenants and conditions hereof.
6.08 Titles. The titles of the Articles and Sections of this
Agreement are inserted merely for convenience and ease of reference and shall
not affect or modify the meaning of any of the terms, covenants or conditions of
this Agreement.
6.09 Applicable Law. This Agreement, and all of the rights and
obligations of the parties in connection with the employment relationship
established hereby, shall be governed by and construed in accordance with the
internal laws of the State of New York without giving effect to principles
relating to conflicts of law.
6.10 Directors' and Officers' Liability Coverage. The Company
will provide the Employee with appropriate directors
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and officers liability insurance coverage throughout the Term. The Employee
shall be entitled to indemnification and advance of expenses by the Company to
the fullest extent available under Delaware law.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
VIDEO SERVICES CORPORATION
By:/s/ Xxxxxxxxxxx Xxxxxxxxx
Name:
Title:
/s/ Xxxxxx X. Xxxx
Xxxxxx X. Xxxx
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SCHEDULE A
Life Insurance Policies
Policy Number Issue Date
------------- ----------
9741383 4/19/94
6196938 4/1/80
9756296 7/11/94
All of the above life insurance policies are with Massachusetts Mutual Life
Insurance Company.
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SCHEDULE B
The direct or indirect ownership and disposition of investments in, and
the exercise, as a stockholder, of the rights of a stockholder with respect to:
Cassette Dub, Inc., a New Jersey corporation, VSC Post Production, Inc., a New
York corporation, Xxxxxx Audio/Video Corporation, a Delaware corporation, Nova
Manufacturing, Inc., a New Jersey corporation, Video Dub, Inc., a New Jersey
corporation, Videotape Distributors, Inc., a New Jersey corporation, VSC
Communications, Inc., a New Jersey corporation and E-Magine, a New York limited
liability company.
