Exhibit (a)(2)
November 8, 1996
Xx. Xxxxxxxxxxx X. Xxxxxxx
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Dear Xx. Xxxxxxx:
This letter will constitute the Employment Agreement ("Agreement") between
The Xxxx-XX Corporation, ("the Company"), and Xxxxxxxxxxx X. Xxxxxxx, "you".
In consideration of the mutual covenants and agreements contained herein, and
other good and valuable conditions, the Company and you agree as follows:
1. EMPLOYMENT AND SERVICES: The Company hereby agrees to employ you as
President and a rerecording sound mixer of Xxxx-XX Studios (a
subsidiary of the Company), and as Senior Vice President of the
Company, and you agree, commencing January 1, 1997 ("the commencement
date"), to perform your exclusive and full-time services in those
capacities for the Company upon the terms and conditions herein set
forth. In addition and/or alternatively, you shall perform such
services as requested from time to time by the President of The Xxxx-
XX Corporation which are attendant to the position of President and
Rerecording Sound Mixer of Xxxx-XX Studios, and Senior Vice President
of the Company.
2. TERM: The term of this Agreement shall be for a period of four (4)
years, commencing January 1, 1997 and terminating on December 31, 2000
subject to Section 6.
3. COMPENSATION: As full compensation for all your services rendered
under this Agreement, you will receive the applicable union rate (Y-1
daily supervisor's rate) plus 300%. For mixing services in excess of
9 hours per day or 45 hours per week or on weekends, you will receive
overtime premiums at the applicable Y-1 daily overtime rate plus 300%.
The compensation shall be paid on the Company's regular paydays during
the Term subject to the usual and required employee payroll deductions
and withholding for federal, state and local taxes, social security
and similar payments.
a. ADDITIONAL COMPENSATION: See Schedule A attached.
4. SPECIAL CONDITIONS: Special Conditions under this contract, which are
not specifically included herein, are covered in Schedule A attached,
which Schedule shall be considered a part of this Agreement.
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Employment Agreement
November 8, 1996
Page Two
5. BENEFITS: During the Term of this Agreement, you shall be entitled to
such fringe benefits as are made available to all eligible employees
including the following:
a. BUSINESS EXPENSES: The Company shall reimburse you for your
reasonable and necessary business expenses in accordance with its
then prevailing policy (which shall include appropriate
itemization and substantiation of expenses incurred).
b. VACATION: Vacation time shall accrue and you shall be entitled
to three (3) weeks paid vacation each year which can be taken at
mutually agreed upon times.
c. GROUP INSURANCE & PENSION: If eligible, you shall be entitled to
participate in any prevailing Motion Picture Health & Welfare and
Pension plans under the same terms and conditions as all eligible
employees (except that solely for purposes of determining pension
contributions your mixing compensation will be calculated on the
basis of 56 hours per week, excluding vacation periods); and
d. OTHER BENEFITS: If eligible, you shall be entitled to
participate in any other fringe benefits which the Company may
provide from time to time for all eligible employees.
6. TERMINATION: The Company may terminate your services in the event of:
a. DEATH: In the event of your death.
b. DISABILITY: Your having suffered a disability, total or partial,
mental or physical, by reason of which you have not performed
your obligations hereunder for six (6) consecutive months or
shorter periods aggregating more than six (6) months in any
twelve (12) month period; or
c. FOR CAUSE: (1) If you engage in a wilful act which constitutes a
fraud or a felony, and which results in an injury to the Company
or its reputation, (2) If you are convicted of or plead guilty to
a felony, (3) Your breach of any of the terms or provisions of
this Agreement, and/or (4) Your failure to perform your duties
and obligations under this Agreement in a satisfactory manner and
you have received prior notification that your performance is not
satisfactory.
7. COMPENSATION UPON TERMINATION: If your employment is terminated by
the Company pursuant to Section 6 above, you shall be entitled to
receive compensation through the date of such termination and shall
receive any incurred but not reimbursed business expenses and accrued
and unused vacation time as of the date of termination.
Xx. Xxxxxxxxxxx X. Xxxxxxx
Employment Agreement
November 8, 1996
Page Three
8. INTELLECTUAL PROPERTY: For purposes of this Agreement, "Included
Inventions" shall mean all patents, developments, designs, creations,
improvements, original works of authorship, copyrights, formulas,
processes, know how, techniques and/or inventions made or conceived or
reduced to practice during the Term of this Agreement or reduced to
practice within 12 months after termination of this Agreement, that
relate in any way to computer graphics, visual effects, audio and
visual production and post production, film, television, cable, CD
ROM, multi-media, or any other business now or hereafter conducted by
the Company or its affiliates. Excluded from the foregoing
definitions of "Included Inventions" are any inventions developed
entirely on your own time without using the Company's equipment,
supplies, facilities or Proprietary Information (as hereafter
defined).
a. DISCLOSURE AND OWNERSHIP: You agree to promptly disclose all
"Included Inventions" to the Company. All "Included Inventions"
shall be the sole and exclusive property of the Company and you
hereby assign to the Company all of your right, title and
interest in such "Included Inventions".
b. FURTHER ASSURANCES: You will assist the Company in applying for
and obtaining patents, copyrights and/or other protection for the
"Included Inventions" (during the Term of this Agreement and
thereafter) provided that you will be reasonably compensated if
the Company requests your assistance after termination of this
Agreement. You will sign such additional documents as the
Company may request in order to confirm the Company's rights to
"Included Inventions". In the event the Company is unable to
obtain your signature on any document needed to apply for, obtain
or enforce any intellectual property rights relating to any
"Included Inventions" for any reason whatsoever (including
without limitation your refusal, unavailability or incapacity),
you hereby irrevocably appoint Xxxxx X. Xxxxxxxxx or Xxxxx X.
Xxxxx, or either of them acting alone, with full power of
substitution, as your agent and attorney in fact to act for and
on your behalf in connection with the execution and filing of any
such document with the same legal force and effect as if such
acts were performed by you.
9. BUSINESS CODE OF CONDUCT: Attached hereto and made a part of this
Agreement is the Company's Business Code of Conduct. You confirm that
you have read, understand and will comply with the terms of such and
any reasonable amendments which you receive thereto.
10. PROPRIETARY INFORMATION: In the course of your service to the Company
you may have access to confidential specifications, know-how,
strategic or technical data, programs, computer software, processes,
business documents or information, marketing data, confidential
customer lists and sources of supply and trade secrets all of which
are
Xx. Xxxxxxxxxxx X. Xxxxxxx
Employment Agreement
November 8, 1996
Page Four
confidential and may be proprietary. For purposes of this Agreement,
"Proprietary Information" shall include all items enumerated in the
preceding sentence to which you have access, whether conceived or
developed by third parties, by you alone and/or with others, during
normal working hours or thereafter. Proprietary Information shall not
include information which is in the public domain unless as a
consequence of unauthorized disclosure.
a. NONDISCLOSURE: During the Term of your employment and for a
period of three (3) years thereafter, you will not use
Proprietary Information in a manner adverse to the Company's
interests nor disclose Proprietary Information, directly or
indirectly, to any person other than the Company or authorized
employees thereof at the time of such disclosure, or as otherwise
specifically instructed by the Company, and in each case only to
the extent reasonably required.
b. AGREEMENTS WITH THIRD PARTIES: You will individually observe the
confidentiality provisions of any Nondisclosure or similar
agreement entered into by the Company and known to you with
respect to information received by the Company which may be
proprietary to third parties.
c. RETURN OF INFORMATION: Upon termination of your employment, you
shall deliver to the Company all embodiments of Proprietary
Information (including without limitation notes, letters,
documents, computer files and other records) which are then in
your possession or control and shall not retain any copies of
summaries thereof.
11. PROTECTIVE COVENANTS: You acknowledge that you are a key employee
whose specialized skills, abilities and contacts are important to the
success of the Company, and agree that you will faithfully and
strictly adhere to the following covenants:
a. NONSOLICITATION OF EMPLOYEES: In the event you voluntarily
terminate your employment during the Term, or your employment is
terminated by the Company for cause, as that term is defined in
Section 6, subsection c, of this Agreement, you covenant and
agree that you shall not, within one (1) year after the date of
such termination of employment, divert, solicit, recruit or hire,
or attempt to divert, solicit, recruit or hire, directly or by
assisting others, any other employee of the Company or any person
who is an employee of the Company, whether or not such employee
is a full-time employee or a temporary employee of the Company
and regardless of whether such employment is pursuant to written
agreement, for a determined period, or at will.
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Employment Agreement
November 8, 1996
Page Five
12. REMEDIES: It is specifically understood and agreed that any breach of
the provisions of Section 10 of this Agreement is likely to result in
irreparable injury to the Company and that the remedy at law alone
will be an inadequate remedy for such breach, and that in addition to
any other remedy it may have, the Company shall be entitled to enforce
the specific performance of this Agreement by you and seek both
temporary and permanent injunctive relief (to the extent permitted by
law) without the necessity of proving actual damages.
13. ARBITRATION. Any controversy or claim arising out of or relating to
this Agreement or breach hereof, other than matters pertaining to
injunctive relief including, without limitation, temporary restraining
orders, preliminary injunctions, and permanent injunctions, shall be
settled in the following manner:
a. NONBINDING MEDIATION: Upon written request of either party, a
retired judge of the California Superior Court, Court of Appeals
or Supreme Court shall be mutually agreed upon by the parties to
engage in nonbinding mediation of the dispute. In the event said
nonbinding mediation does not result in a resolution of the
dispute, the parties will proceed to final and binding
arbitration as set forth in subsection b below.
b. BINDING ARBITRATION: In the event the parties have been unable
to resolve the dispute after nonbinding mediation, they shall
select a retired judge of the California Superior Court, Court of
Appeals or Supreme Court to decide the matter. Any judgment
issued by the arbitrator shall be final and binding.
The parties hereby agree that the arbitrator shall not have
jurisdiction to award other than monetary damages. In the event
the arbitration issue involves a dispute under Section 6
Termination, the arbitrator's authority to award damages is
limited to the provisions of Section 7 Compensation Upon
Termination.
The parties wish to preserve all discovery rights and
specifically incorporate the provisions of California Code of
Civil Procedure, Sec. 1283.05 into this Agreement by reference.
Each party shall bear its own costs and attorney's fees. The
arbitrator's fee shall be divided equally between the parties.
Such arbitration shall take place in Los Angeles, California
unless otherwise agreed to, in writing, by the parties.
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Employment Agreement
November 8, 1996
Page Six
14. ATTORNEYS' FEES: Except as provided in Section 13 (Arbitration), if a
party to this Agreement (or any successor in interest to either party)
based on the performance, breach or interpretation of this Agreement,
each of the parties shall pay for their own respective costs and
attorney's fees regardless of the outcome of any litigation or
proceeding.
15. NOTICES: All notices, requests, consents and other communications
required or permitted to be given hereunder shall be written and shall
be deemed to have been duly given if delivered personally or sent by
prepaid telegram, or mailed first-class, postage prepaid as follows:
You Xxxxxxxxxxx X. Xxxxxxx
000 X. Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
The Company The Xxxx-XX Corporation
Attn: Xxxx Xxxx
000 X. Xxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
or at such other addresses as either party may specify by written
notice to the other.
16. GENERAL:
a. ENTIRE AGREEMENT AND MODIFICATION: This Agreement sets forth the
entire agreement and understanding of the parties hereto, and,
effective on the commencement date hereof, supersedes all prior
agreements, arrangements, and understandings. No representation,
promise or inducement has been made by either party that is not
embodied in this Agreement. This Agreement may only be modified
by an agreement in writing executed by both parties hereto.
b. SUCCESSORS: This Agreement shall be binding upon, and shall
inure to the benefit of the successors and assigns of the
Company.
c. GOVERNING LAW: This Agreement shall be construed under and
governed by the laws of the State of California.
d. SECTION HEADINGS: The section headings contained herein are for
reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.
Xx. Xxxxxxxxxxx X. Xxxxxxx
Employment Agreement
November 8, 1996
Page Seven
e. SEVERABILITY: In the event that any provisions, or portions
thereof, of this Agreement are held to be unenforceable or
invalid by any court of competent jurisdiction, the validity and
enforceability of the remaining provisions or portions thereof
shall not be affected thereby.
If this sets forth our agreement, please sign and return a copy of this letter
Very truly yours,
THE XXXX-XX CORPORATION
By /s/ Xxxxx X. Xxxxxxxxx
------------------------------------
Xxxxx X. Xxxxxxxxx
President & CEO
AGREED:
/s/ Xxxxxxxxxxx X. Xxxxxxx Date 2-15-97
------------------------------- -------------------
Xxxxxxxxxxx X. Xxxxxxx
Attachment: Schedule A
Business Code of Conduct
SCHEDULE A
SPECIAL CONDITIONS
Section 3a of Employment Agreement dated November 8, 1996:
ADDITIONAL COMPENSATION
MANAGEMENT SERVICES: For Management and administrative services, you will
receive the sum of One Hundred Thousand Dollars ($100,000.00) per annum,
which you may elect to receive in cash, weekly or biannually at your option,
as deferred compensation or in Xxxx-XX Class A Common Stock, or in any
combination of the foregoing as determined by you on or prior to January 1 of
each year by written notice to the Company. In the event no notice is given,
you will be deemed to have elected to receive cash.
AUTOMOBILE ALLOWANCE: You will receive an annual Automobile Allowance of
Five Thousand Dollars, ($5,000.00), payable weekly on the Company's regular
paydays during the Term subject to the usual and required employee payroll
deductions and withholding for federal, state and local taxes, social
security and similar payments.
AGREED: Date 2-15-97
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By: /s/ Xxxxxxxxxxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxxxxxxx
-------------------------------- ----------------------------
Xxxxxxxxxxx X. Xxxxxxx Xxxxx X. Xxxxxxxxx
President & CEO
