EXHIBIT 10.5
EMPLOYMENT AGREEMENT
BY AND BETWEEN
FOUR MEDIA COMPANY,
A DELAWARE CORPORATION
AND
XXXXXXX XXXXXXX
DATED AS OF MARCH 10th, 1997
----
TABLE OF CONTENTS
PAGE(S)
-------
INTRODUCTION.................................................. 1
ARTICLE I - EMPLOYMENT; TERM; DUTIES.......................... 1
1.1 Employment................................... 1
1.2 Term......................................... 1
1.3 Duties....................................... 1
1.4 Reporting.................................... 2
1.5 Exclusive Agreement.......................... 2
ARTICLE II - COMPENSATION..................................... 2
2.1 Compensation................................. 2
2.2 Base Salary.................................. 2
2.3 Bonus........................................ 2
2.4 Additional Compensation...................... 2
2.5 Deductions................................... 3
2.6 Disability Adjustment........................ 3
ARTICLE III - BENEFITS; EXPENSES.............................. 3
3.1 Benefits..................................... 3
3.2 1997 Stock Option Plan....................... 3
3.3 Expenses..................................... 3
3.4 Vacation..................................... 4
ARTICLE IV - TERMINATION; DEATH; DISABILITY................... 4
4.1 Termination of Employment With Cause......... 4
4.2 Termination of Employment Without Cause...... 4
4.3 Death; Disability............................ 5
4.4 Continued Compliance......................... 6
i
TABLE OF CONTENTS
(CONTINUED)
ARTICLE V - OWNERSHIP OF PROCEEDS OF EMPLOYMENT;
NON-DISCLOSURE; NON-COMPETITION................. 7
5.1 Ownership of Proceeds of Employment......... 7
5.2 Non-Disclosure of Confidential Information.. 7
5.3 Non-Competition............................. 7
5.4 Non-Solicitation............................ 8
5.5 Breach of Provisions........................ 8
5.6 Reasonable Restrictions..................... 9
5.7 Definition.................................. 9
ARTICLE VI - MISCELLANEOUS.................................. 9
6.1 Binding Effect.............................. 9
6.2 Notices..................................... 9
6.3 Severability................................ 10
6.4 Confidentiality; Press Releases............. 10
6.5 Arbitration................................. 10
6.6 Attorneys' Fees............................. 11
6.7 Waiver...................................... 11
6.8 Controlling Nature of Agreement............. 11
6.9 Entire Agreement............................ 11
6.10 Amendment................................... 11
6.11 Authority................................... 12
6.12 Applicable Law.............................. 12
6.13 Counterparts................................ 12
ii
EMPLOYMENT AGREEMENT
--------------------
This Agreement, dated as of March 10th, 1997, is entered into by and
----
between Four Media Company, a Delaware corporation (the "Company"), and Xxxxxxx
Xxxxxxx ("Executive").
INTRODUCTION
------------
The Company and its operating subsidiaries ("Affiliates") are engaged in
the business of providing technical and creative services to the entertainment
industry. The Company desires to employ Executive, and Executive desires to
accept such employment, under the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
---------
EMPLOYMENT; TERM; DUTIES
------------------------
1.1 Employment. Upon the terms and conditions hereinafter set forth, the
----------
Company hereby employs Executive, and Executive hereby accepts employment, as
Vice President and General Manager - Xxxxxxxx Video Company, a Four Media
Company.
1.2 Term. Subject to Section 4.1, Executive's employment hereunder shall
----
be for a term of three (3) years commencing on the date hereof and expiring at
the close of business on the day prior to the third anniversary of the date
hereof (the "Term").
1.3 Duties. During the Term, Executive shall perform such executive
------
duties for the Company and/or its Affiliates, consistent with his position
hereunder, as may be assigned to him from time to time by the Company's Board of
Directors (the "Board") or the Company's Chief Executive Officer. Without
limiting the generality of the foregoing, Executive will be primarily
responsible for supervising the television services divisions of Company and its
Affiliates. Executive shall perform industriously and to the best of his
ability, experience and talents all the duties which may be required of him from
time to time, pursuant to the terms of this Agreement. Executive shall devote
his entire productive business time, attention and energies to the performance
of his duties hereunder. Executive shall use his best efforts to advance the
interests and business of the Company and its Affiliates. Executive shall abide
by all rules, regulations and policies of the Company, as may be in effect from
time to time. Notwithstanding the foregoing, Executive may act for his own
account in passive-type
investments as provided in Section 5.3, or as a member of other boards of
directors, where the time allocated for those activities does not materially
interfere with or create a conflict of interest with the discharge of his duties
for the Company.
1.4 Reporting. Executive shall report directly to the Vice President and
---------
Chief Technology Officer of the Company, or such other officer as the Board may
from time to time determine.
1.5 Exclusive Agreement. Executive represents and warrants to the Company
-------------------
that there are no agreements or arrangements, whether written or oral, in effect
which would prevent Executive from rendering his exclusive services to the
Company during the Term.
ARTICLE II
----------
COMPENSATION
------------
2.1 Compensation. For all services rendered by Executive hereunder and
------------
all covenants and conditions undertaken by him pursuant to this Agreement, the
Company shall pay, and Executive shall accept, as full compensation, the amounts
set forth in this Article II.
2.2 Base Salary. The base salary shall be an annual salary of One Hundred
-----------
Seventy-five Thousand Dollars ($175,000) ("Base Salary"), payable by the Company
in accordance with the Company's normal payroll practices.
2.3 Bonus. In addition to the Base Salary, the Company may make
-----
discretionary bonus payments to Executive, under such terms, conditions and
requirements as may be established by the Company's Board of Directors in its
sole discretion.
2.4 Additional Compensation. Executive shall be eligible to earn
-----------------------
additional compensation (in addition to Base Salary and discretionary bonuses
described above) for successfully arranging, during the first year of the Term,
a strategic alliance or service arrangement for Company or its Affiliates with
one of the following significant clients with whom Executive has previously
commenced discussions: MCA-Universal; Polygram; and Advanced Digital Services
(each, a "New Business Venture") and which would result in revenues not related
to any current book of business of Xxxxxxxx Film Industries Corp. d/b/a Xxxxxxxx
Video ("Xxxxxxxx Video"). Executive shall be eligible to earn such additional
compensation as may be fairly and reasonably determined by the Chief Executive
Officer, based on the profitability of the New Business Venture. In order to be
eligible for any additional compensation in connection with each New Business
Venture, Executive must have secured a binding commitment in writing for such
New Business Venture during the first year of the Term, it being acknowledged
and agreed that the work related to the New Business Venture, and the benefits
therefrom, will not necessarily be in place during the first year of the Term.
2
2.5 Deductions. The Company shall deduct from the compensation described
----------
in Sections 2.2, 2.3 and 2.4 any federal, state or local 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 local
laws, rules or regulations.
2.6 Disability Adjustment. Any compensation otherwise payable to
---------------------
Executive pursuant to Sections 2.2, 2.3 and 2.4 in respect of any period during
which Executive is disabled (as contemplated in Section 4.3) shall be reduced by
any amounts payable to Executive for loss of earnings or the like under any
insurance plan or policy sponsored by the Company or its Affiliates.
ARTICLE III
-----------
BENEFITS; EXPENSES
------------------
3.1 Benefits. During the Term, Executive shall be entitled to participate
--------
in such group life, health, accident, disability or hospitalization insurance
plans, pension plans and retirement plans as the Company may make available to
its other executive employees as a group, subject to the terms and conditions of
any such plans.
3.2 1997 Stock Option Plan. Executive shall be entitled to participate in
----------------------
Company's 1997 Stock Option Plan (the "Plan") on substantially the same basis as
other similarly-situated senior executives of Company. Company's Board of
Directors (or stock option committee) shall grant Executive nonqualified stock
options covering 100,000 shares of Company's common stock, par value $.01,
within ten (10) days of the date of this Employment Agreement, at an exercise
price equal to the fair market value of the Company's common stock on the date
of the grant. No options will vest prior to the last day of the Term (the
"Vesting Date"), at which time all options will vest. Notwithstanding the
foregoing, (i) if Executive is terminated "without cause" during the Term, a
proportionate number of the options will automatically be deemed vested on the
termination date, based upon the number of days of employment hereunder to the
termination date divided by 1,095; (ii) if Executive's employment terminates by
reason of death or disability during the second year of the Term, one-third of
the options will automatically be deemed vested on the termination date; and
(iii) if Executive's employment terminates by reason of death or disability
during the third year of the Term, two-thirds of the options will automatically
be deemed vested on the termination date.
3.3 Expenses. The Company agrees that Executive is authorized to incur
--------
reasonable expenses in the performance of his duties hereunder and in promoting
the business of the Company. The Company shall from time to time pay or
reimburse Executive for the reasonable and necessary expenses incurred by
Executive in connection with the performance of his duties hereunder if such
expenses have been previously approved by the Company or if reimbursement is
otherwise appropriate in accordance with the Company's established policies and
if the
3
Company receives such substantiation thereof as the Company may require in order
to qualify such expenses as deductible business expenses.
3.4 Vacation. Executive shall accrue, on a daily basis, a total of four
--------
(4) work weeks of vacation per year following the date of this Agreement. If
Executive's earned but unused vacation time reaches six (6) work weeks,
Executive will not continue to accrue additional vacation time until he uses
enough vacation to fall below this maximum amount. Thereafter, Executive will
start earning vacation benefits again until the six (6) work week maximum is
again reached. Vacation shall be scheduled in Executive's discretion, subject
to and taking into account the business exigencies of Company. Vacation in
excess of two (2) consecutive weeks shall be subject to the reasonable approval
of Company's Chief Executive Officer. Any accrued but unused vacation time will
be paid to Executive (calculated on the assumption that Executive's Base Salary
is pro rated ratably over a fifty-two week period) at termination of employment.
ARTICLE IV
----------
TERMINATION; DEATH; DISABILITY
------------------------------
4.1 Termination of Employment With Cause. In addition to any other
------------------------------------
remedies available to the Company at law, in equity or as set forth in this
Agreement, the Company shall have the right, upon written notice to Executive,
to immediately terminate his employment hereunder without any further liability
or obligation to him in respect of his employment (other than its obligation to
pay Base Salary accrued but unpaid as of the date of termination and to
reimburse expenses incurred through such date pursuant to Section 3.3) if
Executive: (a) breaches any material provision of this Agreement and, if such
breach is curable, in the sole judgment of the Company, such breach is not cured
within ten (10) days after written notice thereof from the Company; or (b) has
committed an act of gross misconduct in connection with the performance of his
duties hereunder, as determined in good faith by the Board of Directors; or (c)
demonstrates habitual negligence in the performance of his duties, as determined
by the Board of Directors; or (d) is convicted of or pleads nolo contendere to
---- ----------
any misdemeanor involving moral turpitude or to any felony; or (e) has committed
any act of fraud, misappropriation of funds or embezzlement in connection with
his employment hereunder (a "Termination With Cause").
4.2 Termination of Employment Without Cause. During the Term, the Company
---------------------------------------
may at any time after one year from the date of this Agreement and not before
the expiration of such one-year period, in its sole discretion, terminate the
employment of Executive hereunder without cause by written notice to him. In
such event, the Company shall pay Executive an amount equal to the sum of the
following:
(a) any Base Salary accrued but unpaid as of the date of termination;
(b) any reimbursement for expenses incurred in accordance with Section
3.3;
4
(c) an amount equal to Executive's monthly Base Salary in effect on
the date of termination for the lesser of (i) one (1) year, or (ii) the
remainder of the Term, payable as and when such amounts would have been due and
payable hereunder had such termination not occurred (the "Severance Period");
and
(d) In addition, the Company shall use its best efforts to arrange for
the continuation, through the Severance Period, of such health and/or medical
benefits or plans as are in effect as of the date of termination, if and only if
permissible under such plans. If not so permissible, the Company shall pay to
Executive an amount sufficient to enable Executive to arrange for substantially
equivalent health and/or medical coverage during the Severance Period.
Notwithstanding the foregoing, for purposes of Section 4.2(c), if the
remainder of the Term is less than six (6) months from the date of termination,
and if a Notice has not been given at least six (6) months prior to the end of
the Term, then the Severance Period shall be six (6) months from the date of
such termination. For purposes of the preceding sentence, a Notice shall be a
written notice to Executive that Company does not intend to employ Executive
after the end of the Term either (i) at all, (ii) except upon specified terms
and conditions, or (iii) in the absence of satisfactory negotiations of the
terms of such employment.
Executive acknowledges that the payments and benefits referred to in
this Section 4.2, together with any rights or benefits under any written plan or
agreement which have vested on or prior to the termination date of Executive's
employment under this Section 4.2, constitute the only payments to which
Executive shall be entitled to receive from the Company hereunder in the event
of any termination of his employment pursuant to this Section 4.2, and that
except for such payments or benefits the Company shall have no further liability
or obligation to him hereunder or otherwise in respect of his employment.
If Executive's employment is terminated under this Section 4.2,
Executive shall use all reasonable efforts to obtain other employment or become
self-employed as promptly as possible. If Executive secures other employment or
becomes self-employed during the Severance Period, the Company's obligations
under this Section 4.2 shall be reduced by the earnings from such employment or
self-employment received by Executive; or, if Executive secures Alternate
Employment (as defined in Section 5.3) during the Severance Period, the
Company's obligations under this Section 4.2 shall terminate in their entirety.
During the Severance Period, Executive will notify the Company in writing of any
offer of employment within ten (10) days of Executive's receipt of same. In
addition, Executive will immediately notify the Company in writing if Executive
becomes employed or self-employed during the Severance Period.
4.3 Death; Disability. If Executive dies or becomes Disabled (as defined
-----------------
herein), Executive's employment shall terminate when such death or Disability
occurs and the Company shall pay Executive (or his legal representative, as the
case may be) as follows:
5
(a) any Base Salary accrued but unpaid as of the date of death or
termination for Disability;
(b) any reimbursement for expenses incurred in accordance with Section
3.2.; and
(c) an amount equal to Executive's monthly Base Salary in effect on
such termination date for the lesser of (i) six months or (ii) the remainder of
the Term, payable as and when such amounts would have been due and payable
hereunder had such termination not occurred. The monthly Base Salary with
respect to any period during which Executive is Disabled shall be reduced by
amounts payable to him under any insurance plan sponsored by the Company,
provided that Executive's aggregate compensation during the period of Disability
shall be equal to 100% of his monthly Base Salary then in effect.
For the purposes of this Agreement, Executive shall be deemed to be
"Disabled" or have a "Disability" if, because of Executive's physical or mental
disability, (a) he has been substantially unable to perform his duties
hereunder for twelve (12) work weeks in any twelve (12)-month period, and (b) he
has utilized any and all benefits available to him under state and federal laws
and is either (i) unable to reasonably and effectively carry out his duties with
reasonable accommodations by the Company or (ii) unable to reasonably and
effectively carry out his duties because any reasonable accommodation which may
be required would cause the Company undue hardship. In the event of a
disagreement concerning Executive's perceived Disability, Executive shall submit
to such examinations as are deemed appropriate by three practicing physicians
specializing in the area of Executive's Disability, one selected by Executive,
one selected by the Company, and one selected by both such physicians. The
majority decision of such three physicians shall be final and binding on the
parties. Nothing in this paragraph is intended to limit the Company's right to
invoke the provisions of this paragraph with respect to any perceived Disability
of Executive.
Executive acknowledges that the payments referred to in this Section
4.3, together with any rights or benefits under any written plan or agreement
which have vested on or prior to the termination date of Executive's employment
under this Section 4.3, constitute the only payments to which Executive (or his
legal representative, as the case may be) shall be entitled to receive from the
Company hereunder 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) hereunder or otherwise in respect of his employment.
4.4 Continued Compliance. The amounts or benefits payable by the Company
--------------------
under Sections 4.2(c), 4.2(d) and 4.3(c) are subject to Executive's continued
compliance with the provisions of Article V below. If Executive violates the
provisions of Article V, then the Company will have no obligation to make any of
the payments that remain payable by the Company under Sections 4.2(c), 4.2(d)
and 4.3(c) on or after the date of such violation.
6
ARTICLE V
---------
OWNERSHIP OF PROCEEDS OF EMPLOYMENT; NON-DISCLOSURE;
----------------------------------------------------
NON-COMPETITION
---------------
5.1 Ownership of Proceeds of Employment. The Company shall be the sole
-----------------------------------
and exclusive owner throughout the universe in perpetuity of all of the results
and proceeds of Executive's services, work and labor during the Term in
connection with Executive's employment by the Company, free and clear of any and
all claims, liens or encumbrances. All results and proceeds of Executive's
services, work and labor during the Term shall be deemed to be works-made-for-
hire for the Company within the meaning of the copyright laws of the United
States and the Company shall be deemed to be the sole author thereof in all
territories and for all purposes.
5.2 Non-Disclosure of Confidential Information. As used herein,
------------------------------------------
"Confidential Information" means any and all information affecting or relating
to the business of the Company and its Affiliates, including without limitation,
financial data, customer lists and data, licensing arrangements, business
strategies, pricing information, product development, intellectual, artistic,
literary, dramatic or musical rights, works, or other materials of any kind or
nature (whether or not entitled to protection under applicable copyright laws,
or reduced to or embodied in any medium or tangible form), including without
limitation, all copyrights, patents, trademarks, service marks, trade secrets,
contract rights, titles, themes, stories, treatments, ideas, concepts,
technologies, art work, logos, hardware, software, and may be embodied in any
and all computer programs, tapes, diskettes, disks, mailing lists, lists of
actual or prospective customers and/or suppliers, notebooks, documents,
memoranda, reports, files, correspondence, charts, lists and all other written,
printed or otherwise recorded material of any kind whatsoever and any other
information, whether or not reduced to writing, including "know-how", ideas,
concepts, research, processes, and plans. "Confidential Information" does not
include information that is in the public domain, information that is generally
known in the trade, or information that Executive can prove he acquired wholly
independently of his employment with the Company. Executive shall not, at any
time during the Term or thereafter, directly or indirectly, disclose or furnish
to any other person, firm or corporation any Confidential Information, except in
the course of the proper performance of his duties hereunder or as required by
law (in which event Executive shall give prior written notice to Company and
shall cooperate with Company and Company's counsel in complying with such legal
requirements). Promptly upon the expiration or termination of Executive's
employment hereunder for any reason or whenever the Company so requests,
Executive shall surrender to the Company all documents, drawings, work papers,
lists, memoranda, records and other data (including all copies) constituting or
pertaining in any way to any of the Confidential Information.
5.3 Non-Competition. Executive shall not, for so long as he is entitled
---------------
to compensation under or pursuant to this Agreement (whether or not he is
actively employed by the Company hereunder), directly or indirectly: (a)
compete with the Company; or (b) be interested in, employed by, engaged in or
participate in the ownership, management, operation
7
or control of, or act in any advisory or other capacity for, any Competing
Entity which conducts its business within the Territory (as such terms are
hereinafter defined); provided, however, that notwithstanding the foregoing,
-------- -------
Executive may make solely passive investments in any Competing Entity the common
stock of which is "publicly held," and of which Executive shall not own or
control, directly or indirectly, in the aggregate securities which constitute
more than one (1%) percent of the voting rights or equity ownership of such
Competing Entity; or (c) 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 (d) 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 attempting to do so.
In the event that Executive shall, during any Severance Period, obtain
employment with a Competing Entity ("Alternate Employment"), then, effective on
the first day of said Alternate Employment, the following shall take place:
(a) The Company shall pay to Executive all compensation payments of
whatsoever kind due Executive up to the first day of Alternate Employment;
(b) The Company's obligation to make any further payments which would
have been due and payable to the Executive on or after the date of the first day
of Alternate Employment shall be extinguished; and
(c) Executive shall be free of the provisions of this Section 5.3.
For purposes of this Section 5.3, (i) the term "Competing Entity"
shall mean any entity which presently or during the period referred to above
engages in any business activity the Company is then engaged in or proposes to
be engaged in; and (ii) the term "Territory" shall mean any geographic area in
which the Company conducts business during such period.
5.4 Non-Solicitation. Executive shall not, for a period of two (2) years
----------------
from the date of any termination or expiration of his employment hereunder,
directly or indirectly: (a) solicit or hire, or attempt to solicit or hire, any
employee of the Company, or assist any person, firm or corporation in doing so
or attempting to do so; or (b) solicit or cause to be solicited the disclosure
of, or use or disclose, any Confidential Information for any purpose whatsoever
or for any other party.
5.5 Breach of Provisions. In the event that Executive shall breach any of
--------------------
the provisions of this Article V, or in the event that any such breach is
threatened by Executive, 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, without the necessity of posting a
bond, to restrain any such breach or threatened breach and to enforce the
provisions of this Article V. Executive acknowledges and agrees that there is no
adequate remedy at law for any such breach
8
or threatened breach and, in the event that any action or proceeding is brought
seeking injunctive relief, Executive shall not use as a defense thereto that
there is an adequate remedy at law.
5.6 Reasonable Restrictions. The parties acknowledge that the foregoing
-----------------------
restrictions, the duration and the territorial scope thereof as set forth in
this Article V, are under all of the circumstances reasonable and necessary for
the protection of the Company and its business.
5.7 Definition. For purposes of this Article V, the term "Company" shall
----------
be deemed to include any subsidiary of, Affiliate of, or successor of the
Company.
ARTICLE VI
----------
MISCELLANEOUS
-------------
6.1 Binding Effect. This Agreement shall be binding upon and inure to the
--------------
benefit of the parties hereto and their respective legal representatives, heirs,
distributees, successors and assigns; provided that the rights and obligations
--------
of Executive hereunder shall not be assignable by him.
6.2 Notices. Any notice provided for herein shall be in writing and shall
-------
be deemed to have been given or made when personally delivered or three (3) days
following deposit for mailing by first class registered or certified mail,
return receipt requested, or if delivered by facsimile transmission, upon
confirmation of receipt of the transmission, to the address of the other party
set forth below or to such other address as may be specified by notice given in
accordance with this Section 6.2:
If to the Company:
Four Media Company
0000 X. Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, C.E.O.
Fax No.: (000) 000-0000
With a copy to:
Xxxxxxxxx Glusker Fields Claman
& Machtinger LLP
0000 Xxxxxx xx xxx Xxxxx, #0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Fax No.: (000) 000-0000
9
If to Executive:
Xxxxxxx Xxxxxxx
____________________________
____________________________
Fax No.:
With a copy to:
Xxxxx X. Xxxxxxx, Esq.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Fax No.: (000) 000-0000
6.3 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 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.
6.4 Confidentiality; Press Releases. Except as and to the extent
-------------------------------
previously publicly disclosed by Company, Executive agrees that he will not,
during the Term or thereafter, disclose to any other person or entity the terms
or conditions of this Agreement (excluding the financial terms hereof) without
the prior written consent of the Company or as required by law, regulatory
authority or as necessary to obtain personal loans or financing. Company shall
have the sole right to make a public announcement of the terms, provisions, or
execution of this Agreement, subject to reasonable consultation with Executive,
except as may be necessary or desirable in dealing with or in response to a
governmental or administrative agency, including, but not limited to, the
Securities and Exchange Commission, or in connection with the financing or sale
of the Company or its Affiliates.
6.5 Arbitration. Any controversy, claim or dispute arising out of or in
-----------
any way relating to this Agreement, the alleged breach thereof, and/or
Executive's employment with the Company or termination therefrom, including
without limitation, any and all claims for employment discrimination or
harassment, shall be determined by binding arbitration administered by the
American Arbitration Association under its National Rules for Resolution of
Employment Disputes ("Rules") which are in effect at the time of the arbitration
or the demand therefor. The Rules are hereby incorporated by reference.
California Code of Civil Procedure (S)1283.05, which provides for certain
discovery rights, shall apply to any such arbitration, and said code section is
also hereby incorporated by reference. In reaching a
10
decision, the arbitrator shall have no authority to change, extend, modify or
suspend any of the terms of this Agreement. The arbitration shall be commenced
and heard in Los Angeles County, California. The arbitrator(s) shall apply the
substantive law (and the law of remedies, if applicable) of California or
federal law, or both, as applicable to the claim(s) asserted. Judgment on the
award may be entered in any court of competent jurisdiction, even if a party who
received notice under the Rules fails to appear at the arbitration hearing(s).
The parties may seek, from a court of competent jurisdiction, provisional
remedies or injunctive relief in support of their respective rights and remedies
hereunder without waiving any right to arbitration. However, the merits of any
action that involves such provisional remedies or injunctive relief, including,
without limitation, the terms of any permanent injunction, shall be determined
by arbitration under this paragraph.
6.6 Attorneys' Fees. The parties agree that the prevailing party in any
---------------
action, controversy or dispute arising out of or relating to this Agreement or
the breach of any provision hereof shall be entitled to reimbursement by the
losing party of all costs and expenses including but not limited to reasonable
attorneys' fees and costs resulting from any action or proceeding filed in
accordance with the terms of paragraph 6.5 hereof or otherwise, to enforce any
term of this Agreement or for any damage by reason of an alleged breach of any
term of this Agreement.
6.7 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.
6.8 Controlling Nature of Agreement. To the extent any terms of this
-------------------------------
Agreement are inconsistent with the terms or provisions of the Company's
Employee Manual or any other personnel policy statements or documents, the terms
of this Agreement shall control. To the extent that any terms and conditions of
Executive's employment are not covered in this Agreement, the terms and
conditions set forth in the Employee Manual or any similar document shall
control such terms.
6.9 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 or understanding between the Company and Executive,
whether written or oral, fully or partially performed relating to any or all
matters covered by and contained or otherwise dealt with in this Agreement.
This Agreement does not constitute a commitment of the Company with regard to
Executive's employment, express or implied, other than to the extent expressly
provided for herein.
6.10 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.
11
6.11 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.
6.12 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 substantive
laws of the State of California without giving effect to principles relating to
conflicts of law.
6.13 Counterparts. Thus Agreement may be executed in counterparts, each of
------------
which shall be deemed an original, and all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
"COMPANY"
FOUR MEDIA COMPANY, a Delaware corporation
/s/ Xxxxxx Xxxxxxx
By: ____________________________________
Xxxxxx X. Xxxxxxx, Chairman and Chief
Executive Officer
"EXECUTIVE"
/s/ Xxxxxxx Xxxxxxx
__________________________________________
Xxxxxxx Xxxxxxx
12
