EXHIBIT 10.8
EMPLOYMENT AGREEMENT
--------------------
This Employment Agreement is entered into as of the 1st day of September, 1996
by and between Fox Kids Worldwide, Inc., a Delaware corporation ("Company") and
Xxxxx Xxxx ("Employee"):
1. ENGAGEMENT. Company hereby engages Employee to render services as
Executive Vice-President and Supervising Producer of Live Action Programming of
Company pursuant to the terms and conditions hereof, and Employee hereby accepts
such engagement. Concurrently with the execution of this Agreement, the parties
hereto acknowledge the termination of that certain Loan Out Agreement dated as
of January 1, 1995 by and between Saban Entertainment, Inc. and Arpeggio
Productions, Inc. Employee shall report solely to Xxxx Xxxxx, the Chairman and
Chief Executive Officer of Company, subject to the overall direction and
supervision of Company's Board of Directors; provided that from and after a
"Change of Control," as defined in Section 12, below, Employee agrees that he
may be required to report to some other person. If Employee is elected to the
Board of Directors of Company, Employee agrees to accept such appointment.
2. NATURE AND PLACE OF SERVICES. Employee shall render all services
usually and customarily rendered by and required of executives similarly
employed in the entertainment industry and such other services as may be
reasonably required by Company. The location of Employee's office shall be at
Company's principal Southern California executive offices, which will be located
at such place or places in Los Angeles County as the Board of Directors of
Company shall from time to time designate; and the duties of Employee shall be
performed at such offices, except for such travel as may from time to time be
required.
3. EXCLUSIVITY. Employee shall work for Company and its affiliates
during the Term hereof on a full-time, non-exclusive basis. Notwithstanding the
foregoing, the Company and its affiliates shall have priority on Employee's
services during the Term of this Agreement, and Employee shall not render
services of any nature to or for any other person, firm or corporation in
connection with children's entertainment during the Term of this Agreement
without the prior written consent of Company. For so long as Employee is
employed pursuant to the terms hereof, Employee shall not become financially
interested in or associated with, directly or indirectly, any other person or
entity engaged in the production, distribution or exhibition of motion pictures,
television programs, phonograph recording, or any visual or audio recordings of
any kind (except in connection with Employee's
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employment as a composer by Bubale Music and/or 5161 Corporation), or in the
broadcasting or music publishing businesses, anywhere in the world; provided,
that Employee may invest in the capital stock or other securities of any
corporation whose stock or other securities are publicly owned or are regularly
traded on any securities exchange or in the over-the-counter market, so long as
Employee's ownership of such securities does not exceed 5% of the issued and
outstanding securities of such entity and Employee's holdings in any one such
entity does not in the aggregate cost Employee more than $100,000.
4. TERM. The term of this Agreement ("Term") shall commence on September
1, 1996 and, subject to termination as hereinafter provided, expire with the
close of business on August 31, 1999. Each consecutive year of the Term ending
on August 31 shall be referred to as a "Term Year."
5. COMPENSATION.
(a) Fixed Annual Compensation. The Company shall pay to Employee, as
consideration for all services rendered by Employee pursuant to this Agreement
fixed compensation of Five Hundred Thousand Dollars ($500,000) per year for each
Term Year hereunder.
(b) Stock Options. On June 1, 1994, Employee and Saban Entertainment,
Inc. entered into a Stock Option Agreement, a copy of which is attached to this
Agreement. The Stock Option Agreement shall continue in full force and effect
during the Term, with all references therein to "Consultant" and "engagement"
being deemed to refer to and include, respectively, Employee and his engagement
hereunder.
(c) Bonuses. The Company may in its discretion grant to Employee a
discretionary bonus for each Term Year.
(d) Employee Benefits.
(i) Reimbursements. Company shall reimburse Employee for all
ordinary and necessary business, entertainment and other expenses reasonably
incurred by Employee in the performance of Employee's duties and obligations
under this Agreement, including reimbursement for air travel and accommodations
for business travel. Company agrees to repay or reimburse Employee for such
business expenses upon the presentation of itemized statements of such business
expenses in accordance with Company's policy.
(ii) Annual Vacations. Employee shall be entitled to take four
(4) weeks annual vacation for each Term Year.
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(iii) Health Insurance and Other Employee Benefits. Company shall
provide Employee with health insurance for him and his dependents no less
favorable in benefits than any other employee of Company. To the extent that
Company establishes any other employee benefit plan which provides benefits to
executives of Company generally, Employee shall be entitled to participate in
such plan pursuant to the terms thereof, except that Company may exclude
Employee's participation in any plan which is a stock option plan or plan
similar to a stock option plan.
6. [INTENTIONALLY DELETED]
7. REPRESENTATIONS AND WARRANTIES.
(a) Representations of Employee. Employee represents and warrants
that Employee has all right, power, authority and capacity, and is free, to
enter into this Agreement; that by doing so Employee will not violate or
interfere with the rights of any other person or entity; and that Employee is
not subject to any contract, understanding or obligation which will or might
prevent, interfere with or impair the performance of this Agreement by Employee.
Employee will indemnify and hold Company harmless with respect to any losses,
liabilities, demands, claims, fees, expenses, damages and costs (including
attorneys fees and court costs) resulting from or arising out of any claim or
action based upon Employee's entering into this Agreement.
(b) Representations of Company. Company represents and warrants that
Company has all right, power and authority, without the consent of and other
person, to execute and deliver, and perform its obligations under, this
Agreement. All corporate and other actions required to be taken by Company to
authorize the execution, delivery and performance of this Agreement and the
consummation of all transactions contemplated hereby have been duly and properly
taken. This Agreement is the lawful, valid and legally binding obligation of
Company, enforceable in accordance with its terms.
(c) Materiality of Representations. The representations, warranties
any covenants set forth in this Agreement shall be deemed to be material and
have been relied upon by the parties hereto.
8. RELATIONSHIP AND COVENANTS OF EMPLOYEE.
(a) Covenant Not To Disclose. Employee shall not at any time during
or after the termination of the Term, knowingly reveal, divulge or make known to
any person (other than the Company or its affiliates) or use for Employee's own
account any non-public information concerning or used by Company of which
Employee was
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apprised or otherwise had become aware during the term of Employee's employment
by Company (excluding any such information which becomes public for reasons
other than Employee's breach of this Agreement or which Employee is required to
disclose by law).
(b) Covenant to Deliver Records. All memoranda, notes, records and
other documents made or compiled by Employee, or made available to Employee
during the term of this Agreement concerning the business of Company shall be
Company's property and shall be delivered to Company on the termination of this
Agreement or at any other time on request. Employee shall keep in confidence
and shall not use for Employee or others, or divulge to others, any secret or
confidential information, knowledge or data of Company obtained by Employee as a
result of Company's employment, unless authorized by Company or required by law.
Employee shall be entitled to retain for his own records copies of any and all
memoranda, notes, records and other documents made or compiled by Employee
during the Term of this Agreement.
(c) Covenant Not To Divert. Employee shall not so long as Employee is
employed hereunder, or if such employment shall terminate during or at the
expiration of the Term, for a period of two years following such termination,
directly or indirectly, either on Employee's own behalf, or as a member of a
partnership, joint venture or corporation, or as an employee or agent on behalf
of any person, firm, partnership, joint venture or corporation, either (i)
solicit, induce (or attempt to induce), or endeavor to entice away any clients
of Company (unless Company consents in writing), (ii) solicit, divert, or seek
to develop or exploit any existing entertainment projects on which Company is
working at the time of termination (unless Company thereafter advises Employee
in writing that it has abandoned such project), or (iii) solicit, interfere
with, induce (or attempt to induce) or endeavor to entice away any employee
(other than Employee's assistant) associated with Company to become affiliated
with him or any other person, firm, partnership, joint venture, corporation or
business organization.
(d) Limitations Upon Covenants. The provisions under this Paragraph 8
shall survive the termination of this Agreement. The parties hereto agree that,
in the event any of the provisions set forth in this Paragraph 8 are held by any
court or other duly constituted legal authority to be effective in any
particular area or jurisdiction only if modified to limit their duration or
scope or to be void or otherwise unenforceable in any particular area or
jurisdiction, then such provisions shall be deemed amended and modified with
respect to that particular area or jurisdiction so as to comply with the order
of any such court or other duly constituted legal authority and, as to all other
areas and jurisdictions, and as to all other provisions of this Paragraph 8,
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such provisions shall remain in full force end effect as set forth in this
Agreement.
(e) Remedies. Employee acknowledges that Company will have no
adequate remedy at law if Employee violates the terms of the provisions of this
Paragraph 8 or any other provisions of this Agreement (including, without
limitation, the exclusivity provisions of Paragraph 3, above). In such event,
Company shall have the right, in addition to any other rights it may have, to
obtain in any court of competent jurisdiction injunctive relief to restrain any
breach or threatened breach or specific performance of this Agreement.
9. CERTAIN RIGHTS OF COMPANY.
(a) Announcement. Company shall have the sole right to make a public
announcement of the terms, provisions, or execution of this Agreement.
(b) Use of Name, Likeness, and Biography. Company shall have the
right (but not the obligation) to use, publish and broadcast, and to authorize
others to do so, the name, approved likeness and approved biographical material
of Employee to advertise, publicize and promote the business of Company and of
affiliates, but not for the purposes of direct endorsement without Employee's
consent. An "approved likeness" and "approved biographical material" shall be,
respectively, any photograph or other depiction of Employee, or any biographical
information or life story concerning the professional career of Employee, which
has been submitted to and approved by Employee prior to its first use,
publication or broadcast, such approval not to be unreasonably withheld.
(c) Corporate Offices. In addition to his positions as Executive
Vice-President and Supervising Producer of Live Action Programming of the
Company, Company or its affiliates may from time to time appoint Employee to one
or more corporate offices of Company or its affiliates. Employee agrees to
accept such offices if consistent with Employee's stature and experience.
(d) Right to Insure. Company shall have the right to secure in its
own name, or otherwise, and at its own expense, life, health, accident or other
insurance covering Employee, and Employee shall have no right, title or interest
in and to such insurance. Employee shall assist Company in procuring such
insurance by submitting to examinations and by signing such applications and
other instruments as may be required by the insurance carriers to which
application is made for any such insurance.
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10. TERMINATION.
(a) Disability. If Employee shall be rendered incapable by illness
(physical or mental disability) of complying with the terms, provisions and
conditions hereof on his part to be performed for a period in excess of 90
consecutive days or 250 days in the aggregate during the Term, then Company may,
at its option, prior to the date Employee resumes the rendering of services,
terminate this Agreement by written notice to that effect sent by registered or
certified mail. Such termination shall terminate any and all obligations to
Employee under this Agreement effective as of the date of such written notice
except Employee's right to receive the Fixed Salary in Paragraph 5(a) for the
Term Year in which the date of such written notice falls, pro-rated to the date
of such written notice.
(b) Death. In the event Employee dies during the Term of this
Agreement, such death shall terminate any and all obligations to Employee under
this Agreement effective as of the date of death except Employee's right to
receive the Fixed Salary in Paragraph 5(a) for the Term Year in which the date
of death falls, pro-rated to the date of death.
(c) Cause. Company may terminate Employee's employment hereunder for
cause, which shall mean (i) indictment of Employee for a felony or a crime
involving a high degree of moral turpitude, (ii) the commission by Employee of
an act or acts of dishonesty constituting a crime, which act or acts are
intended to result, directly or indirectly, in gain or personal enrichment at
the expense of Company or any of its subsidiaries or affiliates by Employee,
(iii) certification by a medical doctor that Employee is a habitual alcoholic or
is a narcotic addict, (iv) Employee's material breach of this Agreement. Such
termination shall terminate any and all obligations to Employee under this
Agreement effective as of the date of such written notice except Employee's
right to receive the Fixed Salary in Paragraph 5(a) for the Term Year in which
the date of such written notice falls, pro-rated to the date of such written
notice.
(d) At Convenience of Company. Company shall have the absolute and
unconditional right to terminate Employee's employment hereunder at any time,
other than pursuant to Paragraphs 10(a), 10(b) or 10(c), by written notice to
that effect delivered in person or sent by registered or certified mail. Such
termination shall terminate any and all obligations to Employee under this
Agreement effective as of the date of such written notice except (i) Employee's
right to receive the Fixed Salary in Paragraph 5(a) for the Term Year in which
the date of such written notice falls, pro-rated to the date of such written
notice, and (ii) Employee's
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right to receive the Severance Pay provided in, and subject to the terms and
conditions of, Paragraph 11 hereof.
(e) At Employee's Election. Employee may terminate his employment
hereunder upon Company's material breach of this Agreement by written notice to
that effect delivered in person or sent by registered or certified mail. Such
termination shall terminate any and all obligations of Company to Employee under
this Agreement, including liabilities with respect to such breach, effective as
of the date of such written notice except (i) Employee's right to receive the
Fixed Salary in Paragraph 5(a) for the Term Year in which the date of such
written notice falls, pro-rated to the date of such written notice, and (ii)
Employee's right to receive the Severance Pay provided in, and subject to the
terms and conditions of, Paragraph 11 hereof.
11. SEVERANCE PAY. In the event Employee's services are terminated by
Company pursuant to Paragraph 10(d) or by Employee pursuant to Paragraph 10(e)
above prior to the completion of the Term, Employee shall receive Employee's
fixed salary set forth in Paragraph 5(a) hereof for the balance of the Term,
payable in equal installments no less frequently than semi-monthly. The
termination benefits contemplated by this Paragraph shall be reduced by the
aggregate amount of any wages, salaries, fees or other compensation ("Earnings")
earned by Employee during the period in which payments pursuant to the first
sentence of this Paragraph are otherwise to be made, as compensation for full-
time or part-time services rendered as an employee, consultant, manager,
independent contractor or in any other employment capacity. For the purposes of
determining the amount of such Earnings, if any, Employee shall apprise Company
from time to time, upon its request, of such amounts earned, providing to
Company such evidence thereof (on a confidential basis), including, without
limitation, Employee's federal and state income tax returns, as Company may
reasonably request.
12. CHANGE OF CONTROL.
(a) For the purposes of this Section 12, the following definitions
shall apply:
The following events shall each constitute a "Change of Control" of
Company: (i) the acquisition of one or more shares of the voting securities of
Company by any Acquiring Person, or any group of two or more Acquiring Persons
acting in concert, as a result of which such Person or group beneficially owns
fifty percent (50%) or more of the issued and outstanding voting securities of
Company; (ii) the consolidation with, or merger with or into, any other entity,
by Company and, in connection with such merger or consolidation, Company is not
the continuing or surviving
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entity; (iii) the sale or transfer by other means by Company in one transaction
or a series of related transactions, of assets or earning power aggregating
fifty percent (50%) or more of the assets or earning power of Company and its
subsidiaries (taken as a whole and calculated on the basis of Company's most
recent regularly prepared financial statements) to any other person or persons
(but excluding sales of inventory in the ordinary course of business). The
determination as to which party to a merger or consolidation the "continuing" or
"surviving" corporation shall be made on the basis of the relative equity
interests of the shareholders in the corporation existing after the merger or
consolidation, as follows: if following any merger or reorganization, the
holders of outstanding voting securities of Company immediately prior to the
merger or consolidation beneficially own fifty percent (50%) or more of the
voting power of the entity existing following the merger or consolidation, then
for purposes of this Agreement, Company shall be the survivor or continuing
corporation. In making the determination of beneficial ownership by the
shareholders of a corporation immediately after the merger or consolidation, of
equity securities which the shareholders owned immediately before the merger or
consolidation, shares which they beneficially owned as shareholders of another
party to the transaction shall be disregarded.
"Acquiring Person" shall mean any individual, corporation,
partnership, limited liability company or other entity or group other than Xxxx
Xxxxx or any other of the Saban Entitles, Employee or Company or any of its
wholly-owned subsidiaries.
"Beneficial Ownership" shall be determined pursuant to Rule 13d-3 of
the General Rules and Regulations under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as in effect on the date of this Agreement.
(b) If, in the event of a Change of Control of Company, any Acquiring
Person or other person or group proposing to acquire control of Company and/or
the business of Company (the "Proposed Acquiror") objects to any of the terms of
this Agreement, Employee agrees to negotiate in good faith with Company to amend
this Agreement in such manner as to make it acceptable to the Proposed Acquiror.
Xxxx Xxxxx and Company shall in any event use their best efforts to cause the
Proposed Acquiror to accept the terms of this Agreement.
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13. ARBITRATION.
(a) The terms of this Paragraph 13 contain the sole and exclusive
method, means and procedure to resolve any and all claims, disputes or
disagreements arising under this Agreement, except those arising under the
provisions of Paragraph 8, above. The parties irrevocably waive any and all
rights to the contrary and shall at all times conduct themselves in accordance
with the terms of this Paragraph 13; any attempt to circumvent the terms of this
Paragraph 13 shall be null and void and of no force or effect.
(b) Within ten (10) days after delivery of written notice (the "Notice
of Dispute") of the existence and nature of any dispute given by any party to
the other party, and unless otherwise provided herein in any specific instance,
the parties shall each (i) appoint one (1) lawyer actively engaged in the
licensed and full time practice of law in the County of Los Angeles for a
continuous period immediately preceding the date of delivery (the "Dispute
Date") of the Notice of Dispute of not less than ten (10) years, but who has at
no time ever represented or acted on behalf of any of the parties, and (ii)
deliver written notice of the identity of such lawyer and a copy of his or her
written acceptance of such appointment and acknowledgment of and agreement to be
bound by the time constraints and other terms of this Paragraph 13 (the
"Acceptance") to the other party hereto. In the event that any party fails to
so act, that party's arbitrator shall be appointed pursuant to the same
procedure that is followed when agreement cannot be reached as to the third
arbitrator. Within ten (10) days after such appointment and notice, such
lawyers shall appoint a third lawyer (who, together with the first two (2)
lawyers, shall hereinafter be referred to collectively as the "Arbitration
Panel") of the same qualification and background as the first two (2) lawyers
(including the qualification that he or she has at no time ever represented or
acted on behalf of any of the parties) and shall deliver written notice of the
identity of such lawyers and a copy of his or her written Acceptance of such
appointment to each of the parties. If agreement cannot be reached on the
appointment of a third lawyer within such period, such appointment and
notification shall be made as rapidly as possible by any court of competent
jurisdiction, by any licensing authority, agency or organization having
jurisdiction over such lawyers, by any professional association of lawyers in
existence for not less than ten (10) years at the time of such dispute or
disagreement and the geographical membership boundaries of which extend to the
County of Los Angeles, or by any arbitration association or organization in
existence for not less than ten (10) years at the time of such dispute or
disagreement and the geographic boundaries of which extend to the County of Los
Angeles, as determined by the contrary giving such Notice of Dispute and
simultaneously confirmed in writing delivered by such party to the other party.
Any such
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court, authority, agency, association or organization shall be entitled either
to directly select such third lawyer or to designate in writing delivered to
each of the parties an individual who shall do so. In the event of any
subsequent vacancies or inabilities to perform among the Arbitration Panel, the
lawyer or lawyers involved shall be replaced in accordance with the terms of
this Paragraph 13 as if such replacement was an initial appointment to be made
under this Paragraph 13 within the time constraints set forth in this Paragraph
13, measured from the date of notice of such vacancy or inability to the person
or persons required to make such appointment, with all attendant consequences of
failure to act timely if such appointment is not so made. Unless the parties
shall otherwise agree, all arbitration proceedings shall be conducted at such
location within Los Angeles County as the members of the Arbitration Panel shall
by majority vote from time to time designate.
(c) Consistent with the terms of this Paragraph 13, the members of the
Arbitration Panel shall utilize their utmost skill and shall apply themselves
diligently so as to hear and decide, by majority vote, the outcome and
resolution of any dispute or disagreement submitted to the Arbitration Panel as
promptly as possible, but in any event on or before the expiration of sixty (60)
days after the appointment of the members of the Arbitration Panel. None of the
members of the Arbitration Panel shall have any liability whatsoever for any
acts or omissions performed or omitted in good faith pursuant to the provisions
of this Article.
(d) The Arbitration Panel shall (i) enforce and interpret the rights
and obligations set forth in this Agreement to the extent not prohibited by law,
(ii) fix and establish any and all rules as it shall consider appropriate in its
sole and absolute discretion to govern the proceedings before it, including any
and all rules of discovery, procedure and/or evidence, provided however, that
such rules shall be consistent with such rules established by the American
Arbitration Association and (iii) make and issue any and all orders, final or
otherwise, and any all awards, as a court of competent jurisdiction sitting at
law or in equity could make and issue and as it shall consider appropriate in
its sole and absolute discretion, including the awarding of monetary damages
(but specifically excluding the awarding of consequential, punitive or exemplary
damages or the awarding of attorneys' fees and costs to either party) to the
prevailing party as determined by the Arbitration Panel in its sole and absolute
discretion, and the issuance of injunctive relief.
(e) The decision of the Arbitration Panel shall be final and binding,
and may be confirmed and entered by any court of competent jurisdiction at the
request of any party and may not be appealed to any court of competent
jurisdiction or otherwise,
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except upon a claim of fraud on the part of any member of the Arbitration Panel
(except as to the arbitrator chosen by the party claiming the fraud), or on the
basis of a manifest error as to the applicable Law. The Arbitration Panel shall
retain jurisdiction over any dispute until its award has been implemented, and
judgment on any such award may be entered in any court having appropriate
Jurisdiction and may be enforced against either party and its assets pursuant to
applicable laws and procedures.
(f) Each member of the Arbitration Panel (i) shall be compensated for
any and all services rendered under this Paragraph 13 at a rate of compensation
equal to the sum of Two Hundred Fifty Dollars ($250.00) per hour, which sum
shall be increased each year in accordance with annual increases in the Consumer
Price Index for Urban Wage Earners and Clerical workers, Los Angeles-Anaheim-
Xxxxxxxxx, Xxxxxxxxxx 0000-00 - 100 ("CPI"), and (ii) shall be reimbursed for
any and all expenses incurred in connection with the rendering of such services,
payable in full promptly upon conclusion of the proceedings before the
Arbitration Panel. Such compensation and reimbursement shall be borne by the
non-prevailing party as determined by the Arbitration Panel in its sole and
absolute discretion, unless the Arbitration Panel does not make a determination
that one of the parties is the prevailing party, in which case the parties shall
bear the cost as fixed by the Arbitration Panel.
14. INDEMNIFICATION. Concurrent with the execution and delivery of this
Agreement, Company and Employee have entered into an Indemnification Agreement,
pursuant to which, inter alia, Company has agreed, on the terms and conditions
----- ----
therein set forth, to indemnify Employee against certain claims arising by
reason of the fact that he is or was an officer or director of Company.
15. GENERAL.
(a) Assignment; Successors; Affiliates. Company may assign this
Agreement (or the interest of Company therein) to any affiliate of Company or to
any entity which is a party to a merger, reorganization, or consolidation with
Company or to a subsidiary of Company or to an entity or entities acquiring
substantially all of the assets of Company or of any division with respect to
which Employee is providing services (providing any such assignee assumes
Company's obligations under this Agreement). Employee shall, if requested by
Company, perform Employee's services and duties, as specified in this Agreement,
to or for the benefit of any subsidiary or other affiliate of Company. Upon
such assignment, acquisition, merger, consolidation, or reorganization, the term
"Company" as used herein shall be deemed to refer to such assignee or such
successor entity. Employee shall not have the right to assign Employee's
interest in this Agreement, any rights under this
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Agreement or any duties imposed under this Agreement nor shall Employee (or
Employee's spouse, heirs, beneficiaries, administrator's or executors) have the
right to pledge, hypothecate or otherwise encumber Employee's right to receive
compensation hereunder without the consent of Company.
(b) Headings. The subject headings of the paragraphs and
subparagraphs of this Agreement are included for purposes of convenience only,
and shall not affect the construction or interpretation of any of its
provisions.
(c) Severability. It is agreed that if any term, covenant, provision,
paragraph or condition of this Agreement shall be illegal, such illegality shall
not invalidate the whole Agreement but it shall be construed as if not
containing the illegal part, and the rights and obligations of the parties shall
be construed and enforced accordingly.
(d) Entire Agreement. The parties hereto agree that this Agreement
supersedes all existing agreements between Company and Employee, whether oral,
written, expressed or implied, and contains the entire understanding and
agreement between the parties. This Agreement shall not be amended, modified,
or supplemented in any respect except by a subsequent written agreement entered
into by both parties hereto.
(e) Choice of Law. This Agreement and the performance hereunder shall
be construed in accordance with and under and pursuant to the internal
substantive laws of the State of California applicable to agreements fully
executed and to be performed entirely in such state.
(f) Notices. All communications and notices hereunder shall be in
writing and shall be deemed to have been duly given and delivered personally if
sent by united States registered or certified mail, postage prepaid:
If to Company: Fox Kids Worldwide, Inc.
00000 Xxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxxxx
With a copy to:
Xxxxxxx X. Xxxxx, Esq.
Attorney
0000 Xxxxxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
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If to Employee:
Xxxxx Xxxx
c/o Saban Entertainment, Inc.
00000 Xxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000
or to such other addresses as my be designated in writing by either of the
parties.
(g) No Joint Venture. Nothing herein contained shall constitute a
partnership between or joint venture by the parties hereto or appoint any party
the agent of any other party. No party shall hold itself out contrary to the
terms of this paragraph and, except as otherwise specifically provided herein,
no party shall become liable for the representation, act or omission of any
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.
(h) Contractual Nomenclature. All reference herein to "Dollars" or
"$" shall mean Dollars of the United States of America, its legal tender for all
debts public and private. Where used herein and to the extent appropriate, the
masculine, feminine or neuter gender shall include the other two genders, the
singular shall include the plural, and the plural shall include the singular.
(i) Time of Essence. Time is of the essence of each provision in this
Agreement in which time is an element.
(j) No Adverse Construction. The rule that a contract is to be
construed against the party drafting the contract is hereby waived, and shall
have no applicability in construing this Agreement or the terms of this
Agreement.
IN WITNESS WHEREOF, Company and Employee have executed this Agreement as of
the 1st day of September 1996.
FOX KIDS WORLDWIDE, INC.
By: /s/ Xxx Xxxxx
------------------------------
XXX XXXXX
/s/ Xxxxx Xxxx
------------------------------
XXXXX XXXX
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STOCK OPTION AGREEMENT
----------------------
This STOCK OPTION AGREEMENT (this "Option Agreement") is made and entered
into as of the 1st day of June, 1994 by and between Saban Entertainment, Inc., a
Delaware corporation ("Company"), and Xxxxx Xxxx ("Consultant"):
R E C I T A L S
---------------
A. Consultant is currently engaged by Company as a consultant pursuant to
an oral consulting agreement, terminable at will by either party, with or
without cause; the parties intend to memorialize that agreement in the near
future. If and when the agreement is memorialized, terms used herein will be
defined consistent with the understanding of the parties as to their use and
meaning herein.
B. As used herein, "Term Year" means a period of twelve (12) consecutive
calendar months ending on May 31 of each year. The first Term Year shall
commence on the date of this Agreement. The "Term" shall be a period of five (5)
consecutive years, commencing with the date of this Agreement.
Company and Consultant agree as follows:
1. Subject to the terms and conditions hereof, including the vesting
requirements under Paragraph 2, below, Company hereby grants to Consultant the
option to purchase sixteen and three hundred twenty-seven one thousandths
(16.327) shares ("Option Shares") of Company common stock at a purchase price of
One Hundred Twenty-Two Thousand Four Hundred Ninety-Six Dollars and Forty-Eight
Cents ($122,496.48) per share.
2. The option shall vest and be exercisable by Consultant with respect to
one-fifth (1/5) of the Option Shares after the completion of the first Term
Year, provided Consultant is then and has continuously been engaged by Company.
The option shall vest and be exercisable by Consultant with respect to an
additional one-fifth (1/5) of the Option Shares after the completion of each
Term Year of the Term, provided Consultant is
and has continuously been engaged by Company at the end of each such Term Year.
Notwithstanding the foregoing:
(A) if (I) Consultant dies during the Term or Consultant's
engagement is terminated by reason of disability, (II) Consultant was until
then continuously engaged by Company, and (III) the option has then vested
and become exercisable with respect to less than one-half (1/2) of the
Option Shares, then the option shall immediately vest and be exercisable by
Consultant with respect to an additional number of Option Shares equal to
one-half the Option Shares less the number of Option Shares which have
theretofore vested and become exercisable;
(B) if (I) Consultant's engagement is terminated during any Term
Year other than for cause, death or disability, (II) Consultant was until
then continuously engaged by Company, and (III) the option has then vested
and become exercisable with respect to less than one-half (1/2) of the
Option Shares, then the option shall immediately vest and be exercisable by
Consultant with respect to an additional number of Option Shares equal to
one-half the Option Shares less the number of Option Shares which have
theretofore vested and become exercisable; and
(C) if (I) Consultant's engagement is terminated during any Term
Year other than for cause, death or disability, (II) Consultant was until
then continuously engaged by Company, and (III) the option has then vested
and become exercisable with respect to at least one-half (1/2) of the
Option Shares, then the option shall, effective immediately prior to such
termination, vest and be exercisable by Consultant with respect to that
portion of the Option Shares which would have vested upon completion of the
Term Year in which Consultant's termination occurs, had such termination
not occurred.
3. Upon termination of Consultant's engagement with Company for any
reason, Consultant shall be entitled to exercise only the portion of the option
that has vested pursuant to Paragraph 2, above, as of the termination date.
Nothing in this Paragraph 3 shall, however, be construed to limit any of
2
Consultant's rights or remedies in the event of Company's breach of this
Agreement.
4. During Consultant's lifetime, the option may be exercised only by
him and may not be transferred, assigned, pledged or hypothecated (whether by
operation of law or otherwise) other than by will or the applicable laws of
descent or distribution. If Consultant dies at a time when the option, or a
portion thereof, is exercisable by him, the portion of the option that is then
exercisable by him shall be exercisable by Consultant's executors, personal
representatives, legatees or distributees, as applicable.
5. The option granted hereunder shall be exercised by Consultant by
giving written notice to Company stating the number of Option Shares with
respect to which the option is being exercised and tendering payment therefor in
cash or by certified check. As a condition to the issuance of the Option Shares,
Consultant shall (A) execute such further documents and instruments and take
whatever acts are necessary in order for the issuance to be in compliance with
all applicable federal and state securities laws, (B) enter into a shareholders
agreement restricting the transferability of the Option Shares and providing for
such other matters as the parties may agree, the terms of which shareholders
agreement shall be negotiated in good faith, and (C) enter into a voting trust
agreement or such other arrangement as is reasonably satisfactory to Company
whereunder Xxxx Xxxxx (or, in the event of Xxxx Xxxxx'x death, his successor) is
granted the power to vote the Option Shares. As soon as reasonably practicable
thereafter, a certificate representing the Option Shares with respect to which
the option is exercised shall be delivered to Consultant. Such certificate may
contain a legend thereon reflecting the restrictions set forth in subparagraphs
(A), (B) and (C), above, and Paragraphs 9 and 10, below.
6. Consultant shall have none of the rights or privileges of a
shareholder of Company in respect of any of the Option Shares, unless and until
the purchase price for such Option Shares shall have been paid in full.
7. The number of Option Shares shall be appropriately adjusted for
any increase or decrease in the number
3
of shares of issued and outstanding common stock of Company resulting from a
subdivision or consolidation of shares, whether through reorganization,
recapitalization, stock split-up, stock distribution or combination of shares,
or payment of a share dividend or other increase or decrease in the number of
such shares outstanding effected without receipt of consideration by Company. In
the event of any such adjustment, the purchase price per share for the Option
Shares as so adjusted shall be adjusted by dividing Two Million Dollars
($2,000,000) by the number of Option Shares as so adjusted. Upon a merger or
consolidation of Company in which Company is not the surviving corporation or an
exchange of all of the outstanding shares of common stock of Company or all or a
substantial portion of the assets of Company for shares of another corporation
or equity interests in a partnership, limited partnership, limited liability
company or other entity (any such corporation and any such entity is referred to
in this Paragraph 7 as a "corporation"), the successor or exchanging corporation
shall assume all obligations under this Agreement and such option shall be
converted into an option for a number of shares or other equity interests of the
successor or exchanging corporation (or cash, property or such other
consideration) that Consultant would have received if Consultant had owned the
Option Shares on the effective date of such transaction, and the purchase price
per share of the stock or other equity interests of the successor or exchanging
corporation under such converted option shall be equal to Two Million Dollars
($2,000,000) divided by the number of shares of the stock or other equity
interests of such successor or exchanging corporation to which the converted
option applies (if, following such merger, consolidation or exchange, Consultant
would receive non-share (or other equity interest) consideration upon exercise
of the option, the purchase price to be paid upon exercise of the option shall
be equal to Two Million Dollars ($2,000,000) multiplied by a fraction equal to
that portion of the option then being exercised). Upon the dissolution or
liquidation of Company other than following an asset transfer subject to this
Paragraph 7, the option granted hereunder shall expire as of the effective date
of such transaction, provided, however, that Company shall give at least sixty
(60) days prior written notice of such event to Consultant during which time he
shall have a right to exercise his unexercised vested option.
4
8. Upon the exercise of the option hereunder, Company shall have
the right to require Consultant to remit to Company, prior to the issuance of
any Option Shares, an amount sufficient to satisfy all federal, state and local
withholding tax requirements. As soon as reasonably practicable following the
"initial public offering" (as that term is defined in Paragraph 5(f)(xii)
hereof), Company shall prepare, or cause to be prepared, and file with the
Securities and Exchange Commission (the "Commission") a registration statement
on Form S-8 under the Securities Act of 1933, as amended (the "Act"), (or such
successor form of registration statement as shall then have been adopted by the
Commission) covering the offer and sale by Company of the Option Shares
underlying the then unexercised portion of the option granted to Employee
hereunder, and, to the extent permitted under such form, any Option Shares
issued upon exercise of such option prior to the initial public offering; and
Company shall use its best efforts during the term of the option to maintain
such registration statement in effect, and to comply with the rules and
regulations of the Commission applicable to securities covered by such
registration statement, so that the issuance of any Option Shares upon exercise
of the option shall be registered under the Act.
9. After Consultant's engagement with Company is terminated for any
reason, Company shall purchase from Consultant and Consultant shall sell to
Company any and all Option Shares owned by Consultant and the option granted to
Consultant hereunder for an amount (the "Termination Purchase Price") equal to
(A) the fair market value of the Option Shares owned by Consultant plus the fair
market value of the Option Shares with respect to which Consultant's option has
vested but has not been exercised, less (B) Consultant's purchase price,
determined under Paragraph 1, above, for the Option Shares with respect to which
Consultant's option has vested but has not been exercised. The fair market
value of the Option Shares for purposes of the Termination Purchase Price shall
be determined by mutual agreement of the parties as of the date of Consultant's
termination of his engagement ("Termination Date"). In the event the parties
are unable to reach agreement within thirty (30) days of the Termination Date,
the fair market value of the Option Shares shall be determined by the following
appraisal procedure: Each party shall appoint an appraiser by giving notice
of such appointment to the other party within forty-five (45) days
5
from the Termination Date. Such appraiser shall be a certified public accountant
practicing in the entertainment, licensing and television industries or such
other person with experience in valuing companies in the entertainment,
licensing and television businesses. If either party fails to appoint an
appraiser within said time period, the other party's appointed appraiser shall
be the sole appraiser. If both parties have so appointed appraisers, then within
thirty (30) days from the appointment of both parties' appraisers, the
appraisers so appointed shall appoint a third appraiser, with the same
qualifications. The third appraiser (or the sole appraiser if either party fails
to appoint an appraiser within the required time period) shall then determine
the fair market value of the Option Shares within sixty (60) days after the
appointment of the third appraiser (or within sixty (60) days after the failure
by either party to appoint an appraiser within the required time period). The
third appraiser, or such sole appraiser, as applicable, is referred to
hereinbelow as the "Selected Appraiser." The determination of the Selected
Appraiser shall be binding on the parties hereto. The costs and fees of the
Selected Appraiser shall be borne equally by the parties hereto. Company shall
give the Selected Appraiser reasonable access to its books and records to enable
him or her to undertake his or her appraisal. Within ten (10) days after the
parties' agreement on the fair market value of the Option Shares, or, failing
such agreement, the notification by the Selected Appraiser of his or her
appraisal, Company shall pay to Consultant ten percent (10%) of the Termination
Purchase Price (the "Down Payment") and shall deliver to Consultant a promissory
note (the "Note") for payment of the remainder of the Termination Purchase Price
in nine (9) equal annual installments. The Note shall provide for the annual
payment of interest on the outstanding balance of the remainder of the
Termination Purchase Price at the rate per annum equal to the "prime" or
"reference" rate charged by Company's principal bank (currently Imperial Bank),
as determined from time to time. Concurrently with the payment of the Down
Payment and delivery of the Note, Consultant shall execute and deliver to
Company an assignment of the option in form reasonably satisfactory to Company
and an assignment separate from certificate for the Option Shares, in each case
free and clear of any and all liens, claims, encumbrances and restrictions of
any type, kind or nature.
6
10. Except as provided below, in the event Xxxx Xxxxx, any member of
his immediate family or any of his affiliated entities (collectively with Xxxx
Xxxxx and such family members, "Saban Entities") sells to a third party in a
bona fide sale any of his or its shares of the common stock of Company ("Saban
Shares"), the parties agree as follows:
(a) Company shall purchase from Consultant and Consultant shall
sell to Company the "Applicable Percentage," as defined below, of the Option
Shares owned by Consultant for a per-share consideration equal to the per-share
consideration paid by the third party for the Saban Shares. If the consideration
paid by the third party for the Saban Shares includes non-cash consideration
and/or deferred consideration, the consideration paid by Company to Consultant
for the Option Shares sold by Consultant to Company under this subparagraph (a)
shall consist of similar non-cash and/or deferred consideration in the same
ratio as the non-cash and/or deferred consideration paid by the third party for
the Saban Shares bears to the total consideration paid by the third party for
the Saban Shares. The "Applicable Percentage" shall equal the percentage that
the Saban Shares sold to the third party represents of the total shares of
Company owned by the Saban Entities immediately prior to the sale. The purchase
and sale of the Option Shares under this subparagraph (a) shall close no later
than ten (10) days after the closing of the sale of the Saban Shares to the
third party. Concurrently with the purchase and sale of the Option Shares under
this subparagraph (a), Consultant shall execute and deliver to Company an
assignment separate from certificate for the Option Shares, free and clear of
any and all liens, claims, encumbrances and restrictions of any type, kind or
nature.
a. Company shall pay to Consultant an amount equal to the
Applicable Percentage (as defined in subparagraph (a) above) of (x) the per-
share consideration paid by the third party for the Saban Shares multiplied by
the number of Option Shares with respect to which Consultant's option has vested
but has not been exercised, less (y) Consultant's purchase price, determined
under Paragraph 1, above, for such Option Shares. If the consideration paid by
the third party for the Saban Shares includes non-cash consideration and/or
deferred consideration, the payment by Company to Consultant under this
subparagraph (b) shall consist of similar non-cash and/or deferred consideration
in the same ratio as the
7
non-cash and/or deferred consideration paid by the third party for the Saban
Shares bears to the total consideration paid by the third party for the Saban
Shares. The payment under this subparagraph (b) shall be made no later than ten
(10) days after the closing of the sale of the Saban Shares to the third party.
b. The number of Option Shares Consultant shall have the option to
purchase pursuant to this Agreement shall immediately be reduced by a number of
shares of Company equal to the Applicable Percentage (as defined in subparagraph
(a), above) of the Option Shares with respect to which Consultant's option has
vested but has not been exercised. Such reduction shall reduce only the Option
Shares with respect to which Consultant's option has vested but has not been
exercised and shall not reduce any Option Shares with respect to which
Consultant's option has not then vested.
d. If in connection with any sale of Saban Shares subject to this
Paragraph 10, Xxxx Xxxxx is required to enter into an agreement which includes
provisions restricting his ability to compete, directly or indirectly
(including, without limitation, through an ownership or licensing arrangement
with a competitor or potential competitor of Company), with Company
("noncompetition provisions"), and if the purchaser of the Saban Shares so
requires, Consultant shall, in connection with the sale of the Option Shares and
payment for vested options under this Paragraph 10, execute and deliver to
Company and such purchaser an agreement, in form and substance reasonably
acceptable to the purchaser, which agreement shall contain noncompetition
provisions, the scope, duration, terms and provisions of which are substantially
identical to the noncompetition provisions contained in Xxxx Xxxxx'x agreement;
provided, that no separate payment will be required to be made to Consultant on
account of such agreement.
This Paragraph 10 shall not apply to (i) any sale by a Saban Entity pursuant to
an "initial public offering" (as defined in Paragraph 12) of the common stock of
the Company or (ii) any transaction subject to Paragraph 7, above.
11. The obligations of Company to make any payment or payments to
Consultant with respect to the purchase of Option Shares by Company (including
any payments under the Note)
8
are subject to the satisfaction by Company of any applicable statutory
provisions restricting Company's ability to make such payments, including,
without limitation, Section 160 of the Delaware General Corporation Law and
Chapter 5 of the California General Corporation Law, and if and to the extent
that under those provisions, any such payment would expose the directors of
Company to any liability, or would be unlawful, Company shall deliver to
Consultant, in lieu of such payment, a promissory note with terms identical to
the Note, which note shall be due and payable at the earliest practicable date
thereafter when such payment would not be violative of such statutory
provisions.
12. Notwithstanding any provision of this Paragraph Agreement to the
contrary, following the earlier to occur of (I) the first closing of an offer
and sale of shares of the common stock of Company (whether such shares are sold
by Company, existing stockholders or both) for cash pursuant to a firmly
underwritten public offering effected pursuant to a registration statement filed
by Company with the Securities and Exchange Commission under the Securities Act
of 1933, as amended (or such successor legislation as shall then be in effect)
or (II) the date upon which the shares of common stock of Company are first
authorized for quotation on the Nasdaq National Market, or listed on the New
York Stock Exchange or American Stock Exchange (either event, an "initial public
offering"):
(A) the provisions of Paragraphs 9 and 10 shall terminate and be of no
further force or effect;
(B) the provisions of any voting trust agreement entered into pursuant
to Paragraph 5(C) shall not prevent or restrict Consultant's right to sell and
transfer any of the Option Shares free and clear of the obligations therein set
forth;
(C) the option shall terminate and expire, to the extent not
theretofore exercised, (x) if Consultant's engagement with Company is terminated
for any reason other than for "cause", on the first anniversary of such
termination, and (y) if Consultant's engagement with Company is terminated for
"cause", on
9
the thirtieth (30th) day following the date of such termination; and
(D) after Consultant's engagement with Company is terminated for any
reason, Company shall have the right and option, exercisable at any time prior
to the date of expiration of the option by delivery of written notice of such
exercise to Consultant, to purchase from Consultant, and if such option is
exercised, Consultant shall sell to Company, any and all Option Shares owned by
Consultant on the date of receipt of the notice of exercise (or acquired
thereafter upon exercise of the option and prior to the closing of such
purchase) and the option granted to Consultant hereunder for an amount equal to
the "Termination Purchase Price," as defined in and determined pursuant to the
procedures provided in Paragraph 9, above; and within ten (10) days after the
parties' agreement on the fair market value of the Option Shares, or, failing
such agreement, the notification by the Selected Appraiser of his or her
appraisal, Company shall pay the Termination Purchase Price to Consultant,
against delivery by Consultant to Company of an assignment of the option in form
reasonably satisfactory to Company and an assignment separate from certificate
for the Option Shares, in each case free and clear of any and all liens, claims,
encumbrances and restrictions of any type, kind or nature.
13. ARBITRATION.
(a) The terms of this Paragraph 13 contain the sole and exclusive
method, means and procedure to resolve any and all claims, disputes or
disagreements arising under this Agreement, except those arising under the
provisions of Paragraph 9, above. The parties irrevocably waive any and all
rights to the contrary and shall at all times conduct themselves in accordance
with the terms of this Paragraph 13; any attempt to circumvent the terms of this
Paragraph 13 shall be null and void and of no force or effect.
(b) Within ten (10) days after delivery of written notice (the "Notice
of Dispute") of the existence and nature of any dispute given by any party to
the other party, and unless otherwise provided herein in any specific instance,
the parties shall each
10
(i) appoint one (1) lawyer actively engaged in the licensed and full time
practice of law in the County of Los Angeles for a continuous period immediately
preceding the date of delivery (the "Dispute Date") of the Notice of Dispute of
not less than ten (10) years, but who has at no time ever represented or acted
on behalf of any of the parties, and (ii) deliver written notice of the identity
of such lawyer and a copy of his or her written acceptance of such appointment
and acknowledgment of and agreement to be bound by the time constraints and
other terms of this Paragraph 13 (the "Acceptance") to the other party hereto.
In the event that any party fails to so act, that party's arbitrator shall be
appointed pursuant to the same procedure that is followed when agreement cannot
be reached as to the third arbitrator. Within ten (10) days after such
appointment and notice, such lawyers shall appoint a third lawyer (who, together
with the first two (2) lawyers, shall hereinafter be referred to collectively as
the "Arbitration Panel") of the same qualification and background as the first
two (2) lawyers (including the qualification that he or she has at no time ever
represented or acted on behalf of any of the parties) and shall deliver written
notice of the identity of such lawyers and a copy of his or her written
Acceptance of such appointment to each of the parties. If agreement cannot be
reached on the appointment of a third lawyer within such period, such
appointment and notification shall be made as rapidly as possible by any court
of competent jurisdiction, by any licensing authority, agency or organization
having jurisdiction over such lawyers, by any professional association of
lawyers in existence for not less than ten (10) years at the time of such
dispute or disagreement and the geographical membership boundaries of which
extend to the County of Los Angeles, or by any arbitration association or
organization in existence for not less than ten (10) years at the time of such
dispute or disagreement and the geographic boundaries of which extend to the
County of Los Angeles, as determined by the party giving such Notice of Dispute
and simultaneously confirmed in writing delivered by such party to the other
party. Any such court, authority, agency, association or organization shall be
entitled either to directly select such third lawyer or to designate in writing
delivered to each of the parties an individual who shall do so. In the event of
any subsequent vacancies or inabilities to perform among the Arbitration Panel,
the lawyer or
11
lawyers involved shall be replaced in accordance with the terms of this
Paragraph 13 as if such replacement was an initial appointment to be made under
this Paragraph 13 within the time constraints set forth in this Paragraph 13,
measured from the date of notice of such vacancy or inability to the person or
persons required to make such appointment, with all attendant consequences of
failure to act timely if such appointment is not so made. Unless the parties
shall otherwise agree, all arbitration proceedings shall be conducted at such
location within Los Angeles County as the members of the Arbitration Panel shall
by majority vote from time to time designate.
(c) Consistent with the terms of this Paragraph 13, the members of the
Arbitration Panel shall utilize their utmost skill and shall apply themselves
diligently so as to hear and decide, by majority vote, the outcome and
resolution of any dispute or disagreement submitted to the Arbitration Panel as
promptly as possible, but in any event on or before the expiration of sixty (60)
days after the appointment of the members of the Arbitration Panel. None of the
members of the Arbitration Panel shall have any liability whatsoever for any
acts or omissions performed or omitted in good faith pursuant to the provisions
of this Article.
(d) The Arbitration Panel shall (i) enforce and interpret the rights and
obligations set forth in this Agreement to the extent not prohibited by law,
(ii) fix and establish any and all rules as it shall consider appropriate in its
sole and absolute discretion to govern the proceedings before it, including any
and all rules of discovery, procedure and/or evidence, provided however, that
such rules shall be consistent with such rules established by the American
Arbitration Association and (iii) make and issue any and all orders, final or
otherwise, and any all awards, as a court of competent jurisdiction sitting at
law or in equity could make and issue and as it shall consider appropriate in
its sole and absolute discretion, including the awarding of monetary damages
(but specifically excluding the awarding of consequential, punitive or exemplary
damages or the awarding of attorneys' fees and costs to either party) to the
prevailing party as determined by the Arbitration Panel in its sole and absolute
discretion, and the issuance of injunctive relief.
12
(e) The decision of the Arbitration Panel shall be final and binding, and
may be confirmed and entered by any court of competent jurisdiction at the
request of any party and may not be appealed to any court of competent
jurisdiction or otherwise, except upon a claim of fraud on the part of any
member of the Arbitration Panel (except as to the arbitrator chosen by the party
claiming the fraud), or on the basis of a manifest error as to the applicable
law. The Arbitration Panel shall retain jurisdiction over any dispute until its
award has been implemented, and judgment on any such award may be entered in any
court having appropriate jurisdiction and may be enforced against either party
and its assets pursuant to applicable laws and procedures.
(f) Each member of the Arbitration Panel (i) shall be compensated for any
and all services rendered under this Paragraph 13 at a rate of compensation
equal to the sum of Two Hundred Fifty Dollars ($250.00) per hour, which sum
shall be increased each year in accordance with annual increases in the Consumer
Price Index for Urban Wage Earners and Clerical Workers, Los Angeles-Anaheim-
Xxxxxxxxx, Xxxxxxxxxx 0000-00 = 100 ("CPI"), and (ii) shall be reimbursed for
any and all expenses incurred in connection with the rendering of such services,
payable in full promptly upon conclusion of the proceedings before the
Arbitration Panel. Such compensation and reimbursement shall be borne by the
non-prevailing party as determined by the Arbitration Panel in its sole and
absolute discretion, unless the Arbitration Panel does not make a determination
that one of the parties is the prevailing party, in which case the parties shall
bear the cost as fixed by the Arbitration Panel.
14. GENERAL.
A. Assignment; Successors; Affiliates. Company may assign this
Agreement (or the interest of Company therein) to any affiliate of Company or to
any entity which is a party to a merger, reorganization, or consolidation with
Company or to a subsidiary of Company or to an entity or entities acquiring
substantially all of the assets of Company or of any division with respect to
which Consultant is providing services (providing any such assignee
13
assumes Company's obligations under this Agreement). Consultant shall, if
requested by Company, perform Consultant's services and duties, as specified in
this Agreement, to or for the benefit of any subsidiary or other affiliate of
Company. Upon such assignment, acquisition, merger, consolidation, or
reorganization, the term "Company" as used herein shall be deemed to refer to
such assignee or such successor entity. Consultant shall not have the right to
assign Consultant's interest in this Agreement, any rights under this Agreement
or any duties imposed under this Agreement nor shall Consultant (or Consultant's
spouse, heirs, beneficiaries, administrator's or executors) have the right to
pledge, hypothecate or otherwise encumber Consultant's right to receive
compensation hereunder without the consent of Company.
B. Headings. The subject headings of the paragraphs and
subparagraphs of this Agreement are included for purposes of convenience only,
and shall not affect the construction or interpretation of any of its
provisions.
C. Severability. It is agreed that if any term, covenant, provision,
paragraph or condition of this Agreement shall be illegal, such illegality shall
not invalidate the whole Agreement but it shall be construed as if not
containing the illegal part, and the rights and obligations of the parties shall
be construed and enforced accordingly.
D. Entire Agreement. The parties hereto agree that this Agreement
supersedes all existing agreements between Company and Consultant, whether oral,
written, expressed or implied, and contains the entire understanding and
agreement between the parties. This Agreement shall not be amended, modified, or
supplemented in any respect except by a subsequent written agreement entered
into by both parties hereto.
E. Choice of Law. This Agreement and the performance hereunder shall
be construed in accordance with and under and pursuant to the internal
substantive laws of the State of California applicable to agreements fully
executed and to be performed entirely in such state.
14
F. Notices. All communications and notices hereunder shall be in
writing and shall be deemed to have been duly given and delivered personally if
sent by united States registered or certified mail, postage prepaid:
If to Company: Saban Entertainment, Inc.
0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxxxx
With a copy to:
Xxxxxxx X. Xxxxx, Esq.
Attorney
0000 Xxxxxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
If to Consultant:
Xxxxx Xxxx
------------------------
------------------------
or to such other addresses as my be designated in writing by either of the
parties.
G. No Joint Venture. Nothing herein contained shall constitute a
partnership between or joint venture by the parties hereto or appoint any party
the agent of any other party. No party shall hold itself out contrary to the
terms of this paragraph and, except as otherwise specifically provided herein,
no party shall become liable for the representation, act or omission of any
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.
H. Contractual Nomenclature. All reference herein to "Dollars" or
"$" shall mean Dollars of the United States of America, its legal tender for all
debts public and private. Where
15
used herein and to the extent appropriate, the masculine, feminine or neuter
gender shall include the other two genders, the singular shall include the
plural, and the plural shall include the singular.
(i) Time of Essence. Time is of the essence of each provision in
this Agreement in which time is an element.
(j) No Adverse Construction. The rule that a contract is to be
construed against the party drafting the contract is hereby waived, and shall
have no applicability in construing this Agreement or the terms of this
Agreement.
* * *
IN WITNESS WHEREOF, Company and Consultant have executed this Agreement as
of the 1st day of June 1994.
SABAN ENTERTAINMENT, INC.
By /s/ Xxxx Xxxxx
----------------------------
/s/ Xxxxx Xxxx
----------------------------
XXXXX XXXX
16
AMENDMENT NO. 1
TO
STOCK OPTION AGREEMENT
This Amendment No. 1 to Stock Option Agreement (the "Amendment") is made
and entered into as of September 26, 1996, by and between Saban Entertainment,
Inc., a Delaware corporation ("SEI") and Xxxxx Xxxx ("Xxxx").
R E C I T A L S
----------------
X. Xxxx and SEI are parties to that certain Stock Option Agreement,
dated as of June 1, 1994 (the "Agreement"). All terms defined in the Agreement
which are not defined in this Amendment shall have the same meanings when used
in this Amendment.
B. The parties hereto desire to amend the Agreement from and after
the effective date of the initial public offering (the "Initial Public
Offering") of Fox Kids Worldwide, Inc., a Delaware corporation ("Fox Kids
Worldwide").
A G R E E M E N T
-----------------
NOW, THEREFORE, in consideration of the foregoing facts, the parties hereto
agree that from and after the effective date of the Initial Public Offering, the
following sections are amended as follows:
1. Expiration of Stock Option. From and after the effective date of the
--------------------------
Initial Public Offering, Paragraph 1. of the Agreement is amended by adding the
following sentence at the end of such Paragraph.
"As long as the option is not earlier exercised or terminated in
accordance with the terms of this Agreement, the option shall expire on June 1,
2004."
2. Termination of Option. From and after the effective date of the
---------------------
Initial Public Offering, Paragraph 12(D) of the Agreement shall terminate and be
of no further force or effect.
3. Effect of Amendment. Except as expressly modified herein, all terms
-------------------
of the Agreement remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the day
and year first above written.
SABAN ENTERTAINMENT, INC.
By: /s/ Xxx Xxxxx
_________________________
Its: President
________________________
XXXXX XXXX
/s/ Xxxxx Xxxx
_________________________
