EXHIBIT 10.13
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of the
7th day of January, 1997, by and between Prism Entertainment Corporation, a
Delaware corporation (the "Company"), and Xxxxx Xxxxx Xxxxx ("Xxxxx").
1. Term of Employment. The Company hereby employs Xxxxx, and Xxxxx
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hereby agrees to serve the Company, under and subject to all of the terms,
conditions and provisions of this Agreement for a period of three years from the
date hereof, in the capacity of Senior Vice President and Chief Operating
Officer of the Company, or to serve in such other executive capacity with the
Company as the Company's board of directors (the "Board of Directors") may from
time to time designate, provided such assignment is consistent with Kelly's
level of experience and expertise. In the performance of his duties and the
exercise of his discretion, Xxxxx shall be under the supervision and control of,
and shall report only to, the Chairman of the Board. Kelly's duties shall be
designated by the Chairman of the Board and shall be subject to such policies
and directions as may be established or given by the Board of Directors from
time to time.
2. Devotion of Time to Company Business. Xxxxx shall devote
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substantially all of his productive time, ability and attention to the business
of the Company during the term of this Agreement. Xxxxx shall not, without the
prior written consent of the Board of Directors, directly or indirectly render
any services of a business, commercial or professional nature to any other
person or organization, whether for compensation or otherwise, which may compete
or conflict with the Company's business or with Kelly's duties to the Company.
3. Compensation.
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3.1 Base Salary. For all services rendered by Xxxxx under this
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Agreement, the Company shall pay Xxxxx a base salary ("Base Salary"), payable
semi-monthly, at the rate of $120,000.
3.2 Bonus. In addition to the Base Salary, the Company shall pay
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Xxxxx an annual bonus ("Bonus") with respect to any pretax profit of the Company
(any such pretax profit to be determined in accordance with the usual and
customary accounting practices of the Company and consistent with generally
accepted accounting principles) as follows:
(a) an amount equal to 3% of any pretax profit of the Company in
excess of $1,100,000 with respect to the fiscal year commencing in 1997;
(b) an amount equal to 3% of any pretax profit of the Company in
excess of $1,200,000 with respect to the fiscal year commencing in 1998; and
(c) an amount equal to 3% of any pretax profit of the Company in
excess of $1,300,000 with respect to the fiscal year commencing in 1999.
4. Benefits.
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(a) In addition to the Base Salary and the Bonus, if any, Xxxxx
will be entitled to participate in all benefits of employment available to other
members of the Company's management, on a commensurate basis as they may be
offered from time to time by the Board of Directors to the Company's other
management employees. Such benefits include, but are not limited to, full
medical, dental and long term disability insurance for Xxxxx and his immediate
family, participation in group life insurance and retirement plans, and term
life insurance of $500,000 payable to Kelly's designees. During the period of
his employment hereunder, Xxxxx will be reimbursed for reasonable business,
travel and entertainment expenses incurred in accordance with Company policy on
behalf of the Company in connection with his employment, and will be required to
submit appropriate expense reports for approval by signature of the Chairman of
the Board as a condition of reimbursement of such expenses.
(b) The Company will pay up to $500 per month (including all
maintenance and operating expenses) for Xxxxx to have the use of one Company-
provided automobile (or an equivalent expense allowance for an automobile owned
by Xxxxx).
(c) If the Company's headquarters is moved from Bakersfield,
California, such that Xxxxx must relocate, the Company shall pay his reasonable
relocation costs, including, but not limited to, moving expenses.
5. Authority. So long as Xxxxx serves as Chief Operating Officer of the
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Company under this Agreement, he shall have the authority specified in the
Bylaws of the Company, except that he shall not proceed with any matters, or
permit the Company to take any actions, which are prohibited by, or are in
conflict with, resolutions or guidelines adopted by the Board of Directors,
6. Termination. This Agreement shall terminate in advance of the time
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specified in Section 1 above (and except as provided in Sections 6(c) and 6(d)
below, Xxxxx shall have no right to receive any compensation not due and payable
to him or to his estate at the time of such termination) under any of the
following circumstances:
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(a) Upon the death of Xxxxx.
(b) In the event that Xxxxx shall become either physically or
mentally incapacitated so as to not be capable of performing his duties as
required hereunder, and if such incapacity shall continue for a period of six
months consecutively, the Company may, at its option, terminate this Agreement
by written notice to Xxxxx at that time or at any time thereafter while such
incapacity continues. In case of termination under this Section 6(b) or under
Section 6(a), Xxxxx or his estate shall be entitled to receive Base Salary or
any other compensation accrued or earned as of or to the date of any termination
for six months following such termination, or until the expiration of the term
of this Agreement, whichever is earlier.
(c) By Xxxxx, if the Company shall have materially breached any
of the provisions of this Agreement, and such termination shall have the same
effect on the payment of Kelly's Base Salary and Bonus as a termination by the
Company under Section 6(e).
(d) By the Company for Cause. The term "Cause" used in this
Section 6(e) means Xxxxx, (i) after repeated notices and warnings, fails to
perform his reasonably assigned duties as reasonably determined by the Company,
(ii) materially breaches any of the terms or conditions of Sections 1 or 2 of
this Agreement, or (iii) commits or engages in a felony or any intentionally
dishonest or fraudulent act which materially damages the Company's reputation.
If the Company terminates Xxxxx for Cause, no payments or benefits under this
Agreement shall become payable after the date of Kelly's termination. The
Company may terminate Kelly's employment under this Section 6(e)(i) or (ii) only
if written notice of the facts constituting the basis for such termination has
been given to Xxxxx and Xxxxx shall have been afforded 30 days opportunity to
take such action as may be reasonable under the circumstances to furnish
assurance to the Board of Directors that such basis for termination has been
corrected or cured (to the extent susceptible to cure) and will not recur.
(e) By the Company at any time, without Cause; provided, that
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the Company shall pay Xxxxx his Base Salary and any Bonus which would otherwise
have become payable under Section 3.2 above through the remaining term of this
Agreement.
7. Attorney Fees. The successful party in any litigation relating to
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matters covered by this Agreement shall be entitled to an award of reasonable
attorneys' fees in such action.
8. Assignment. Neither this Agreement nor any of the rights or
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obligations of either party hereunder shall be assignable by either Xxxxx or the
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Company, except that this Agreement shall be assignable by the Company to and
shall inure to the benefit of and be binding upon (i) any successor of the
Company by way of merger, consolidation or transfer of all or substantially all
of the assets of the Company to an entity other than any parent, subsidiary or
affiliate of the Company and (ii) any parent, subsidiary or affiliate of the
Company to which the Company may transfer its rights hereunder.
9. Binding Effect. The terms, conditions, covenants and agreements set
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forth herein shall inure to the benefit of, and be binding upon, the heirs,
administrators, successors and assigns of each of the parties hereto, and upon
any corporation, entity or person with which the Company may become merged,
consolidated, combined or otherwise affiliated.
10. Amendment. This Agreement may not be altered or modified except by
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further written agreement between the parties.
11. Notices. Any notice required or permitted to be given under this
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Agreement by one party to the other shall be sufficient if given or confirmed in
writing and delivered personally or mailed by first class mail, registered or
certified, return receipt requested (if mailed from the United States), postage
prepaid, addressed to such party as respectively indicated below or as otherwise
designated by such party in writing.
If to the Company, to:
Prism Entertainment Corporation
0000 XxXxxxxx Xxxxx, Xxxxx X
Xxxxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxx
Fax: (000) 000-0000
If to Xxxxx, to:
Xxxxx X. Xxxxx
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12. California Law. This Agreement is being executed and delivered and
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is intended to be performed and shall be governed by and construed in accordance
with the laws of the State of California.
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13. Board of Directors. On any matter calling for authorization,
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approval, decision, determination or other action of the Board of Directors
under the provisions of this Agreement, Kelly's vote as a director shall not be
counted.
14. Indemnification Agreement. The Company shall enter into an
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Indemnification Agreement with Xxxxx indemnifying him against personal liability
to the fullest extent permissible under applicable corporate law.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
PRISM ENTERTAINMENT CORPORATION
By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
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Title: President
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/s/ Xxxxx Xxxxx Xxxxx
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Xxxxx Xxxxx Xxxxx
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