Exhibit 10.17
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made effective as of February 19, 1996, and has been
entered into between Unapix Entertainment, Inc., a Delaware corporation with its
principal offices at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000 (hereinafter,
together with its subsidiaries referred to as the "Employer" or "Company"), and
Xxxxxx Xxxxxx, an individual with a residence located at 000 Xxxxxxxxx Xxxxxx,
Xxxxxxxxx, XX 00000 (hereinafter called the "Employee").
WHEREAS, Employer desires to employ, on the terms and conditions set forth
herein, the Employee as Executive Vice President of Employer's Unapix North
American division (the "North American Division"); and
WHEREAS, The Employee desires to be employed by the Employer on the
terms and conditions set forth herein,
NOW THEREFORE, the Employer and Employee agree as follows:
1. EMPLOYMENT:
The Employer hereby employs the Employee, and the Employee hereby
accepts such employment, upon the terms and conditions hereinafter set forth.
2. TERM:
Subject to the provisions of termination as hereinafter provided,
the term of this agreement shall begin on February 19, 1996, and shall terminate
on February 18, 1999 (being three years after the commencement date). The term
of this Agreement is hereinafter sometimes referred to as the "Employment
Period".
3. COMPENSATION:
(a) For all services rendered by the Employee under this Agreement,
the Employer shall pay the Employee a salary of $136,000 per year (the "Base
Salary").
Such compensation shall be payable in equal installments in conformity
with the regular payroll of Employer. Commencing January 1, 1997 and for each
year thereafter that this agreement is in effect, Employee's Base Salary will be
increased by the increase, during the prior year, in the Consumer Price Index
applicable to the New York, New York, Metropolitan Region as published by the
Bureau of Labor statistics of the U.S. Department of Labor (the "Index"). If the
Employer's Board of Directors awards the Employee a discretionary bonus or
increases his salary in any year and an increase is due to Employee as a result
of an increase in the Index, the increase attributable to the increase in
the Index will be offset by the amount of the discretionary bonus or salary
increase received by the Employee in the prior year.
(b) Employee will receive from the Company, as bonus compensation, the
following percentages of "Commissions" (as hereinafter defined) actually
received by the North American Division during the Employment Period from such
division's distribution of entertainment properties during such period: (i) 2.5%
of all Commissions; plus (ii) 2.5% of all Commissions generated by sales or
licenses of entertainment properties for which Employee was the principal
salesperson of the Company responsible for originating and completing same. Such
bonus shall be payable on the 45th day following the end of each calendar
quarter during the Employment Period with respect to Commissions received during
such quarter. "Commissions" shall mean all sums actually received (on a cash
basis) by the North American Division as payment of a sales commission or
distribution fee; provided, however, that the following shall not be included in
the definition of "Commissions": (x) any sums received by the North American
Division with respect to licenses granted, or sales made, by such division to
other divisions or subsidiaries of the Company or any affiliates of the Company;
and (y) any sums received by the North American Division with respect to
licenses or sales of "Ushuaia". Notwithstanding anything else to the contrary
contained herein, (i) the Company shall pay Employee $1,500 per month as an
advance of his bonus hereunder, which advance shall be setoff against all bonus
amounts which would otherwise be due Employee hereunder whether for the year in
which such advance is paid or for subsequent periods, and (ii) the last day of
the Employment Period shall be deemed to be the last day of a calendar quarter
for purposes of computing the bonus to which Employee is entitled with respect
to the calendar quarter in which his Employment Period ends.
4. DUTIES:
The Employee is employed as Executive Vice President of the North
American Division. Employee shall report to the President and Chairman of the
Board of the Company, until otherwise directed by the Company's Board of
Directors, and shall perform such duties as are assigned to him by the President
or Chairman of the Board.
5. EXTENT OF SERVICES:
During the term of his employment, Employee will devote all of his
business related time to the performance of his services for the Company, and
except as may be specifically permitted by the Board of Directors of the
Company, shall not be engaged in any other business activity during the
Employment Period.
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6. VACATION:
The Employee shall be entitled each year to a vacation of three
weeks as well as three personal days, during which time his compensation shall
be paid in full and his fringe benefits shall not be suspended or diminished.
7. FRINGE AND RETIREMENT BENEFITS:
The Employee shall be entitled to participate on the same basis, and
subject to the same qualifications as other executives of the Employer (other
than those benefits provided under or pursuant to separate individual employment
agreements or arrangements), in any pension, profit sharing, insurance, stock
purchase, savings, hospitalization, sick leave and other fringe benefit plans
("Plans") in effect from time to time with respect to executives of the Employer
(the "Fringe Benefits"). Employee's Base Salary shall constitute the
compensation on the basis of which the amount of Employee's benefits under any
such plan shall be fixed and determined.
8. EXPENSES:
The Employee shall be entitled to reimbursement for reasonable
out-of-pocket expenses incurred on behalf of the Employer, including all
reasonable travel and entertainment expenses paid or incurred by Employee in
connection with the performance of his duties. Employee shall provide such
documentation for such expenses as Employer shall from time to time reasonably
require.
9. TERMINATION:
(a) Death. If Employee dies during the Employment Period, the
Company shall pay Employee's designated beneficiary (or, in the event of the
death of or failure to designate a beneficiary, Employee's personal
representative) the Base Salary provided for in Section 3(a) above, for the four
calendar week period (the "Four Week Period") following the calendar week in
which Employee dies, at the rate in effect at the time of his death. The
Employment Period shall be deemed to end as of the end of the Four Week Period,
but without prejudices to any other payments due in respect of Employee's death.
(b) Disability. If Employee suffers a "Disability" (as hereinafter
defined) and as a result is unable to perform substantially and continuously the
duties assigned to him for a period of 90 consecutive or non-consecutive days
out of any consecutive twelve-month period, the Company shall have the right to
terminate the employment of the Employee effective 30 days after notice in
writing to the Employee. In the event of termination pursuant to this Section
9(b), the Employee shall be entitled to
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receive (i) any Base Salary and other benefits earned and accrued, and
reimbursement for expenses incurred, prior to the date of termination, (ii)
regular installments of the Employee's Base Salary for the four week period
immediately following such termination. No provision of this Agreement shall
limit any of Employee's rights under any Plans for which the Employee was
eligible at the time of such death or Disability. During the period of any
Disability prior to termination of the Employee's employment, the Employee shall
continue to receive his Base Salary, reduced by any payments paid to the
Employee for the same period because of disability under any disability or
pension plan of the Company.
For purposes of this Agreement, "Disability" shall mean the mental or
physical inability of the Employee to materially perform his duties under this
Employment Agreement.
(c) Termination for Employee's Breach. Employer shall have the right to
terminate this Agreement and the employment hereunder if Employee materially
violates his responsibilities under the Agreement and such violation continues
after having received notice of such violation and 30 days to cure such
violation(s) to the satisfaction of Employer's Board of Directors. Employer may
immediately terminate this Agreement (i) upon the good-faith determination,
based upon reasonable evidence, by Employer's Board of Directors that the
Employee has willfully defaulted on a material obligation of this Agreement,
(ii) upon the good-faith determination, based upon reasonable evidence, by
Employer's Board of Directors that there has been a defalcation of the
Employer's funds by Employee, (iii) upon conviction of Employee on a felony
charge, (iv) upon Employee's commission of an act of moral turpitude which is in
some manner related to the business of the Company; or (v) subject to Section 10
below, upon the good-faith determination, based upon reasonable evidence, by
Employer's Board of Directors that the Employee has continued to have
unauthorized discussions of Employer's business activities, or continued to
improperly disclose trade secrets or confidential information concerning
Employer's business activities or proposed business activities, after having
been provided with written notice from the Company with respect to unauthorized
discussions or improper disclosure of trade secrets or confidential information.
Upon termination of employment pursuant to this Section 10(c), Employee shall
not be entitled to any further bonus payments pursuant to Section 3(b).
(d) Termination for Employer's Breach. Employee shall have the right
to terminate this Agreement if the Employer materially breaches any of the
provisions hereof and such breach is not cured within thirty (30) days after the
Employer receives written notice from Employee thereof.
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10. CUSTOMER LISTS AND TRADE SECRETS:
From and after the date of this Agreement, including after the
Employment Period, Employee shall treat as the Company's confidential trade
secrets all data, information, ideas, knowledge and papers pertaining to the
affairs of the Company. Without limiting the generality of the foregoing, such
trade secrets shall include: the identity of the Company's customers, suppliers
and prospective customers and suppliers; the identity of the Company's creditors
and other sources of financing; the Company's estimating and costing procedures
and the cost and gross prices charged by the Company for its products; the
prices or other consideration charged to or required of the Company by any of
its suppliers or potential suppliers; the Company's sales and promotional
policies; and all information relating to entertainment programs or properties
being produced or otherwise developed by the Company. Employee shall not reveal
said trade secrets to others except in the proper exercise of his duties and
authorities for the Company, or use his knowledge thereof in any way that would
be detrimental to the interests of the Company, unless compelled to disclose
such information by judicial or administrative process; provided, however, that
the divulging of information shall not be a breach of this Section 10 to the
extent that such information was (i) previously known by the party to which it
is divulged, (ii) already in the public domain, all through no fault of
Employee, or (iii) required to be disclosed by Employee pursuant to judicial or
governmental order. Employee shall also treat all information pertaining to the
affairs of the Company's suppliers and customers and prospective customers and
suppliers as confidential trade secrets of such customers and suppliers and
prospective customers and suppliers.
11. CERTAIN RESTRICTIONS:
During the Employment Period and for a period of two years
thereafter Employee shall not (i) influence or attempt to influence any customer
not to do business with the Company, (ii) induce, invite, solicit or attempt to
induce, invite or solicit any person who shall have been an employee of the
Company at the time of termination of the Employment Period or during any part
of the period of one year prior to such date to leave the employ of the Company
or to become interested in or in any way connected with a business similar to
that of the Company, or employ or attempt to employ any such employee of the
Company, (iii) divert or attempt to divert any business from the Company, (iv)
interfere or attempt to interfere in any way with the Company's relationship
with any of such customers, employees or suppliers.
In addition to any other restrictions on Employee's activities, Employee
shall not, during the Employment Period, directly or indirectly, except with the
written consent of Company, engage in any business (whether alone or as a
consultant, officer, director, owner, employee, partner or other active or
passive participant) with or for, be financially interested in, or
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represent or otherwise render assistance or services to any person or entity who
or which competes or intends to compete, or who or which is affiliated (by
reason of common control, ownership or otherwise) with any other person or
entity who or which competes or intends to compete, directly or indirectly, with
the business then conducted by the Company or any of its affiliates.
12. INJUNCTION:
Notwithstanding any other provisions of this Agreement, Employee
acknowledges and agrees that in the event of a violation or threatened violation
of any of the provisions of Sections 10 or 11, Employer shall have no adequate
remedy at law and shall therefore be entitled to enforce each such provision by
temporary or permanent injunctive or mandatory relief obtained in any court of
competent jurisdiction without the necessity of proving damage, without posting
bond or other security, and without prejudice to any other remedies that may be
available at law or in equity.
13. OPTIONS TO PURCHASE COMMON STOCK:
Promptly following execution of this Agreement the Company shall
issue to Employee 78,750 common stock purchase options (the "Initial Options"),
each entitling the Employee to purchase one share of the Company's common stock
at an exercise price of $4.29 per share (Such figures give effect to the
Company's 5% stock dividend paid on May 6, 1996 to stockholders of record on
April 28, 1996). The Company shall issue to Employee 75,000 additional options
(the "Additional Options"; collectively, the Initial Options together with the
Additional Options are referred to as the "Options") to purchase shares of the
Company's common stock, upon the following terms and conditions: (i) if the
North American Division has "Fee Income" (as hereinafter defined) of at least
$500,000 ("Fee Benchmark I") for the year ended December 31, 1996, then 25,000
Additional Options shall be issued to Employee (i.e. options to purchase 25,000
shares of the Company's common stock); if the North American Division has Fee
Income of at least $750,000 ("Fee Benchmark II) for the year ended December 31,
1997, then another 25,000 Additional Options will be issued to Employee (i.e.
options to purchase another 25,000 shares of the Company's common stock); and if
the North American Division has Fee Income of at least $1,000,000 ("Fee
Benchmark III," and together with Fee Benchmarks I and II, the "Fee Benchmarks")
for the year ended December 31, 1998, then the remaining 25,000 Additional
Options will be issued (i.e. options to purchase the remaining 25,000 shares of
the Company's common stock). The Additional Options to be issued following a
particular year will be issued on a pro rata basis if at least 50% of the Fee
Benchmark for that year has been attained. For example, if during the year ended
December 31, 1996 the North American Division attains Fee Income of only
$250,000 (one-half of Fee Benchmark I), one-half of one-third of the Additional
Options will be issued (i.e. 12,500 Additional Options).
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The Fee Benchmarks shall be cumulative through the year ending December 31, 1998
to the extent the Company does not achieve any of the prior years' Fee
Benchmarks. For example, if during the year ending December 31, 1996, the North
American Division attains Fee Income of only $250,000 (and, therefore, only
one-half of one-third of the Additional Options are issued following that year),
the one-half of one-third portion which were not issued following such year may
be issued following the year ending December 31, 1997, if the North American
Division attains Fee Income of $1,000,000 (Fee Income of $750,000 which would
meet Fee Benchmark II for the year ending December 31, 1997, and an additional
Fee Income of $250,000, which compensates for the amount by which Fee Benchmark
I was missed in the previous year).
Each Additional Option shall entitle the Employee to purchase one share of
the Company's common stock at an exercise price equal to the "Market Value" (as
hereinafter defined) of such common stock on the date such option is issued. The
Additional Options earned with respect to any particular year shall be issued on
the day preceding the Company's announcement of its earnings with respect to
such year. "Market Value" means the closing sales price of the Company's common
stock as reported by the principal stock exchange on which shares of the
Company's common stock are traded, and if not so traded on a securities
exchange, then as reported by NASDAQ (and if not so reported by NASDAQ or traded
on a securities exchange, the "Market Value" shall mean the average of the bid
and asked prices of the Company's common stock as reported in the "pink
sheets.")
The Initial Options shall terminate on June 30, 2001. Each Additional
Option shall terminate five years after the date of its issuance.
Notwithstanding the foregoing, all Options shall terminate ninety (90) days
after termination of Employee's employment by the Company, unless such
termination of employment is pursuant to Section 9(c), in which case such
Options shall immediately expire. The Options shall have such other terms and
provisions as are customarily contained in options granted by the Company to its
other employees.
For purposes of this Section 13, "Fee Income" for a particular year means
the North American Division's income for such year derived from sales
commissions or distribution fees, determined in accordance with generally
accepted accounting principles and as reflected in the Company's audited
financial statements for such year; provided however, that the following shall
not be included in the definition of "Fee Income": (x) any sums received by the
North American Division with respect to licenses granted, or sales made, by such
division to other divisions or subsidiaries of the Company or any affiliates of
the Company; and (y) any sums received by the North American Division with
respect to licenses or sales of "Ushuaia".
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14. MISCELLANEOUS PROVISIONS:
(a) Notice and Communication. All notices and communications
hereunder shall be in writing and shall be hand delivered or sent postage
prepaid by registered or certified mail, return receipt requested, to the
addresses first above written or to such other address of which notice shall
have been given in the manner herein provided.
(b) Entire Agreement. All prior agreements and understandings
between the parties with respect to the subject matter of this Agreement are
superseded by this Agreement, and this Agreement constitutes the entire
understanding between the parties with respect to employment of the Employee by
Employer. This Agreement may not be modified, amended, changed or discharged,
except by a writing signed by the parties hereto and then only to the extent
therein set forth.
(c) Non-Delegation, Etc. Neither party may assign any rights under
this Agreement; provided, however, that upon the sale of all or substantially
all of the assets, business and goodwill of the Company, or upon the merger of
the Company into or consolidation thereof with another corporation, this
Agreement shall bind and inure to the benefit of both the Employee and the
acquiring, succeeding or surviving corporation or other entity or individual, as
the case may be.
(d) Waiver. No waiver of any breach of this agreement or of any
objection to any act or omission connected herewith shall be implied or claimed
by any party, or be deemed to constitute a consent to any continuation of such
breach, act or omission, unless in a writing signed by the party against whom
enforcement of such waiver or consent is sought, and then only to the extent
therein set forth.
(e) Section Headings. The section headings of this agreement
are solely for the purpose of convenience and shall neither be deemed a part
of this agreement nor used in any interpretation thereof.
(f) Governing Law. This Agreement and the relationship of the
parties shall be governed by, and construed in accordance with, the laws of the
State of New York, without giving effect to conflict of laws principles.
(g) Prior Employment. Employee represents to Employer that Employee
is not a party to or bound by any other agreement, understanding or restriction
relating to his employment. Employee expressly represents, undertakes and agrees
that he has not done and will not do anything in furtherance of this Agreement
or his duties hereunder that will violate any obligations he may have to any
prior employer (or will impose upon Employer any liability to
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any prior employer) and that he will comply with all requirements of notice
applicable to the termination of any prior employment or agreement before he
commences his employment under this Agreement.
(h) Severability. If any provision of this Agreement or part
thereof, is held to be unenforceable, the remainder of such provision and this
Agreement, as the case may be, shall nevertheless remain in full force and
effect.
(i) Binding Effect. This Agreement shall be binding upon and
inure to the benefit of Employee, the Company, and the Company's successors
and assigns.
(j) Cooperation in Connection with Obtaining Key Man Life Insurance.
If the Company, in its discretion, elects to obtain "Key Man", life insurance
with respect to Employee, which insures Employee's life and names the Company as
beneficiary, Employee shall cooperate with the Company in obtaining said
insurance. Without limiting the generality of the foregoing, Employee agrees to
submit to such medical examinations, and take such other actions, as may be
reasonably requested by the Company in obtaining such insurance.
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IN WITNESS WHEREOF, the parties hereto execute this Agreement and intend
to be hereby bound, effective as of the date first above written.
UNAPIX ENTERTAINMENT, INC.
ATTEST:
/s/ By:/s/ Xxxxx X. Xxx
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Xxxxx X. Xxx, President
WITNESS:
/s/ Xxxxxx X. Xxxxxx /s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx
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