EXHIBIT 10.18
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of July 1, 1994, (as from time to time
amended, this "Agreement") between xxxx xxxxx productions, inc., a Delaware
corporation (the "Company"), and Xx. Xxxxxxx X. Xxxxxxxx (the "Executive").
The Executive is currently the Vice President, Treasurer and Chief
Financial Officer of the Company and has served in that capacity pursuant to an
Employment Agreement dated as of July 1, 1994 (the "Old Agreement"). The Company
wishes to continue the Executive's employment with the Company in the
Executive's present capacity but changing his title to Vice President --
Finance, Treasurer and Chief Financial Officer, and the Executive wishes to
continue his employment with the Company in that capacity, with the change in
title, subject to the terms, provisions and conditions set forth in this
Agreement.
Therefore the Company and the Executive hereby agree as follows:
1. Employment.
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(a) The Company hereby employs the Executive for the Term (as
hereinafter defined) of this Agreement (subject to earlier termination as
hereinafter provided), and the Executive hereby accepts such employment as
herein provided and agrees to serve the Company, as its Vice President --
Finance, Treasurer and Chief Financial Officer, with such duties and
responsibilities as are normally associated with those positions and such other
duties as may from time to time be assigned to the Executive by the President
and Chief Operating Officer of the Company or the Board of Directors of the
Company. The Executive shall devote his best efforts and substantially all of
his business
time to the performance of his duties and obligations under this Agreement and
shall perform them faithfully, diligently, competently and to the best of his
ability. The Executive shall report directly to the President and Chief
Operating Officer of the Company.
(b) The Executive shall not engage in any outside activities, whether
or not during regular business hours, if such activities would detract from the
performance of his duties and obligations hereunder. Notwithstanding anything to
the contrary contained in the immediately preceding sentence, the Executive may
devote a portion of his business time to serving as an officer of companies a
majority of whose equity is owned by Xx. Xxxxxxx X. Xxxxx on the date of this
Agreement and companies a majority of whose equity is owned by Xx. Xxxxxxx X.
Xxxxx after the date of this Agreement (collectively, the "Xxxxx Affiliates")
and to Xx. Xxxxx directly; provided however, that providing services to the
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Xxxxx Affiliates or Xx. Xxxxx'x directly does not compete with any business or
activity conducted by the Company (unless such activities were presented to the
Company and the Board of Directors of the Company determined not to engage in
such activities); and provided further, that such activities do not materially
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interfere with the Executive's performance of his duties and obligations under
this Agreement.
2. Term of Employment.
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The Executive's employment by the Company pursuant to this Agreement
shall commence as of the date of this Agreement and, subject to earlier
termination pursuant to Section 5 or 7 hereof, shall terminate on June 30, 1997
(the "Term").
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3. Compensation.
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(a) As full compensation for all services rendered by the Executive
to the Company under this Agreement, the Company shall pay to the Executive (i)
a base salary at the initial annual rate of $150,000, payable in equal
installments (once every two weeks) in accordance with the Company's customary
payroll practice for its senior executives, and (ii) subject to the
discretionary nature thereof, a bonus determined in accordance with Section 3(c)
hereof.
(b) The base salary payable to the Executive pursuant to Section 3(a)
hereof, shall be subject to adjustment based upon the Consumer Price Index for
the Los Angeles, California, Metropolitan Area (the "CPI Index") or if the CPI
Index is no longer published by the United States Department of Commerce any
successor index to the CPI Index or any comparable index (the "Inflation
Index"), for each year during the Term of this Agreement, commencing with the
year beginning on July 1, 1995. For each such year, the Executive's base salary
shall be adjusted (either up or down but never to an amount below $150,000) for
any cost of living increase or decrease, as evidenced by the Inflation Index for
the yearly period ending on the December 31 immediately preceding the relevant
July 1, as compared to the yearly period ending December 31 immediately
preceding such December 31. For example, on July 1, 1995 the base salary payable
to the Executive pursuant to Section 3(a) hereof shall be adjusted based upon
any increase in the Inflation Index for the period from January 1, 1994, through
December 31, 1994, when compared to the period from January 1, 1993 through
December 31, 1993.
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(c) The Company may, in its sole and absolute discretion, pay an
annual bonus to the Executive for any completed fiscal year of the Company. The
bonus shall be based upon such criteria as the President of the Company and
Chief Operating Officer considers appropriate. In no event will any bonus paid
pursuant to this Section 3(c) exceed fifty percent (50%) of the Executive's base
compensation payable pursuant to Section 3(a) hereof.
(d) In addition to the foregoing, as consideration for the Executive
entering into this Agreement, the Company hereby grants to the Executive the
option to purchase up to 7,500 shares of the Company's Common Stock par value
$0.01 per share (the "Option Shares"), at fair market value for the Option
Shares on the date this grant is approved by the Company's Stock Option
Committee. The Option Shares shall vest in annual increments of 2,500 Option
Shares as follows: 2,500 on June 29, 1995, 2,500 on June 29, 1996 and 2,500 on
June 29, 1997; provided that on each such date the Executive continues to be
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employed by the Company hereunder. The Option Shares shall be issued under and
subject to all of the terms and provisions to the Company's 1987 Employee Stock
Option Plan.
4. Fringe Benefits; Expenses, etc.
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(a) The Executive shall be entitled to receive all health and pension
benefits provided by the Company to its senior executives as a group and shall
also be entitled to participate in all other benefit plans provided by the
Company to its senior executives as a group.
(b) The Company shall reimburse the Executive for all reasonable,
necessary and ordinary out-of-pocket expenses incurred by him in connection with
the performance of his
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services for the Company pursuant to this Agreement; provided, however, that
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each such reimbursement shall be upon submission of vouchers and receipts in
accordance with the Company's customary policies and procedures from time to
time in effect. In addition, the Company shall reimburse the Executive for the
costs associated with the use of the Executive's cellular telephone maintained
in his automobile.
(c) The Executive shall be entitled to four (4) weeks vacation time
annually, to be taken at times selected by him, subject to the concurrence of
the President and Chief Operating Officer of the Company, which are consistent
with the proper performance of the Executive's duties under this Agreement.
5. Disability or Death.
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(a) If, as the result of any physical or mental disability, the
Executive shall have failed or been unable to perform his duties for a period of
one hundred twenty (120) consecutive days or greater than one hundred eighty
(180) days during any twelve (12) month period, the Company may, be notice to
the Executive subsequent thereto, terminate the Executive's employment under
this Agreement, effective as of the date of the notice, and the Company shall
not be required to make any further payment or to furnish any benefit to the
Executive under this Agreement (other than accrued and unpaid base salary
pursuant to Section 3(a) hereof and expenses pursuant to Section 4(b) hereof and
the benefits which have accrued pursuant to any plan pursuant to Section 4(a)
hereof or by applicable law).
(b) The term of the Executive's employment under this Agreement shall
terminate upon his death and the Company shall not be required to make any
further payment or to furnish any benefit to the Executive under this Agreement
(other than
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accrued and unpaid salary pursuant to Section 3(a) hereof and expenses pursuant
to Section 4(b) hereof and benefits which have accrued pursuant to any plan
pursuant to Section 4(a) hereof or by applicable law).
6. Non-Competition; Confidential Agreement.
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(a) From the date hereof through the later to occur of (i) the
termination of the Executive's employment under this Agreement and (ii) June 30,
1997, unless the Executive's employment with the Company is terminated "without
cause", the Executive shall not, directly or indirectly, engage or be interested
(as a stockholder, director, officer, agent, broker, partner, individual
proprietor, joint venturer, lender or otherwise), individually or in any
representative capacity, in any other business which is competitive with any
business conducted by or contemplated to be conducted by the Company or any
Xxxxx Affiliate, except that the Executive may own not more than 5% of the
outstanding securities of any class of any publicly held company.
(b) The Executive shall not, directly or indirectly, either during
the term of the Executive's employment under this Agreement or thereafter,
disclose to any person or entity (except in the regular course of the Company's
business during the period of the Executives's employment hereunder or as
required by applicable law), or use in competition with the Company or any Xxxxx
Affiliate, any information of any nature whatsoever acquired by the Executive
during his employment by the Company or during the period that the Executive
provides services to such Xxxxx Affiliate, with respect to any confidential,
secret, non-public or proprietary aspect of the Company's or such Xxxxx
Affiliate's operations, business affairs, financial
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condition, customers, clients, trade secrets or other confidential information,
unless such information has become known to the general public other than by
reason of any action (direct or indirect) on the part of the Executive.
(c) The Executive shall not, directly or indirectly, either during
the term of the Executive's employment under this Agreement or for a period of
one (1) year thereafter, solicit the services of any person who was a full-time
employee of the Company or any Xxxxx Affiliate (other than employees employed
for limited periods of time in connection with the production of particular
television or motion picture programming and the Executive's executive
assistant) during the last twelve months of the period of the Executive's
employment with the Company hereunder.
(d) The Executive acknowledges that the remedy at law for breach of
any of his covenants or obligations under this Section 6 will be inadequate and,
accordingly, in the event of any breach or threatened breach by the Executive of
the provision of this Section 6, the Company shall be entitled, in addition to
all other rights and remedies to obtain an injunction restraining any such
breach or threatened breach (without posting any bond or other security and
without the necessity of demonstrating actual damages). The equitable remedy set
forth in this Section 6(d) shall not be the exclusive remedy available to the
Company and shall be cumulative with all other rights and remedies available to
the Company at law, in equity or otherwise.
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7. Termination.
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The Company shall have the right to terminate the Executive's
employment with the Company (i) "for cause" or (ii) "without cause". For
purposes of this Agreement, termination "for cause" shall mean termination of
the Executive's employment based upon (i) any breach of the Executive's
covenants or obligations under Section 6 of this Agreement which is not cured
within thirty (30) days after written notice to the Executive by the Company;
(ii) fraud, theft or gross malfeasance on the part of the Executive, including,
without limitation, conduct of a felonious or criminal nature, embezzlement or
misappropriation of assets; (iii) the chronic addiction of the Executive to
drugs or alcohol; (iv) violation by the Executive of his duties or obligations
to the Company or any Xxxxx Affiliate, including, without limitation, conduct
which is inconsistent with the Executive's position and which results or is
reasonably likely to result (in the opinion of the President and Chief Operating
Officer of the Company) in an adverse effect (financial or otherwise) on the
business of the Company or any Xxxxx Affiliate, as the case may be, and such
violation is not cured within fifteen (15) days after written notices to the
Executive by the Company; or (v) the Executive's failure, refusal or neglect to
perform his duties hereunder within a reasonable period, under the
circumstances, after written notice from the Board of Directors or the President
and Chief Operating Officer of the Company (specifically identifying the manner
in which the Board of Directors or the President and Chief Operating Officer of
the Company believes that the Executive has failed, refused or neglected his
duties). A termination of the Executive's employment with the Company for any
reason other than those enumerated in the immediately preceding sentence or as
provided in Section 5 hereof shall be, for purposes of this Agreement, deemed to
be
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a termination of the Executive's employment with the Company "without cause".
If the employment of the Executive is terminated "for cause", the
Company shall not be obligated to make any further payment to the Executive
(other than accrued and unpaid base salary pursuant to Section 3(a) hereof and
expenses pursuant to Section 4(b) hereof incurred prior to the date of
termination), or continue to provide any benefit (other than benefits which have
accrued under any plan pursuant to Section 4(a) hereof or by applicable law) to
the Executive under this Agreement prior to the date of termination. If the
Executive's employment is terminated "for cause", to the extent permitted by
applicable law, the Company shall be entitled to deduct any amounts owing to the
Company from the amounts payable to the Executive. If the employment of the
Executive is terminated "without cause", the Company shall pay to the Executive
all of his base salary pursuant to Section 3(a) hereof for the remainder of the
term of this Agreement, as if the employment of the Executive hereunder had not
been terminated regardless of the amount of compensation the Executive may earn
or be able to earn with respect to any other employment (subject to Section 6(a)
hereof) he may obtain or be able to obtain (i.e. the Executive shall have no
duty to mitigate and the Company shall have no right to offset), but the Company
shall not be obligated to continue to provide any other benefit (other than the
benefits under any plan pursuant to Section 4(a) hereof through June 30, 1997,
unless such benefits are available to the Executive in connection with other
employment obtained by the Executive) to the Executive under this Agreement.
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8. Miscellaneous.
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(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAW OF THE STATE OF CALIFORNIA APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED IN CALIFORNIA. THIS AGREEMENT SHALL BE INTERPRETED WITHOUT ANY
PRESUMPTION AGAINST THE PARTY CAUSING THIS AGREEMENT TO BE DRAFTED.
(b) This Agreement contains a complete statement of all the
agreements and understandings between the Company and the Executive with respect
to its subject matter, supersedes all previous agreements and understandings
among them relating such subject matter (whether written or oral) including,
without limitation, the Old Agreement, all of which are merged herein. This
Agreement cannot be modified, amended or terminated orally and may only be
modified or amended by an instrument in writing signed by each of the parties
hereto. There are no representations or warranties between the parties with
respect to the subject matter hereof, except as expressly set forth herein.
(c) Any notice or other communication under or relating to this
Agreement shall be in writing and shall be considered given when received and
shall be delivered personally or mailed by certified mail, return receipt
requested or by an overnight courier service, to the parties at their respective
addresses set forth below (or at such other address as a party may specify by
notice to the other):
If to the Company, to it at:
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn: President and Chief Operating Officer
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with a copy to
Xxxxxx Xxxxxx Flattau & Klimpl
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxx Xxxxxxxx, Esq.
If to the Executive to him at:
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
(d) The failure of a party to insist upon strict adherence to any
term or provision of this Agreement on any occasion shall not be considered a
waiver or deprive that party of the right thereafter to insist upon strict
adherence to that term or provision or any other term or provision of this
Agreement. Any waiver must be in writing and signed by each of the parties. All
rights and remedies of the parties hereunder are cumulative and may be exercised
separately or concurrently. Any waiver of any term or provision hereof shall be
effective for the specific instance in which given and it shall not be construed
as a waiver of any other term or provision.
(e) The invalidity or unenforceability of any term or provision of
this Agreement shall not affect the validity or enforceability of the remaining
terms or provisions of this Agreement which shall remain in full force and
effect and any such invalid or unenforceable term or provision shall be given
full effect as far as possible. If any term or provision of this Agreement is
invalid or unenforceable in any one jurisdiction, it shall not affect the
validity or enforceability of that term or provision in any other jurisdiction.
It is the intention of the parties that this Agreement be enforced by any court
of competent jurisdiction to the fullest extent permitted by applicable law
and that the Agreement may be reformed and
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amended by a court of competent jurisdiction in connection with its enforcement.
(f) This Agreement is not assignable by either party, except that it
shall inure to the benefit of and be binding upon any successor to the Company
by merger or consolidation or any assignee of the Company upon the acquisition
of all or substantially all of the Company's assets by such assignee: provided
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such successor assumes all of the obligations of the Company hereunder; and this
Agreement shall inure to the benefit of the heirs and legal representatives of
the Executive.
(g) The section headings are inserted herein for convenience of
reference only and shall not be taken into account in the interpretation or
construction of this Agreement.
xxxx xxxxx productions, inc.
By: /s/ Xxxxxxx X. Xx Xxxxx
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Name:
Title: President
/s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
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