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EXHIBIT 10.26
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made and entered into as of
the 4th day of November, 1996 (the "Commencement Date"), by and between
SPELLING ENTERTAINMENT GROUP INC., a Delaware corporation ("Employer"), and
XXXXXXX X. XXXXX ("Employee"). The parties agree to the following:
1. Duties
Employer engages Employee to serve in the capacity of Senior
Vice President and Chief Financial Officer, reporting to the Executive Vice
President, Office of the President of Employer, or such other persons as
Employer may later designate. During the term of this Agreement, Employee shall
perform the duties and responsibilities as shall from time to time, be
reasonably delegated or assigned to Employee by Employer.
2. Employment Term
2.1 Employment of Employee. Subject to the termination
provisions of this Agreement, Employer hereby employs Employee under the terms
and conditions set forth in this Agreement for a period of three (3) years,
commencing on the Commencement Date and terminating on November 3, 1999 (the
"Employment Term").
2.2 Employment Relationship. Employee and Employer
acknowledge and agree that neither has any obligation or duty to renew, extend
or negotiate for the renewal or extension of the employment relationship beyond
the Employment Term. Should the employment relationship continue after the
Employment Term without a new employment contract, the employment during such
period shall be at will, so that either Employer or Employee may terminate the
employment at any time.
3. Compensation
3.1 Base Salary. As compensation for the performance of
Employee's obligations hereunder, Employer shall pay Employee a base salary
("Base Salary") during the Employment Term as follows:
$300,000 during the first year of the Employment Term;
$325,000 during the second year of the Employment Term; and
$350,000 during the third year of the Employment Term.
All compensation under this section shall be payable in
accordance with Employer's normal practices.
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3.2 Bonus Compensation. Employee shall be eligible, at
Employer's sole discretion, to receive bonus compensation up to 40% of
Employee's Base Salary.
4. Benefits
4.1 Expenses. Employer agrees to pay or reimburse Employee
for reasonable and necessary business expenses in accordance with Employer's
general policies for employees of similar stature.
4.2 Medical, Insurance and Other Benefits. During the
Employment Term, Employee shall be entitled to participate in all benefit plans
available to other employees of Employer of similar stature, including, without
limitation, any stock option plan (together with applicable option, vesting,
exercise and termination provisions), or group medical, dental or disability
benefits, as such plans or benefits may be established or modified from time to
time in Employer's sole discretion.
4.3 Stock Options. Subject to the approval of the Board of
Directors and the shareholders of the Company, Employee shall be granted 50,000
stock options to purchase common stock of Employer, at a purchase price equal
to the closing price on November 4, 1996, in accordance with the terms of
Employer's Stock Option Plan (the "Plan"). Such options shall vest in four (4)
equal annual installments commencing November 4, 1996. Vesting shall cease upon
termination of Employee's employment, and Employee's right to exercise stock
options shall cease after termination of Employee's employment for any reason
in accordance with the terms of the Plan. Employee acknowledges and agrees that
the vesting periods referred to herein do not expressly or impliedly constitute
a promise or representation concerning an extension or continuation of the
employment relationship beyond the Employment Term.
4.4 Vacation. During the Employment Term, Employee shall be
entitled to four (4) weeks vacation per year, in accordance with the policies
established from time to time by Employer.
4.5 Pension. Employee shall be eligible to participate in
Employer's 401(k) plan offered to its employees, on the same terms and
conditions applicable to all employees of similar stature under the plan.
4.6 Car Allowance. During the Employment Term, Employee
shall receive a car allowance in the amount of $600.00 per month.
5. Termination for "Cause"
Employer may terminate Employee's employment for "cause" as
defined in this Section at any time upon written notice to Employee. As used
herein, the term "cause" shall mean any one or combination of the following:
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(i) Employee's conviction of any crime (whether or not
involving Employer) which constitutes a crime of moral turpitude or is
punishable by imprisonment of one year or more.
(ii) Any act or omission by Employee involving malfeasance
or negligence, or constituting a material breach of this Agreement.
(iii) Employee's omission or act constituting fraud,
dishonesty or misrepresentation, whether prior or subsequent to the date
hereof, including, without limitation any fraud, dishonesty or
misrepresentation relating to Employee's hiring by Employer.
(iv) Employee's failure, inability (which does not qualify
as a disability under federal or state law), or refusal to perform Employee's
duties on an exclusive and full-time basis.
(v) Employee's violation of any material rule or regulation
of Employer applicable to other employees of similar stature.
Notwithstanding the foregoing, Employee shall not be
deemed in breach of this provision unless and until Employer shall have given
Employee written notice describing the breach and Employee shall have failed to
cure that breach within five (5) days after Employee's receipt of that written
notice, provided further that there shall be no cure period with respect to any
matter incapable of being cured.
6. Mitigation
If Employee's employment is terminated by Employer without
cause, as "cause" is defined in Section 5 hereof, Employer shall, except as
otherwise provided below, pay to Employee the compensation described in Section
3.1 for the balance of the Employment Term. However, Employee shall have the
obligation to use good faith and best efforts to seek alternative employment.
Employer shall be entitled to reduce the amount of any compensation and
applicable benefits payable to Employee under this agreement by the amount of
salary, bonus and/or benefits or other compensation of any kind earned or
received by Employee from any third party and/or any such amounts, compensation
or benefits earned through self employment from the date of termination through
the end of the Employment Term. Notwithstanding the previous sentence, Employer
shall not be entitled to reduce any amounts or compensation received by
Employee which paid for the overhead expenses of Employee's self employment.
7. Confidentiality
7.1 Non-Disclosure of Company Information. During the term
of Employee's employment and thereafter, Employee shall keep in confidence and
shall not use for Employee or others, or divulge to others, any information
pertaining to the
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business of Employer or its affiliates including, without limitation, secret or
confidential information, knowledge, data or plans of Employer or its
affiliates, including, without limitation, matters of a business nature such as
information about costs and profits, projections, personnel information,
records, customer lists, contact persons, customer data, software, sales data,
or matters of a creative nature, including without limitation, matters regarding
ideas of a literary or dramatic nature, or regarding any form of motion pictures
or television product ("Company Information") unless Employee is required to
disclose Company Information pursuant to a court order. Company Information
shall be considered and kept as the private, proprietary and confidential
information of Employer and may not be divulged without the express written
authorization of Employer. Company Information does not include information
which is, or becomes, generally available to the public other than as a result
of an unauthorized disclosure by Employee or Employer or their respective
representatives. In the event that Employee is required to disclose any Company
Information pursuant to a court order, Employee agrees to provide Employer with
prompt notice of such request(s) to enable Employer to seek an appropriate
protective order.
7.2 Return of Records. All records, files, lists, drawings,
documents, models, equipment, software or intellectual property relating to
Employer's business shall be returned to Employer upon the termination of
Employee's employment.
7.3 Irreparable Harm. Employee acknowledges and agrees
that any breach of this provision could cause irreparable harm to Employer,
and would entitle Employer to enjoin unauthorized disclosure of Company
Information.
8. Conflict of Interest
8.1 Restriction of Use of Title. Employee shall not use,
or allow the use of, Employee's title or the fact of Employee's employment or
affiliation with Employer or any of its affiliates in connection with any
activities or endeavors which are not directly related to the performance of
Employee's duties under this Agreement without the prior written approval of
Employer.
8.2 Investment Limitation. Employee shall not become
financially interested in, or associated with, directly or indirectly, any third
party in connection with the production, distribution or exhibition of motion
pictures, television programs, sound recordings, theatrical plays, any visual
an/or audio recordings or any kind, or any other entertainment related business
or activity without the prior written approval of Employer; provided, however,
that this provision shall not prevent Employee from (i) holding a passive or
beneficial interest in any third party which is not a competitor of Employer or
any of its affiliates or (ii) holding a passive or beneficial interest not
exceeding one percent (1%) of the outstanding stock of any publicly traded
corporation whether or not such publicly traded corporation competes with
Employer or any of its affiliates.
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9. No Solicitation of Employees
Employees shall not during the term of this Agreement or for a
period of one year thereafter induce or attempt to induce any employees or
representatives of Employer (or those of any of its affiliates) to stop working
for or representing Employer or any of its affiliates in order to work for or
represent any of Employer's competitors. The provisions of this Section shall
survive the expiration, termination or rescission of this Agreement.
10. Ownership of Intellectual Property
10.1 Agreement to Transfer Intellectual Property. Employer
shall own, and Employee hereby transfers and assigns to it, all rights, of
every kind and character throughout the world, in perpetuity, in and to any
material or ideas and all results and proceeds of Employee's services
hereunder, or conceived of or produced during the term of Employee's
employment, whether the same consists of literary, dramatic, musical, motion
picture, mechanical, or any other form of works, themes, ideas, inventions,
creations, products or compositions.
10.2 Execution of Assignment Documents. Employee agrees to
execute and deliver to Employer such assignments, certificates of authorship,
or other instruments in accordance with standard industry practice as Employer
may require from time to time to evidence ownership of the results and proceeds
of Employee's services. Employee's agreement to assign to Employer any of
Employee's rights as set forth in this Section does not apply to any invention
which qualifies fully as Employee's invention under the provisions of Section
2870 of the California Labor Code, where no equipment, supplies, facility, or
trade secret information of Employer was used and which was developed entirely
upon Employee's own time, and which (i) does not relate to the business of
Employer or to its actual or demonstrably anticipated research or development,
or (ii) which does not result from any work performed by Employee for Employer.
10.3 Status of Ownership of Copyrights. Employee represents
and warrants that except as previously disclosed to Employer in writing,
Employee neither owns nor controls any copyrights, literary rights, contract
rights, or other rights in any literary, dramatic work, musical work or any
concept or idea which could be the basis for a television program, feature
film, video or other motion picture or copyrightable product.
11. Exclusive Services
Employee agrees not to perform services of any kind or nature
which would interfere with the performance of Employee's services hereunder for
any third party or render services for Employee's own account which would
interfere with the performance of Employee's services hereunder.
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12. Unique Personal Services
Employee agrees and acknowledges that Employee's personal
services are of a special, unique, unusual, extraordinary, and intellectual
character giving them a peculiar value, the loss of which Employer cannot be
reasonably compensated for in damages in an action at law. Therefore, in the
event of the breach by Employee of this Agreement, Employer shall,
notwithstanding the provisions of Section 21 below, be entitled to make
application to a court of competent jurisdiction for equitable relief by way of
injunction or otherwise. This provision shall not be construed as a waiver of
any of the rights which Employer may have for damages under this Agreement or
otherwise, and all of Employer's rights and remedies shall be unrestricted.
13. Acknowledgment of Section 508
Employee acknowledges that Employee is familiar with the
requirements of Section 508 of the Federal Communications Act (regarding the
acceptance or payment of money or other consideration for the inclusion of
program matter), is aware that the violation of Section 508 constitutes a
criminal offense, has not violated and will not violate any of the provisions
of Section 508, and has not and will not do any act which would require
disclosure pursuant to Section 508.
14. Disability
If Employee becomes "Materially Disabled" (as defined in this
Section) during the Employment Term, Employer may, at its election, terminate
this Agreement, except that Employee's obligations under Sections 6, 7, 9 and
10 of this Agreement shall survive any such termination. "Materially Disabled"
shall mean any instance where Employee becomes unable, as a result of a serious
health condition (other than a pregnancy-related disability), to render full
services as contemplated by this Agreement for any period totaling more than
twelve (12) weeks in the aggregate during any twelve (12) month period.
15. Death
In the event of Employee's death, this Agreement shall
terminate, and Employer shall thereupon be released and discharged from all
further obligations under this Agreement, except for any vested benefits and
earned and unpaid earned Base Salary for time worked.
16. Complete Agreement
16.1 No Other Agreements. This Agreement is the product of
negotiation between the parties hereto and supersedes all prior agreements, if
any, between Employer and Employee, and constitutes the entire agreement
between the parties.
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16.2 Modification or Amendment. No amendment or modification
of this Agreement shall be valid or binding unless it is in writing and duly
executed by Employer.
16.3 No Third Party Representations. Employee acknowledges
that no person has made any representation or promise on behalf of Employer not
set forth herein and this Agreement has not been executed in reliance upon any
such representation or promise.
17. Severable Agreement
If any provision of this Agreement is declared invalid,
illegal, or incapable of being enforced, all of the remaining provisions of
this Agreement shall nevertheless continue in full force and effect.
18. Notices
Any notice required or desired to be given to Employer or to
Employee shall be given in writing, and shall be addressed:
To Employer:
Spelling Entertainment Group Inc.
0000 Xxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx, Senior Vice President,
General Counsel and Secretary
To Employee:
Xxxxxxx X. Xxxxx
0000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
With a Copy To:
Xxxxxxx Xxxxxxx, Esq.
Ziffren, Brittenham, Branca & Xxxxxxx
2121 Avenue of the Stars
00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Notices given under this Section shall be given by hand delivery,
telecopy, registered mail or overnight courier.
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19. Assignment
Employer shall have the right to assign this Agreement to any
subsidiary or affiliate or successor of Employer.
20. Employer's Affiliated Corporations
20.1 Employee acknowledges and agrees that all of Employee's
covenants and obligations to Employer, as well as the rights of Employer
hereunder, shall run in favor of and shall be enforceable by the parent,
subsidiary and affiliated companies of Employer.
20.2 Employee acknowledges that notwithstanding references
in this Agreement to the parent, subsidiary and affiliated companies of
Employer, this Agreement is between Employee and Employer and there are no
other parties to this Agreement. Employee shall have no right to enforce this
Agreement against SEGI or any other parent, subsidiary and affiliated companies
of Employer unless this Agreement is assigned to any such entity in accordance
with the provisions of paragraph 19 hereof.
21. Alternative Dispute Resolution
21.1 Binding Arbitration. Except for Employer's right to
seek equitable relief in accordance with the provisions of Sections 7, 9, and
12 of this Agreement, the parties agree that all disputes, claims and other
matters in controversy arising out of or relating to this Agreement, or the
performance or breach thereof, shall be submitted to binding arbitration in
accordance with the provisions and procedures of this Section.
21.2 Arbitrator/Place of Arbitration. The arbitration
provided for in this paragraph shall take place in Los Angeles County,
California, in accordance with the provisions of Title 9, Sections 1280 et seq
of the California code of Civil Procedure ("CCP"), except as provided to the
contrary hereunder. The arbitration shall be held before and decided by a
single neutral arbitrator. The single neutral arbitrator shall be selected from
a list of retired judges of the Superior Court of the State of California for
the County of Los Angeles by a process mutually agreed upon by the parties. If
no agreement can be reached as to the process for selecting the arbitrator or
if the agreed method fails, the arbitrator shall be appointed in accordance
with the provisions of CCP Section 1281.6.
21.3 Arbitration Procedures
(a) Time and Place for Hearing. The parties shall mutually
agree upon the date and location of the arbitration, subject to the
availability of the arbitrator. If no agreement can be reached as to the date
and location of the arbitration, the arbitrator shall appoint a time and place
in accordance with the provisions of CCP
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Section 1282.2(a)(1), except that the arbitrator shall give not less
than 30 days notice of the hearing unless the parties mutually agree to
shorten time for notice.
(b) Discovery. The parties shall be entitled to undertake
discovery in the arbitration in accordance with the provisions of
subsections (a) through (d) of CCP Section 1283.05. In conjunction with
these procedures, the parties shall be entitled to request and obtain
production of documents in discovery in the arbitration in accordance
with the same rights, remedies and procedures, and shall be subject to
all of the same duties, liabilities and obligations as if the subject
matter of the arbitration were pending in a civil action before a
Superior Court of the State of California. The parties hereby agree that
any discovery taken hereunder shall be permitted without first securing
leave of the arbitrator and shall be kept to a reasonable minimum.
(c) Award Final. The decision of the arbitrator may be
confirmed pursuant to the provisions of CCP Section 1285, and shall not
be appealable for any reason, it being understood that a petition to
vacate an award for any of the reasons set forth in CCP Section 1286.2
shall not be permitted.
22. Counterparts
This Agreement may be executed in counterparts, each of which,
when so executed, shall be deemed an original, but all of which together shall
constitute one and the same instrument.
23. Governing Law
This Agreement shall be deemed made in the State of California,
County of Los Angeles, and shall be governed by the laws of the State of
California.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
SPELLING ENTERTAINMENT GROUP INC.
(Employer)
By: /s/ Xxxxx Xxxxxxxx
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Its: Executive Vice President
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XXXXXXX XXXXX
(Employee)
/s/ Xxxxxxx Xxxxx
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