EXHIBIT 10.8
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is entered into as of October
10, 1996 between Metro-Xxxxxxx-Xxxxx Inc., a Delaware corporation (the
"Company") and A. Xxxxxx Xxxxxx ("Executive").
The parties agree as follows:
1. Employment and Title. Effective as of October 10, 1996, the Company
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employs Executive as, and Executive accepts employment to serve as, Vice
Chairman, all upon the terms and conditions set forth in this Agreement
including the powers and authority set forth in Paragraph 2 below.
2. Powers and Authority.
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a. Title. During the Term, as defined in Paragraph 6 below,
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Executive shall be Vice Chairman. Executive shall have all the powers and
duties typically exercised by chief operating officers at companies in the
entertainment industry of similar size and nature as the Company and, subject to
the direction of the Chief Executive Officer of the Company, shall be in charge
of all aspects of the business
activities and operations of the Company, including, but not limited to,
business and legal affairs, corporate communications, strategy and development,
human resources, finance and administration, the Home Entertainment,
Telecommunications, Consumer Products, and Interactive divisions, all joint
ventures, and all other such aspects of the business activities of the Company,
except those matters related to, or executives exercising, creative decisions.
b. Services. Executive's services shall be exclusive to the Company and
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its subsidiaries. Executive shall devote his best efforts and substantially his
full business time (except as provided in the following sentence) to the
services to be performed hereunder. Executive may serve on the boards of
directors of (but in no other capacity for) other companies and non-profit
organizations, may manage the investment of his personal assets, and may make
new investment of his personal assets in other companies so long as such
activities do not materially interfere with Executive's duties hereunder and
(other than investments not to exceed 1% of the total outstanding in publicly
traded securities) such companies do not directly compete with the Company.
3. Location. The location of Executive's principal place of employment shall
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be in his office at the Company's headquarters, both of which shall be in the
greater
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Los Angeles, California area, provided, however, that Executive shall perform
such services outside of Los Angeles as are, in his and the Chairman and Chief
Executive Officer of the Company's reasonable determination, reasonably required
for the proper performance of his duties under this Agreement.
4. Reporting. Executive shall report to, and only to, the Chairman
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and Chief Executive Officer of the Company.
5. Availability. Each party represents and warrants to the other
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that it has the full power and authority to enter into and perform its
obligations under this Agreement and that its execution of and performance under
this Agreement shall not constitute a default under or breach of the terms of
any other agreement or order of any court or governmental authority to which it
is a party or under which it is bound. Each party shall defend and hold harmless
the other for any and all claims, demands, losses or damages (including
reasonable attorneys' fees) arising from any action against any such party due
to a breach of any representation and warranty contained in the Paragraph or
based upon any allegations of interference with contractual obligations or the
like based upon any allegations of interference with contractual obligations or
the like relating to the negotiation or execution of this Agreement.
6. Term. Subject to the provisions for earlier termination set forth
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in Paragraph 11, the term of Executive's employment hereunder shall commence on
the effective date and continue through October 9, 2001 (the "Term"), provided
Executive's
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employment may be terminated on the occurrence of an event described in
Paragraph 11. Neither the Company nor Executive will have any obligation to
renew or extend this Agreement beyond the Term.
7. Compensation.
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a. Salary and Bonus. In full consideration for the services to be
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rendered by Executive, and in full discharge of the Company's salary
obligations, Company shall pay to Executive and Executive shall accept:
i. an annualized base salary of $950,000 (less appropriate
deductions) during each year of the Term, payable bi-weekly in arrears
commencing on the first regular bi-weekly payment date; and
ii. an annual guaranteed bonus (or such applicable prorated portion
thereof in the first and last years of the Term) of $750,000 (less
appropriate deductions), payable on or before January 10 following the
expiration of each calendar year (or pro rata portion thereof) and payable
at the end of the Term for the last year of the Term; and
iii. an annual bonus (or such applicable pro-rated portion thereof in
the first and last years of the Term) (less appropriate deductions) to be
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determined in the sole discretion of the Chairman and Chief Executive
Officer of the Company, payable on the first day of the second month
following the completion of each fiscal year of the Term; and
iv. participation in the P&F Acquisition Corp. and
Metro-Xxxxxxx-Xxxxx Inc. 1996 Management Stock Option and Bonus Plans
(the "1996 Management Incentive Plan") in the amounts designated
therein.
b. Other Benefits. Executive shall be entitled to such
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additional benefits as are made available to executives in comparable positions
in the Company, including, without limitation, a car allowance, an executive
assistant, reimbursement of reasonable travel expenses, including first class
airfare, for Executive and Executive's spouse, when accompanying Executive on
travel, to the extent, in Executive's reasonable judgment, her presence is
required or advisable in the Company's interest in the discharge of Executive's
duties, and four (4) weeks vacation per year.
c. Business Expenses. During the Term, the Company shall pay
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or reimburse Executive promptly for all reasonable and necessary business
expenses incurred by Executive in the performance of this duties under this
Agreement, with the requirements of reporting and verification as may be
applicable to other senior executives of the Company.
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d. Insurance.
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i. During the Term, Executive shall be entitled to and
shall be accorded all rights and benefits under any disability
insurance, health and major medical insurance policy or policies,
which the Company provides for its senior officers or employees
generally. Nothing in this paragraph shall require the Company to
retain any particular policy or plan, but some reasonable policy or
plan shall be maintained.
ii. The Company shall purchase a term life insurance policy
on Executive's life in the face amount of $5 Million, the proceeds of
which shall be payable to Executive's estate or such other person or
persons as Executive shall designate.
e. Employee Benefit Plans. Executive shall be entitled to
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participate in and/or receive all other employee benefits under any 401(k) Plan,
a Savings Plan, and such other similar plan or program which the Company
provides for its senior officers or employees generally, all subject to the
terms and conditions of the various benefit plans.
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8. Compensation in the Event of Termination.
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a. If the Executive's employment is terminated under Paragraph 11(a),
Executive or his estate shall receive the compensation provided in Paragraphs
7(a)(i) and 7(a)(ii) through such termination date and a pro rata portion of the
amount set forth in Paragraph 7(a)(iii), if any, discounted to present value at
the 30-day LIBOR rate in effect at the date of termination, and payable within
ten (10) days of termination, and all amounts accrued under benefit plans in
which Executive is a participant as of such termination date, including without
limitation, the benefits provided in Paragraph 7(a)(iv) in accordance with the
provisions of the 1996 Management Incentive Plan, which Plan benefits shall vest
immediately.
b. If the Executive's employment is terminated under Paragraph 11(b),
Executive shall receive the amounts and benefits set forth in Paragraph 8(a),
plus 50% of the compensation provided in Paragraphs 7(a)(i) and 7(a)(ii) through
what would be the remainder of the Term, without regard to such termination.
c. If the Executive's employment is terminated under Paragraph 11(c)
or 11(e) below, or expires pursuant to its terms, Executive shall receive:
i. the net present value, discounted at the 30-day LIBOR rate in
effect at the date of termination, and payable within ten (10) days of
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termination, of the difference between (x) $8.5 Million, and (y) the sum of all
amounts paid to the date of the termination pursuant to Paragraphs 7(a)(i) and
7(a)(ii); and
(ii) the benefits specified in Paragraph 7(d) for what would be the
remainder of the Term without regard to such termination (provided, however,
that if prior to the expiration of said remainder of the Term, Executive
receives any of the types of benefits specified in Paragraph 7(d) from a
subsequent employer, the Company shall immediately cease to provide such types
of benefits received from the subsequent employer).
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d. If the Employment is terminated under Paragraph 11(d), Executive
shall not be entitled to receive any payment or benefits following the date of
termination, except as may be accrued to the date of termination, including the
pro rata portion of the guaranteed bonus pursuant to Paragraph 7(a)(ii), or
vested under the 1996 Management Incentive Plan, or any other plan or policies
of the Company.
9. Property Rights. Executive agrees that all the results and proceeds of
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his services, including any ideas, programs, formats, plans and arrangements,
composed, conceived or created by him during the period of this employment,
solely or in collaboration with others, whether or not same is made at the
request or suggestion of the Company, or during or outside regular hours of
work, shall at all times be and remain the sole and exclusively property of the
Company. The Executive further agrees that he will, at the request of the
Company, executive and deliver to the Company, in the form satisfactory to the
Company, documents evidencing the Company's ownership to the foregoing, but
notwithstanding that no such documents are executed, the Company, as
Executive's employer, shall be deemed the owner thereof immediately upon
creation. All memoranda, notes, records and other documents made or compiled by
the Executive, or made available to him, during his employment by the Company
shall remain the sole and exclusive property of the Company. Employee shall not
use for himself, or others, any secret of confidential information, knowledge or
data of the Company obtained by Executive as a result of his employment by the
Company. Anything to this Agreement to
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the contrary notwithstanding, the provisions of this paragraph shall survive the
termination, for any reason, of this Agreement.
10. Existing Employment Agreement. Executive and the Company agree
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to terminate, as of the date of this Agreement, the current Employment Agreement
date as of August 6, 1993, between Executive and the Company. In full
satisfaction and settlement of all amounts due to Executive under the current
Employment Agreement, Executive shall receive, upon execution of the Agreement
(i) 360 units of P&F Capital Stock, consisting of 4/9 of a share of P&F Common
Stock and 5/9 of a share of P&F Series A convertible Preferred Stock; and (ii)
cash of $235,343, out of which the Company shall make the required withholdings
under applicable Federal, state and other tax laws, rules or regulations.
11. Termination. Executive's employment shall terminate:
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a. Upon the death of Executive.
b. At the opinion of the Company, if Executive is disabled.
Disability shall mean Executive's inability to substantially perform his duties
hereunder due to a medically determinable physical or mental impairment that
can reasonably be expected to result in death within twelve (12) months, or
which has lasted or can be expected to last for a continuous period of not
less than twelve (12) months.
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c. After thirty (30) days' written notice by the Company to Executive
without "Cause".
d. Upon written notice by the Company to Executive for "Cause" which
shall be defined as set forth in Paragraph 1.1 of the 1996 Management Incentive
Plan.
e. Upon thirty (30) days' written notice by Executive to the Company
for "Good Reason" which shall include:
i. a substantial and adverse change in Executive's status or
position as Vice Chairman or a key employee of the Company, or a reduction in
the duties and responsibilities as contemplated by this Agreement, as set forth
in Paragraph 2; or
ii. a reduction (other than for "Cause" or as the result of a
lower payment under Paragraph 7(a)(iii) by the Company in Executive's
compensation as provided in Section 7 of this Agreement that is not cured
within thirty (30) days of written notice thereof to the Company from Executive;
or
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iii. Intentionally omitted.
iv. the occurrence of a Designated Change of Control
(as defined in Section 6(e) of the 1996 Management Incentive Plan).
v. Intentionally omitted.
f. At the expiration of the Term.
12. No Mitigation. Except as provided in Paragraph 8(c) regarding
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benefits provided by a subsequent employer, and without limiting any other
provision hereof, any income and any other employment benefits received by
Executive from any and all sources other than the Company before or after the
expiration or termination of this Agreement for any reason whatsoever shall in
no way reduce or otherwise affect the Company's obligation to make payments and
afford benefits hereunder. Executive shall have no duty to seek employment. No
claim, including without limitation, a claim under Paragraph 9, the Company has
against Executive under this Agreement or otherwise shall be used to offset the
Company's obligation hereunder.
13. Intentionally omitted.
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14. Miscellaneous.
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a. Arbitration. Any controversy or claim arising out of or
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relating to this Agreement or any breach of this Agreement shall be settled by
arbitration. Any such arbitration shall be held in Los Angeles, California and
shall be conducted in accordance with the Commercial Arbitration Rules of the
American Arbitration Association. The Special New Procedures for Large, Complex
Issues shall apply. The arbitration proceedings shall be conducted in English.
The arbitration panel shall consist of three (3) arbitrators to be selected
pursuant to such Commercial Arbitration Rules. The arbitration proceedings, all
documents related thereto and all testimony, written or oral, and the
arbitration award shall be confidential, except with respect to any proceedings
commenced to compel arbitration or to enforce the arbitration award or as
otherwise required by law.
b. Applicable Law and Venue. This Agreement and any disputes
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or claims arising hereunder shall be construed in accordance with, governed by
and enforced under the laws of the State of California without regard for any
rules or conflicts of law. The State and federal courts (or arbitrators
appointed as described herein) located in Los Angeles, California shall be the
sole fora for any action for relief arising out of or pursuant to, or to enforce
or interpret, this Agreement. Each party to this Agreement consents to the
personal jurisdiction and arbitration in such fora and
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courts and each party hereto convenants not to, and waives any right to seek a
transfer of venue from such jurisdiction on any grounds.
c. Interpretation. The provisions of this Agreement were
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negotiated by each of the parties hereto and this Agreement shall be deemed to
have been drafted by each party.
d. Representations of the Company. The Company represents and
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warrants that this Agreement is validly binding and enforceable in accordance
with its Terms on the Company.
e. No waivers. The failure of either party to enforce any
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provision of this Agreement shall not be construed as a waiver of any such
provision, nor prevent such party thereafter from enforcing much provision or
any other provision of this Agreement. Rights granted the parties hereto herein
are cumulative and the election of one shall not constitute a waiver of such
party's right to assert all other legal remedies available under the
circumstances.
f. Notices. Any notice to be given under the terms of this
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Agreement shall be in writing and may be delivered personally, be telecopy,
telex or
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other form of written electronic transmission, by overnight courier or by
registered or certified mail, postage prepaid, and shall be addressed as
follows:
TO THE COMPANY:
Metro-Xxxxxxx-Xxxxx Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000-0000
Attention: Director of Human Resources
WITH A COPY TO:
Metro-Xxxxxxx-Xxxxx Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000-0000
Attention: Legal Department
TO THE EXECUTIVE:
Mr. A. Xxxxxx Xxxxxx
000 Xxxxxx Xxxxx
Xxxxxxx Xxxxxxxxx, Xxxxxxxxxx 00000
WITH A COPY TO:
Simpson, Thacher & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx Xxxxx, Esq.
Telecopier: 212/455-2502
Either party may hereafter notify the other in writing of any change in address.
Any notice hereunder shall be deemed duly given when received by the person to
whom it was sent.
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g. Severability. The provisions of the Agreement are severable
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and if any provision of the Agreement shall be held to be invalid or otherwise
unenforceable, in whole or in part, the remainder of the provision, or
enforceable parts thereof, shall not be affected thereby unless as a result of
such severing the remaining provisions or enforceable parts do not substantially
reflect the intention of the parties in entering into this Agreement.
h. Successors and Assigns. The rights and obligations of the
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parties under this Agreement shall inure to the benefit of and be binding upon
their successors and assigns, including the survivor upon any merger,
consolidation or combination of the Company with any other entity.
i. Entire Agreement. This Agreement supersedes all prior
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agreements and understanding between the parties hereto, oral or written, and
may not be modified or terminated orally. No modification, termination or
attempted waiver shall be valid unless in writing, signed by the party against
whom such modification, termination or waiver is sought to be enforced.
j. Survival. The provisions of Paragraphs 8, 9, 10, 11, 12,
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and 14 of this Agreement shall survive the Term, it being understood that the
foregoing shall not limit Executive's rights with respect to amounts due him and
unpaid at, or after, the expiration of the Term.
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k. Confidential and Publicity. This Agreement shall remain
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confidential and the terms shall not be divulged to any person except to the
extent required by law or legal process. Any press release or announcement or
relating to this Agreement and the timing of any such announcement shall only
be made with the agreement of Executive and the Company.
l. Attorneys' Fees and Costs. If any arbitration proceeding or any
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action at law or in equity is commenced hereunder, the prevailing party shall
receive its attorneys' fees, costs and disbursements in addition to any other
relief granted. Each party may be represented by counsel of its choice even
though such counsel may have represented the other party in matters related to
the business of the Company, and each party agrees to execute an appropriate
waiver to effectuate this clause.
m. Indemnification. The Company shall indemnify Executive through
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its Certificate of Incorporation, By-laws, indemnification agreements or
otherwise to the fullest extent permitted by the Delaware General Corporation
Law (including the reimbursement of defense costs as incurred), as the same
exists and may hereafter be amended. Such indemnification shall apply, but not
be limited to, any actions taken or omissions by Executive, including, without
limitation, furnishing information, during the period from and after January 1,
1996 until the Closing Date in
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connection with the potential sale of the Company and Executive's efforts to
assemble a bid group to purchase the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first above written.
METRO-XXXXXXX-XXXXX INC.
By /s/ Xxxxx X. Xxxxxxx
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Its Chairman CEO
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/s/ A. Xxxxxx Xxxxxx
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A. Xxxxxx Xxxxxx
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