EMPLOYMENT AGREEMENT
AGREEMENT, dated as of June 16, 1998, by and between Neptune
Acquisition Corporation, a Delaware corporation (the "Company"), and L.
Steven Minkel (the "Employee").
WHEREAS, the Employee's current employer, Nimbus CD International,
Inc. ("Nimbus"), has entered into an Agreement and Plan of Merger, dated as
of June 16, 1998 with the Company and with Carlton Communications, Plc (the
"Merger Agreement") pursuant to which the Company will merge with and into
Nimbus; and
WHEREAS, the Company desires to secure the continued employment of
Employee as Executive Vice President, Chief Financial Officer and Secretary
following the Effective Time of the Merger (as such term is defined in the
Merger Agreement); and
WHEREAS, the Employee and the Company desire to enter into an
agreement setting forth the terms and conditions of the employment of the
Employee with the Company on and after the Effective Time;
NOW, THEREFORE, IN CONSIDERATION OF the mustial covenants herein
contained, and other good and valuable consideration, the parties hereto
agree as follows:
1. Employment
Subject to the consummation of the transactions contemplated by
the Merger Agreement, the Company hereby agrees to employ Employee, and
Employee agrees to serve as an employee of the Company, on the terms and
conditions set forth in this Agreement, effective as of the date of this
Agreement. The continuation of such employment shall be expressly conditioned
on and subject to the consummation of the transactions contemplated by the
Merger Agreement. This Agreement shall become null and void, and shall have
no force or effect, if the transactions contemplated under the Merger
Agreement are not consummated.
2. Period of Employment
The "Period of Employment" shall be the period commencing on
the Effective Time and ending on the third anniversary of the Effective Time,
during which the Company shall pay to the Employee a base salary and annual
bonus as provided in Section 4 and shall provide the Employee with the
benefits and compensation as described in Section 5. Commencing on the second
anniversary of the Effective Time, if on or before that date the Company has
not delivered to the Employee and the Employee has not delivered to the
Company notice of termination of this Agreement (in accordance with Section
11 hereof), the Period of Employment will be automatically extended each day
by one day until a date which is one year following the date on which the
Company first delivers to the Employee, or the Employee first delivers to
Company, notice of termination of the Agreement.
3. Duties During the Period of Employment.
During the Period of Employment, Employee shall serve as Executive
Vice President, Chief Financial Officer and Secretary of the Company and
shall have such duties and responsibilities as are assigned to him by the
Chief Executive Officer of the Company and the Board of Directors of the
Company commensurate with such position. Employee shall report directly to
the Chief Executive Officer of the Company.
Employee shall devote Employee's full business time, attention and
efforts to the affairs of the Company during the Period of Employment,
provided, however, that Employee may engage in other activities, such as
activities involving professional, charitable, educational, religious and
similar types of organizations, speaking engagements, membership on the board
of directors of such other organizations as Company may from time to time
agree to, and activities of a similar nature to the extent that such other
activities do not inhibit the performance of Employee's duties under this
Agreement, or conflict in any material way with the business of Company and
its affiliates.
Employee's principal work location will be in Charlottesville,
Virginia. Employee agrees to travel to, and work at, the offices of the
Technicolor Packaged Media
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Group in Camarillo, California as is reasonably required for the performance
of his assigned duties.
4. Annual Cash Compensation.
(a) Base Salary.
As compensation for his services hereunder, Company will pay to
Employee during the Period of Employment a base salary at the annual rate of
$250,000, payable in accordance with the Company's standard payroll practices
for senior executives. Company shall review the Employee's base salary on
October 1, 1999 and on each October 1 thereafter during the Period of
Employment and in light of such review may, in the discretion of the Board of
Directors of Company (but shall not be obligated to), increase such base
salary taking into account any change in Employee's responsibilities,
increases in the cost of living, the Employee's job performance and other
pertinent factors. Effective as of the date of any such increase, the base
salary (as increased) shall be considered the Employee's new base salary for
all purposes of this Agreement and may not thereafter be reduced. Any
increase in base salary shall not limit or reduce any other obligations of
the Company to the Employee under this Agreement.
(b) Annual Bonus Plan.
For each fiscal year during the Period of Employment, other than
with respect to the Carlton Communications, Plc ("Carlton") or Technicolor
Packaged Media Group 1998 fiscal year, Employee will participate in the
Technicolor Packaged Media Group annual bonus plan and shall be eligible to
receive an annual target bonus in accordance with the terms of such plan.
Employee shall be entitled to receive a maximum bonus of 30% of base salary
if certain operating profit and cash flow objectives (as agreed to in the
annual budget) are met and certain personal management objectives mutually
agreed to by the Employee and the Company at the beginning of each fiscal
year are satisfied. In order to receive a bonus under the plan, the Employee
must be employed by the Company at the time required for the payment of
bonuses under the terms of the annual bonus plan.
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5. Other Employee Benefits and Compensation.
(a) Initial Carlton Stock Option.
The Company shall request as of the date of this Agreement that
Carlton shall immediately grant to the Employee, effective as of the date of
this Agreement, an option (the "Stock Option") to purchase ordinary shares of
Carlton pursuant to the Carlton 1987 Incentive and Nonqualified Stock Option
Plan for US Employees and Directors, as amended. The Stock Option shall be
expressly conditioned on and subject to the consummation of the transactions
contemplated by the Merger Agreement. The Stock Option shall be null and
void, and shall have no force and effect, if the transactions contemplated
under the Merger Agreement are not consummated. The Stock Option shall permit
the Employee to acquire ordinary shares of Carlton equal in amount to the
result of dividing four times the Employee's base salary (as defined in
Section 4(a)) by the fair market value of one ordinary share of Carlton as of
the date of this Agreement. The exercise price per share of the Stock Option
shall be equal to the fair market value of one ordinary share of Carlton as
of the date of this Agreement. The Stock Option shall become nonforfeitable
and exercisable in three installments as follows: (i) 60% of the Stock Option
on the day immediately preceding the third anniversary of the Effective Time;
(ii) 20% of the Stock Option on the day immediately preceding the fourth
anniversary of the Effective Time; and (iii) 20% of the Stock Option on the
day immediately preceding the fifth anniversary of the Effective Time. The
Stock Option shall be granted on terms and conditions which are not less
favorable than those set forth in the stock option agreement attached as
Exhibit A.
(b) Long Term Incentive Plan.
Employee shall be entitled to participate in the Technicolor
Packaged Media Group Long Term Incentive Plan and to receive awards
thereunder in accordance with the terms of such Plan, as summarized in the
attached Exhibit B.
(c) Vacation and Sick Leave.
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Employee shall be entitled to reasonable paid annual vacation
periods (but in no event less than four weeks in each year) and to reasonable
sick leave as determined by the Board of Directors of Company.
(d) Regular Reimbursed Business Expenses.
Company shall reimburse Employee for all expenses and
disbursements reasonably incurred by Employee in the performance of
Employee's duties during the Period of Employment, and provide such other
facilities or services as Company and Employee may, from time to time, agree
are appropriate, all in accordance with the Company's established policies.
(e) Employee Benefit Plans.
In addition to the cash compensation described in Section 4, the
Employee shall be entitled to participate in the Company's employee benefit
plans, as presently in effect or as may be modified by the Company from time
to time, subject to meeting the eligibility conditions of such plans and any
applicable provisions of this Agreement.
(f) Executive Compensation Plans.
In addition to the cash compensation described in Section 4 and
the executive compensation and benefits described in this Agreement, the
Employee shall be entitled to participate in Company's executive compensation
plans, as presently in effect or as may be modified by the Company from time
to time, subject to meeting the eligibility conditions of such plans and any
applicable provisions of this Agreement.
(g) Relocation Expenditures.
In the event the Employee agrees to relocate to the offices of the
Technicolor Packaged Media Group in Camarillo, California, Company shall
reimburse Employee in amounts, which after provision for the net amount of
all income taxes payable by Employee with respect to the receipt of such
amounts (taking into account any moving expense or other deductions available
to Employee), shall be equal to all reasonable expenses of moving Employee
and Employee's family and their personal effects from Charlottesville,
Virginia (the "Existing Location") to Camarillo, California, including,
without limitation, (i) reasonable travel expenses, (ii) all household moving
expenses, (iii)
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all real estate expenses associated with selling the Employee's Existing
Location home and purchasing a new home, (iv) up to six (6) months of
reasonable temporary living costs, and (v) a cost of living salary adjustment
if a recognized national survey shows the cost of living in the new location
is on average more than 5% above the cost of living for the Existing Location.
(h) Options and Bonuses in Replacement of Nimbus Options.
The Employee shall receive additional options to purchase ordinary
shares of Carlton and a cash bonus, in accordance with the provisions of the
attached Exhibit C.
6. Termination.
(a) Termination by Company Without Cause.
If the Company terminates the Employee's employment during the
Period of Employment without Cause (as defined below), in addition to all
other compensation and benefits payable to the Employee under this Agreement,
the Company shall pay to Employee in a lump sum an amount equal to the
greater of:
(i) the product of (A) the number of years and
fractions thereof remaining until the third anniversary
of the Effective Time and (B) the base annual salary
payable to Employee pursuant to Section 4(a) as of the
date of termination of the Employee's employment; or
(ii) the base annual salary then payable to the
Employee pursuant to Section 4(a).
The lump sum payment shall be paid to the Employee within thirty (30) days
following the date of the Employee's termination of employment.
Until the third anniversary of the Effective Time, the Company
shall provide the Employee with the same level of medical and dental benefits
upon substantially the same terms and conditions (including contributions
required by Employee for such benefits), as existed immediately prior to
Employee's termination of employment.
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For purposes of this Agreement, "Cause" shall mean (i) the
willful and continued failure by Employee to perform substantially his duties
with Company (other than any such failure resulting from incapacity due to
physical or mental illness) after a demand for substantial performance is
delivered to Employee by the Company which specifically identifies the manner
in which Company believes Employee has not substantially performed his
duties; (ii) the Employee's conviction of a felony; (iii) the Employee's
habitual abuse of narcotics or alcohol; or (iv) the Employee's fraud,
material dishonesty or gross misconduct in connection with the business of
the Company or its affiliates. Cause shall not exist unless and until the
Company has deliverd to Employee a copy of a resolution duly adopted by
two-thirds (2/3) of the entire Board of Directors of the Company (excluding
Employee if Employee is a Board member) at a meeting of the Board held for
such purpose (after reasonable notice to Employee and an opportunity for
Employee, together with counsel, to be heard before the Board), which (i)
finds that in the good faith opinion of the Board an event constituting Cause
has occurred, and (ii) sets forth in detail the basis for the Board's
findings.
(b) Termination by Company for Cause.
If Company terminates the Employee's employment during the Period
of Employment for Cause (as defined above), Employee will be entitled only to
(i) the base annual salary otherwise payable to Employee under Section 4(a)
through the end of the month in which the Period of Employment is terminated,
and (ii) the benefits described in Section 5(h).
(c) Termination by Employee for Good Reason.
If the Employee terminates employment during the Employee Period
after having given written notice to the Board of Directors of the Company
that an event constituting Good Reason has occurred, and the Company does not
reasonably remedy such event within the period described below, the
Employee's employment shall be deemed to have been terminated by the Company
without Cause and he shall receive the lump sum payment and all other
benefits described in Section 6(a) above.
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For purposes of this Agreement, "Good Reason" shall mean: (i)
the failure of the Company or any of its affiliates to comply with any of the
material provisions of this Agreement or any agreement which relates to the
Agreement, (ii) any material adverse change in the Employee's
responsibilities and duties, or (iii) the failure by the Company to assign
this Agreement to a successor to the Company or the failure of a successor to
the Company to explicitly assume and agree to be bound by this Agreement.
Notwithstanding the foregoing, an isolated action taken in good faith and
which is remedied by the Company within ten (10) days after receipt of notice
given by Employee shall not constitute Good Reason.
7. Noncompetition.
(a) Employee covenants that at all times during the period of
his employment and for a period of one year immediately following the
termination thereof for any reason, he will not, without the prior written
consent of Company, which consent shall not be unreasonably withheld, for a
period of one year following his date of termination, either individually or
in partnership or jointly or in conjunction with any person as principal,
agent, employee, shareholder (other than by way of holding shares listed on a
stock exchange in a number not exceeding five percent of the outstanding
class or series of shares so listed) or in any other manner whatsoever carry
on, be engaged in, be concerned with or be interested in, or advise, lend
money to, guarantee the debts or obligations of or permit his name or any
part thereof to be used or employed by, any person engaged in or concerned
with or interested in, any business in competition with the business carried
on by Company or any of its subsidiaries or affiliates.
(b) Employee hereby covenants and agrees that, at all times
during the period of his employment and for a period of one year immediately
following the termination thereof for any reason, Employee shall not employ
or seek to employ any person employed at that time by Company or any of its
subsidiaries or its affiliates who is engaged in or concerned with or
interested in, any business in competition with the business carried on by
Company or any of its subsidiaries or affiliates, or otherwise encourage or
entice such person or entity to leave such employment.
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(c) Employee hereby covenants and agrees that to the extent that
he receives compensation or benefits from other employment, the payments to
be made and the benefits to be provided by the Company shall, to the extent
permitted under applicable law, be correspondingly reduced, if such
compensation or benefits are earned through competing activity as defined in
this Section 7.
(d) It is the intention of the parties hereto that the
restrictions contained in this Section 7 be enforceable to the fullest extent
permitted by applicable law. Therefore, to the extent any court of competent
jurisdiction shall determine that any portion of the foregoing restrictions
is excessive, such provision shall not be entirely void, but rather shall be
limited or revised only to the extent necessary to make it enforceable.
(e) Employee confirms that all restrictions in this Section 7
are reasonable and valid and all defenses to the strict enforcement thereof
by Company are hereby waived by Employee.
8. Confidential Information.
Employee agrees to keep secret and retain in the strictest
confidence all confidential matters which relate to Company or any affiliate
of Company, including, without limitation, customer lists, client lists,
trade secrets, pricing policies and other business affairs of Company and
any affiliate of Company learned by him from Company or any such affiliate or
otherwise before or after the date of this Agreement, and not to disclose any
such confidential matter to anyone outside Company or any of its affiliates,
whether during or after his period of service with Company, except as may be
required by a court of law, by any governmental agency having supervisory
authority over the business of the Company or by any administrative or
legislative body (including a committee thereof) with apparent jurisdiction
to order him to divulge, disclose or make accessible such information.
Employee agrees to give Company advance written notice of any disclosure
pursuant to the preceding sentence and to cooperate with any reasonable and
legally permissible efforts by Company to limit the extent of such
disclosure. Upon request by Company, Employee agrees to deliver promptly to
Company upon termination of his services for Company, or at any time
thereafter as Company may request, all Company or
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affiliate memoranda, notes, records, reports, manuals, drawings, designs,
computer files in any media and other documents (and all copies thereof)
relating to Company's or any affilliate's business and all property of
Company or any affiliate associated therewith, which he may then possess or
have under his control, other than personal notes, diaries, rolodexes and
correspondence.
9. Remedy.
Should Employee engage in or perform, either directly or
indirectly, any of the acts prohibited by Section 7 or 8 hereof, it is agreed
that Company shall be entitled to full injunctive relief, to be issued by any
competent court of equity, enjoining and restraining Employee and each and
every other person, firm, organization, association, or corporation concerned
therein, from the continuance of such violative acts. The foregoing remedy
available to Company shall not be deemed to limit or prevent the exercise by
Company of any or all further rights and remedies which may be available to
Company hereunder or at law or in equity.
10. Governing Law.
This Agreement is governed by and is to be construed and enforced
in accordance with the laws of the State of Virginia without reference to
principles relating to conflicts of law. If under such law, any portion of
this Agreement is at any time deemed to be in conflict with any applicable
statute, rule, regulation or ordinance, such portion shall be deemed to be
modified or altered to conform thereto or, if that is not possible, to be
omitted from this Agreement; the invalidity of any such portion shall not
affect the force, affect and validity of the remaining portion hereof.
11. Notices.
All notices under this Agreement shall be in writing and shall be
deemed effective when delivered in person, or five (5) days after deposit
thereof in the U.S. mails, postage prepaid, for delivery as registered or
certified mail, addressed to the respective party at the address set forth
below or to such other addresses as may hereafter be designated
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by like notice. Unless otherwise notified as set forth above, notice shall be
sent to each party as follows:
(a) Employee, to:
L. Steven Minkel
1446 Bremerton Lane
Keswick, VA 22947
(b) Company, to:
Sarah Osborne
Brandywine Corporate Center
Naamans Road, Suite 117
Claymont, DE 19703
(805) 792-2666 (facsimile)
Attention: Chairman
with a copy to:
Thomas M. Collins, Jr.
3223 East Mission Oaks Blvd.
Camarillo, CA 93012
(805) 445-1964 (facsimile)
Attention: Vice President
In lieu of personal notice or notice by deposit in the U.S. mail,
a party may give notice by confirmed telegram, telex or fax, which shall be
effective upon receipt.
12. Miscellaneous.
(a) Entire Agreement.
This Agreement constitutes the entire understanding between
Company and Employee relating to employment of Employee by Company and
supersedes and cancels all prior written and oral agreements and
understandings with respect to the subject matter of this Agreement, including
but not limited to the term sheet to this Agreement dated May 13, 1998.
Notwithstanding the foregoing, nothing in this Agreement shall supersede or
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cancel any other written agreements or understandings between the Employee
and any affiliate of the Company. This Agreement may be amended but only by a
subsequent written agreement of the parties. This Agreement shall be binding
upon and shall inure to the benefit of Employee, Employee's heirs, executors,
administrators and beneficiaries, and Company and its successors and assigns.
(b) Withholding Taxes.
All amounts payable to Employee under this Agreement shall be
subject to applicable income, wage and other tax withholding requirements.
(c) Reimbursement of Legal Fees and Expenses.
The Company shall pay all reasonable legal fees and expenses, if
any, that are incurred by the Employee to successfully enforce this Agreement
and which result from a breach of this Agreement by the Company, any
affiliate of the Company, or any successor thereto.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the year and day first above written.
Neptune Acquisition Corporation
By:
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Chairman
/s/ L. Steven Minkel
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L. Steven Minkel