Exhibit 10(a)
EXECUTION COPY
AGREEMENT
THIS AGREEMENT, dated as of September 1, 1998, by and between UNITEL VIDEO,
INC., a Delaware corporation (herein "Employer") and ALBERT WALTON, an
individual residing at 1040 S. Longwood Ave., Los Angeles, CA 90019
(hereinafter "Employee").
Section 1. EMPLOYMENT.
A. Employee shall perform such duties and exercise such powers on behalf
of Employer and have such responsibilities as are consistent with the position
of "President - Editel Los Angeles", together with any other function as might
reasonably be deemed required and necessary for the advancement of the interests
of Employer.
B. Employee shall devote his best efforts and his time, knowledge, skill,
attention and energy exclusively to the business of Employer in the advancement
of the interests of Employer. Employee will not engage in any activities that
would interfere with his ability to discharge his responsibilities as an
employee of Employer.
C. Employer shall have the right at any time, and from time to time, to
modify the duties to be performed by Employee, or the powers exercised by him,
consistent with the discharge of his responsibilities as President of Editel Los
Angeles; provided, however, that Employer may not modify the duties of Employee
such that the modification(s) creates a substantial change or alteration in
Employee's duties without first obtaining Employee's written consent.
Section 2. TERM OF EMPLOYMENT.
A. Employee's employment under this Agreement shall be for an initial
period of 12 months commencing on September 1, 1998 and ending on August 31,
1999 (the "Initial Term"). The Initial Term shall automatically renew for an
additional twelve month period expiring on August 31, 2000 (such period being,
the "Renewal Year" and the Initial Term and the Renewal Year being the
"Employment Period"), unless either party shall have given the other written
notice, at least ninety (90) days prior to the end of the Initial Term, that the
Employment Period shall expire at the end of the Initial Term.
B. Notwithstanding the terms of paragraph A of this section, Employee's
employment is subject to termination by Employer in accordance with the
provisions of Section 5 of this Agreement.
Section 3. COMPENSATION.
A. In consideration for the services to be rendered by Employee hereunder
and in consideration of the covenants herein given by Employee, Employer shall
pay to Employee an annual base salary (i) during the Initial Term equal to Two
Hundred Thousand Dollars ($200,000.00) and (ii) during the Renewal Year equal to
the greater of (a) $200,000.00 (the "Base Amount") or (b) the Base Amount plus
an amount equal to the percentage increase in the Bureau of Labor Statistics
Consumer Price Index, All Urban Consumers, for the Los Angeles Metropolitan Area
(the "Index") (or its successor index, or, failing such successor, the most
nearly comparable index published by a governmental authority) at August 31,
1999 over the index at August 31, 1998 multiplied by the Base Amount (by way of
example, at September 1, 1999 the Index increase shall be measured by comparing
the Index at August 31, 1999 over the Index at August 31, 1998 and in the event
that the Index increase during that period is 5%, Employee's annual base salary
shall increase in the Renewal Year to $210,000.00).
B. Employee shall be paid bonus compensation in respect of each fiscal
year of Employer during the Employment Period equal to five (5%) percent of the
increase in pre-tax net income of Editel Los Angeles for such fiscal year over
the pre-tax net income of Editel Los Angeles in the prior fiscal year
(calculated in accordance with Employer's accounting practices currently in
force; provided that the corporate charge used in calculating such amount shall
be whatever was agreed to in the budget for Editel Los Angeles for such fiscal
year (whether the actual number for such charge in such fiscal year increases or
decreases from such budgeted amount) and the depreciation expense used in such
calculation shall be the lesser of the budgeted amount or the actual amount for
Editel Los Angeles for such fiscal year unless actual exceeds budgeted due to an
increase in Editel Los Angeles' capital budget for such fiscal year in which
case the actual amount will be used in such calculation). Bonus compensation
payable pursuant to this Section 3B shall be paid within 90 days after the end
of the applicable fiscal year. Bonus compensation shall be pro rated in respect
of any period during the Employment Period which is shorter than a full fiscal
year of Employer.
C. All compensation provided for in this paragraph 3, shall be subject to
withholding as required by law or by the terms of any applicable benefit plan(s)
and shall be paid in accordance with Employer's customary practices.
Section 4. BENEFITS.
A. During the Employment Period, Employee shall be eligible to
participate in such pension, insurance, medical, disability and other employee
benefit plans of Employer which may be in effect from time to time, to the
extent he is eligible under the terms of those plans on the same basis as other
similarly situated employees of Employer.
B. Employee shall receive vacation during each annual period during the
Employment Period calculated in accordance with Employer policy.
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C. Employer will pay for (i) lease payments on one automobile leased and
utilized for business purposes not to exceed a maximum of $600 per month
(including sales taxes) and (ii) the cost of insurance and maintenance for such
automobile.
Section 5. TERMINATION.
A. Employee's employment and his rights hereunder shall terminate on the
first to occur of the following dates:
(i) the expiration of the Employment Period;
(ii) the date on which Employer gives Employee written notice of
termination for cause pursuant to subsection (b) hereof;
(iii) upon Employee's death; or
(iv) at the option of Employer, at the expiration of the maximum
period or leave pursuant to the federal Family Medical Leave
Act (if applicable to Employee) or 60 days after the onset of
Employee's disability, whichever is later.
B. Should Employee (in the reasonable opinion of Employer) (i) fail,
neglect or refuse (other than by reason of mental or physical disability) to
perform or observe any or all of his obligations hereunder at the time and in
the manner herein provided; (ii) commit an act of dishonesty, gross negligence
or willful misconduct, including, without limitation, fraud or embezzlement;
(iii) make or be found to have made any false representation or warranty herein;
(iv) be in breach of any material covenant or other obligation contained in this
Agreement; (v) be convicted of a felony or any crime involving moral turpitude;
or (vi) be found to be in possession or under the influence of illegal drugs,
Employer may upon written notice, at its option, terminate this Agreement, and
thereupon be released and discharged from the obligation to pay salary accruing
after the date of Employee's discharge, and from all other obligations provided
for herein, but such termination shall not affect any liability of Employee to
Employer for any loss or damages to Employer caused by, or arising out of, the
conduct of Employee resulting in his termination under this subsection (B).
Section 6. NON-DISCLOSURE COVENANT; OWNERSHIP OF PROCEEDS EMPLOYMENT.
A. Employee shall not, at any time during the term of this Agreement or
thereafter, except in the performance of his duties hereunder, communicate or
disclose to any person, or use for his own account, without the prior written
consent of Employer, any knowledge or information concerning any patents,
inventions or equipment used in, or any secret or confidential information
(including, without limitation, any customer lists or trade secrets) acquired by
Employee by reason of his employment hereunder concerning
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the business and affairs of Employer or any of its affiliates. Employee shall
retain all such proprietary and confidential information in trust for the sole
benefit of Employer and its successors and assigns.
B. Employer shall be the sole owner of all the fruits and proceeds of
Employee's services hereunder all of which Employee will promptly disclose to
Employer, including, but not limited to, all formats, suggestions, developments,
arrangements, designs, packages, programs, promotions and other intellectual
properties which Employee may create in connection with and during the
Employment Period, free and clear of any claims by Employee (or anyone claiming
through or under him) of any kind or character (other than his right to
compensation hereunder). All copyrightable works created by Employee and
covered by this paragraph shall be deemed to be Works for Hire. Employee shall,
at the request of Employer, execute such assignments, certificates or other
instruments as Employer may from time to time deem necessary or desirable to
evidence, establish, maintain, perfect, protect, enforce or defend its rights,
title or interest in or to any such properties. If Employee is unable or
unwilling to perform such acts, Employee hereby appoints Employer his
attorney-in-fact with full power and authority to execute any and all documents
and take such other action as is necessary to accomplish the foregoing.
C. All memoranda, notes, records, and other documents made or compiled by
Employee, or made available to him during his employment by Employer, concerning
the business of Employer, shall be Employer's property and shall be delivered to
Employer on the termination of this Agreement or at any other time on request.
Section 7. COVENANTS NOT TO COMPETE; NON-INTERFERENCE.
A. Except in the course of his employment or upon the prior written
consent of Employer, Employee shall not at any time during the Employment Period
(i) render services or advice, for compensation or otherwise, to any other
person or entity as an employee, consultant or independent contractor or
otherwise; or (iii) enter into any other business affiliation, including,
without limitation, the establishment of a proprietorship or the participation
in a partnership or joint venture.
B. Employee shall not, at any time during the Employment Period and for
six (6) months after termination pursuant to Section 5, for compensation or
otherwise, acting alone or in conjunction with others, directly or indirectly,
as a stockholder, investor, officer or director of a corporation in which he
possesses, directly or indirectly, the power to direct or cause the direction of
management or policies (including without limitation a 5% or more holder of the
voting securities of a corporation), or as sole proprietor or member of a
partnership in all cases.
(i) for his own account or for the account of any other person,
engage, hire, employ or solicit the employment of any person who is then or has
been, within three (3) months prior thereto, an officer, manager or employee of
Employer, whether or not
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such person would commit a breach of his or her contract of employment by reason
of leaving the services of Employer or
(ii) take advantage of any corporate opportunity of Employer.
C. The restrictions contained in this section are considered reasonable
by the parties and it is the intent of the parties that such restrictions and
the other provisions of this Section be enforced to the fullest extent
permissible under the laws and the public policies applied in each jurisdiction
in which enforcement is ought.
Section 8. COMPLIANCE WITH OTHER AGREEMENTS.
Employee represents and warrants to Employer that (i) he is legally
free to make and perform this Agreement; and (ii) he has no obligation to any
other person or entity that would or will affect or conflict with any of his
obligations hereunder.
Section 9. FULL AND COMPLETE AGREEMENT; AMENDMENT.
This Agreement constitutes the full and complete understanding and
agreement of the parties and supersedes all prior understandings and agreements
regarding Employee's employment by Employer. This Agreement may be modified
only by a written instrument executed by both parties.
Section 10. WAIVER.
No waiver by either party of any failure or refusal to comply with its
or his obligation shall be deemed a waiver of any other or subsequent failure or
refusal to so comply.
Section 11. PARTIAL INVALIDITY.
If any term or provision of this Agreement or the application thereof
to any person or circumstances shall, to any extent, be invalid or
unenforceable, the remainder of this Agreement, or the application of such term
or provision to persons or circumstances other than those as to which it is held
invalid or unenforceable shall not be affected thereby, and each term and
provision of this Agreement shall be valid and enforceable to the fullest extent
permitted by law.
Section 12. SUCCESSORS AND ASSIGNS.
This Agreement shall inure to the benefit of, and shall be binding
upon the parties hereto and their respective successors, assigns, heirs, and
legal representatives, including any person or entity with which Employer may
merge or consolidate or to which it may transfer all or substantially all of its
assets. With respect to Employee, this Agreement, being personal, cannot be
assigned.
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Section 13. AUTHORIZATION.
Employer warrants and represents that the person executing this
Agreement on behalf of Employer has full right and authority to bind Employer
corporation, and was and is authorized in every manner and respect to enter into
this Agreement.
Section 14. NOTICES.
All notices and other communications which are required or may be
given under this agreement shall be in writing and shall be deemed to have been
duly given when delivered in person or transmitted by facsimile, or five (5)
days after being mailed by registered or certified first class mail, postage
prepaid, return receipt requested, in the case of Employer, to its Chief
Executive Officer at 555 West 57th Street, New York, NY 10019, and, in the case
of Employee, to 1040 S. Longwood Ave., Los Angeles, CA 90019, or to such other
address as such party shall have specified by notice to the other party hereto.
Section 15. JURISDICTION.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York (without regard to the principles of conflicts of
laws), the principal place of business of Employer. The parties agree that the
courts of the State of California shall have exclusive jurisdiction over all
matters of this Agreement and either party may bring suit in such jurisdiction.
The venue of such action shall be in Los Angeles County.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date first set forth above.
UNITEL VIDEO, INC. ALBERT WALTON
By: /s/ Barry Knepper /s/ Albert Walton
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Name: Bary Knepper
Title:Chief Executive Officer
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