6. HANDBOO K
Employee agrees that the Company Employee Handbook outlines other policies in addition to the terms set forth in this Agreement, which will apply to Employee’s employment with the Company, and Employee acknowledges receipt of such handbook. Employee acknowledges and agrees that the Company retains the right to revise, modify or delete any such policy or any employee benefit plan it deems appropriate.
7. TERMINATION (a) This Agreement and the Term shall terminate upon the happening of any one or more of the following events:
The mutual written agreement between the Company and Employee;
The death of Employee;
Employee’s having become so physically or mentally disabled as to be incapable, even with a reasonable accommodation, of satisfactorily performing Employee’s duties hereunder for a period of twelve (12) consecutive weeks or sixteen (16) weeks in any year, provided that Employee has not cured disability within ten days of written notice;
The determination on the part of the Company that “cause” exists for termination of this Agreement. As used herein, “cause” is defined as the occurrence of any of the following:
Employee’s conviction of a felony or plea of nolo contendere to a felony (other than a traffic violation);
commission, by act or omission, of any material act of dishonesty in the performance of Employee’s duties hereunder;
material breach of this Agreement by Employee; or
any act of misconduct by Employee having a substantial adverse effect on the business or reputation of the Company. Prior to terminating Employee's employment for "cause," the Company shall provide Employee with written notice of the grounds for the proposed termination. If the grounds for termination are subject to cure, the Employee shall have fifteen (15)
days after receiving such notice in which to cure such grounds to the extent such cure is possible. If not cure is possible or Employee has failed to cure, Employee's employment shall terminate upon the 15 th day following notice of termination.
Employee is terminated “without cause.” If the Company elects to terminate Employee “without cause,” it must provide Employee with sixty (60) days prior written notice. Termination “without cause” shall be defined as Employee being terminated by the Company for any reason other than as set forth in Sections 7(a)(i)-(iv) above. In the event of a termination “without cause,” subject to Employee’s execution and delivery to the Company of a general release of claims in a form acceptable to the Company not more than twenty-one (21) days after the date of such termination (and Employee’s not revoking such release within any revocation period provided under applicable law), Employee shall be entitled to receive a lump sum severance payment equal to 50% of the amount of the Base Salary which Employee would have been entitled to receive for the period commencing on the date of such termination and ending on the last day of the Term had Employee continued to be employed with the Company through such date, but in no event less than the greater of either (i) twelve (12) months’ Base Salary at the monthly rate in effect on the date of such termination, or (ii) the amount Employee would receive from the Company’s severance policy for non-contract employees that is currently in effect at the time of termination; provided, however, that in the event such a termination “without cause” occurs on or within six (6) months following a Change of Control, (x) instead of the severance payment provided for above, Employee shall be entitled to receive a continued Base Salary as set forth in Section 2 through the conclusion of the Term, subject to Employee’s obligation to mitigate in accordance with California Law (unless such termination occurs during the final year of the Term, in which case the severance payment shall be twelve (12) months’ Base Salary paid in one lump sum), and (y) Employee’s equity-based awards granted by Lions Gate, to the extent then outstanding and unvested, shall become fully vested upon such termination. Any lump sum cash severance payable to Employee pursuant to the preceding provisions of this Section 7(a)(v) shall be paid, subject to Section 14(b), as soon as practicable after (and in all events not more than two and one-half (2 ½) months after) the date of Employee’s “separation from service” (within the meaning of Treasury Regulation Section 1.409A-1(h)) with the Company. The Company’s provision of the payments and benefits referred to in
this 7(a)(v), in addition to the accrued obligations described in Section 7(b) below, shall relieve the Company of any and all obligations to Employee, with the exception that Employee shall remain eligible for any amounts payable under Section 2(c) above.
(b) In the event that this Agreement is terminated pursuant to Sections 7(a)(i)-(iv) above, neither the Company nor Employee shall have any remaining duties or obligations hereunder, except that the Company shall pay to Employee, any base salary that had accrued but had not been paid (including accrued and unpaid vacation time) as of the date of termination. Following the termination of the Term and/or this Agreement for any reason, Sections 9 through 14 shall, notwithstanding anything else herein to the contrary, survive and continue to be binding upon the parties following such termination.
8. EXCLUSIVITY AND SERVICE Employee’s services shall be exclusive to the Company during the Term. Employee shall render such services as are customarily rendered by persons in Employee’s capacity in the entertainment industry and as may be reasonably requested by the Company. Employee hereby agrees to comply with all reasonable requirements, directions and requests, and with all reasonable rules and regulations made by the Company in connection with the regular conduct of its business. Employee further agrees to render services during Employee’s employment hereunder whenever, wherever and as often as the Company may reasonably require in a competent, conscientious and professional manner, and as instructed by the Company in all matters, including those involving artistic taste and judgment, but there shall be no obligation on the Company to cause or allow Employee to render any services, or to include all or any of Employee’s work or services in any motion picture or other property or production.
9. INTELLECTUAL PROPERTY (a) Employee agrees that the Company shall own all rights of every kind and character throughout the universe, in perpetuity to any material and/or idea suggested or submitted by Employee or suggested or submitted to Employee by a third party that occurs during the Term or any other period of employment with the Company, its parent, affiliates, or subsidiaries that are within the scope of Employee’s employment and responsibilities hereunder. Employee agrees that during the Term and any other period of employment with the Company, its parent, affiliates, or subsidiaries, the Company shall own all other results and proceeds of Employee’s services that are related to Employee’s employment and responsibilities. Employee shall promptly and fully disclose all intellectual property generated by the Employee during the Term and any other period of employment with the Company, its parent, affiliates, or subsidiaries in connection with Employee’s employment hereunder.
(b) All copyrightable works that Employee creates in connection with Employee’s obligations under this Agreement and any other period of employment with the Company, its parent, affiliates, or subsidiaries shall be considered “work made for
hire” and therefore the property of the Company. To the extent any work so produced or other intellectual property so generated by Employee is not deemed to be a “work made for hire,” Employee hereby assigns and agrees to assign to the Company (or as otherwise directed by the Company) Employee's full right, title and interest in and to all such works and other intellectual property. Employee agrees to execute any and all applications for domestic and foreign copyrights or other proprietary rights and to do such other acts (including without limitation the execution and delivery of instruments of further assurance or confirmation) requested by the Company to assign the intellectual property to the Company and to permit the Company to enforce any copyrights or other proprietary rights to the intellectual property. Employee further agrees not to charge the Company for time spent in complying with these obligations. This Section 9 shall apply only to that intellectual property which related at the time of conception to the Company's then current or anticipated business or resulted from work performed by Employee for the Company. Employee hereby acknowledges receipt of written notice from the Company pursuant to California Labor Code Section 2872 that this Agreement (to the extent it requires an assignment or offer to assign rights to any invention of Employee) does not apply to an invention which qualifies fully under California Labor Code Section 2870.
10. ASSIGNMENT AND DELEGATION Employee shall not assign any of Employee’s rights or delegate any of Employee’s duties granted under this Agreement. Any such assignment or delegation shall be deemed void ab initio .
11. TRADE SECRETS The parties acknowledge and agree that during the Term of this Agreement and in the course of the discharge of Employee’s duties hereunder and at any other period of employment with the Company, its parent, affiliates, or subsidiaries, Employee shall have and has had access to information concerning the operation of the Company and its affiliated entities, including without limitation, financial, personnel, sales, planning and other information that is owned by the Company and regularly used in the operation of the Company’s business and (to the extent that such confidential information is not subsequently disclosed) that this information constitutes the Company’s trade secrets. Notwithstanding the above, the parties acknowledge and agree that trade secrets shall not include any information that Employee can demonstrate (i) was publicly available at the time of its disclosure to Employee; (ii) was already in Employee's possession at the time of disclosure; (iii) was rightfully received by Employee from a third party not subject to obligations of confidentiality, or (iv) was independently developed by Employee without use of any trade secrets.
Employee agrees that Employee shall not disclose any such trade secrets, directly or indirectly, to any other person or use them in any way, either during the Term of this Agreement or at any other time thereafter, except as is required in the course of Employee’s employment for the Company, as required by applicable law or court order,
or if authorized in writing.. Employee shall not use any such trade secrets in connection with any other employment and/or business opportunities following the Term. In addition, Employee hereby expressly agrees that Employee will not disclose any confidential matters of the Company that are not trade secrets prior to, during or after Employee’s employment including the specifics of this Agreement. Employee shall not use any such confidential information in connection with any other employment and/or business opportunities at any time during or following the Term. In addition, in order to protect any such confidential information, Employee agrees that during the Term and for a period of eighteen (18) months thereafter, Employee will not, directly or indirectly, induce or entice any other executive or employee of the Company, with the sole exception of Employee’s assistant if Company has employed an individual in such role, to leave such employment.
12. ARBITRATION Any dispute, controversy or claim arising out of or in respect to this Agreement (or its validity, interpretation or enforcement), the employment relationship or the subject matter hereof shall at the request of either party be submitted to and settled by binding arbitration conducted before a single arbitrator in Los Angeles in accordance with the Federal Arbitration Act, to the extent that such rules do not conflict with any provisions of this Agreement. Said arbitration shall be under the jurisdiction of Judicial Arbitration and Mediation Services, Inc. (“JAMS”) in Los Angeles, California. All such actions must be brought within the statute of limitations period applicable to the claim as if that claim were being filed with the judiciary or forever be waived. Failure to institute an arbitration proceeding within such period shall constitute an absolute bar to the institution of any proceedings respecting such controversy or claim, and a waiver thereof. The arbitrator shall have the authority to award damages and remedies in accordance with applicable law. Any award, order, or judgment pursuant to such arbitration shall be deemed final and binding and may be entered and enforced in any state or federal court of competent jurisdiction. Each party agrees to submit to the jurisdiction of any such court for purposes of the enforcement of any such award, order, or judgment. Company shall pay for the administrative costs of such hearing and proceeding.
13. INTEGRATION, AMENDMENT, NOTICE, SEVERABILITY, AND FORUM (a) This Agreement expresses the binding and entire agreement between Employee and the Company and shall replace and supersede all prior arrangements and representations, either oral or written, as to the subject matter hereof (including, without limitation, the Prior Agreement).
(b) All modifications or amendments to this Agreement must be made in writing and signed by both parties.
(c) Any notice required herein shall be in writing and shall be deemed to have been duly given when delivered by hand, received via electronic mail or on the depositing of said notice in any U.S. Postal Service mail receptacle with postage prepaid,
addressed to the Company at 2700 Colorado Avenue, Suite 200, Santa Monica, California 90404 and to Employee at the address set forth above, or to such address as either party may have furnished to the other in writing in accordance herewith.
(d) If any portion of this Agreement is held unenforceable under any applicable statute or rule of law then such portion only shall be deemed omitted and shall not affect the validity of enforceability of any other provision of this Agreement.
(e) This Agreement shall be governed by the laws of the State of California. The state and federal courts (or arbitrators appointed as described herein) located in Los Angeles, California shall, subject to the arbitration agreement set forth in Section 12 above, be the sole forum for any action for relief arising out of or pursuant to the enforcement or interpretation of this Agreement. Each party to this Agreement consents to the personal jurisdiction and arbitration in such forum and courts and each party hereto covenants not to, and waives any right to, seek a transfer of venue from such jurisdiction on any grounds.
14. SECTION 409A (a) It is intended that any amounts payable under this Agreement shall either be exempt from or comply with Section 409A of the U.S. Internal Revenue Code (including the Treasury regulations and other published guidance relating thereto) (“Code Section 409A”) so as not to subject Employee to payment of any additional tax, penalty or interest imposed under Code Section 409A. The provisions of this Agreement shall be construed and interpreted to avoid the imputation of any such additional tax, penalty or interest under Code Section 409A yet preserve (to the nearest extent reasonably possible) the intended benefit payable to Employee.
(b) Notwithstanding any provision of this Agreement to the contrary, if Employee is a “specified employee” within the meaning of Treasury Regulation Section 1.409A-1(i) as of the date of Employee’s separation from service (as defined above), Employee shall not be entitled to any payment or benefits pursuant to Section 7(a)(v) until the earlier of (i) the date which is six (6) months after Employee’s separation from service for any reason other than death, or (ii) the date of Employee’s death. Any amounts otherwise payable to Employee upon or in the six (6) month period following Employee’s separation from service that are not so paid by reason of this paragraph shall be paid (without interest) as soon as practicable (and in all events within thirty (30) days) after the date that is six (6) months after Employee’s separation from service (or, if earlier, as soon as practicable, and in all events within thirty (30) days, after the date of Employee’s death). The provisions of this paragraph shall only apply if, and to the extent, required to avoid the imputation of any tax, penalty or interest pursuant to Code Section 409A.
(c) To the extent that any reimbursements pursuant to the provisions of this Agreement are taxable to Employee, any such reimbursement payment shall be paid to Employee on or before the last day of Employee’s taxable year following the taxable year in which the related expense was incurred. The benefits and reimbursements pursuant to
such provisions are not subject to liquidation or exchange for another benefit and the amount of such benefits and reimbursements that Employee receives in one taxable year shall not affect the amount of such benefits or reimbursements that Employee receives in any other taxable year.
Please acknowledge your confirmation of the above terms by signing below where indicated and returning this letter to me.
Steve, please call Nancy Coleman at (310) 255-3929 if you have any questions.
Very truly yours,
LIONS GATE FILMS INC.
/s/ Wayne Levin
Executive Vice President and General Counsel
AGREED AND ACCEPTED
This 5th day of March, 2012
/s/ Steve Beeks
Exhibit 10.89 CONFIDENTIAL AGREEMENT AND GENERAL RELEASE
Reference is hereby made to that certain employment agreement between Joseph Drake and Lions Gate Films, Inc. dated September 10, 2007 (“Employment Agreement”).
In reference to the Employment Agreement, LIONS GATE ENTERTAINMENT INC., its parents, affiliates and subsidiaries (collectively referred to as “Company”) and Joseph Drake, his heirs, executors, administrators, successors, and assigns (collectively referred to as “Employee”), agree that:
1. Except as expressly set forth herein, Employee’s Employment Agreement with Company shall terminate for all purposes (including without limitation the Lions Gate Incentive Savings Plan), as of April 30, 2012 (the “Separation Date”). Company and Employee agree to so terminate Employee’s Employment Agreement pursuant to Section 8.a.v. of the Employment Agreement and under the terms of this Confidential Agreement and General Release (“Agreement”). Upon full execution of this Agreement by both parties, Company shall have no further obligations, other than those set forth in Section 2 below, to Employee under the Employment Agreement including the payment of a bonus of any kind.
2. Consideration . In consideration for signing this Agreement and compliance with the promises made herein, Company agrees to the following:
Company shall pay the following severance amounts to Employee:
FOUR HUNDRED TWENTY-FIVE THOUSAND DOLLARS ($425,000), less lawful and customary deductions, due to Employee pursuant to Section 8.b.i. of the Employment Agreement. Said payment shall be made within ten (10) business days after the date that Company receives this executed Agreement from Employee.
TWO MILLION DOLLARS ($2,000,000), less lawful and customary deductions, in connection with Hunger Games and in lieu of any other bonus amount due to Employee pursuant to the Employment Agreement or otherwise. Said payment shall be made at the same time as the payment in Section 2.a.i. above. Employee agrees that he shall not be due any other bonus payment from Company following such payment unless otherwise set forth in this Section 2.a..
A ONE MILLION DOLLAR ($1,000,000) advance, less lawful and customary deductions, against the Box Office Bonuses set forth below, payable in four (4) equal installments on each of June 1, 2012, September 1, 2012, December 1, 2012 and March 1, 2013.
Employee shall receive the following payments (“Box Office Bonuses”) for Catching Fire and each of the first and second Mockingjay films (each a “Qualifying Picture”) if any of such pictures are produced and distributed.
If any of the Qualifying Pictures achieve an actual box office of TWO HUNDRED FIFTY MILLION DOLLARS ($250,000,000) or more as reported in Daily Variety (or if there is no Daily Variety then another comparable publication) based upon its theatrical release in the U.S. and Canada,, Employee shall receive a Box Office Bonus payment of FIVE HUNDRED THOUSAND DOLLARS ($500,000), less lawful and customary deductions.
If any of the Qualifying Pictures achieve an actual box office of THREE HUNDRED MILLION DOLLARS ($300,000,000) or more based upon its theatrical release in the U.S. and Canada, Employee shall receive an additional Box Office Bonus payment of FIVE HUNDRED THOUSAND DOLLARS ($500,000), less lawful and customary deductions. Any Box Office Bonus payments shall be made as soon as practicable after the Qualifying Picture’s achievement of the required actual box office and in all events within the “short-term deferral” period provided under Treasury Regulation Section 1.409A-1(a)(4).
After the release of the final picture in the Hunger Games franchise (as determined by Company in its sole and reasonable discretion), if the aggregate Box Office Bonuses do not equal $1,000,000, Employee shall repay the Company the difference between $1,000,000 and the aggregate amount of Box Office Bonuses.
Employee acknowledges that he shall have the option to convert and continue Employee’s health insurance after the Separation Date, as may be required or authorized by law under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), as amended. If Employee opts to so convert and continue Employee's health insurance, Company shall for eighteen (18) months pay the monthly premiums for said converted and continued health insurance that it paid for Employee's health insurance at the time Employee's employment with Company terminated. Except as provided in this Agreement (and as controlled by COBRA), from and after the Separation Date, Employee shall not be entitled to participate in or accrue any other payments or benefits under any employee benefit plan of Company.
All restricted share units granted pursuant to the Restricted Share Unit Award Agreements dated as of August 6, 2009 and June 27, 2011, to the extent outstanding and unvested as of the Separation Date, shall accelerate and immediately become fully vested upon execution of this Agreement by Employee and approval of the Lions Gate Entertainment Corp. Compensation Committee.
3. No Consideration Absent Execution of this Agreement. Employee understands and agrees that he would not receive the benefits specified in Section 2 above except for his execution of this Agreement and the fulfillment of the promises contained herein.
4. General Release of Claims . Employee knowingly and voluntarily releases and forever discharges, to the full extent permitted by law, Company, its parent corporation, affiliates, subsidiaries, divisions, predecessors, successors and assigns and the current and former employees, officers, directors and agents thereof (collectively referred to throughout the remainder of this Agreement as “Released
Parties”), of and from any and all claims, known and unknown, asserted and unasserted, Employee has or may have against Company or the other Released Parties as of the date of execution of this Agreement, including, but not limited to, any alleged violation of:
Title VII of the Civil Rights Act of 1964, as amended;
The Civil Rights Act of 1991;
Sections 1981 through 1988 of Title 42 of the United States Code, as amended;
The Employee Retirement Income Security Act of 1974, as amended;
The Immigration Reform and Control Act, as amended;
The Americans with Disabilities Act of 1990, as amended;
The Occupational Safety and Health Act, as amended;
The Sarbanes-Oxley Act of 2002;
The federal Worker Adjustment and Retraining Notification Act (or any similar state, local or foreign law);
California Family Rights Act – Cal. Govt. Code § 12945.2 et seq.;
California Fair Employment and Housing Act – Cal. Gov’t Code § 12900 et seq.;
California Unruh Civil Rights Act, including California’s Sexual Orientation Bias Law – Civ. Code § 51 et seq.;
California AIDS Testing and Confidentiality Law – Cal. Health & Safety Code §120980 et seq.;
California Confidentiality of Medical Information – Cal. Civ. Code §56 et seq.;
California Smokers’ Rights Law;
California Parental Leave Law – Cal. Lab. Code §230.7 et seq.;
California Apprenticeship Program Bias Law – Cal. Lab. Code §3070 et seq.;
California Wage Payment Act, as amended;
California Equal Pay Law – Cal. Lab. Code §1197.5 et seq.;
California Whistleblower Protection Law – Cal. Lab. Code § 1102.5(a) to (c);
California Military Personnel Bias Law – Cal. Mil. & Vet. Code §394 et seq.;
California Family and Medical Leave – Cal. Lab. Code §233;
California Electronic Monitoring of Employees – Cal. Lab. Code §435 et seq.;
The California Occupational Safety and Health Act, as amended, California Labor Code §6300 et seq. , and any applicable regulations thereunder;
California Consumer Reports: Discrimination Law – Cal. Civ. Code §1786.10 et seq.;
California Political Activities of Employees Act – Cal. Lab. Code §1101 et seq.;
California Voting Leave Law – Cal. Elec. Code §14000 et seq.;
California Court Leave Law – Cal. Lab. Code §230;
Los Angeles AIDS-Based Discrimination Ordinance, Los Angeles Municipal Ordinance §45.80 et seq.;
Any other federal, state or local civil or human rights law or any other local, state or federal law, regulation or ordinance;
United States and California Constitutions;
Any public policy, contract, tort, or common law; or
Any claim for costs, fees, or other expenses including attorneys’ fees incurred in these matters.
5. Waiver of California Civil Code section 1542. To effect a full and complete general release as described above, Employee expressly waives and relinquishes all rights and benefits of section 1542 of the Civil Code of the State of California, and Employee does so understanding and acknowledging the significance and consequence of specifically waiving section 1542. Section 1542 of the Civil Code of the State of California states as follows: