Employment Agreement - Image Entertainment Inc. and Martin W. Greenwald
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered
into as of the 1st day of July, 1998 (the "Effective Date"), by
and between IMAGE ENTERTAINMENT INC., a California corporation
("Image"), and MARTIN W. GREENWALD, an individual ("Executive").
RECITALS
WHEREAS, the Board of Directors of Image has determined
that because of Executive's substantial experience with respect
to sales and marketing, management and other aspects of the
business of Image, business relationships in connection with the
business of Image, and Executive's past leadership of and
familiarity with the clientele served by Image, it is in the best
interests of Image to secure the services of Executive and to
provide Executive with the compensation and benefits set forth
herein; and
WHEREAS, Executive desires to render to Image, on an
exclusive basis, Executive's professional services with respect
to Executive's experience and abilities, and Image desires to
secure, on an exclusive basis, Executive's services, on the terms
and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual promises
and covenants contained herein, the parties hereto agree as
follows:
1. TERM OF AGREEMENT.
Except as otherwise expressly set forth herein, this
Agreement shall remain in full force and effect for the
period commencing as of the date hereof and ending on June
30, 2000 (the "Term"); provided, however, that unless Image
or Executive gives written notice of its or his intention
not to extend the Term by January 1, 2000 or any subsequent
anniversary thereof, then the Term of this Agreement shall
automatically be extended for an additional one (1) year
commencing on the July 1 immediately thereafter, but shall
not in any case be extended beyond June 30, 2005. The
capitalized word "Term" as used in other paragraphs of this
Agreement (except Paragraph 3(a)) shall include any
extensions pursuant to the preceding sentence.
2. ENGAGEMENT.
Subject to the terms and conditions contained herein, Image
hereby engages the services of Executive (the "Services")
and Executive hereby accepts such engagement and agrees to
render Executive's Services to Image for the Term.
Executive shall report directly to the Image Board of
Directors and initially shall have the title of "CHIEF
EXECUTIVE OFFICER and PRESIDENT."
(a) Extent of Services and Duties. Executive shall perform
such duties, compatible with Executive's position as an
"Executive Officer" (as defined below) and as the Board
of Directors of Image may reasonably require. In
rendering Services to Image, Executive shall use
Executive's best efforts and ability to maintain,
further and promote the interests and welfare of Image.
At the request of Image, Executive shall serve as an
officer or director of Image or any entity controlled
by Image or in which it has a substantial direct or
indirect interest (any such entity or entities together
with Image, the "Company"), without additional
compensation; provided that Executive is included on
any such entity's directors and officers insurance
policy (if any). For purposes of this Agreement
"Executive Officer" shall include any person similarly
designated as an "Executive Officer" in that person's
Employment Agreement with Image.
(b) Exclusive Engagement. Executive hereby acknowledges
and agrees that the engagement of Executive by Image
under this Agreement is exclusive and that during the
Term hereof Executive shall not, directly or
indirectly, whether for compensation or otherwise,
engage in any business that is competitive with the
business of the Company or that otherwise interferes in
any significant respect with the Executive's exclusive
commitment and duties under this Agreement, or render
any services of a business, commercial or professional
nature to any other person or organization that is a
competitor of Image or in a business similar to that of
Image, without the prior written consent of Image.
Notwithstanding the foregoing, Executive may make and
manage personal business investments of his choice and
serve in any capacity with any civic, educational or
charitable organization without seeking or obtaining
approval by the Board, provided that such activities
and services do not substantially interfere or conflict
with the performance of duties hereunder or create any
conflict of interest with such duties.
3. COMPENSATION.
(a) Base Salary. During the Term of this Agreement, Image
hereby agrees to pay Executive for all Services to be
rendered hereunder a base salary ("Base Salary") at the
following rates:
Period Annual Rate
Year ending on the first anniversary of the date hereof $400,000 per year
Year ending on the second anniversary of the date hereof $420,000 per year
In the event the Term is extended pursuant to Paragraph
1, the Base Salary for each such extension shall be (i)
the Base Salary for the year ending on the expiration
date of the Term prior to the extension plus (ii) an
amount equal to five percent (5%) of the Base Salary.
The Base Salary will be payable in equal biweekly
installments or as otherwise provided in accordance
with the regular executive officer compensation pay
schedules and procedures in effect from time to time
for Image, subject to Paragraph 7
(Withholding/Deductions).
(b) Bonus Compensation. Executive shall be entitled to
participate in a bonus plan available generally to, on
terms not substantially less favorable than, and with
bonus opportunities not materially disproportionate in
the aggregate to the distinctions made for fiscal year
1999 in respect of similarly situated Executive
Officers of the Company (other than plans available
only to the Chief Executive Officer or President). The
level of bonus opportunity and form of payment shall be
determined annually by the Board or its Compensation
Committee and may be expressed as a multiple of base
salary based on performance of the Company relative to
a specified target.
For fiscal year 1999, the cash bonus shall be
determined based on a formula utilizing earnings before
interest, taxes, depreciation and amortization
("EBITDA") as the applicable performance criterion.
The specific performance targets for fiscal 1999 are
(and for future years will be) confidential business
information and provided to Executive on that basis by
the Chief Executive Officer upon request. The specific
cash bonus payable to Executive for fiscal year 1999
shall be determined by multiplying (i) the percentage
determined by dividing Image's actual EBITDA by the
target EBITDA (the "Performance Factor") by (ii) the
amount equal to 75% of Executive's Base Salary. In
order for a bonus award to be paid under the bonus
program in fiscal year 1999, the Performance Factor
must reach a minimum of 40%. The amount of bonus shall
be capped by a Performance Factor of 125%.
In years following fiscal 1999, annual cash bonuses
under this program may be based on different business
criteria or models and Performance Factors and Base
Salary multiples may change (in the individual case or
for all similarly situated officers) as determined
annually by the Board of Directors or the Compensation
Committee of Image. Image anitcipates that bonus
entitlements will be determined on or before the end of
the first quarter of the applicable fiscal year and
that any bonuses payable shall be paid, provided the
Executive is then employed by the Company, no later
than the end of the quarter following each fiscal year.
4. OPTIONS AND OTHER STOCK-BASED AWARDS.
In addition to Base Salary and Bonus Compensation, Image may
grant stock options and other stock-based awards to
Executive, in such form and amounts, and at such time or
times, as Image's Board of Directors (or, if applicable, the
administrators of Image's stock option plans and (subject to
shareholder approval) the 1998 Incentive Plan (the "1998
Plan")) shall determine. If this Agreement is terminated
early "Without Cause" under Subparagraph 12(b) or upon or
following a "Change in Control" under Paragraph 13(d), all
unvested options granted to Executive will immediately vest.
The vesting of other stock-based awards will depend upon the
provisions of the Executive's award agreement and the plan
(if any) under which the Awards are granted. Unless this
Agreement is terminated early for Cause under Subparagraph
12(a), all options granted to Executive prior to July 1,
1998 shall be exercisable after employment ceases for the
longest period permissible under the applicable stock option
plan, to the extent the option was vested as of the date of
termination, and all options or rights granted on or after
July 1, 1998 shall be exercisable as provided in the
applicable award or grant.
Image recognizes hereby that Executive is entitled, subject
to shareholder approval of the 1998 Plan, to a grant of
41,791 Restricted Stock Units, in substantially the Form of
Performance Restricted Stock Unit Award attached hereto as
Exhibit A.
5. FRINGE BENEFITS.
(a) Image agrees to provide Executive with fringe benefits
including but not limited to the medical, dental, life
and short and long-term disability insurance, expense
allowance and vacation time described below:
(i) Medical, Dental, Life & Short and Long-Term
Disability Insurance. Image shall purchase
(or, if applicable, maintain) during the Term
medical, dental, life and short and long-term
disability insurance for Executive, and
provide coverage under the medical and dental
policies for Executive's direct dependent
beneficiaries (e.g., spouse and minor
children), on terms no less favorable than
the terms and conditions in effect as of the
date hereof and at all times at least equal
to that received by any other Executive
Officer (collectively, "Insurance").
(ii) Business/Travel Expenses. Executive shall be
reimbursed in full for all reasonable and
actual out-of-pocket business and travel
expenses incurred in the performance of
Executive's Services, on terms and at all
times at least equal to that received by any
other Executive Officer, provided Executive
shall first present an itemized account of
such expenditures together with supporting
vouchers.
(iii) Vacation Time. Executive is entitled to
4 weeks of paid vacation time per year of the
Term, but may accrue no more than 8 weeks
vacation during the Term. Any unused
vacation time as of June 30, 1998 will
continue to be available through the Term and
will not be subject to any offset, reduction
or deduction until such time as the then
accrued vacation time available under the
foregoing sentence has been used.
(b) CEO Fringe Benefits. Notwithstanding the foregoing,
Image agrees to also provide Executive with the
following fringe benefits:
(i) Personal Life and Disability Insurance.
Image shall purchase (or, if applicable,
maintain) during the Term personal life and
disability insurance for Executive on terms
no less favorable than the terms and
conditions in effect as of the date hereof;
provided, however, that the aggregate annual
premium payment for such coverage together
with payment for any non-reimbursable medical
expenses (i.e., medical expenses not covered
by the policy) shall not exceed $30,000 per
annum. Executive shall have the exclusive
right to name the beneficiaries of such
coverage.
(ii) Personal Expenses. Executive shall receive
an unaccountable, personal expense allowance
annualized at $65,637.31 per year for the
first year of the current Term, payable in
equal monthly installments of $ 5469.78. For
each year of the Term commencing on the first
anniversary of the date hereof, Executive
will receive a 5% increase to Executive's
then personal expense allocation.
(iii) Company Car. Executive shall be
entitled to the use of a company car and to
reimbursement for all reasonable expenses
incurred in connection with the use of such
car, including but not limited to the costs
of gasoline, maintenance/service and car
insurance.
6. SEVERANCE.
Upon expiration of the Term, Executive shall be entitled to
receive:
(a) Base Salary continuation for a period of 6 months; and
(b) any Bonus Compensation payable but not previously paid
for any prior completed fiscal year, if Executive has
remained employed for the period contemplated by
Subparagraph 3(b); plus a prorated portion of Bonus
Compensation, if any, otherwise payable pursuant to
Subparagraph 3(b) for 6 months or any partial fiscal
year that has occurred prior to the expiration of the
Term, whichever is greater, payable only if and when
the amount thereof is determined in accordance with the
terms of the bonus opportunity or entitlement; and
(c) Insurance continuation for a period of 6 months.
7. WITHHOLDING/DEDUCTIONS.
There shall be deducted from all compensation payable to
Executive hereunder such sums, including without limitation,
social security, income tax withholding and unemployment
insurance, as Image is by law obligated to deduct and
additionally as the Executive may duly authorize.
8. CONFIDENTIALITY.
In consideration of the payments to be received hereunder,
Executive agrees as follows:
(a) That during the Term of this Agreement he will have
access to and become acquainted with various "Trade
Secrets" (as defined below) and proprietary information
of Image. Except as Executive's duties may require or
as Image may otherwise consent to in writing, Executive
will not at any time disclose or use to the detriment
of Image or the sole benefit of Executive, either
directly or indirectly, and either during or subsequent
to the Term hereof, any information, knowledge or data
he receives in confidence or acquires from Image or
which relates to the Trade Secrets of Image. For
purposes of this Agreement "Trade Secrets" shall
include, but not be limited to:
(i) Financial information, such as Image's
earnings, assets, debts, prices, pricing
structure, volumes of purchases or sales or
other financial data, whether relating to
Image generally, or to particular products,
services, geographic areas, or time periods;
(ii) Supply and service information, such as goods
and services, suppliers' names or addresses,
terms of supply or service contracts, or of
particular transactions, or related
information about potential suppliers, to the
extent that such information is not generally
known to the public, and to the extent that
the combination of suppliers or use of a
particular supplier, though generally known
or available, yields advantages to Image, the
details of which are not generally known:
(iii) Marketing information, such as details
about ongoing or proposed marketing programs
or agreements by or on behalf of Image, sales
forecasts or results of marketing efforts or
information about impending transactions;
(iv) Licensing or Distribution information, such
as details about ongoing or proposed
negotiations or agreements by or on behalf of
Image, terms and details of such negotiations
or agreements or results of licensing or
distribution efforts or information about
impending transactions; or,
(v) Customer information, such as any compilation
of past, existing or prospective customers,
customers' proposals or agreements between
customers and status of customers accounts or
credit, or related information about actual
or prospective customers.
(b) That all files, records, documents, data information
and customer lists are special, valuable and unique
assets of Image and are essential to its continued
business success, and that under no circumstance during
the Term hereof or subsequent thereto will he influence
or attempt to influence any employee of Image to
terminate his or her employment with Image to work for
any competitor of Image, nor shall the Executive
solicit, directly or indirectly, any customers of Image
or disclose or use for the purpose of such
solicitation. without the prior written consent of
Image, any files, records, document, data, information,
customer lists or any other proprietary information of
Image.
(c) Executive acknowledges that any violation of the terms
of this Paragraph 8 will constitute a material breach
of this Agreement and will cause Image immediate and
irreparable harm and that the damages which Image will
suffer may be difficult or impossible to measure.
Therefore, upon any actual or impending violation of
this Paragraph 8, Image shall be entitled to the
issuance of a restraining order, preliminary and
permanent injunction, without bond, restraining or
enjoining such violation by Executive or any entity or
person acting in concert with Executive. Such remedy
shall be additional to and not in limitation of any
other remedy which may otherwise be available to Image.
9. INDEMNIFICATION OF EXECUTIVE.
Image will, to the maximum extent permitted by law,
indemnify and hold Executive harmless against expenses,
including reasonable attorney's fees, judgments, fines,
settlements and other amounts actually and reasonably
incurred in connection with any proceeding arising by reason
of Executive's employment by Image. Image shall advance to
Executive any expenses incurred in defending any proceeding
to the maximum extent permitted by law. Image will at all
times maintain directors' and officers' liability insurance
("D&O Insurance"), or have sufficient funds to self-insure,
in amounts and on terms at least as favorable as the D&O
Insurance policy in effect on the date hereof.
10. DEATH.
In the event of Executive's death, this Agreement will
terminate on the last day of the calendar month of
Executive's death. In such event, Executive's personal
representative, heirs or beneficiaries entitled by will or
the laws of descent and distribution shall be entitled to
receive only:
(a) Base Salary continuation for a period of 6 months or
the expiration of the Term, whichever occurs first; and
(b) any Bonus Compensation payable but not previously paid
for any prior completed fiscal year, if Executive has
remained employed for the period contemplated by
Subparagraph 3(b); plus a prorated portion of Bonus
Compensation, if any, otherwise payable pursuant to
Subparagraph 3(b) for 6 months or any partial fiscal
year that has occurred prior to the expiration of the
Term, whichever is greater, payable only if and when
the amount thereof is determined in accordance with the
terms of the bonus opportunity or entitlement; and
(c) dependent Insurance continuation for a period of 6
months or the expiration of the Term, whichever occurs
first.
11. PERMANENT DISABILITY/SUSPENSION.
If Executive fails, because of physical or mental illness,
incapacity or injury ("disability"), and other than in
connection with an authorized leave of absence, to perform a
majority of Executive's usual duties for a period of longer
than 120 consecutive days or an aggregate 150 days in a 12-
month period, but subject to compliance with applicable law,
Image's obligation to pay Base Salary will be suspended. If
the suspension because of disability is reasonably
anticipated to exceed 180 consecutive days, or an aggregate
210 days in a 12-month period, Image may terminate this
Agreement effective upon 30 days prior written notice to
Executive. In such event, Executive shall be entitled to
receive:
(a) Base Salary continuation for a period of 6 months; and
(b) any Bonus Compensation payable but not previously paid
for any prior completed fiscal year, if Executive has
remained employed for that year; plus a prorated
portion of Bonus Compensation, if any, otherwise
payable pursuant to Subparagraph 3(b) for 6 months or
any partial fiscal year that has occurred prior to the
suspension of Executive's duties due to disability,
whichever is greater, payable only if and when the
amount thereof is determined in accordance with the
terms of the bonus opportunity or entitlement; and
(c) Insurance continuation for a period of 6 months.
Disagreement as to the severity, characterization or
anticipated duration of a disability or suspension and/or
the date such disability/suspension commenced shall be
settled by the majority decision of three neutral
arbitrators (or licensed physicians, if the parties so
agree) - one to be selected by each party to the dispute,
the two thus appointed shall choose the third, and the three
thus appointed shall constitute the board of arbitration.
Such board, acting by majority vote within 30 days after
choosing the third arbitrator, shall resolve such
disagreement and their decision shall be final and binding
on Executive, Image and any other person with an interest in
the matter.
12. TERMINATION.
(a) "Cause." In the event of "Cause" (as defined below),
Image may terminate this Agreement at any time
effective upon delivery of written notice to Executive.
In such event, all of Image's obligations hereunder
will immediately terminate without further liability.
Moreover, Executive shall not be entitled to receive
any severance, fringe benefits, compensation or other
such rights hereunder, nor shall Executive be entitled
to receive any Bonus Compensation otherwise payable
pursuant to Subparagraph 3(b). For purposes of this
Agreement "Cause" shall include, but is not limited to:
(i) Executive's (a) fraud, dishonesty or
felonious conduct or breach of fiduciary
duty; (b) willful misconduct or gross
negligence in the performance of Executive's
duties hereunder; (c) knowing and willful or
negligent violation (including conduct in
respect of Executive's supervisory
responsibilities) of any law, rule or
regulation or other wrongful act that causes
or is likely to cause harm or loss to the
Company; or (d) conviction of a felony or
misdemeanor (other than minor traffic
violations or similar offenses that do not
affect the business or reputation of the
Company); or
(ii) Executive's breach of any material provision
of this Agreement or any other material
agreement between Image and Executive,
whenever executed, provided, however, that
bona fide disagreements or disputes as to
expense reimbursement shall not be deemed
fraud or felonious conduct or Executive's
breach of any material provision of this
Agreement.
(b) "Without Cause." Notwithstanding anything contained
herein to the contrary, if this Agreement is terminated
prior to expiration of the Term for any reason other
than (i) pursuant to Paragraph 10 or 11, (ii) for Cause
or (iii) because of voluntary termination (whether or
not in breach of this Agreement), this Agreement shall
be deemed to have been terminated "Without Cause", and
if such termination occurs prior to a Change in
Control, Executive shall be entitled to receive all of
the compensation, rights and benefits described in
Paragraphs 3, 4 and 5 through the expiration of the
Term and the severance described in Paragraph 6, as if
this Agreement were in full force.
13. CHANGE IN CONTROL.
Notwithstanding anything contained herein to the contrary,
the terms and conditions of this Paragraph 13 shall control
upon or following a "Change in Control" (as defined below).
(a) Termination. If (1) this Agreement is terminated prior
to expiration of the Term for any reason other than (a)
pursuant to Paragraph 10 (Death) or 11 (Permanent
Disability/Suspension), (b) for Cause or (c) because of
a voluntary termination (other than for Good Reason)
and whether or not in breach of this Agreement, or (2)
Executive terminates this Agreement for Good Reason
under Paragraph 13(d), Executive shall be entitled to
receive all of the compensation, rights and benefits
described in Paragraphs 3, 4 and 5 for a period of
one year following the effective date of termination or
through the expiration of the Term, whichever is
longer, and the severance described in Paragraph 6, as
if this Agreement were in full force. If any other
Executive Officer's options are acquired pursuant to a
Change in Control, Executive's options will be acquired
on the same terms as any other Executive Officer.
Executive must receive 30 days prior written notice of
termination regardless of the reason for termination.
(b) "Change in Control Prior to Effective Date." With
respect to options granted prior to the Effective Date,
"Change in Control" shall mean and be deemed to have
occurred on the earliest of the following dates:
(i) the date, pursuant to Section 13(d) of the
Act and the rules promulgated thereunder, a
person shall have acquired beneficial
ownership of more than 45% of the Voting
Stock;
(ii) the date the persons who were members of the
Board at the beginning of any 24-month period
shall cease to constitute a majority of the
Board, unless the election, or the nomination
for election by Image's shareholders, of each
new director was approved by two-thirds of
the members of the Board then in office who
were in office at the beginning of the
24-month period; or
(iii) the date Image's shareholders shall
approve a definitive agreement (a) to merge
or consolidate Image with or into another
corporation, unless the holders of Image's
capital stock immediately before such merger
or consolidation will, immediately following
such merger or consolidation, hold as a group
on a fully-diluted basis the ability to elect
at least a majority of the directors of the
surviving corporation (assuming cumulative
voting, if applicable), or (b) to sell or
otherwise dispose of all or substantially all
the assets of Image.
(c) "Change in Control After Effective Date." For purposes
of this Agreement and of options and other stock-based
awards granted after the Effective Date, "Change in
Control" shall mean and be deemed to have occurred on
the earliest of the following dates or events:
(i) the date of an acquisition by any Person of
beneficial ownership (within the meaning of
Rule 13d-3 under Exchange Act) or a pecuniary
interest in more than 45% of the Common Stock
or voting securities then entitled to vote
generally in the election of directors of
Image ("Voting Stock"), other than an
acquisition by one or more Excluded Persons
(Image, Image Investors Co., or Messrs. John
Kluge, Stuart Subotnick or Executive) in
connection with a new issuance of Voting
Stock (or rights to acquire Voting Stock)
after the effective date of the 1998 Plan by
Image to the Excluded Person in a transaction
that the Committee determines (in advance of
the issuance) does not constitute a Change in
Control event;
(ii) approval by the shareholders of Image of a
plan of merger, consolidation, or
reorganization of Image or sale or other
disposition of all or substantially all of
Image's assets involving a more than 50%
change in ownership (collectively, a
"Business Combination"), other than a
Business Combination: (1) (a) in which
substantially all of the holders of Image's
Voting Stock hold or receive directly or
indirectly 50% or more of the voting stock of
the resulting entity or a parent company
thereof, and (b) after which no Person (other
than any one or more of the Excluded Persons,
as defined above) owns more than 50% of the
voting stock of the resulting entity (or a
parent company) who did not own directly or
indirectly at least that amount of Voting
Stock immediately before the Business
Combination; or (2) in which the holders of
Image's capital stock immediately before such
Business Combination will, immediately after
such Business Combination, hold as a group on
a fully diluted basis the ability to elect at
least a majority of the directors of the
surviving corporation (or a parent company);
(iii) approval by the Board of Directors and
(if required by law) by shareholders of Image
of a plan to consummate the dissolution or
complete liquidation of Image; or
(iv) the date the persons who were members of the
Board of Directors at the beginning of any 24-
month period shall cease to constitute a
majority of the Board, unless the election,
or the nomination for election by Image's
shareholders, of each new director was
approved by two-thirds of the members of the
Board of Directors then in office who were in
office at the beginning of the 24-month
period.
For purposes of determining whether a Change in Control
has occurred, a transaction includes all transactions
in a series of related transactions, and terms used in
this definition but not defined are used as defined in
the 1998 Plan.
(d) Executive's Right to Terminate For Good Reason. During
the Term, Executive shall be entitled to terminate
Executive's employment with Image for "Good Reason" (as
defined below) following a Change in Control. For
purposes of this Agreement "Good Reason" shall mean any
of the following events which occurs without
Executive's express written consent following a Change
in Control:
(i) the assignment of any duties materially
inconsistent with Executive's status as an
Executive Officer or a substantial reduction
in the nature or status of Executive's
responsibilities from those in effect
immediately prior to a Change in Control
other than any such alteration primarily
attributable to the fact that Image may no
longer be a public company;
(ii) a reduction by Image in Base Salary;
(iii) the relocation of Image's principal
executive offices to a location more than
35 miles from the current locale or Image's
requiring Executive to be based anywhere
other than Image's principal executive
offices except for required travel on Image's
business to an extent substantially
consistent with Executive's present travel
obligations;
(iv) the failure by Image to continue in effect
without material change any compensation or
benefit plan in which Executive is entitled
to participate, or the failure by Image to
continue Executive's participation therein,
or the taking of any action by Image which
would directly or indirectly materially
reduce any of the benefits of such plans
enjoyed by Executive immediately prior to the
Change in Control, or the taking of any other
action by Image which materially adversely
changes the conditions or perquisites of
Executive's employment;
(v) the failure of Image to obtain a successor's
assumption and agreement to perform this
Agreement, unless the assumption occurs by
operation of law;
(vi) any purported termination of employment which
is not effected pursuant to
Subparagraph 13(a), any such purported
termination shall not be effective for
purposes of this Agreement;
(vii) the failure of Image to maintain
adequate D&O insurance coverage pursuant to
the terms of this Agreement, unless such
insurance is not available on commercially
reasonable terms; or
(viii) the breach by Image of any material term
of this Agreement.
The rights provided under this Paragraph 13(d) to
terminate for Good Reason shall not adversely affect
any rights of Executive whether before or after a
Change in Control in respect of a breach of this
Agreement by Image.
(e) Legal Fees and Expenses. If Executive is terminated
following a Change in Control and Executive shall incur
any legal fees or expenses as a result of (i) seeking
to obtain or enforce any right or benefit provided by
this Agreement or (ii) a claim of wrongful discharge or
breach of this Agreement, Image agrees to pay or
reimburse Executive for such fees and expenses;
provided, however, that any claims giving rise to such
fees or expenses must be made in good faith and for
good cause. In the event there is a dispute regarding
Executive's good faith or the merits of Executive's
claim, and it is determined by the court that the claim
lacked merit or was made in bad faith, Executive shall
be limited to recovering only such fees and expenses,
if any, as the court shall determine.
14. GENERAL PROVISIONS.
(a) Successors and Assigns. This Agreement is binding upon
and shall inure to the benefit of the parties hereto,
and any of their heirs, legatees, devisees, personal
representatives, assigns and successors in interest of
every kind and nature whatsoever. The parties hereto
agree that Executive's services are personal and that
this Agreement is executed with respect thereto.
Executive shall have no right to sell, transfer or
assign this Agreement in any manner whatsoever.
(b) Entire Understanding; Amendment. This Agreement and
the Exhibit hereto constitute the entire understanding
and agreement between the parties with respect to the
subject matter hereof and supersede (i) any and all
prior and preliminary discussions, (ii) any and all
prior written or oral and any and all contemporaneous
written or oral agreements, understandings and
negotiations between the parties; including but not
limited to prior written or oral employment agreements
and severance agreements, and (iii) the Employment
Agreement between Image and Executive dated July 1,
1994, as amended through July 1, 1997. There are no
warranties, representations or other agreements between
the parties in connection with the subject matter
hereof except as set forth or referred to herein. This
Agreement shall not be modified, amended or altered
except by an instrument in writing executed by the
parties hereto.
(c) Severability. In case one or more of the provisions
contained in this Agreement (or any portion of any such
provision) shall for any reason be held invalid,
illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not
affect any other provision of this Agreement (or any
portion of any such provision), but this Agreement
shall be construed as if such invalid, illegal or
unenforceable provision (or portion thereof) had never
been contained herein.
(d) Waiver. The failure by Image, at any time, to require
performance by Executive of any of the provisions
hereof, shall not be deemed a waiver of any kind nor
shall it in any way affect Image's rights thereafter to
enforce the same.
(e) Notices. All notices, requests, demands and other
communications provided for by this Agreement shall be
in writing and shall be deemed to have been given
24 hours after deposit thereof for mailing at any
general or branch United States Post Office, enclosed
in a registered or certified postpaid envelope and
addressed as follows:
To Image: IMAGE ENTERTAINMENT, INC
9333 Oso Avenue
Chatsworth, CA 91311
Attn: General Counsel
To Executive: MARTIN GREENWALD
605 N. Alpine Drive
Beverly Hills, CA 90210
The parties hereto may designate a different place at
which notice shall be given; provided, however, that
any such notice of change of address shall be effective
only upon receipt.
(f) Good Faith. The parties hereto shall perform, fulfill
and discharge their duties and obligations hereunder in
a reasonable manner in good faith.
(g) Governing Law. This Agreement and all rights,
obligations and liabilities arising hereunder shall be
construed and enforced in accordance with the laws of
the State of California.
(h) Attorneys' Fees. Subject to Paragraph 13(e), in the
event it becomes necessary to commence any proceeding
or action to enforce the provisions of this Agreement,
the court before whom the same shall be tried may award
the prevailing party all costs and expenses thereof,
including without limitation, reasonable attorney's
fees, the usual, customary and lawfully recoverable
court costs, and all other expenses in connection
therewith.
(i) Advice of Counsel. The parties represent and warrant
that in executing this Agreement, they have each had
the opportunity to obtain independent financial, legal,
tax and other appropriate advice, and are not relying
upon any other party or the attorneys or other agents
of such other party) for any such advice.
(j) Subject Headings and Defined Terms. Subject headings
and choice of defined terms are included for
convenience only and shall not be deemed part of this
Agreement.
(k) Cumulative Rights and Remedies. The rights and
remedies provided for in this Agreement shall be
cumulative; resort to one right or remedy shall not
preclude resort to another or to any other right or
remedy provided for by law or in equity.
IN WITNESS WHEREOF, the parties hereto have executed this
Employment Agreement as of the date first above written.
IMAGE ENTERTAINMENT, INC. EXECUTIVE
By: /s/ Cheryl Lee /s/ Martin W. Greenwald
------------------------------ ----------------------------------
Cheryl Lee Martin W. Greenwald, an individual
Its: Chief Adminstrative Officer
605 N. Alpine Dr.
Beverly Hills, CA 90210