EXHIBIT 10.13
Employment Agreement
EMPLOYMENT AGREEMENT, dated as of September 1, 2002 between
Panavision Inc., a Delaware corporation (the "Company") and ▇▇▇▇ ▇. ▇▇▇▇▇▇ (the
"Executive").
WHEREAS, the Company wishes to employ the Executive, and the
Executive wishes to accept such employment, on the terms and conditions set
forth in this Agreement.
NOW, THEREFORE, the Company and the Executive hereby agree as
follows:
1. Employment, Duties and Acceptance.
1.1 Employment, Duties. The Company hereby employs
the Executive for the Term (as defined in Section 2.1), to render exclusive and
full-time services to the Company as Executive Vice President and General
Counsel or in such other executive position as may be mutually agreed upon by
the Company and the Executive, and to perform such other duties consistent with
such position as may be assigned to the Executive by the Board of Directors or
any officer of the Company senior to the Executive. The Executive will report
jointly to the Chief Executive Officer of Panavision and the General Counsel of
Mafco Holdings Inc.
1.2 Acceptance. The Executive hereby accepts such
employment and agrees to render the services described above. During the Term,
the Executive agrees to serve the Company faithfully and to the best of the
Executive's ability, to devote the Executive's entire business time, energy and
skill to such employment, and to use the Executive's best efforts, skill and
ability to promote the Company's interests. The Executive further agrees to
accept election, and to serve during all or any part of the Term, as an officer
or director of the Company and of any subsidiary or affiliate of the Company,
without any compensation therefor other than that specified in this Agreement,
if elected to any such position by the shareholders or by the Board of Directors
of the Company or of any subsidiary or affiliate, as the case may be. The
Executive hereby represents and warrants that the Executive is not subject to
any other agreement, including without limitation any agreement not to compete
or confidentiality agreement, which would be violated by the Executive's
performance of services hereunder.
1.3 Location. The duties to be performed by the
Executive hereunder shall be performed primarily at the office of the Company in
Woodland Hills, California, subject to reasonable travel requirements on behalf
of the Company.
2. Term of Employment; Certain Post-Term Benefits.
2.1 The Term. The term of the Executive's
employment under this Agreement (the "Term") shall commence on September 1, 2002
and shall end on August 31, 2004 or such later date to which the Term is
extended pursuant to Section 2.2.
2.2 End-of-Term Provisions. At any time on or after
August 31, 2003 the Company shall have the right to give written notice of
non-renewal of the Term. In the event the Company gives such notice of
non-renewal, the Term automatically shall be extended so that it ends twelve
months after the last day of the month in which the Company gives such notice.
From and after August 31, 2004, unless and until the Company gives written
notice of non-renewal as provided in this Section 2.2, the Term automatically
shall be extended day-by-day; upon the giving of such notice by the Company, the
Term automatically shall be extended so that it ends twelve months after the
last day of the month in which the Company gives such notice.
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2.3 Special Curtailment. The Term shall end earlier
than the original August 31, 2004 termination date provided in Section 2.1 or
any extended termination date provided in Section 2.2, in either case if sooner
terminated pursuant to Section 4. Non-extension of the Term shall not be deemed
to be a wrongful termination of the Term or this Agreement by the Company
pursuant to Section 4.4.
3. Compensation; Benefits.
3.1 Salary. As compensation for all services to be
rendered pursuant to this Agreement, the Company agrees to pay the Executive
during the Term a base salary, payable semi-monthly in arrears, at the annual
rate of not less than $250,000, less such deductions or amounts to be withheld
as required by applicable law and regulations (the "Base Salary"). In the event
that the Company in its sole discretion from time to time determines to further
increase the Base Salary, such increased amount shall, from and after the
effective date of the increase, constitute "Base Salary" for purposes of this
Agreement.
3.2 Incentive Compensation. In addition to the
amounts to be paid to the Executive pursuant to Section 3.1, the Executive will
be eligible to participate in the Company's Executive Incentive Compensation
Plan or any successor incentive compensation plan from time to time maintained
by the Company for employees or officers generally (the "Bonus Plan"). The
Executive shall receive a bonus (a "Bonus") on account of service to the Company
during any calendar year in an amount equal to the greater of (i) $100,000 (the
"Minimum Bonus") and (ii) any award pursuant to the Bonus Plan, to be paid in
the next following year on the earlier to occur of (a) March 15th and (b) the
date on which the Company pays bonuses to officers generally. For the period
from September 1, 2002 through December 31, 2002, the Executive shall be paid a
Bonus of $33,350. For any subsequent period of less than a full calendar year
during the Term, the Executive shall be paid a Bonus in an amount equal to the
greater of (i) the Minimum Bonus and (ii) any award pursuant to the Bonus Plan,
in the applicable case prorated for the number of full calendar months of
service rendered by the Executive during such year.
3.3 Business Expenses. The Company shall pay or
reimburse the Executive for all reasonable expenses actually incurred or paid by
the Executive during the Term in the performance of the Executive's services
under this Agreement, upon presentation of expense statements or vouchers or
such other supporting information as the Company customarily may require of its
officers provided, however, that the maximum amount available for such expenses
during any period may be fixed in advance by the Chairman of the Board of
Directors or the Executive Committee of the Board of Directors.
3.4 Vacation. The Executive shall be entitled to a
vacation period in accordance with the vacation policy of the Company during
each year of the Term.
3.5 Fringe Benefits. During the Term, the Executive
shall be entitled to all benefits for which the Executive shall be eligible
under any qualified pension plan, 401(k) plan, group insurance or other
so-called "fringe" benefit plan which the Company provides to its employees and
officers generally.
3.6 Additional Benefits. During the Term, the
Executive shall be entitled to such other benefits as are specified in Appendix
I to this Agreement.
3.7 Signing Bonus. The Executive shall be paid a
signing bonus of $25,000 on the first regular payroll date that occurs during
the Term.
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4. Termination.
4.1 Death. If the Executive shall die during the
Term, the Term shall terminate and no further amounts or benefits shall be
payable hereunder, except that the Executive's legal representatives shall be
entitled to receive continued payments in an amount equal to 60% of the Base
Salary, in the manner specified in Section 3.1, until the end of the Term (as in
effect immediately prior to the Executive's death) or, if the Company has not
then given written notice of non-renewal pursuant to Section 2.2, for a period
of twelve months after the last day of the month in which termination described
in this Section 4.1 occurred, whichever is longer.
4.2 Disability. If during the Term the Executive
shall become physically or mentally disabled, whether totally or partially, such
that the Executive is unable to perform the Executive's services hereunder for
(i) a period of six consecutive months or (ii) for shorter periods aggregating
six months during any twelve month period, the Company may at any time after the
last day of the six consecutive months of disability or the day on which the
shorter periods of disability shall have equalled an aggregate of six months, by
written notice to the Executive (but before the Executive has recovered from
such disability), terminate the Term and no further amounts or benefits shall be
payable hereunder, except that the Executive shall be entitled to receive
continued payments in an amount equal to 60% of the Base Salary, in the manner
specified in Section 3.1, until the end of the Term (as in effect immediately
prior to such termination) or, if the Company has not then given notice of
non-renewal pursuant to Section 2.2, for a period of twelve months after the
last day of the month in which termination described in this Section 4.2
occurred. If the Executive shall die before receiving all payments to be made by
the Company in accordance with the foregoing, such payments shall be made to a
beneficiary designated by the Executive on a form prescribed for such purpose by
the Company, or in the absence of such designation to the Executive's legal
representative.
4.3 Cause. In the event (i) of gross neglect by the
Executive of the Executive's duties hereunder, (ii) conviction of the Executive
of any felony, (iii) conviction of the Executive of any lesser crime or offense
involving the property of the Company or any of its subsidiaries or affiliates,
(iv) willful misconduct by the Executive in connection with the performance of
any material portion of the Executive's duties hereunder, (v) breach by the
Executive of any material provision of this Agreement, (vi) breach by the
Executive of the Company's official written Code of Conduct as in effect from
time to time or (vii) any other conduct on the part of the Executive which would
make the Executive's continued employment by the Company materially prejudicial
to the best interests of the Company, the Company may at any time by written
notice to the Executive terminate the Term, provided, however, that in the case
of any matter covered by clauses (i), (iv), (v) or (vii), the Company shall
first have given the Executive written notice of the conduct (or lack thereof)
at issue and 30 days within which to cure. Upon such termination, this Agreement
shall terminate and the Executive shall be entitled to receive no further
amounts or benefits hereunder, except Base Salary and benefits as shall have
been earned to the date of such termination.
4.4 Company Breach. In the event of the breach of
any material provision of this Agreement by the Company, the Executive shall be
entitled to terminate the Term upon 60 days' prior written notice to the
Company. Upon such termination, or in the event the Company terminates the Term
or this Agreement other than pursuant to the provisions of Sections 4.2 or 4.3,
the Company shall continue to provide the Executive (i) payments of (A) Base
Salary, in the manner and amount specified in Section 3.1 and (B) Bonus in the
manner and amount specified in Section 3.2 and (ii) fringe benefits and
additional benefits in the manner and amounts specified in Sections 3.5 and 3.6
until the end of the Term (as in effect immediately prior to such termination)
or, if the Company has not then given written notice of non-renewal pursuant to
Section 2.2, for a period of twelve months after the last day of the month in
which termination described in this Section 4.4 occurred, whichever is longer
(the "Damage Period"). The Company's obligations pursuant to this Section 4.4
are subject to the Executive's duty to mitigate damages by seeking other
employment provided, however, that the Executive shall not be required to accept
a position of lesser importance or of substantially different character than the
position held with the Company immediately prior to the effective date of
termination or in a location outside of the Los Angeles County, California area.
The Company acknowledges that the non-competition obligation imposed on the
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Executive pursuant to Section 5.2 may reduce substantially the ability of the
Executive to mitigate damages pursuant to this Section 4.4 and, accordingly,
agrees that the Executive's failure to mitigate damages as a consequence of the
restrictions imposed on him by Section 5.2 will be deemed an excuse for such
failure on the Executive's part. To the extent that the Executive shall earn
compensation during the Damage Period (without regard to when such compensation
is paid), the Base Salary and Bonus payments to be made by the Company pursuant
to this Section 4.4 shall be correspondingly reduced. All payments and benefits
(including service credit for benefit plan purposes and stock option vesting
purposes) to be received by the Executive under this Section 4.4 will be treated
for the Executive's benefit in the same manner as that customarily accorded
full-time employees of the Company.
4.5 Litigation Expenses. Except as provided for in
Section 5.7, if the Company and the Executive become involved in any action,
suit or proceeding relating to the alleged breach of this Agreement by the
Company or the Executive, and if a judgment in such action, suit or proceeding
is rendered in favor of the Executive, the Company shall reimburse the Executive
for all expenses (including reasonable attorneys' fees) incurred by the
Executive in connection with such action, suit or proceeding.
5. Protection of Confidential Information;
Non-Competition.
5.1 In view of the fact that the Executive's work
for the Company will bring the Executive into close contact with many
confidential affairs of the Company, its subsidiaries and affiliates not readily
available to the public, and plans for future developments, the Executive
agrees:
5.1.1 To keep and retain in the strictest confidence
all confidential matters of the Company, its subsidiaries and affiliates,
including, without limitation, "know how", trade secrets, customer lists,
pricing policies, operational methods, technical processes, formulae, inventions
and research projects, other business affairs of the Company, its subsidiaries
and affiliates, and any information whatsoever concerning any director, officer,
employee or agent of the Company, its subsidiaries and affiliates or their
respective family members learned by the Executive heretofore or hereafter, and
not to disclose them to anyone outside of the Company, either during or after
the Executive's employment with the Company, except in the course of performing
the Executive's duties hereunder or with the Company's express written consent.
The foregoing prohibitions shall include, without limitation, directly or
indirectly publishing (or causing, participating in, assisting or providing any
statement, opinion or information in connection with the publication of) any
diary, memoir, letter, story, photograph, interview, article, essay, account or
description (whether fictionalized or not) concerning any of the foregoing,
publication being deemed to include any presentation or reproduction of any
written, verbal or visual material in any communication medium, including any
book, magazine, newspaper, theatrical production or movie, or television or
radio programming or commercial; and
5.1.2 To deliver promptly to the Company on
termination of the Executive's employment by the Company, or at any time the
Company may so request, all memoranda, notes, records, reports, manuals,
drawings, blueprints and other documents (and all copies thereof), including
data stored in computer memories or on other media used for electronic storage
or retrieval, relating to the Company's business, or the business of its
subsidiaries or affiliates, and all property associated therewith, which the
Executive may then possess or have under the Executive's control.
5.2 During the Term and for a period of twenty-four
months thereafter, the Executive shall not, directly or indirectly, enter the
employ of, or render any services to, any person, firm or corporation engaged in
any business competitive with the business of the Company or of any of its
subsidiaries or affiliates; the Executive shall not engage in such business on
the Executive's own account; and the Executive shall not become interested in
any such business, directly or indirectly, as an individual, partner,
shareholder, director, officer, principal, agent, employee, trustee, consultant,
or in any other relationship or capacity provided, however, that nothing
contained in this Section 5.2 shall be deemed to prohibit the
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Executive from acquiring, solely as an investment, up to five percent (5%) of
the outstanding shares of capital stock of any public corporation. In addition,
during the Term and for a period of twenty-four months thereafter, the Executive
shall not solicit or encourage any person who, within six (6) months prior to
the expiration or earlier termination of the Term, was an employee of the
Company or any of its subsidiaries or affiliates to (i) terminate his or her
employment with the Company or any such subsidiary or affiliate or (ii) engage
in any activity prohibited to the Executive by the first sentence of this
Section 5.2.
5.3 If the Executive commits a breach, or threatens
to commit a breach, of any of the provisions of Sections 5.1 or 5.2 hereof, the
Company shall have the following rights and remedies:
5.3.1 The right and remedy to have the provisions of
this Agreement specifically enforced by any court having equity jurisdiction, it
being acknowledged and agreed that any such breach or threatened breach will
cause irreparable injury to the Company and that money damages will not provide
an adequate remedy to the Company; and
5.3.2 The right and remedy to require the Executive to
account for and pay over to the Company all compensation, profits, monies,
accruals, increments or other benefits (collectively "Benefits") derived or
received by the Executive as the result of any transactions constituting a
breach of any of the provisions of Sections 5.1 or 5.2, and the Executive hereby
agrees to account for and pay over such Benefits to the Company.
Each of the rights and remedies enumerated above shall be independent of the
other, and shall be severally enforceable, and all of such rights and remedies
shall be in addition to, and not in lieu of, any other rights and remedies
available to the Company under law or in equity.
5.4 If any of the covenants contained in
Sections 5.1 or 5.2, or any part thereof, hereafter are construed to be invalid
or unenforceable, the same shall not affect the remainder of the covenant or
covenants, which shall be given full effect, without regard to the invalid
portions.
5.5 If any of the covenants contained in
Sections 5.1 or 5.2, or any part thereof, are held to be unenforceable because
of the duration of such provision or the area covered thereby, the parties agree
that the court making such determination shall have the power to reduce the
duration and/or area of such provision and, in its reduced form, said provision
shall then be enforceable.
5.6 The parties hereto intend to and hereby confer
jurisdiction to enforce the covenants contained in Sections 5.1 and 5.2 upon the
courts of any state within the geographical scope of such covenants. In the
event that the courts of any one or more of such states shall hold such
covenants wholly unenforceable by reason of the breadth of such covenants or
otherwise, it is the intention of the parties hereto that such determination not
bar or in any way affect the Company's right to the relief provided above in the
courts of any other states within the geographical scope of such covenants as to
breaches of such covenants in such other respective jurisdictions, the above
covenants as they relate to each state being for this purpose severable into
diverse and independent covenants.
5.7 In the event that any action, suit or other
proceeding in law or in equity is brought to enforce the covenants contained in
Sections 5.1 and 5.2 or to obtain money damages for the breach thereof, and such
action results in the award of a judgment for money damages or in the granting
of any injunction in favor of the Company, all expenses (including reasonable
attorneys' fees) of the Company in such action, suit or other proceeding shall
(on demand of the Company) be paid by the Executive. In the event the Company
fails to obtain a judgment for money damages or an injunction in favor of the
Company, all expenses (including reasonable attorneys' fees) of the Executive in
such action, suit or other proceeding shall (on demand of the Executive) be paid
by the Company.
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6. Inventions and Patents.
6.1 The Executive agrees that all processes,
technologies and inventions (collectively, "Inventions"), including new
contributions, improvements, ideas and discoveries, whether patentable or not,
conceived, developed, invented or made by him during the Term shall belong to
the Company, provided that such Inventions grew out of the Executive's work with
the Company or any of its subsidiaries or affiliates, are related in any manner
to the business (commercial or experimental) of the Company or any of its
subsidiaries or affiliates or are conceived or made on the Company's time or
with the use of the Company's facilities or materials. The Executive shall
further: (a) promptly disclose such Inventions to the Company; (b) assign to the
Company, without additional compensation, all patent and other rights to such
Inventions for the United States and foreign countries; (c) sign all papers
necessary to carry out the foregoing; and (d) give testimony in support of the
Executive's inventorship.
6.2 If any Invention is described in a patent
application or is disclosed to third parties, directly or indirectly, by the
Executive within two years after the termination of the Executive's employment
by the Company, it is to be presumed that the Invention was conceived or made
during the Term.
6.3 The Executive agrees that the Executive will
not assert any rights to any Invention as having been made or acquired by the
Executive prior to the date of this Agreement, except for Inventions, if any,
disclosed to the Company in writing prior to the date hereof.
7. Intellectual Property.
The Company shall be the sole owner of all the products and
proceeds of the Executive's services hereunder, including, but not limited to,
all materials, ideas, concepts, formats, suggestions, developments,
arrangements, packages, programs and other intellectual properties that the
Executive may acquire, obtain, develop or create in connection with and during
the Term, free and clear of any claims by the Executive (or anyone claiming
under the Executive) of any kind or character whatsoever (other than the
Executive's right to receive payments hereunder). The Executive shall, at the
request of the Company, execute such assignments, certificates or other
instruments as the Company may from time to time deem necessary or desirable to
evidence, establish, maintain, perfect, protect, enforce or defend its right,
title or interest in or to any such properties.
8. Indemnification.
The Company will indemnify the Executive, to the maximum
extent permitted by applicable law, against all costs, charges and expenses
incurred or sustained by the Executive in connection with any action, suit or
proceeding to which the Executive may be made a party by reason of the Executive
being an officer, director or employee of the Company or of any subsidiary or
affiliate of the Company.
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9. Notices.
All notices, requests, consents and other communications
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given if delivered personally, sent by overnight
courier or mailed first class, postage prepaid, by registered or certified mail
(notices mailed shall be deemed to have been given on the date mailed), as
follows (or to such other address as either party shall designate by notice in
writing to the other in accordance herewith):
If to the Company, to:
Panavision Inc.
▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
with a copy to:
MacAndrews & Forbes Holdings Inc.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
If to the Executive, to:
▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
10. General.
10.1 This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New York
applicable to agreements made and to be performed entirely in New York.
10.2 The section headings contained herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
10.3 This Agreement sets forth the entire agreement
and understanding of the parties relating to the subject matter hereof, and
supersedes all prior agreements, arrangements and understandings, written or
oral, relating to the subject matter hereof. No representation, promise or
inducement has been made by either party that is not embodied in this Agreement,
and neither party shall be bound by or liable for any alleged representation,
promise or inducement not so set forth.
10.4 This Agreement, and the Executive's rights and
obligations hereunder, may not be assigned by the Executive. The Company may
assign its rights, together with its obligations, hereunder (i) to any affiliate
or (ii) to third parties in connection with any sale, transfer or other
disposition of all or substantially all of its business or assets; in any event
the obligations of the Company hereunder shall be binding on its successors or
assigns, whether by merger, consolidation or acquisition of all or substantially
all of its business or assets.
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10.5 This Agreement may be amended, modified,
superseded, canceled, renewed or extended and the terms or covenants hereof may
be waived, only by a written instrument executed by both of the parties hereto,
or in the case of a waiver, by the party waiving compliance. The failure of
either party at any time or times to require performance of any provision hereof
shall in no manner affect the right at a later time to enforce the same. No
waiver by either party of the breach of any term or covenant contained in this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be, or construed as, a further or continuing waiver of any such
breach, or a waiver of the breach of any other term or covenant contained in
this Agreement.
11. Subsidiaries and Affiliates.
11.1 As used herein, the term "subsidiary" shall mean any
corporation or other business entity controlled directly or indirectly by the
corporation or other business entity in question, and the term "affiliate" shall
mean and include any corporation or other business entity directly or indirectly
controlling, controlled by or under common control with the corporation or other
business entity in question.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
PANAVISION INC.
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Executive Vice President and
General Counsel
/S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
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APPENDIX I
Additional Benefits:
1. Medical Examination. The Executive shall be reimbursed by
the Company for the reasonable cost of one annual medical examination upon
presentation of an expense statement.
2. Automobile. The Company shall afford the Executive the
right to use an automobile on a continuing basis and shall provide garaging near
the Executive's residence, all on the following basis. The Company shall pay,
upon presentation of an expense statement, all reasonable expenses associated
with the operation of such automobile and the rental of such garage space in the
same manner as is, from time to time, in effect with respect to executive
officers of the Company generally, including, without limitation, all reasonable
maintenance and insurance expenses. The automobile furnished by the Company
shall be a late model top-of-the-line BMW530 or like vehicle to be reasonably
selected by the Executive. Upon the expiration of the Term, the Executive
promptly shall return the automobile to the Company.
3. Insurance. The Company agrees to provide the Executive
with additional term life insurance coverage with a face amount of twice the
then current Base Salary, subject to the insurer's satisfaction with the results
of any required medical examination to which the Executive hereby agrees to
submit, on the following basis. The Executive may select a plan of his choice
and may designate the beneficiary of such plan. The Company shall pay, upon
presentation of an expense statement, the periodic premiums relating to such
additional term life insurance payable during the Term.
4. Relocation. The Company acknowledges that the Executive
will relocate his family and principal residence from Washington, D.C. to
Woodland Hills, California. The Company shall provide the Executive with the
following payments and benefits:
(i) During the period from September 1, 2002 through
December 31, 2002, the Company shall pay the lesser of (A) the cost of business
class commercial airline transportation for the Executive to commute weekly
between the Company's offices and Washington, D.C. and (B) the actual cost
incurred by the Executive for such commutation.
(ii) During the period from September 1, 2002 through
December 31, 2002, the Company shall pay the lesser of (A) the cost of coach
class commercial airline transportation for the Executive's wife and two
children to make three round trips between Woodland Hills, California and
Washington, D.C. and (B) the actual cost incurred by the Executive's wife and
children for such trips.
(iii) During the period from September 1, 2002 through
December 31, 2002, the Company shall pay the rental and related costs of a
suitable short term furnished corporate apartment in the Woodland Hills,
California vicinity for the Executive's use.
(iv) The Company shall pay the actual and reasonable
expenses of relocating the Executive and his family from the Washington, D.C.
metropolitan area to the Woodland Hills, California vicinity.
(v) The Company shall reimburse to the Executive,
upon presentation of reasonable supporting documentation, any loss on
disposition of his principal residence in the Washington, D.C. metropolitan
area. For purposes of determining loss on disposition for purposes of this
clause (v), there shall be added to the cost basis of the Executive's existing
principal residence closing costs on Executive's purchase thereof and selling
costs on Executive's disposition thereof. The Executive's right to
reimbursement for loss on sale pursuant to this clause (v) is subject to the
following limitations: (A) the Executive's principal residence shall have become
subject to a contract for sale no later than August 31, 2003 and the closing
shall have occurred no later than November 30, 2003 and (B) the Company shall
have the right to reject the selling price as being too low provided that, if
the Company does so, it shall purchase the home from the Executive at a price
which results in neither gain nor loss (as determined pursuant to the preceding
sentence) to the Executive.
(vi) Should any of the benefits described in clauses
(i), (ii), (iii) or (iv) above, or any payment by the Company described in
clause (v) above, require income to be imputed to the Executive, the Company
shall "gross up" the income imputed to the Executive under federal and any
applicable state income tax laws on account of such benefits and payment, such
that the Executive effectively suffers no personal cost for such benefits or
payment.
5. Airline Club. The Company shall pay the cost of membership
for the Executive in an "executive" or similar commercial airline "club" or
preferred passenger program.