<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
ON
FORM 10-K/A
-------------
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
- ---- ACT OF 1934
For the Fiscal Year Ended August 31, 1997
-----------------------------------------------------
OR
- ---- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________ to _________
Commission file number 1-8654
------
UNITEL VIDEO, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 23-1713238
- ---------------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
555 West 57th Street, New York, New York 10019
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 265-3600
------------------------
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of each exchange on which registered
------------------- -------------------------------------------
Common Stock, $.01 par value American Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
(Cover Page: 1 of 2 Pages)
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<PAGE>
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K (X).
The aggregate market value of the voting stock (based on the closing price
of such stock on the American Stock Exchange) held by non-affiliates of the
Registrant at November 21, 1997 was approximately $16,090,000.
There were 2,674,665 shares of Common Stock outstanding at November 21,
1997.
2
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant.
<TABLE>
<CAPTION>
Name Age Title
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Barry Knepper....................... 47 President, Chief Executive Officer and Director
Richard L. Clouser.................. 57 Senior Vice President--Corporate, President of the Mobile Division
and Director
Karen Ceil Lapidus.................. 40 Vice President, General Counsel and Secretary
Jill Debin Cohen.................... 45 President of the Unitel New York Post Production Division
Albert Walton....................... 52 President of the Editel Los Angeles Division
Tom Eyring.......................... 45 Chief Technology Officer
Edwin Levine........................ 58 President of the Unitel New York Studios Division
George C. Horowitz.................. 45 Chief Financial Officer
Herbert Bass........................ 68 Director
Alex Geisler........................ 74 Director
Philip S. Birsh..................... 38 Director
Walter G. Arader.................... 76 Director
</TABLE>
There are no family relationships among any of the persons listed above.
3
<PAGE>
Mr. Knepper has been President and Chief Executive Officer of the Company
since April 1996 and a Director since May 1995. He has served as Senior Vice
President-Finance and Administration from April 1995 to May 1996 and as Chief
Financial Officer from January 1982 to April 1995.
Mr. Clouser has been President of the Mobile division of the Company since
1982, Senior Vice President-Corporate since April 1996 and a Director since
October 1996.
Ms. Lapidus has been General Counsel and Secretary of the Company since
January 1994 and a Vice President since April 1996. From 1984 until joining the
Company, Ms. Lapidus was an associate attorney at Mudge Rose Guthrie Alexander &
Ferdon, a New York law firm.
Ms. Debin Cohen has been President of the Unitel New York Post Production
division since August 1996. From June 1995 to August 1996 she was President of
the Windsor Video division which became a part of the Unitel New York Post
Production division in August 1996. From November 1993 to June 1995 she was the
Vice President/General Manager of the Windsor Video division. Ms. Debin Cohen
was the Vice President of Operations for the Editel New York division from 1988
through November 1993.
Mr. Walton has been President of the Editel Los Angeles division since July
1995. From May 1994 through July 1995 he was the Director of New Business
Development for the Editel Los Angeles division. He served as Vice President of
CIS from 1988 through 1994, a Hollywood based specialized visual effects
company.
Mr. Eyring has been Chief Technology Officer since June 1995. From 1991 to
June 1995 he was Vice President of Engineering of the Editel New York division
and from 1982 through 1991 he was Director of Engineering Services for the
Editel New York division.
Mr. Levine has been President of the Unitel New York Studios division since
August 1996. From June 1975 to August 1996 he was Vice President of Technical
Operations for the Unitel New York division of the Company.
Mr. Horowitz has been Chief Financial Officer of the Company since April
1996. From May of 1993 through June of 1996 he was Director of Finance for the
Company.
Messrs. Bass and Geisler have served as Directors of the Company since its
founding in 1969. Mr. Bass served as President of the Company and Mr. Geisler as
Executive Vice President of the Company from 1969 until 1989, when they became
Co-Chairmen and Co-Chief Executive Officers. In August 1993, they relinquished
their duties as Co-Chief Executive Officers and, from that date through August
1996 they each served as consultants to the Company. Messrs. Bass and Geisler
have been private investors since September 1996.
Mr. Arader has been a Director of the Company since March 1981 and has been
Chairman and Chief Executive Officer of Walter G. Arader & Associates, a
financial and management consulting firm, since January 1993. For more than five
years prior thereto, Mr. Arader was Chairman and Chief Executive Officer of the
financial and management consulting firm of Arader, Herzig & Associates, Inc.
Mr. Arader is a former Commissioner of the Pennsylvania Securities Commission
and a former Secretary of Commerce of the Commonwealth of Pennsylvania. Mr.
Arader is a Director of HMG/Courtland, Inc.
4
<PAGE>
Mr. Birsh has been a Director of the Company since April 1992 and Publisher
of Playbill Incorporated, which publishes "Playbill" Magazine, and President and
Publisher of Racing Today Publishing Inc., which publishes a variety of racing
magazines, since March 1992. In January 1992, Mr. Birsh became President of AP
Realty Corp., a real estate investment company. From May 1989 to February 1992,
Mr. Birsh was Senior Vice President and Director of the private business group
of Kidder Peabody & Co. Incorporated, and for the nine years prior to May 1989,
Mr. Birsh was with Drexel Burnham Lambert Incorporated. At his departure in
1989, Mr. Birsh was a vice president in the mergers and acquisitions department.
The Company's Board of Directors presently consists of six Directors divided
into three classes. Walter G. Arader and Philip S. Birsh serve as Class I
Directors, Barry Knepper and Richard Clouser serve as Class II Directors and
Herbert Bass and Alex Geisler serve as Class III Directors. The term of office
of Class I Directors continues until the Company's 2000 Annual Meeting of
Stockholders, the term of office of Class II Directors continues until the
Company's 1999 Annual Meeting of Stockholders and the term of office of Class
III Directors continues until the Company's 1998 Annual Meeting of Stockholders.
Each officer of the Company serves, at the pleasure of the Board of
Directors, for a term of one year and until his successor is elected and
qualified.
5
<PAGE>
Item 11. Executive Compensation.
Summary Compensation Table
The following table sets forth certain summary information concerning
compensation with respect to each person who served as the Company's Chief
Executive Officer during the fiscal year ended August 31, 1997 and each of the
Company's four other most highly compensated executive officers:
<TABLE>
<CAPTION>
Long Term
Compensation
Awards
Annual Compensation -------------
--------------------- Securities All Other
Name and Bonus Underlying Compen-
Principal Position Year Salary $ (1) $ Options(#) sation $
- ------------------------------------------------------------- --------- ---------- --------- ------------- -----------
<S> <C> <C> <C> <C> <C>
Barry Knepper................................................ 1997 $ 183,365 $ 1,568(2)
President and Chief Executive Officer 1996 $ 159,413 25,000 1,389
1995 $ 138,972 10,000 1,600
Richard Clouser.............................................. 1997 $ 206,654 $ 1,568(2)
Senior Vice President Corporate and President, Mobile 1996 $ 191,083 $ 73,405 12,500 1,389
Division 1995 $ 173,916 $ 69,300 1,600
Mark Miller.................................................. 1997 $ 177,934
Former President, Unitel-Hollywood Division (3) 1996 $ 172,517
1995 $ 166,009
Albert Walton................................................ 1997 $ 207,231(4)$ 40,000 $ 1,568(2)
President, Editel-Los Angeles Division 1996 $ 152,454 10,000 141
1995 $ 99,597
Thomas Eyring................................................ 1997 $ 162,254 $ 1,568(2)
Chief Technology Officer 1996 $ 157,587 $ 8,100 7,500 776
1995 $ 151,805
</TABLE>
(1) Bonus compensation is shown for the fiscal year in which earned.
(2) Includes the value, as at August 31, 1997, of shares of Common Stock
allocated to such executive officer under the Company's Savings Plan during
the fiscal year ended August 31, 1997.
(3) Mr. Miller's employment with the Company terminated in October 1997.
(4) Includes $24,957 in respect of salary earned in fiscal 1996 and paid in
fiscal 1997.
6
<PAGE>
Employment and Severance Arrangements
During fiscal 1997, Mr. Albert Walton was a party to an employment agreement
with the Company pursuant to which he served as President of the Editel Los
Angeles division of the Company. Under the agreement, the term of which ends on
August 31, 1998, Mr. Walton receives a base salary at the rate of $190,000 per
annum. In addition, Mr. Walton receives bonus compensation during the term of
the agreement equal to 5% of the pre-tax net income of the Editel Los Angeles
division for the Company's 1997 and 1998 fiscal years and a one time $40,000
bonus payment. Under the agreement, Mr. Walton is provided with an automobile
and related expense allowance.
During fiscal 1997, Mr. Mark Miller was a party to an employment agreement
with the Company pursuant to which he served as President of the Company's
Unitel- Hollywood division. Under the agreement, in fiscal 1997 Mr. Miller was
entitled to receive a base salary at the rate of $178,500 per annum and bonus
compensation in an amount equal to 5% of the pre-tax net income of the
Unitel-Hollywood division. In addition, Mr. Miller was provided with an
automobile and related expense allowance. Mr. Miller and the Company terminated
the agreement in October 1997 at which time the Company agreed to pay to Mr.
Miller severance in an amount equal to twenty-two weeks of his base salary and
Mr. Miller left the employ of the Company.
Commencing September 1, 1997, Mr. Barry Knepper has an employment agreement
with the Company pursuant to which he serves as President and Chief Executive
Officer of the Company. Under the agreement, the term of which is one year with
automatic one-year renewals unless either party gives 90 days notice of
termination, Mr. Knepper receives a base salary at the rate of $200,000 per
annum with a consumer price index increase each May 1st (a minimum of 5%) during
the term. In addition, Mr. Knepper is entitled to receive bonus compensation for
all fiscal years of the Company during the term of the agreement equal to 2-1/2%
of consolidated pretax profits of the Company. Under the Agreement Mr. Knepper
is also provided with an automobile and related expense allowance. In the event
of a change in control (as defined in the agreement) of the Company and the
termination of Mr. Knepper's employment in certain circumstances, under the
agreement the Company will pay to Mr. Knepper severance in an amount equal to
the greater of one year's base salary and the remaining base salary for the
employment term plus a pro-rata portion of the current year's bonus amount.
The Company has entered into severance agreements with Messrs. Clouser and
Eyring through December 31, 1998 which automatically renew on such date and on
every one-year anniversary thereafter unless terminated by the Company. In the
event of a change of control (as defined in such agreements) of the Company and
the termination of the officer's employment in certain circumstances, the
Company will pay to such officer severance in an amount equal to one-half of his
annual base salary.
7
<PAGE>
Stock Options
The Company currently grants stock options to employees and directors under
the Company's 1992 Stock Option Plan (the "1992 Plan"). During the fiscal year
ended August 31, 1997, no stock options were granted to or exercised by any of
the executive officers named in the Summary Compensation Table. The following
table sets forth certain information with respect to the number and value of
unexercised options held by such officers as of August 31, 1997.
AGGREGATED OPTION EXERCISES IN FISCAL 1997 AND
FISCAL 1997 YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options Options
Shares Acquired at FY-End(#) at FY-End($)
On Exercise Value Realized Exercisable/ Exercisable/
Name (#) ($) Unexercised Unexercisable
- ------------------------------------------ ------------------- ----------------- ---------------- -----------------
<S> <C> <C> <C> <C>
Barry Knepper............................. -- -- 38,000/19,000 $23,100/$26,250
Richard Clouser........................... -- -- 35,000/7,500 $14,350/$13,125
Mark Miller............................... -- -- 0/0 0/0
Albert Walton............................. -- -- 4,000/6,000 $7,000/$10,500
Thomas Eyring............................. -- -- 3,500/4,000 $6,305/$7,120
</TABLE>
Compensation of Directors
Directors who are not employees of the Company receive $2,500 each fiscal
quarter and $1,000 for each Board of Directors' meeting and each committee
meeting attended. Pursuant to the terms of the 1992 Plan, each director of
the Company who is not an employee of the Company or any subsidiary of the
Company is automatically granted an option to purchase 3,000 shares of Common
Stock on May 1 of each year during the term of the 1992 Plan. During fiscal
1997, Messrs. Arader, Birsh, Bass and Geisler were granted an option under
the 1992 Plan to purchase 3,000 shares of Common Stock at an exercise price
of $6.00, the fair market value per share of Common Stock of the Company on
the date of grant.
8
<PAGE>
Item 12. Share Ownership of Certain Beneficial
Owners and Management.
The following table sets forth information on December 22, 1997 (except as
indicated below) with respect to each person (including any "group" as that term
is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")), who is known by the Company to be the beneficial owner or
more than 5% of the Company's Common Stock. Unless otherwise indicated, each
beneficial owner named below has sole voting and dispositive power with respect
to the shares of Common Stock indicated as beneficially owned by such owner.
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership Class
- ------------------------------------------------------------------------------- --------------------- -------------
<S> <C> <C>
Herbert Bass................................................................... 181,379(1) 6.8%
146 Waters Edge
Admiral's Cove
Jupiter, Florida 33477
Alex Geisler................................................................... 211,353(2) 7.9%
131 Regatta Drive
Admiral's Cove
Jupiter, Florida 33477
Dimensional Fund Advisors Inc.................................................. 166,100(3) 6.2%
1299 Ocean Avenue
Santa Monica, California 90401
Kennedy Capital Management, Inc................................................ 144,560(4) 5.4%
10829 Olive Blvd.
St. Louis, Missouri 63141
Investment Counselors of Maryland.............................................. 175,000(5) 6.5%
803 Cathedral Street
Baltimore, Maryland 21201
</TABLE>
(1) Includes 8,000 shares subject to presently exercisable stock options.
(2) Includes 8,000 shares subject to presently exercisable stock options, 57,193
shares held by Jean Z. Geisler (Mr. Geisler's wife) as trustee for the
benefit of the Geisler's children and 67,234 shares held by Mrs. Geisler,
with respect to all of which shares Mr. Geisler has sole voting and
dispositive power. Mr. and Mrs. Geisler disclaim beneficial ownership as to
the 57,193 shares held by Mrs. Geisler as trustee.
(3) Pursuant to a Schedule 13G, as amended, dated February 5, 1997 filed by
Dimensional Fund Advisors Inc. ("DFA") with the Securities and Exchange
Commission (the "SEC"), DFA has indicated that all shares listed in the
table above opposite its name are owned by advisory clients of DFA, no one
of which, to DFA's knowledge, owns more than 5% of the Company's Common
Stock. DFA has indicated that it has sole dispositive power with respect to
all such shares of Common Stock, that it has sole voting power with respect
to 123,100 of such shares and that certain of its officers, who also serve
as officers of DFA Investment Dimensions Group Inc. (the "Fund") and The DFA
Investment Trust Company
9
<PAGE>
(the "Trust"), each an open-end management investment company registered
under the Investment Company Act of 1940, vote 23,200 additional shares of
Common Stock which are owned by the Fund and 19,800 shares of Common Stock
which are owned by the Trust.
(4) Pursuant to a Schedule 13G dated February 10, 1997 filed by Kennedy Capital
Management, Inc., a Missouri corporation ("KCM"), with the SEC, KCM has
indicated that it owns all shares listed in the table above opposite its
name and that it had sole dispositive power and sole voting power with
respect to all of such shares.
(5) Pursuant to a Schedule 13G dated February 14, 1997 filed by Investment
Counselors of Maryland, an investment advisor registered under the
Investment Advisor's Act of 1940 ("ICM"), with the SEC, ICM has indicated
that all shares listed in the table above opposite its name are owned by
advisory clients of ICM, that it has sole dispositive power with respect to
all of such shares and sole voting power as to 155,000 of such shares.
The following table sets forth information at December 22, 1997 with respect
to the beneficial ownership of the Company's Common Stock by (a) each director
(b) each executive officer named in the Summary Compensation Table under the
caption "EXECUTIVE COMPENSATION" and (c) all directors and executive officers of
the Company as a group (13 persons). Unless otherwise indicated, each person
named below and each person in the group named below has sole voting and
dispositive power with respect to the shares of Common Stock indicated as
beneficially owned by such person or group.
<TABLE>
<CAPTION>
Amount and Nature of Percent
Name of Beneficial Owner Beneficial Ownership of Class
- --------------------------------------------------------------------------------- --------------------- -----------
<S> <C> <C>
Herbert Bass..................................................................... 181,379(1) 6.8%
Alex Geisler..................................................................... 211,353(2) 7.9%
Walter G. Arader................................................................. 28,000(3) 1.0%
Philip S. Birsh.................................................................. 17,400(4) *
Barry Knepper.................................................................... 57,835(5) 2.1%
Richard Clouser.................................................................. 59,908(6) 2.2%
Mark Miller...................................................................... 1,199(7) *
Thomas Eyring.................................................................... 7,062(8) *
Albert Walton.................................................................... 7,449(9) *
All directors and executive officers as a group (13 persons)..................... 625,093(10) 21.9%
</TABLE>
* Less than one percent.
(1) See footnote (1) above to the first table under the caption "Share
Ownership of Certain Beneficial Owners and Management" for information as to
the beneficial ownership by Mr. Bass of the Company's Common Stock.
(2) See footnote (2) above to the first table under the caption "Share
Ownership of Certain Beneficial Owners and Management" for information as to
the beneficial ownership by Mr. Geisler of the Company's Common Stock.
(3) Includes 20,000 shares issuable to Mr. Arader pursuant to presently
exercisable stock options.
10
<PAGE>
(4) Includes 10,000 shares issuable to Mr. Birsh pursuant to presently
exercisable stock options.
(5) Includes 38,000 shares issuable to Mr. Knepper pursuant to presently
exercisable stock options, 4,635 shares allocated to Mr. Knepper and held in
his account under the Savings Plan, 2,100 shares held by Mr. Knepper in an
Individual Retirement Account and 3,200 shares purchasable by Mr. Knepper
under the Company's Employee Stock Purchase Plan (the "Purchase Plan").
(6) Includes 35,000 shares issuable to Mr. Clouser pursuant to presently
exercisable stock options, 1,914 shares allocated to Mr. Clouser and held in
his account under the Savings Plan and 3,200 shares purchasable by Mr.
Clouser under the Purchase Plan. Also includes 15,000 shares issuable to Mr.
Clouser's wife pursuant to presently exercisable stock options, 1,594 shares
allocated to his wife and held in her account under the Savings Plan and
3,200 shares purchasable by her under the Purchase Plan, with respect to all
of which shares Mr. Clouser disclaims beneficial ownership.
(7) Includes 1,199 shares allocated to Mr. Miller and held in his account under
the Savings Plan.
(8) Includes 3,500 shares issuable to Mr. Eyring pursuant to presently
exercisable stock options, 362 shares allocated to Mr. Eyring and held in
his account under the Savings Plan and 3,200 shares purchasable by Mr.
Eyring under the Purchase Plan.
(9) Includes 4,000 shares issuable to Mr. Walton pursuant to presently
exercisable stock options, 249 shares allocated to Mr. Walton and held in
his account under the Savings Plan and 3,200 shares purchasable by Mr.
Walton under the Purchase Plan.
(10) Includes 152,500 shares issuable to executive officers and directors of the
Company pursuant to presently exercisable stock options and 28,800 shares
purchasable by executive officers of the Company under the Purchase Plan.
Item 13. Certain Relationships
and Related Transactions.
The Company is a party to an agreement (each, an "Agreement") with each of
Messrs. Herbert Bass and Alex Geisler, Directors and former Co-Chairmen and
Co-Chief Executive Officers of the Company. Under the Agreements, Messrs. Bass
and Geisler served as consultants to the Company through August 31, 1996.
Beginning September 1, 1996, Mr. Bass and Mr. Geisler are each entitled to
receive retirement benefits for the rest of his life at an annual rate of
$92,061 per annum. These retirement benefits are payable for a minimum of 10
years and will be paid to the person's estate in the event of his death prior to
August 31, 2006. They are also entitled to receive non-competition payments of
$50,000 per annum for the 10 years following the terms of the Agreements.
Susan Devlin, wife of Richard Clouser, Senior Vice President-Corporate and
President of the Company's Mobile division, was employed by the Company during
the fiscal year ended August 31, 1997 as a vice president of its Mobile division
and, during fiscal 1997, was paid a salary of $165,323.
11
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K
(a) 1. The following financial statements of the Company are
included in Part II, Item 8:
<TABLE>
<CAPTION>
Page
---------
<S> <C>
Report of Grant Thornton LLP Independent Accountants...................................................... 20
Consolidated Balance Sheets--August 31, 1997 and 1996..................................................... 21-22
Consolidated Statements of Operations--Years Ended August 31, 1997, 1996, and 1995........................ 23
Consolidated Statement of Stockholders' Equity--Years Ended August 31, 1997, 1996 and 1995................ 24
Consolidated Statements of Cash Flows -Years Ended August 31, 1997, 1996 and 1995......................... 25-27
Notes to Consolidated Financial Statements................................................................ 28-42
2. The following schedule is included in Part IV:
Consolidated Financial Statement Schedule
Schedule II--Valuation and Qualifying Accounts and Reserves............................................... 50
</TABLE>
All other schedules are omitted because they are not applicable, not
required or the required information is included in the consolidated financial
statements or notes thereto.
(b) Reports on Form 8-K. No reports on Form 8-K were filed by
the Company during the three months ended August 31, 1997.
(c) Exhibits required to be filed by Item 601 of Regulation S-K:
1. Exhibit 3(A). Certificate of Incorporation, as amended
(incorporated by reference to Exhibit 3(A) of the Registrant's Annual Report
on Form 10-K filed November 24, 1992 (File No. 1-8654)).
2. Exhibit 3(B). Amended and Restated By-laws (incorporated by
reference to Exhibit 3(ii) of the Registrant's Quarterly Report on form 10-Q
filed April 15, 1996 (file No. 1-8654)).
3. Exhibit 4(A). Specimen of Stock Certificate (incorporated
by reference to Exhibit 4 of the Registrant's Annual Report on form 10-K
filed November 29, 1984 (File No. 1-8654)).
12
<PAGE>
4. Exhibit 4(B). Amended and Restated Loan and Security
Agreement dated as of December 12, 1995 among Unitel Video, Inc., R Squared,
Inc., and Heller Financial, Inc. as agent and lender (incorporated by
reference to Exhibit 4(B) of the Registrant's Annual Report on form 10-K
filed December 14, 1995 (File No. 1-8654)).
5. Exhibit 4(C). First Amendment and Limited Waiver to Loan and
Security Agreement dated November 26, 1996.
6. Exhibit 4(D). Second Amendment to Loan and Security
Agreement and Limited Waiver dated as of February 24, 1997 (incorporated by
reference to Exhibit 4(A) of the Registrant's Quarterly Report on Form 10-Q
filed July 9, 1997 (File No. 1-8654)).
7. Exhibit 4(E). Third Amendment and Limited Waiver to Amended
and Restated Loan and Security Agreement dated as of March 21, 1997
(incorporated by reference to Exhibit 4(B) of the Registrant's Quarterly
Report on Form 10-Q filed July 9, 1997 (File No. 1-8654)).
8. Exhibit 4(F). Fourth Amendment to Amended and Restated Loan
and Security Agreement dated as of May 7, 1997 (incorporated by reference to
Exhibit 4(C) of the Registrant's Quarterly Report on Form 10-Q filed July 9,
1997 (File No. 1-8654)).
9. Exhibit 4(G). Fifth Amendment to Amended and Restated Loan
and Security Agreement dated as of July 24, 1997.
10. Exhibit 4(H). Reimbursement Agreement dated as of July 1,
1997 between Unitel Video, Inc. and Heller Financial, Inc., as agent.
11. Exhibit 4(I). Second Amended and Restated Credit Agreement
dated as of December 12, 1995 between Unitel Video, Inc. and The Chase
Manhattan Bank, N.A. (incorporated by reference to Exhibit 4(C) of the
Registrant's Annual Report on Form 10-K filed December 14, 1995 (File No.
1-8654)).
12. Exhibit 4(J). Waiver to Loan and Security Agreement dated
April 12, 1996 (incorporated by reference to Exhibit 4(D) of the Registrant's
Annual Report on Form 10-K filed November 27, 1996 (File No. 1-8654)).
13. Exhibit 4(K). Waiver and Agreement to Amend Financial
Covenants dated November 27, 1996 (incorporated by reference to Exhibit 4(E)
of the Registrant's Annual Report on Form 10-K filed November 27, 1996 (File
No. 1-8654)).
14. Exhibit 4(L). First Amendment to Second Amended and Restated
Credit Agreement dated as of May 31, 1997.
15. Exhibit 4(M). Loan Agreement dated as of July 1, 1997
between Unitel Video, Inc. and the Allegheny County Industrial Development
Authority.
16. Exhibit 4(N). Pledge Agreement dated as of July 1, 1997
among Unitel Video, Inc., PNC Bank, National Association and Heller
Financial, Inc., as agent.
13
<PAGE>
17. Exhibit 10. Material Contracts:
10(A). Amended Non-Qualified Stock Option Plan of Unitel Video,
Inc. (incorporated by reference to Exhibit 10(A) of the Registrant's Annual
Report on Form 10-K filed November 27, 1996 (File No. 1-8654)).*
10(B). Lease Agreement between Unitel Video, Inc. and
Educational Broadcasting Corporation dated July 16, 1993 (incorporated by
reference to Exhibit 10(B) of the Registrant's Annual Report on Form 10-K
filed November 26, 1993 (File No. 1-8654)).
10(C). Amended Non-Statutory Stock Option Plan of Unitel Video, Inc.
(incorporated by reference to Exhibit 10(C) of the Registrant's Annual
Report on Form 10-K filed November 27, 1996 (File No. 1-8654)).*
10(D). Amended Employee Stock Purchase Plan of Unitel Video, Inc.
(incorporated by reference to Exhibit 10(D) of the Registrant's Annual
Report on Form 10-K filed November 27, 1996 (File No. 1-8654)).*
10(E). Employment & Consulting Agreement between Unitel Video, Inc. and
Herbert Bass dated as of May 26, 1988 (incorporated by reference to Exhibit
10(R) of the Registrant's Annual Report on Form 10-K filed December 13, 1989
(File No. 1-8654)).*
10(F). Employment & Consulting Agreement between Unitel Video, Inc. and
Alex Geisler dated as of May 26, 1988 (incorporated by reference to Item
14(C)4(S) of the Registrant's Annual Report on form 10K filed December 13,
1989 (File No. 1-8654)).*
10(G). Amendment to Employment and Consulting Agreement dated as of
February 14, 1996 between Unitel Video, Inc. and Alex Geisler. (incorporated
by reference to Exhibit 10(G) of the Registrant's Annual Report on Form 10-K
filed November 27, 1996 (File No. 1-8654)).*
10(H). Lease Agreement between UNV, Inc. and HBWC Limited Partnership
dated as of August 12, 1988 (incorporated by reference to Exhibit 10(U) of
the Registrant's Annual Report on Form 10-K filed December 13, 1989 (File
No. 1-8654)).
10(I). Lease Agreements between Windsor Video, Inc. and Time Equities
Inc. dated as of September 4, 1986 (incorporated by reference to Exhibit
10(V) of the Registrant's Annual Report on form 10-K filed December 13, 1989
(File No. 1-8654)).
10(J). Amendment to each Lease Agreement between Windsor Video, Inc. and
Time Equities Inc. dated as of July 13, 1994 and July 18, 1994 (incorporated
by reference to Exhibit 10(K) of the Registrant's Annual Report on form 10-K
filed November 28, 1994 (File No. 1-8654)).
10(K). Lease Agreement between Unitel Video, Inc. and CBS, Inc. dated as
of June 15, 1990 (incorporated by reference to Exhibit 10(Y) of the
Registrant's Annual Report on Form 10-K filed November 26, 1990 (File No.
1-8654)).
14
<PAGE>
10(L). Amendment to Lease Agreement dated July 11, 1996 between Unitel
Video, Inc. and CBS, Inc. (incorporated by reference to Exhibit 10(L) of the
Registrant's Annual Report on Form 10-K filed November 27, 1996 (File No.
1-8654)).
10(M). Assumption and Assignment of Lease between Unitel Video, Inc. and
VCA/Teletronics Inc. dated May 19, 1990 (incorporated by reference to
Exhibit 10(AA) of the Registrant's Annual Report on Form 10-K filed November
26, 1990 (File No. 1-8654)).
10(N). Amendment to Lease between Unitel Video, Inc. and Stage 57 Co.
dated May 14, 1990 (incorporated by reference to Exhibit 10(BB) of the
Registrant's Annual Report on Form 10-K filed November 26, 1990 (File No.
1-8654)).
10(O). Second Amendment to Lease between Unitel Video, Inc. and Stage 57
Co. dated as of May 1, 1994 (incorporated by reference to Exhibit 10(O) of
the Registrant's Annual Report on Form 10-K filed November 28, 1994 (File
No. 1-8654)).
10(P). Amended 1992 Stock Option Plan. (incorporated by reference to
Exhibit 10 to the Registrant's Quarterly Report on Form 10-Q filed April 7,
1997 (File No. 1-8654)).*
10(Q). Lease Termination and Release Agreement dated as of March 13,
1996 between Unitel Video, Inc. and Putman Publishing Company (Incorporated
by reference to Exhibit 10(Q) of the Registrant's Annual Report on Form 10-K
filed November 27, 1996 (File No. 1-8654)).
10(R). Assignment, Assumption and Acceptance of Lease between Scanline
Communications and Unitel Video, Inc. (incorporated by reference to Exhibit
10(V) of the Registrant's Annual Report on Form 10-K filed November 24, 1992
(File No. 1-8654)).
10(S). Asset Purchase Agreement dated as of May 5, 1992 between Unitel
Video, Inc. and Scanline Communications (incorporated by reference to
Exhibit 2.1 of the Registrant's Current Report on Form 8-K dated May 15,
1992 (File No. 1-8654)).
10(T). Amendment dated as of October 29, 1992 to Asset Purchase
Agreement dated as of May 5, 1992 between Unitel Video, Inc. and Scanline
Communications (incorporated by reference to Exhibit 10(X) of the
Registrant's Annual Report on Form 10-K filed November 24, 1992 (File No.
1-8654)).
10(U). Lease Agreement between First East Associates and Unitel Video,
Inc. dated May 26, 1993 and Sublease dated May 26, 1993 between Unitel
Video, Inc. and KingWorld Productions, Inc.(incorporated by reference to
Exhibit 10(U) of the Registrant's Annual Report on Form 10-K filed November
26, 1993 (File No. 1-8654)).
10(V). Sublease Agreement dated April 1, 1987 between R.E. Graphics,
Inc. (f/k/a Micor, Inc.) and Scanline Communications, together with
Modification dated February 1989 of Sublease Agreement (incorporated by
reference to Exhibit 10(AA) of the Registrant's Annual Report on Form 10-K
filed November 24, 1992 (File No. 1-8654)).
15
<PAGE>
10(W). Sublease Agreement dated January 1, 1982 between Columbia
Pictures Industries, Inc. and Bell & Howell/Columbia Pictures Video Services,
together with letter dated April 3, 1989 from Columbia Pictures to Scanline
Communications and undated Letter from Columbia Pictures to 43rd Street
Estates Corp. (incorporated by reference to Exhibit 10(BB) of the
Registrant's Annual Report on Form 10-K filed November 24, 1992 (File No.
1-8654)).
10(X). Third Tier Sublease, dated May 14, 1996, between Unitel Video,
Inc. and Photo-Magnetic Sound Studios Inc. (incorporated by reference to
Exhibit 10(X) of the Registrant's Annual Report on Form 10-K filed November
27, 1996 (File No. 1-8654)).
10(Y). Sublease Agreement dated as of July 3, 1996 between Unitel Video,
Inc. and Henry Dreyfuss Associates and Second Tier Sublease dated as of July
3, 1996 between Unitel Video, Inc. and Paramount Pictures Corporation
(incorporated by reference to Exhibit 10(Y) of the Registrant's Annual
Report on Form 10-K filed November 27, 1996 (File No. 1-8654)).
10(Z). 401K Employee Savings and Stock Ownership Plan of Unitel Video,
Inc. effective July 1, 1992 (incorporated by reference to Exhibit 10(X) of
the Registrant's Annual Report on Form 10-K filed November 26, 1993 (File
No. 1-8654)).*
10(AA). Asset Purchase Agreement dated as of February 24, 1995 between
Jee See & Co., Inc. and Unitel Video, Inc. (incorporated by reference to
Exhibit 2-1 of the Registrant's Current Report on Form 8-K dated February 24,
1995 (File No. 1-8654)).
10(BB). Two Third Tier Sublease agreements dated November 22, 1996
between Unitel Video, Inc. and Digital Universe II, Inc. (incorporated by
reference to Exhibit 10(BB) of the Registrant's Annual Report on Form 10-K
filed November 27, 1996 (File No. 1-8654)).
10(CC). Employment Agreement between Editel Los Angeles and Albert
Walton dated as of March 20, 1997 (incorporated by reference to Exhibit
10(A) to the Registrant's Quarterly Report on Form 10-Q filed July 9, 1997
(File No. 1-8654)).
10(DD). Deed of Lease dated June 16, 1997 between Olymbec Construction
Inc. and Unitel Video Canada Inc.
10(EE). Remarketing Agreement, dated as of July 1, 1997, among Allegheny
County Industrial Development Authority, PNC Bank, National Association,
Unitel Video, Inc. and RRZ Public Markets, Inc.
10(FF). Employment Agreement dated as of September 1, 1997 between
Unitel Video, Inc. and Barry Knepper.*
10(GG). Agreement dated December 8, 1997 between Unitel Video, Inc. and
Richard Clouser.*
10(HH). Agreement dated December 8, 1997 between Unitel Video, Inc. and
Thomas Eyring.*
18. Exhibit 23. Accountant's consent.
16
<PAGE>
19. Exhibit 24. Power of Attorney from officers and directors to Barry
Knepper (included on signature page).
20. Exhibit 27. Financial Data Schedule.
* Management contract or compensatory plan or arrangement required to be noted
as provided in Item 14(a)(3).
17
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
UNITEL VIDEO, INC.
By: /s/ BARRY KNEPPER
-------------------------------
Barry Knepper
Chief Executive Officer
By: /s/ GEORGE HOROWITZ
--------------------------------
George Horowitz
Chief Financial Officer
Dated: December 24, 1997
18
<PAGE>
EMPLOYMENT AGREEMENT
AGREEMENT dated as of September 1, 1997 between UNITEL VIDEO, INC.,
a Delaware corporation (the "Corporation"), with an address at 555 West 57th
Street, New York, New York 10019, and Barry Knepper ("Employee"), residing at
18 Westchester Avenue, Jericho, New York 11753 .
W I T N E S S E T H:
WHEREAS, the Corporation believes the contributions that have been
made and can continue to be made by Employee toward the success of the
business of the Corporation are valuable and wishes to retain the services of
Employee for its benefit; and
WHEREAS, Employee is willing to continue as an employee of the
Corporation upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants herein and
other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Corporation and Employee hereby agree as follows:
1.Term.
1. The Corporation hereby employs Employee, and Employee
hereby accepts employment by the Corporation, on the terms and conditions
herein contained, to perform the duties described in paragraph 2 for a
term (as such term may be extended or earlier terminated as provided
herein, the "Employment Term") commencing on the date hereof and, subject
to the remaining provisions of this Agreement, ending on August 31, 1998.
(b) On August 31, 1998 and each subsequent August 31, the
Employment Term automatically shall be extended for an additional period of
one year unless either the Corporation or Employee shall give the other party
not less than 90 days' written notice prior to such August 31 that such party
shall not desire that the Employment Term be so extended, in which event the
Employment Term shall not thereafter be extended beyond the then current
expiration date thereof.
(c) Notwithstanding the provisions of paragraph 1(b), upon a Change
of Control (as hereinafter defined), the Employment Term automatically shall
be extended for an additional period commencing on the date the Change of
Control shall have occurred and ending on the last day of the calendar month
immediately succeeding the date that is 18 months from and after the date of
occurrence of such Change of Control (the "Change of Control End Date"). On
the Change of Control End Date and on each anniversary of the Change of
Control End Date, the Employment Term automatically shall be extended for an
additional period of one year unless either the Corporation or Employee shall
give the other party not less than 90 days' written notice
<PAGE>
prior to the Change of Control End Date or such anniversary of the Change of
Control End Date, as the case may be, that such party shall not desire that
the Employment Term be so extended, in which event the Employment Term shall
not thereafter be extended beyond the then current expiration date thereof.
(d) In the event that the Corporation shall not extend the
Employment Term pursuant to paragraphs 1(b) or (c), then at the expiration of
the Employment Term, the Corporation shall pay to Employee, within 30 days of
such expiration (10 days of expiration pursuant to paragraph 1(c)) and
without regard to any applicable principles of mitigation of damages, set off
and the like, an amount equal to one times the annual Base Salary in effect
on such expiration of the Employment Term. In addition, within 30 days after
the next Financial Statement Receipt Date (as hereinafter defined) to occur,
the Corporation shall also pay to Employee an amount equal to all bonus,
incentive or similar or other form of compensation under any plan or
arrangement with the Corporation which he would have been entitled to for the
period in which the end of the Employment Term occurs computed through the
expiration of the Employment Term and utilizing the method for pro-ration
described in paragraph 4(c). The Corporation shall also pay to Employee all
Accrued Compensation Amounts (as hereinafter defined) through the expiration
of the Employment Term and shall reimburse Employee for expenses as
contemplated by paragraph 3(c). In addition, for a period of 12 months after
such expiration of the Employment Term, the Corporation will provide Employee
and his family the same medical, disability, life and other insurance
coverages provided immediately prior to such expiration.
2. Duties.
1. During the Employment Term, Employee shall serve as
President and Chief Executive Officer of the Corporation, with such
authority, duties and responsibilities as shall from time to time be
designated by the Board of Directors of the Corporation. Employee agrees
that during the Employment Term he will devote his full time and
attention during regular business hours to the business and affairs of
the Corporation and its subsidiaries except during vacation periods and
periods of illness or incapacity. Nothing contained herein shall prevent
Employee from serving as a director or trustee of any corporation or
other organization, and in any other capacity with any non-commercial
enterprise; provided, that such service does not materially interfere
with the performance of his duties hereunder and such business or
organization does not have business relations with or compete with the
Corporation or any of its subsidiaries or affiliates.
2. Employee will perform his duties and services
hereunder with the same degree of diligence and integrity which he has
exercised during the course of his employment by the Corporation prior to
the date of this Agreement. In addition, Employee agrees to serve as a
director of the Corporation and its subsidiaries, including committee
memberships, to which he may from time to time be elected or appointed.
<PAGE>
3. Compensation and Benefits.
1. The Corporation agrees to pay Employee a base salary
("Base Salary") at the rate of $200,000 per year, payable in accordance
with the Corporation's regular pay intervals or in such other manner as
shall be mutually agreeable to Employee and the Corporation. Employee's
Base Salary shall be increased effective on each May 1 from time to time
during the Employment Term, commencing May 1, 1998, by an amount equal to
the greater of (i) 5% of the Base Salary in effect on the immediately
preceding April 30 and (ii) the Base Salary in effect on the immediately
preceding April 30 multiplied by a fraction, the numerator of which is
the Index (as hereinafter defined) for the month of April immediately
preceding the effective date of such increase and (B) the denominator of
which is the Index for the month of April in the immediately preceding
calendar year. Any increase in Base Salary or other compensation shall
not limit or reduce any other obligation of the Corporation under this
Agreement. As used in this Agreement, "Index" for any calendar month
means the Revised Consumer Price Index for Urban Wage Earners and
Clerical Workers, All Items (base index year 1982-84=100), for New
York-Northern New Jersey-Long Island, NY-NJ-CT, for such month, as
published by the United States Department of Labor, Bureau of Labor
Statistics. If the Index is not published by the Bureau of Labor
Statistics or another governmental agency at any time, then such
calculation shall be made using the most closely comparable statistics on
the purchasing power of the consumer dollar as published by a responsible
financial authority selected in good faith by the Board of Directors of
the Corporation.
2. During the Employment Term, Employee shall be entitled to
participate in all bonus, incentive compensation, stock option or stock
related right, retirement, profit-sharing, medical payment, disability,
health or life insurance and other benefit plans and arrangements which
may be or become available to executives of the Corporation in general;
provided, that Employee shall be required to comply with the conditions
attendant to coverage by such plans and arrangements and notwithstanding
anything contained herein to the contrary, shall comply with, and be
entitled to benefits only in accordance with, the terms and conditions of
such plans and arrangements. Notwithstanding the foregoing, the
Corporation shall continue to provide Employee with substantially the
same medical, disability, life and other insurance coverages currently
provided to Employee.
3. Employee shall be entitled to reimbursement, not less
frequently than biweekly, for expenses reasonably incurred by him in
furtherance of the business of the Corporation and in the performance of
his duties hereunder, on an accountable basis with such substantiation as
the Corporation may at the time and from time to time require from its
senior executive officers.
4. Employee shall be entitled to five weeks vacation in each
year during the Employment Term, which is the number of weeks currently
available to Employee based upon his seniority with the Corporation.
Such vacation shall be taken at such time or times as may be mutually
agreed upon by the Corporation and Employee.
<PAGE>
5. Employee shall also be entitled to receive a cash bonus
equal to 2 1/2% of Consolidated Pretax Profits (as hereinafter defined)
in each fiscal year of the Corporation during the Employment Term. The
cash bonus is sometimes hereinafter referred to as "Incentive
Compensation." Employee shall be entitled to receive Incentive
Compensation within 15 days of receipt of the Corporation from its then
independent certified public accountants of the audited financial
statements for the applicable fiscal year (the date of receipt by the
Corporation of such audited financial statements being hereinafter
referred to as the "Financial Statement Receipt Date"). For purposes of
this Agreement, the term "Consolidated Pretax Profits" shall mean
earnings before (i) income taxes, (ii) the cumulative or other effect of
changes in accounting principles or practices, (iii) other extraordinary
items and (iv) gain or loss from the sale of businesses (including
divisions and subsidiaries) of the Corporation, all as determined in
accordance with generally accepted accounting principles, consistently
applied, and reflected on the Corporation's audited Consolidated
Statements of Operations for the applicable fiscal year.
6. Throughout the Employment Term, the Corporation will
continue to furnish Employee with an automobile comparable to the
automobile provided at the commencement of this Agreement and shall pay
for or reimburse Employee for all expenses relating to the insurance,
maintenance and operation thereof, on an accountable basis with such
substantiation as the Corporation may at the time and from time to time
require from its senior executive officers.
4. Termination upon Death or Disability. Employee's employment
hereunder shall terminate upon his death, or, at the election of the
Corporation, by written notice to Employee, if Employee becomes Disabled (as
hereinafter defined). In the event of a termination of Employee's employment
for death or Disability, the Corporation shall pay Employee (or his legal
representatives, as the case may be), as follows:
1. within fifteen (15) days following death or such notice,
any accrued but unpaid Base Salary, any accrued and unused vacation days
based upon Employee's salary on a 365 day per year daily basis, any
accrued but unpaid expenses as per paragraph 3(c) hereof and any other
accrued and unpaid compensation or benefits to which Employee may be
entitled under this Agreement (collectively, "Accrued Compensation
Amounts"), in each case as of the Termination Date (as hereinafter
defined);
2. Employee's Base Salary until the expiration of 12 months
from the date of death or termination for Disability (the "Extension
Period"), such Base Salary to be paid as and when such Base Salary would
have been paid had the employment of Employee continued through the
Extension Period; and
3. within fifteen (15) days after the Financial Statement
Receipt Date immediately following such termination of Employee's
employment, an amount equal to (i) the amount of Incentive Compensation,
if any, that would have been payable to Employee
<PAGE>
with respect to the fiscal year during which the Termination Date
occurred multiplied by (ii) a fraction, the numerator of which is the
number of days in such fiscal year which expired prior to the Termination
Date and the denominator of which is 365.
For the purposes of this Agreement, Employee shall be deemed to be
"Disabled" or have a "Disability" if as a result of the occurrence of mental
or physical disability during the Term he has been unable to perform his
duties hereunder for six (6) consecutive months, as determined in good faith
by the Board of Directors of the Corporation.
Employee acknowledges that the payments referred to in this
paragraph 4 and the payment and benefits, if any, to which Employee (or his
legal representatives, as the case may be) may be entitled under the
Corporation's group life insurance plan now or at any time hereafter in
effect constitute the only payments to which Employee (or his legal
representatives, as the case may be) shall be entitled to receive from the
Corporation under this Agreement in the event of a termination of his
employment for death or Disability, and that except for such payments and
benefits, the Corporation shall have no further liability or obligation to
him (or his legal representatives, as the case may be) under this Agreement.
5. Change of Control.
(a) Employee may, at any time during the twelve (12) month period
following a Change of Control, by delivery of written notice to the
Corporation, terminate his employment hereunder in the event that during such
period the compensation, benefits, authority, responsibilities, privileges,
duties and/or title of Employee are materially diminished (individually or in
the aggregate). Upon such permitted termination by Employee, the Corporation
shall pay to Employee, within 10 days of such termination and without regard
to any applicable principles of mitigation of damages, set off and the like,
the greater of (i) the Base Salary Employee would have received (based on the
Base Salary in effect on the date of such termination of the Employment Term)
through what would otherwise have been the last day of the Employment Term
had this Agreement not been so terminated and (ii) one times the annual Base
Salary in effect on the date of such termination of the Employment Term. In
addition, within 30 days after the next Financial Statement Receipt Date (as
hereinafter defined) to occur, the Corporation shall also pay to Employee an
amount equal to all bonus, incentive or similar or other form of compensation
under any plan or arrangement with the Corporation which he would have been
entitled to for the period in which the end of the Employment Term occurs
computed through the Termination Date and utilizing the method for pro-ration
described in paragraph 4(c). The Corporation shall also pay to Employee all
Accrued Compensation Amounts through the Termination Date of the Employment
Term and shall reimburse Employee for expenses as contemplated by paragraph
3(c). In addition, for a period of 12 months after such termination of the
Employment Term, the Corporation will provide Employee and his family the
same medical, disability, life and other insurance coverages provided
immediately prior to such termination.
(b) "Change of Control" as used in this Agreement means the
occurrence of any of the following: (i) the approval by the Board of
Directors of the Corporation and the execution by the Corporation of an
agreement providing for the sale by the Corporation of all or
<PAGE>
substantially all of its properties and assets to one or more corporations or
other entities not owned by or affiliated with the Corporation; (ii) the
majority of the Board of Directors of the Corporation shall consist of
persons who are neither present members of the Board of Directors, nor
persons initially selected by the Board of Directors (rather than elected by
shareholders) as additional or replacement members of the Board of Directors;
(iii) if any "person" (as such term is defined in Sections 3(a)(9) and
13(d)(3) of the Securities Exchange Act of 1934, as amended and in effect on
the date hereof), other than an employee stock ownership plan or similar
benefit plan of the Corporation, becomes a beneficial or record holder,
directly or indirectly, of securities of the Corporation representing thirty
(30%) percent or more of the Corporation's then outstanding securities having
the right to vote on the election of directors; (iv) if the Board of
Directors approves a merger or consolidation of the Corporation with any
other corporation or entity, other than a merger or consolidation that would
result in the holders of voting securities of the Corporation outstanding
immediately prior thereto being the holders of at least 80% of the voting
securities of the surviving or resulting entity outstanding immediately after
such merger or consolidation; or (v) the adoption by the Board of Directors
of the Corporation and approval by the Corporation's shareholders of a plan
of liquidation or dissolution of the Corporation.
6. Termination for Cause; Termination without Cause.
1. The Corporation may terminate this Agreement, without
liability (other than for (i) the payment of all Accrued Compensation
Amounts through the Termination Date of the Employment Term and (ii) the
reimbursement of Employee for expenses as contemplated by paragraph
3(c)), if Employee's employment is terminated for "Cause". The term
"Cause" shall, for all purposes of this Agreement, mean and be limited to
(i) the continued failure by Employee to substantially perform his duties
to the Corporation pursuant hereto after a demand for performance is
delivered to Employee that specifically identifies the manner in which
the Corporation believes that Employee has not substantially performed
his duties, and Employee has failed to cure such failure in the good
faith opinion of the Board of Directors within 30 days of such demand by
the Corporation, (ii) the conviction of Employee of a felony under
federal or state law, and (iii) the violation by Employee of the
provisions of paragraph 8 of this Agreement. Amounts payable under this
paragraph 6(a) shall be paid by the Corporation within 30 days of the
Termination Date.
(b) The Corporation may terminate this Agreement at any time
without Cause. In such event, the Corporation shall pay to Employee, within
30 days of termination (within 10 days of termination if such termination
shall occur after the occurrence of a Change of Control) and without regard
to any applicable principles of mitigation of damages, set off and the like,
the greater of (i) the Base Salary Employee would have received (based upon
the Base Salary in effect on the Termination Date) through what otherwise
would have been the last day of the Employment Term had this Agreement not
been so terminated and (ii) one times the annual Base Salary in effect on the
Termination Date. In addition, within 30 days after the next Financial
Statement Receipt Date to occur, the Corporation shall also pay to Employee
an amount equal to all bonus, incentive or similar or other form of
compensation under any plan or arrangement with the Corporation which he
would have been entitled to for the period in which the end of the
<PAGE>
Employment Term occurs computed through the Termination Date and utilizing
the method for pro-ration described in paragraph 4(c). The Corporation shall
also pay to Employee all Accrued Compensation Amounts through the Termination
Date of the Employment Term and shall reimburse Employee for expenses as
contemplated by paragraph 3(c). In addition, for a period of 12 months after
any termination pursuant to this paragraph or, if longer, the period
commencing on the date of termination and ending on what otherwise would have
been the last day of the Employment Term has this Agreement not been so
terminated, the Corporation will provide Employee and his family the same
medical, disability, life and other insurance coverages provided immediately
prior to such termination.
(c) It is intended that the "present value" of the payments and
benefits to Employee, whether under this Agreement or otherwise, which are
includable in the computation of "parachute payments" shall not, in the
aggregate, exceed 2.99 times the "base amount" (the terms "present value,"
"parachute payments" and "base amount" being determined in accordance with
Section 280G of the Internal Revenue Code of 1986, as amended (the "Code")).
Accordingly, if Employee has received or is entitled at any time to receive
any such payments or benefits that would, in the opinion of the independent
certified public accountants retained by the Corporation immediately prior to
any Change of Control, subject any such payments or benefits to Employee to
the excise tax imposed by Section 4999 of the Code, such payments and
benefits shall be reduced by the smallest amount necessary, in the opinion of
such accountants, to avoid such excise tax; provided, that the type of
payment or benefits to be reduced shall be determined by Employee. No
reduction in any such payments or benefits in reliance of such accountant's
opinion shall be permitted unless and until the Corporation shall have
provided to Employee a copy of any such opinion no later than the date
otherwise required for the payment of such payments or benefits.
7. Notice of Termination and Termination Date.
1. Any termination of Employee's employment by the
Corporation or by Employee shall be communicated by a Notice of
Termination to the other party hereto. For purposes hereof, a "Notice of
Termination" shall mean a notice which shall state the "Termination Date"
(as hereinafter defined) and the specific provision or provisions of this
Agreement pursuant to which this Agreement is being terminated.
2. "Termination Date" shall mean the date specified in the
Notice of Termination as the last day of Employee's employment, which
date shall not be sooner than the date on which the Notice of Termination
is given or such later date as specified in the applicable provision of
this Agreement.
8. Certain Covenants and Agreement.
1. Employee acknowledges that, by his employment, he has been
and will be in a confidential relationship with the Corporation and has
had and will have access to confidential information and trade secrets of
the Corporation, its subsidiaries and affiliates. Confidential
information and trade secrets include, but are not limited to,
<PAGE>
customer and client lists, price lists, marketing and sales strategies
and procedures, operation techniques, business plans and systems, and all
other records, files and information which are not in the public domain.
Accordingly, Employee will not, during the term of this Agreement or
thereafter, except as may be required in the performance of his duties to
the Corporation under this Agreement, use, or disclose to any third
party, any confidential information or trade secrets.
(b) In the event of a breach or threatened breach by Employee of
any of the provisions of this paragraph 8, the Corporation shall be entitled
to an injunction by any court or tribunal to restrain Employee from
committing or continuing any violation. In any proceeding for an injunction,
Employee agrees that his ability to answer in damages shall not be a bar or
be interposed as a defense to the granting of a temporary or permanent
injunction against him. Employee acknowledges that the Corporation will not
have an adequate remedy at law in the event of any breach by him as aforesaid
and that the Corporation may suffer irreparable damage and injury in the
event of such a breach by him. Nothing contained herein shall be construed as
prohibiting the Corporation from pursuing any other remedy or remedies
available to the Corporation in respect of such breach or threatened breach.
(c) The provisions of this paragraph 8 shall survive the
termination of the Employment Term and/or this Agreement.
9. Assignability. This Agreement may not be assigned by Employee.
This Agreement and all of its terms and conditions shall be binding upon and
inure to the benefit of Employee and his heirs, executors, administrators,
legal representatives and assigns and the Corporation and its successors and
assigns. Successors of the Corporation shall include, without limitation, any
corporation or corporations acquiring directly or indirectly all or
substantially all of the assets of the Corporation whether by merger,
consolidation, purchase, lease or otherwise, and such successor shall
thereafter be deemed the "Corporation" for purposes hereof.
10. Notices. All notices, requests, demands and other
communications provided for hereby shall be in writing and shall be deemed to
have been duly given when delivered personally or two days after sent by
registered or certified mail, return receipt requested, to the party entitled
thereto at the address first above written or to such changed address as the
addressee may have given by a similar notice, with a copy, in each case, to
William D. Freedman, Esq., Parker Chapin Flattau & Klimpl, LLP, 1211 Avenue
of the Americas, New York, New York 10036.
11. Modification. This Agreement may be modified or amended only
by an instrument in writing signed by Employee and the Corporation and any
provision hereof may be waived only by an instrument in writing signed by the
party hereto against whom any such waiver is sought to be enforced.
12. Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect, impair or invalidate any other
provision of this Agreement.
<PAGE>
13. Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of New York,
without regard to principles of conflicts of law (or any other law that would
make the laws of any jurisdiction other than the State of New York applicable
to this Agreement).
<PAGE>
14. Captions. The captioned headings contained herein are for
convenience of reference only and are not intended, nor shall they be
construed, to have any substantive effect.
IN WITNESS WHEREOF, the Corporation and Employee have signed this
Agreement on the date set forth on the first page of this Agreement.
UNITEL VIDEO, INC.
By: /s/ Karen Ceil Lapidus
--------------------------
Name: Karen Ceil Lapidus
Title: Vice President, General Counsel
and Secretary
/s/BarryKnepper
-------------------------
Barry Knepper
<PAGE>
UNITEL VIDEO, INC.
555 WEST 57TH STREET
NEW YORK, NEW YORK 10019
December 8, 1997
Mr. Richard Clouser
1700 Grandview Avenue
Apt. 502
Pittsburgh, PA 15211
Dear Mr. Clouser:
In recognition of the value of your services to Unitel Video, Inc.
(the "Company"), the Board of Directors of the Company has determined that,
subject to the terms and conditions of this agreement (the "Agreement"), you
shall be entitled to receive the severance benefits set forth below in this
Agreement in the event your employment terminates under certain circumstances in
connection with a "Change in Control" (as defined below) of the Company.
This Agreement shall commence on the date hereof and, subject to the
next succeeding sentence of this paragraph, shall continue through December 31,
1998; provided, however, that commencing on January 1, 1999 and on each January
1 thereafter, the term of this Agreement shall automatically be extended for one
additional year unless, not later than the October 1 immediately preceding any
such January 1, the Company shall have given notice to you that it does not wish
to extend this Agreement; and further, provided, that if a Change of Control
shall have occurred during the original or extended term of this Agreement, this
Agreement shall continue in effect for a period through the day immediately
preceding the one-year anniversary date of the occurrence of such Change of
Control, but shall not thereafter be further extended. Notwithstanding the
foregoing, in the event that at any time either (i) you shall terminate your
employment with the Company for any reason whatsoever, or (ii) the Company shall
terminate your employment for any reason whatsoever, in each case other than in
the circumstances set forth in the next succeeding paragraph, this Agreement
shall terminate and shall be of no further force or effect (other than with
respect to those provisions that, by their terms, expressly survive the
termination of this Agreement).
If, during the period beginning upon the occurrence of a Change in
Control and ending on the day immediately preceding the one-year anniversary
date thereof, your employment is terminated (i) by the Company without "Cause"
(as defined below), or (ii) by you as a result of a substantial diminution of
your duties or responsibilities in effect prior to such Change of Control, or a
reduction in the base salary compensation theretofore provided to you by the
Company, then the Company shall pay to you, without regard to any applicable
principles of mitigation of damages or set off (except as expressly hereinafter
provided), an amount equal to one-half of your annual base salary as in effect
immediately prior to your termination (or, if greater, immediately prior to the
Change in Control). Such amount shall be paid to you in six monthly
installments, each as nearly equal in amount as possible, commencing on the
first day of the month immediately subsequent to the date on which your
employment shall be so terminated and ending on the first day of the sixth month
thereafter (the "Last Payment Date") (the period commencing on the date of such
termination of employment and ending on the Last Payment Date is hereinafter
referred to as the "Severance Period").
You acknowledge that, as a result of your employment, you are in a
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<PAGE>
confidential relationship with the Company and have access to confidential
information and trade secrets of the Company, its subsidiaries and affiliates
(collectively, the "Confidential Information"). Accordingly, during your
employment and thereafter, you agree to maintain in the strictest confidence all
Confidential Information and shall not use or permit the use of, or disclose,
discuss, communicate or transmit or permit the disclosure, discussion,
communication or transmission of, any Confidential Information. This paragraph
shall not apply to (i) information that, by means other than your deliberate or
inadvertent disclosure, becomes generally known to the public, or (ii)
information the disclosure of which is compelled by law (including judicial or
administrative proceedings and legal process). In that connection, if you are
requested or required (by oral question, interrogatories, requests for
information or documents, subpoenas, civil investigative demand or other legal
process) to disclose any Confidential Information, you agree to provide the
Company with prompt written notice of such request or requirement so that the
Company may seek an appropriate protective order or relief therefrom or may
waive the requirements of this paragraph. If, failing the entry of a protective
order or the receipt of a waiver hereunder, you are compelled to disclose
Confidential Information under penalty of liability for contempt or other
censure or penalty, you may disclose such Confidential Information to the extent
so required. For purposes hereof, "Confidential Information" includes, but is
not limited to, customer and client lists, financial information, price lists,
marketing and sales strategies and procedures, computer programs, databases and
software, supplier, vendor and service information, personnel information,
operating procedures and techniques, business plans and systems, and all other
records, files, and information in respect of the Company. The provisions of
this paragraph shall survive the termination of this Agreement.
In addition, during the Severance Period you will not directly or
indirectly (i) solicit, induce or entice for employment, retention or
affiliation, or recommend to any corporation, entity or other person the
solicitation, inducement or enticement for employment, retention or affiliation
of, any employee of the Company, or any of its subsidiaries or affiliates, or
(ii) engage in any activity intended to terminate, disrupt or interfere with the
Company's or any of its subsidiaries' relationship with any customer, supplier,
lessor or other person.
In the event of the breach or a threatened breach by you of any of two
immediately preceding paragraphs, the Company's obligation to make the payments
described in this Agreement shall automatically terminate. In addition, the
Company shall be entitled to an injunction to be issued by any court or tribunal
of competent jurisdiction to restrain you from committing or continuing any such
violation without posting a bond or other security. In any proceeding for an
injunction, you agree that your ability to answer in damages shall not be a bar
or be interposed as a defense to the granting of a temporary or permanent
injunction against you. You acknowledge that the Company will not have an
adequate remedy at law in the event of any breach by you as aforesaid and that
the Company may suffer irreparable damage and injury in the event of such a
breach by you. Nothing contained herein shall be construed as prohibiting the
Company from pursuing any other remedy or remedies available to the Company in
respect of such breach or threatened breach. The provisions of this paragraph
shall survive the termination of this Agreement.
If any term or provision of this Agreement shall be held invalid or
unenforceable because of its duration, geographic scope, or for any other
reason, the Company and you agree that the court making such determination shall
have the power to modify such provision, whether by limiting the geographic
scope, reducing the duration, or otherwise, to the minimum extent necessary to
make such term or provision valid and enforceable, and such term or provision
shall be enforceable in such modified form. The provisions of
-2-
<PAGE>
this paragraph shall survive the termination of this Agreement.
For purposes of this Agreement:
(a) "Change in Control" shall mean the occurrence of any of the
following: (i) the direct or indirect sale, lease, exchange or other transfer of
all or substantially all of the assets of the Company to any "person" or "group"
(as such terms are used in Sections 13(d)(3) and 14(d)(2) of the Securities and
Exchange Act of 1934, as amended (the "Exchange Act")); (ii) the merger or
consolidation of the Company with or into another corporation with the effect
that the then existing stockholders of the Company hold less than 80% of the
combined voting power of the then outstanding securities of the surviving
corporation of such merger or the corporation resulting from such consolidation
having the right to vote in the election of directors; (iii) the replacement of
a majority of the Board of Directors of the Company (the "Board of Directors")
over a two-year period from the directors who constituted the Board of Directors
at the beginning of such period, and such replacement shall not have been
approved by the Board of Directors as constituted at the beginning of such
period; (iv) a "person" or "group" (as defined above), other than an employee
stock ownership plan of the Company, as a result of a tender or exchange offer,
open market purchases, privately negotiated purchases or otherwise, shall have
become the beneficial owner (within the meaning of Rule 13d-3 under the Exchange
Act) of securities of the Company representing 30% or more of the combined
voting power of the then outstanding securities of the Company having the right
to vote in the election of directors; or (v) the adoption by the Board of
Directors and approval by the Company's shareholders of a plan of liquidation or
dissolution of the Company.
(b) "Cause" shall mean (i) your conviction of a felony involving
moral turpitude or your conviction of any crime involving dishonesty, theft,
fraud or unethical business conduct with respect to the Company or any of its
subsidiaries; (ii) substantial and repeated failure, which is not cured within
15 days after written notice thereof to you, to perform duties and
responsibilities as reasonably and lawfully directed in good faith by the Board
of Directors; provided, that such duties and responsibilities are consistent
with your duties and responsibilities with the Company immediately prior to such
Change of Control; or (iii) any breach of the provisions of any employment
agreement, non-competition or confidentiality agreement applicable to you which
is not remedied within any cure period that may be set forth in any such
agreement (or, if no such cure period shall be set forth in any such agreement,
within 15 days after written notice thereof to you), in each case as determined
in the good faith judgment of the Board of Directors.
This Agreement is not, and shall not be construed, as an employment
agreement or arrangement between the Company, or any other entity or person, and
you, and nothing herein shall confer on you any right to continue in the employ
of the Company, or any other entity or person, or interfere in any way with the
right of the Company, or any other entity or person, to terminate your
employment for any reason whatsoever without liability therefor except as
expressly provided in this Agreement.
This Agreement shall be binding upon and shall inure to the benefit of
the Company and its successors and assigns (including, without limitation, any
entity or person who shall acquire all or substantially all of the businesses or
assets of the Company and its subsidiaries, whether by purchase, merger,
consolidation or otherwise) and you and your heirs, legal representatives,
executors and assigns; provided, that you may not assign this Agreement without
the prior written consent of the Company.
This Agreement sets forth the entire agreement and understanding of
-3-
<PAGE>
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.
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 parties hereto. The failure of either party at any
time or times to require performance of any provision hereof shall in no manner
affect such party's 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
waiver of the breach of any term or covenant contained in this Agreement.
This Agreement will 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 within such State.
-4-
<PAGE>
Please signify your agreement to the foregoing by signing this
Agreement below and returning it to the Company.
Very truly yours,
UNITEL VIDEO, INC.
By:/s/ Barry Knepper
---------------------------------
Name: Barry Knepper
Title: Chief Executive Officer
AGREED:
/s/ Richard Clouser
- ----------------------------------
Richard Clouser
-5-
<PAGE>
UNITEL VIDEO, INC.
555 WEST 57TH STREET
NEW YORK, NEW YORK 10019
December 8, 1997
Mr. Thomas Eyring
90 Orchard Street
Plainview, NY 11803
Dear Mr. Eyring:
In recognition of the value of your services to Unitel Video, Inc.
(the "Company"), the Board of Directors of the Company has determined that,
subject to the terms and conditions of this agreement (the "Agreement"), you
shall be entitled to receive the severance benefits set forth below in this
Agreement in the event your employment terminates under certain circumstances
in connection with a "Change in Control" (as defined below) of the Company.
This Agreement shall commence on the date hereof and, subject to the
next succeeding sentence of this paragraph, shall continue through December
31, 1998; provided, however, that commencing on January 1, 1999 and on each
January 1 thereafter, the term of this Agreement shall automatically be
extended for one additional year unless, not later than the October 1
immediately preceding any such January 1, the Company shall have given notice
to you that it does not wish to extend this Agreement; and further, provided,
that if a Change of Control shall have occurred during the original or
extended term of this Agreement, this Agreement shall continue in effect for
a period through the day immediately preceding the one-year anniversary date
of the occurrence of such Change of Control, but shall not thereafter be
further extended. Notwithstanding the foregoing, in the event that at any
time either (i) you shall terminate your employment with the Company for any
reason whatsoever, or (ii) the Company shall terminate your employment for
any reason whatsoever, in each case other than in the circumstances set forth
in the next succeeding paragraph, this Agreement shall terminate and shall be
of no further force or effect (other than with respect to those provisions
that, by their terms, expressly survive the termination of this Agreement).
If, during the period beginning upon the occurrence of a Change in
Control and ending on the day immediately preceding the one-year anniversary
date thereof, your employment is terminated (i) by the Company without
"Cause" (as defined below), or (ii) by you as a result of a substantial
diminution of your duties or responsibilities in effect prior to such Change
of Control, or a reduction in the base salary compensation theretofore
provided to you by the Company, then the Company shall pay to you, without
regard to any applicable principles of mitigation of damages or set off
(except as expressly hereinafter provided), an amount equal to one-half of
your annual base salary as in effect immediately prior to your termination
(or, if greater, immediately prior to the Change in Control). Such amount
shall be paid to you in six monthly installments, each as nearly equal in
amount as possible, commencing on the first day of the month immediately
subsequent to the date on which your employment shall be so terminated and
ending on the first day of the sixth month thereafter (the "Last Payment
Date") (the period commencing on the date of such termination of employment
and ending on the Last Payment Date is hereinafter referred to as the
"Severance Period").
You acknowledge that, as a result of your employment, you are in a
-1-
<PAGE>
confidential relationship with the Company and have access to confidential
information and trade secrets of the Company, its subsidiaries and affiliates
(collectively, the "Confidential Information"). Accordingly, during your
employment and thereafter, you agree to maintain in the strictest confidence
all Confidential Information and shall not use or permit the use of, or
disclose, discuss, communicate or transmit or permit the disclosure,
discussion, communication or transmission of, any Confidential Information.
This paragraph shall not apply to (i) information that, by means other than
your deliberate or inadvertent disclosure, becomes generally known to the
public, or (ii) information the disclosure of which is compelled by law
(including judicial or administrative proceedings and legal process). In
that connection, if you are requested or required (by oral question,
interrogatories, requests for information or documents, subpoenas, civil
investigative demand or other legal process) to disclose any Confidential
Information, you agree to provide the Company with prompt written notice of
such request or requirement so that the Company may seek an appropriate
protective order or relief therefrom or may waive the requirements of this
paragraph. If, failing the entry of a protective order or the receipt of a
waiver hereunder, you are compelled to disclose Confidential Information
under penalty of liability for contempt or other censure or penalty, you may
disclose such Confidential Information to the extent so required. For
purposes hereof, "Confidential Information" includes, but is not limited to,
customer and client lists, financial information, price lists, marketing and
sales strategies and procedures, computer programs, databases and software,
supplier, vendor and service information, personnel information, operating
procedures and techniques, business plans and systems, and all other records,
files, and information in respect of the Company. The provisions of this
paragraph shall survive the termination of this Agreement.
In addition, during the Severance Period you will not directly or
indirectly (i) solicit, induce or entice for employment, retention or
affiliation, or recommend to any corporation, entity or other person the
solicitation, inducement or enticement for employment, retention or
affiliation of, any employee of the Company, or any of its subsidiaries or
affiliates, or (ii) engage in any activity intended to terminate, disrupt or
interfere with the Company's or any of its subsidiaries' relationship with
any customer, supplier, lessor or other person.
In the event of the breach or a threatened breach by you of any of
two immediately preceding paragraphs, the Company's obligation to make the
payments described in this Agreement shall automatically terminate. In
addition, the Company shall be entitled to an injunction to be issued by any
court or tribunal of competent jurisdiction to restrain you from committing
or continuing any such violation without posting a bond or other security.
In any proceeding for an injunction, you agree that your ability to answer in
damages shall not be a bar or be interposed as a defense to the granting of a
temporary or permanent injunction against you. You acknowledge that the
Company will not have an adequate remedy at law in the event of any breach by
you as aforesaid and that the Company may suffer irreparable damage and
injury in the event of such a breach by you. Nothing contained herein shall
be construed as prohibiting the Company from pursuing any other remedy or
remedies available to the Company in respect of such breach or threatened
breach. The provisions of this paragraph shall survive the termination of
this Agreement.
If any term or provision of this Agreement shall be held invalid or
unenforceable because of its duration, geographic scope, or for any other
reason, the Company and you agree that the court making such determination
shall have the power to modify such provision, whether by limiting the
geographic scope, reducing the duration, or otherwise, to the minimum extent
necessary to make such term or provision valid and enforceable, and such term
or provision shall be enforceable in such modified form. The provisions of
-2-
<PAGE>
this paragraph shall survive the termination of this Agreement.
For purposes of this Agreement:
(a) "Change in Control" shall mean the occurrence of any of the
following: (i) the direct or indirect sale, lease, exchange or other transfer
of all or substantially all of the assets of the Company to any "person" or
"group" (as such terms are used in Sections 13(d)(3) and 14(d)(2) of the
Securities and Exchange Act of 1934, as amended (the "Exchange Act")); (ii)
the merger or consolidation of the Company with or into another corporation
with the effect that the then existing stockholders of the Company hold less
than 80% of the combined voting power of the then outstanding securities of
the surviving corporation of such merger or the corporation resulting from
such consolidation having the right to vote in the election of directors;
(iii) the replacement of a majority of the Board of Directors of the Company
(the "Board of Directors") over a two-year period from the directors who
constituted the Board of Directors at the beginning of such period, and such
replacement shall not have been approved by the Board of Directors as
constituted at the beginning of such period; (iv) a "person" or "group" (as
defined above), other than an employee stock ownership plan of the Company,
as a result of a tender or exchange offer, open market purchases, privately
negotiated purchases or otherwise, shall have become the beneficial owner
(within the meaning of Rule 13d-3 under the Exchange Act) of securities of
the Company representing 30% or more of the combined voting power of the then
outstanding securities of the Company having the right to vote in the
election of directors; or (v) the adoption by the Board of Directors and
approval by the Company's shareholders of a plan of liquidation or
dissolution of the Company.
(b) "Cause" shall mean (i) your conviction of a felony involving
moral turpitude or your conviction of any crime involving dishonesty, theft,
fraud or unethical business conduct with respect to the Company or any of its
subsidiaries; (ii) substantial and repeated failure, which is not cured
within 15 days after written notice thereof to you, to perform duties and
responsibilities as reasonably and lawfully directed in good faith by the
Board of Directors; provided, that such duties and responsibilities are
consistent with your duties and responsibilities with the Company immediately
prior to such Change of Control; or (iii) any breach of the provisions of any
employment agreement, non-competition or confidentiality agreement applicable
to you which is not remedied within any cure period that may be set forth in
any such agreement (or, if no such cure period shall be set forth in any such
agreement, within 15 days after written notice thereof to you), in each case
as determined in the good faith judgment of the Board of Directors.
This Agreement is not, and shall not be construed, as an employment
agreement or arrangement between the Company, or any other entity or person,
and you, and nothing herein shall confer on you any right to continue in the
employ of the Company, or any other entity or person, or interfere in any way
with the right of the Company, or any other entity or person, to terminate
your employment for any reason whatsoever without liability therefor except
as expressly provided in this Agreement.
This Agreement shall be binding upon and shall inure to the benefit
of the Company and its successors and assigns (including, without limitation,
any entity or person who shall acquire all or substantially all of the
businesses or assets of the Company and its subsidiaries, whether by
purchase, merger, consolidation or otherwise) and you and your heirs, legal
representatives, executors and assigns; provided, that you may not assign
this Agreement without the prior written consent of the Company.
This Agreement sets forth the entire agreement and understanding of
-3-
<PAGE>
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.
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 parties hereto. The failure of either
party at any time or times to require performance of any provision hereof
shall in no manner affect such party's 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 waiver of the breach of any term or
covenant contained in this Agreement.
This Agreement will 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 within such State.
-4-
<PAGE>
Please signify your agreement to the foregoing by signing this
Agreement below and returning it to the Company.
Very truly yours,
UNITEL VIDEO, INC.
By:/s/ Barry Knepper
---------------------------
Name: Barry Knepper
Title: Chief Executive Officer
AGREED:
/s/ Thomas Eyring
- --------------------
Thomas Eyring
-5-
