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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): August 1, 1997
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INTERNATIONAL FAMILY ENTERTAINMENT, INC.
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(Name of Registrant as Specified in its Charter)
DELAWARE 1-11121 54-1522360
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
2877 Guardian Lane, Virginia Beach, Virginia 23452
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (757) 459-6000
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT
CHANGE OF CONTROL TRANSACTION; SOURCE OF CONSIDERATION
General
On August 1, 1997, the transactions contemplated by the following
agreements were consummated: (i) the Stock Purchase Agreement dated as of June
11, 1997, by and among M.G. "Pat" Robertson, the Chairman of International
Family Entertainment, Inc. (the "Company"), Timothy B. Robertson, the Company's
President and Chief Executive Officer, and related trusts and family members
(such persons and entities, collectively, the "Robertson Sellers") and Fox Kids
Worldwide, Inc., a Delaware corporation ("FKWW") (the "Robertson Stock Purchase
Agreement"); (ii) the Stock Purchase Agreement dated as of June 11, 1997 (the
"CBN Stock Purchase Agreement"), by and between FKWW and the Christian
Broadcasting Network, Inc. ("CBN"); (iii) the Stock Purchase Agreement dated as
of June 11, 1997 (the "Regent Stock Purchase Agreement" and, together with the
Robertson Stock Purchase Agreement and the CBN Stock Purchase Agreement, the
"Stock Purchase Agreements"), by and between FKWW and Regent University
("Regent"); and (iv) the Contribution and Exchange Agreement, dated as of June
11, 1997 (the "Contribution and Exchange Agreement"), by and between Liberty
IFE, Inc. ("LIFE") and FKWW. As a result of the consummation of these
agreements, FKWW presently owns a majority of the Company's outstanding voting
common stock of the Company, assuming FKWW converts all Class C common stock,
$.01 par value per share (the "Class C Stock") and 6% Convertible Notes due
2004 (the "Convertible Notes") of the Company it owns as a result of such
transactions to Class B common stock, $.01 par value per share, of the Company
(the "Class B Stock").
Stock Purchase Agreements. On August 1, 1997, pursuant to the Robertson
Stock Purchase Agreement, the Robertson Sellers sold to FKWW all 5,000,000
shares of Class A common stock, $.01 par value per share, of the Company (the
"Class A Stock"), owned by them, in the form of the 5,000,000 shares of Class B
Stock into which such Class A Stock was convertible, and 1,231,981 shares of
Class B Stock for $35.00 per share in cash. FKWW lent to M.G. Robertson and Tim
Robertson sufficient funds to permit each of them to exercise options to
purchase 625,000 shares of Class B Stock held by each of them following
the sale described above, and, upon receiving such funds, each of M.G. Robertson
and Tim Robertson immediately exercised his options and sold to FKWW the shares
of Class B Stock received upon such exercise for a cash purchase price equal to
$35.00 per share, less the amount of such loan. CBN, pursuant to the CBN Stock
Purchase Agreement and Regent, pursuant to the Regent Stock Purchase Agreement,
sold to FKWW all shares of Class B Stock held by them (3,891,121 shares
and 4,214,325 shares, respectively) for $35.00 per share in cash. The $35.00 per
share price shall be increased if FKWW purchases stock of the Company at a
higher price under certain circumstances prior to the consummation of the
previously announced merger of FKWW into the Company (the "Merger").
The total cash consideration paid pursuant to the Stock Purchase
Agreements of approximately $545,600,000 (including $15 million paid to the
Company representing the exercise price of M.G. and Tim Robertson's options) was
obtained by FKWW pursuant to a credit agreement dated as of August 1, 1997 (the
"Credit Agreement"), providing for a $602,000,000 seven-year Secured Reducing
Revolving Credit Facility (the "Tranche A Revolving Credit"), a $400,000,000
seven-year Secured Reducing Revolving Credit Facility (the "Tranche B Revolving
Credit") and a $298,000,000 nine-year Secured Term Loan Facility (the "Term
Loan" and, together with the Tranche A Revolving Credit and the Tranche B
Revolving Credit, the "Facilities") with Citicorp USA, Inc. acting as the
administrative agent for a syndicate of financial institutions providing the
Facilities. The obligations of FKWW under the
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Credit Agreement are secured by the shares of Common Stock of the Company owned
by FKWW and by certain other assets of FKWW and its subsidiaries.
Contribution and Exchange Agreement. Concurrently with consummation of
the Stock Purchase Agreements, LIFE, pursuant to the Contribution and Exchange
Agreement, contributed its 7,088,732 shares of Class C Stock and $23 million in
aggregate principal amount of Convertible Notes, convertible into 2,587,500
shares of Class C Stock, to FKWW in exchange for a new series of preferred stock
of FKWW (the "FKWW Preferred"), in a transaction intended to constitute a tax
free exchange. The FKWW Preferred is exchangeable at the holder's option, upon
the happening of certain events, into shares of a new series of preferred stock
(the "NPAL Preferred") of News Publishing Australia Limited, the primary U.S.
holding company for News Corp. ("NPAL"). The FKWW Preferred has, and the NPAL
Preferred will have, a liquidation preference of $35.00 per share or share
equivalent of Class C Stock, plus $6.33 million representing interest income
foregone on the Convertible Notes and partial compensation for certain tax
consequences. The liquidation preference is subject to increase if FKWW
purchases stock of the Company at a price higher than $35.00 per share under
certain circumstances prior to the Merger. It was originally agreed by the
parties that the FKWW Preferred and the NPAL Preferred would each be entitled to
receive cumulative dividends at a rate of 8.5% per annum of the liquidation
price, payable quarterly, increasing to 11% if any quarterly dividend is not
declared and paid in full when due and was mandatorily redeemable on June 30,
2027 and redeemable at the option of the issuer at any time after June 30, 2007
or, at the option of the holder, for a thirty day period every five years
commencing on June 30, 2002. The terms of each such series was amended on August
1, 1997, as provided in the Contribution and Exchange Agreement, to provide
for cumulative dividends at a rate of 9% per annum, increasing to 11.5% as
noted, mandatory redemption on August 1, 2027, redemption at the option of the
issuer at any time after August 1, 2007, and redemption at the option of the
holder for the thirty-day period commencing on August 2, 2017 and 2022. As
provided in the Contribution and Exchange Agreement, each such series, as
revised, is intended to have a value equivalent to the respective series as
originally negotiated. News Corp., together with NPAL, has entered into a
funding agreement supporting the obligations of FKWW and NPAL under the
preferred stock issued or issuable to LIFE pursuant to the Contribution and
Exchange Agreement.
BOARD REPRESENTATION
The Agreement and Plan of Merger, dated as of June 11, 1997, by and
among the Company, FKWW and Fox Kids Merger Corporation, a Delaware corporation
and wholly-owned subsidiary of FKWW ("FKW Sub") (the "Merger Agreement"), filed
as an exhibit to the Company's Current Report on Form 8-K dated June 11, 1997,
provides that after the purchase of Class A Stock from the Robertson Sellers
pursuant to the Robertson Stock Purchase Agreement, which occurred on August 1,
1997, FKWW will be entitled to designate, subject to certain conditions, up to
the number of directors equal to the aggregate voting power of the shares then
held by it (assuming conversion of the Class C Stock and Convertible Notes
acquired from LIFE). FKWW has also agreed that, prior to the date and time a
certificate of merger is filed with the Secretary of State of the State of
Delaware in accordance with the Delaware General Corporation Law or such later
time as may be mutually agreed by the parties and designated in such filing
(the "Effective Time"), or the termination of the Merger Agreement, the Company
will continue to have at least two directors who were elected by the holders of
Class B Stock as of the date of the Merger Agreement (such directors, the
"Continuing Directors") and that it will not exercise any rights which it may
have as a stockholder to otherwise change the composition of the Board of
Directors. Following the election or appointment of FKWW's designees and prior
to the Effective Time, any amendment, or waiver of any term or condition, of
the Merger Agreement or the Certificate of
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Incorporation or by-laws of the Company, any termination of the Merger Agreement
by the Company, any extension by the Company of the time for the performance of
any of the obligations or other acts of FKWW or FKW Sub or waiver or assertion
of any of the Company's rights thereunder, or any other consents or actions by
the Board of Directors with respect to the Merger Agreement or News Corp.'s
KWW and FKW Sub thereafter related guaranty of the obligations of FW, will
require, and will require only, the concurrence of a majority of the Continuing
Directors, except to the extent that applicable law requires that such action
be acted upon by the full Board of Directors, in which case such action will
require the concurrence of a majority of the Directors, which majority shall
include each of the Continuing Directors.
ITEM 7. EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
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<S> <C>
10.1 Employment Agreement, dated June 1, 1997, by and between
the "Company" and Larry W. Dantzler.
10.2 Employment Agreement, dated June 1, 1997, by and between the
Company and Louis A. Isakoff.
10.3 Employment Agreement, dated June 1, 1997, by and between the
Company and K.J. "Gus" Lucas.
10.4 Employment Agreement, dated June 1, 1997, by and between the
Company and Richard L. Sirvaitis.
10.5 Amendment to Employment Agreement, dated June 1, 1997, by and
between the Company and Craig R. Sherwood.
10.6 Amendment to Employment Agreement, dated June 1, 1997, by and
between the Company and B. Randall Seiler.
10.7 International Family Entertainment, Inc. Executive Retirement
Plan, dated June 1, 1997.
10.8 Participation Agreement Under the International Family
Entertainment, Inc. Executive Retirement Plan, dated June 1,
1997, by and between the Company and Louis A. Isakoff.
10.9 Participation Agreement Under the International Family
Entertainment, Inc. Executive Retirement Plan, dated June 1,
1997, by and between the Company and Larry W. Dantzler.
</TABLE>
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
INTERNATIONAL FAMILY
ENTERTAINMENT, INC.
(Registrant)
Date: August 13, 1997 By: /s/ LARRY W. DANTZLER
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Larry W. Dantzler
Senior Vice President
Chief Financial Officer
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EXHIBIT INDEX
Exhibit
Number Description
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10.1 Employment Agreement, dated June 1, 1997, by and between
International Family Entertainment, Inc. (the "Company") and
Larry W. Dantzler.
10.2 Employment Agreement, dated June 1, 1997, by and between the
Company and Louis A. Isakoff.
10.3 Employment Agreement, dated June 1, 1997, by and between the
Company and K.J. "Gus" Lucas.
10.4 Employment Agreement, dated June 1, 1997, by and between the
Company and Richard L. Sirvaitis.
10.5 Amendment to Employment Agreement, dated June 1, 1997, by and
between the Company and Craig R. Sherwood.
10.6 Amendment to Employment Agreement, dated June 1, 1997, by and
between the Company and B. Randall Seiler.
10.7 International Family Entertainment, Inc. Executive Retirement
Plan, dated June 1, 1997.
10.8 Participation Agreement Under the International Family
Entertainment, Inc. Executive Retirement Plan, dated June 1,
1997, by and between the Company and Louis A. Isakoff.
10.9 Participation Agreement Under the International Family
Entertainment, Inc. Executive Retirement Plan, dated June 1,
1997, by and between the Company and Larry W. Dantzler.
<PAGE> 1
Exhibit 10.1
[INTERNATIONAL FAMILY ENTERTAINMENT LETTERHEAD]
As of June 1, 1997
Larry W. Dantzler
1018 Marlbank Drive
Yorktown, Virginia 23692
Dear Larry:
This letter will set forth the terms of the agreement between you and
International Family Entertainment, Inc. ("IFE"), regarding your employment with
IFE.
1. Employment
You will serve as IFE's Senior Vice President, Chief Financial Officer, and as
such you will perform those duties which are normal and customary in the
industry for like positions. You will be responsible for other similar areas
which relate thereto for IFE and its affiliates and will be responsible to
perform other such duties which are reasonably assigned to you by IFE's
President and Chief Executive Officer. You will report directly to IFE's
President and Chief Executive Officer and will serve as a member of IFE's
Executive Management Committee. You will perform full-time service on an
exclusive basis for IFE and its affiliates. Your principal base of employment
shall be in Virginia Beach, Virginia. You acknowledge that IFE is not required
to actually utilize your services hereunder, but that IFE's sole obligation
shall be to pay you the compensation and provide you the benefits set forth
herein, subject to all the terms and conditions of this Agreement.
2. Term
Your employment under this Agreement shall commence June 1, 1997, and, unless
sooner terminated pursuant to the terms of Paragraphs 6 or 7 of this Agreement,
shall continue for an initial period of five (5) years (as completed or earlier
terminated pursuant to the express terms hereof, the "Initial Period").
Following the completion of the Initial Period, unless thereupon terminated or
renewed pursuant to the terms of this Paragraph 2, your employment under this
Agreement shall continue from year to year, subject to earlier termination
pursuant to the terms of Paragraphs 6 or 7 of this Agreement (each subsequent
year, as completed or earlier terminated, an "Additional Period," and together
with the Initial Period, the "Term"). IFE may terminate this Agreement as of the
last day of the Initial Period or any Additional Period by giving you written
notice of such termination not less than ninety (90) days prior to such date.
<PAGE> 2
Larry W. Dantzler
As of June 1, 1997
Page 2
IFE may elect to renew your employment by offering you a renewal employment
agreement (the "Renewal Agreement") not less than ninety (90) days prior to the
last day of the Initial Period or any Additional Period (the "Renewal Notice
Period"), upon terms and conditions no less favorable to you than those set
forth in this Agreement (including, but not limited to, title; reporting
relationship; services to be rendered; five (5) year minimum term; termination,
renewal, and severance provisions; scheduled base salary increases and annual
bonus percentage; benefits; etc.). The initial annual base salary specified in
such Renewal Agreement shall be not less than your annual base salary for the
previous calendar year, adjusted to reflect the greater of (i) a five per cent
(5%) increase in such annual base salary, or (ii) the increase, if any, in the
cost of living, determined by multiplying your then current annual base salary
by a fraction, the numerator of which is the Consumer Price Index (U.S. City
Average--[1967 = 100%]- -All Items, Bureau of Labor Statistics of the U.S.
Department of Labor) (the "CPI") for the month prior to the proposed
commencement date of such Renewal Agreement and the denominator of which is the
CPI for the month prior to the month in which your annual base salary was most
recently adjusted. You acknowledge and agree that IFE has no obligation to allow
this Agreement to renew, to offer you a Renewal Agreement, or to otherwise
continue your employment after expiration of the Initial Period or any
Additional Period, and you expressly acknowledge that no promises or
understandings to the contrary have been made or reached. In the event you do
not accept an offered Renewal Agreement as of the last day of the Initial Period
or Additional Period during which you first received such Renewal Agreement, you
shall be deemed to have rejected such Renewal Agreement and your employment
shall be terminated as of such date. In the event IFE has not offered you a
Renewal Agreement within the Renewal Notice Period, you may terminate this
Agreement upon thirty (30) days prior written notice to IFE, provided such
termination notice is received by IFE no less than thirty (30) days following
the conclusion of the applicable Renewal Notice Period, in which case the terms
of Paragraph 8(a) of this Agreement shall apply.
3. Base Compensation
As compensation for your services hereunder, IFE shall pay you, and you shall
accept, an initial annual base salary of Three Hundred Fifty Thousand Dollars
($350,000.00), less all appropriate deductions and withholdings, payable in
accordance with the schedule IFE may adopt or alter from time to time in its
discretion, but in any event not less frequently than monthly. IFE shall review
the performance of your duties hereunder on at least an annual basis. Your
annual base salary will be adjusted on January 1 of each calendar year of the
Term to reflect the greater of (i) a five per cent (5%) increase in such annual
base salary, or (ii) the increase, if any, in the cost of living, determined by
multiplying your then current annual base salary by a fraction, the numerator of
which is the CPI for the month of December of the most recently
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Larry W. Dantzler
As of June 1, 1997
Page 3
completed calendar year and the denominator of which is the CPI for the month
prior to the month in which your annual base salary was most recently adjusted.
In addition, the Board of Directors of IFE may increase your annual base salary
at such times as it, in its sole discretion, deems appropriate.
4. Bonus Structure
a. Annual Bonus. In accordance with the executive bonus plan established
by IFE, as may be amended from time to time, in addition to annual base
salary, you shall be eligible to earn and receive an annual bonus based
on your achievement of certain goals during each annual review period
(which shall commence January 1 and conclude December 31 of each
calendar year of the Term). During the first forty-five (45) days of
each annual review period of the Term, IFE, with your consultation,
shall establish reasonable goals for you and your division to achieve
during such review period.
In the event IFE determines that the goals set for any annual review
period have been achieved, you shall be entitled to receive a targeted
bonus of thirty three and one-third per cent (33.33%) of your annual
base salary for such calendar year, with the exact amount of such bonus
to be determined in the discretion of IFE, subject to the terms of the
executive bonus plan then in effect, but in any event not less than
twenty per cent (20%) of your annual base salary for such calendar
year. In the event IFE determines that the goals set for any annual
review period have not been achieved during such annual review period,
you shall receive bonus compensation for such year, if any, as IFE, in
its discretion, deems appropriate, but in any event not less than
twenty per cent (20%) of your annual base salary for such calendar
year.
b. Apportionment. For those periods of your employment which do not
coincide with the calendar year, the amount of the annual bonus shall
be prorated for the number of months you are in the employ of IFE
during such period.
c. Payment. Payment of the annual bonus shall be made no later than
December 31 of the annual review period for which the annual bonus is
calculated.
d. Further Bonuses. From time to time, IFE may enter into supplemental
agreements or memorandums in writing with you for the award and payment
to you of additional compensation or bonuses upon such terms and
conditions as IFE shall deem to be in its business interest. In the
event of the execution by IFE of any such agreements or memorandums,
your right to additional compensation or bonuses shall be determined in
accordance with the applicable
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Larry W. Dantzler
As of June 1, 1997
Page 4
provisions thereof, subject, however, to the provisions of this
sub-paragraph. In the absence of any such supplemental agreements or
memorandums, IFE shall not be obligated to pay you any additional
compensation or bonus whatsoever, irrespective of the payment of
additional compensation or bonus in any past or succeeding year or the
payment or additional compensation or bonus to other executives in any
year, but may do so in its sole discretion.
e. Incentive Compensation. From time to time, IFE may offer phantom stock,
stock appreciation rights, stock options in IFE and its affiliates
and/or other forms of long-term incentives upon such terms and
conditions as IFE shall determine to be in its business interests.
5. Reimbursement for Expenses
The parties recognize that in the course of performing your duties hereunder,
you will necessarily incur expenses in connection with your duties for such
items as entertainment, traveling, hotels, and similar items. You shall be
entitled to have paid or be reimbursed all reasonable expenses incurred by you
in the performance of your duties hereunder, subject to such requirements,
procedures, and rules as may be established by IFE for similarly situated
executives from time to time in its discretion, including, without limitation,
the requirement of submission of appropriate receipts for such expenses prior to
reimbursement.
6. Termination by IFE
IFE shall have the right to terminate this Agreement, and your employment
hereunder, at any time, for cause, immediately upon written or oral notice to
you. As used herein, termination of this Agreement "for cause" shall mean
termination due to your willful breach of contract, habitual neglect of duties,
or gross misconduct. This Agreement shall not otherwise be terminable by IFE.
Except as otherwise specifically set forth herein, in the event your employment
is terminated for cause, all benefits set forth in this Agreement shall cease as
of the last day of your employment hereunder.
7. Termination by Employee
In addition to your right to terminate this Agreement pursuant to Paragraph 2 of
this Agreement, you shall have the right to terminate this Agreement, and your
employment hereunder, at any time during the Term upon thirty (30) days prior
written notice to IFE.
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Larry W. Dantzler
As of June 1, 1997
Page 5
8. Severance Payment
a. In the event this Agreement is terminated by IFE at the conclusion of
the Initial Period or any Additional Period pursuant to Paragraph 2 of
this Agreement, or in the event IFE fails to offer you a Renewal
Agreement and you elect to terminate this Agreement as set forth in
Paragraph 2 of this Agreement, then IFE's sole obligation shall be to
pay you (i) for all accrued but unused vacation (determined in
accordance with Paragraph 9(a) of this Agreement), which sum shall be
paid to you, less all appropriate deductions and withholdings, in a
single payment not more than thirty (30) days following the effective
date of such termination; and (ii) a severance payment equal to the sum
of (x) your then current base salary for twenty-four (24) months, plus
(y) the annual bonus paid to you for the prior calendar year multiplied
by two (2), which severance payment shall be paid to you, less all
appropriate deductions and withholdings, in equal, bi-weekly
installments over the twenty-four (24) month period commencing with the
date of termination (the "Severance Period"). During the Severance
Period, IFE shall provide you with comprehensive health, disability,
and life insurance policies providing benefits at least equivalent to
those you received on the last day of the Term hereof.
b. In the event you reject a Renewal Agreement offered you pursuant to
Paragraph 2 of this Agreement, or in the event IFE terminates this
Agreement pursuant to Paragraph 6 of this Agreement, or in the event
you terminate this Agreement pursuant to Paragraph 7 of this Agreement,
then IFE's sole obligation shall be to pay you for all accrued but
unused vacation (determined in accordance with Paragraph 9(a) of this
Agreement), which shall be paid to you, less all appropriate deductions
and withholdings, in a single payment not more than thirty (30) days
following the effective date of such termination.
c. In the event you become permanently and totally disabled, or if you die
during the Term of this Agreement, then you or your estate, as the case
may be, shall be paid (i) for all accrued but unused vacation
(determined in accordance with Paragraph 9(a) of this Agreement), which
sum shall be paid to you, less all appropriate deductions and
withholdings, in a single payment not more than thirty (30) days
following the effective date of such termination; (ii) the sum of (x)
your then current base salary through the end of the Term, and (y) your
annual bonus for the prior calendar year for each calendar year through
the end of the Term, which sum shall be paid to you, less all
appropriate deductions and withholdings, in equal, bi-weekly
installments through the end of the Term; and (iii) following the end
of the Term, a termination payment equal to the sum of (x) your then
current base salary for twenty-four (24) months, plus (y) the annual
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Larry W. Dantzler
As of June 1, 1997
Page 6
bonus paid to you for the prior calendar year multiplied by two (2),
which termination payment shall be paid to you, less all appropriate
deductions and withholdings, in equal, bi-weekly installments over the
twenty-four (24) month period commencing as of the date of termination
(the "Termination Period"). The payments set forth in this paragraph
shall be reduced by the amount of any benefits payable to you or your
estate, as the case may be, under any disability or life insurance plan
provided by, and the premiums of which are paid by, IFE. During the
Termination Period, IFE shall provide you, if you are then alive, with
comprehensive health, disability, and life insurance benefits at least
comparable to those you received on the last day of the Term hereof.
d. Notwithstanding any other provision of this Agreement to the contrary,
in the event of termination of this Agreement for any reason, you agree
that IFE may offset from any payment made under this Paragraph 8 any
sums owed by you to IFE.
9. Other Benefits
a. Vacation. For each year of the Term of this Agreement, you will be
entitled to four (4) weeks vacation with pay, to be accrued and taken
in accordance with IFE's normal personnel policies regarding vacation
for similarly situated executives, as such policies may be modified
from time to time in the discretion of IFE. Notwithstanding the
foregoing, upon your accruing four (4) weeks of vacation time, vacation
time will cease to accrue and must be used before additional vacation
time will accrue.
b. Health Plans. IFE may, in its discretion, from time to time establish
and maintain employee health, medical, life, and disability insurance
benefit plans. During the Term of this Agreement, your eligibility to
participate in such plans shall be governed by the generally applicable
terms and conditions of the particular plan, as such terms and
conditions may be amended from time to time in the discretion of IFE.
c. 401(k) Plan. IFE may, in its discretion, from time to time, establish
and maintain, or participate in an affiliated company's, 401(k)
retirement plan. During the Term of this Agreement, your eligibility to
participate in such plan shall be governed by the generally applicable
terms and conditions of such plan, as such terms and conditions may be
amended from time to time in the discretion of IFE or such affiliated
company.
<PAGE> 7
Larry W. Dantzler
As of June 1, 1997
Page 7
d. Additional Benefits. You expressly agree and acknowledge that following
the Term of this Agreement, you will be entitled to no additional
benefits except as otherwise specifically set forth in this Agreement,
and except as specifically provided under the benefit plans referred to
in this Paragraph 9 and those benefit plans in which you may
subsequently become a participant, subject in every case to the terms
and conditions of each such plan.
10. No Duty to Mitigate; Offset
It is expressly agreed and understood that in the event of the termination of
this Agreement by IFE you shall have no affirmative duty to mitigate the damages
payable to you by IFE and further that no amounts actually earned or accrued by
you for employment or similar services during the period of time subsequent to
such termination will be offset against any amounts to which you are otherwise
entitled hereunder.
11. Non-Compete
You agree that upon your voluntary termination of this Agreement you will not
work for a direct competitor of IFE for a period of twelve (12) months, unless
given specific agreement in writing from IFE; provided, however, that this
non-compete provision shall not apply in the event IFE fails to offer you a
Renewal Agreement and you elect to terminate this Agreement as set forth in
Paragraph 2 of this Agreement. Direct competitors shall include other cable or
satellite television networks, or television production and distribution
companies.
12. Remedy For Breach
(a) Notwithstanding the agreement to settle disputes by arbitration as
provided in Paragraph 13 of this Agreement, both parties recognize that
the services to be rendered under this Agreement by you are special,
unique, and of an extraordinary character, and that in the event of a
breach by you of any term or condition of this Agreement, IFE shall be
entitled, if it so elects, to institute and prosecute proceedings in
any court of competent jurisdiction to obtain the specific performance
thereof by you, or to enjoin you from performing services for any other
person, firm, or corporation, during the period herein contracted for,
and nothing herein contained shall be construed to prevent such remedy.
In the event IFE institutes proceedings against you pursuant to this
Paragraph 12 and is the prevailing party, you shall pay to IFE the
amount of any fees (including reasonable attorneys' fees), costs, or
expenses incurred by IFE in the prosecution of any such proceeding.
<PAGE> 8
Larry W. Dantzler
As of June 1, 1997
Page 8
(b) The payments and benefits provided to you pursuant to this Agreement
shall constitute your sole and exclusive remedy against IFE in the
event of any claim you may have arising out of or in any way connected
with your employment by IFE or IFE's termination thereof. You do hereby
expressly waive any right you may have to seek punitive damages in
connection with any such claim.
13. Disputes
Except as provided in Paragraph 12 of this Agreement, any and all disputes,
controversies, or claims arising out of or relating to your employment or
cessation of employment with IFE shall be settled exclusively by final and
binding arbitration in Virginia Beach, Virginia, before an arbitrator selected
in accordance with the Employment Dispute Resolution Rules of the American
Arbitration Association ("AAA"). Such disputes include, but are not limited to,
claims arising under this Agreement as well as other employment-related legal
claims such as discrimination or tort. Any arbitration shall be conducted in
accordance with the Employment Dispute Resolution Rules of the AAA.
14. Entire Agreement; Modification
Except as specifically referenced herein, this instrument contains the entire
Agreement between you and IFE with respect to the subject matter hereof and
supersedes all prior or contemporaneous understandings or agreements. This
Agreement may be altered only by an agreement in writing signed by the party
against whom enforcement of any waiver, change, modification, or discharge is
sought.
15. Choice of Law; Binding Effect
This Agreement shall be governed by and construed in accordance with the laws of
the Commonwealth of Virginia without reference to conflicts of laws principles
and shall be binding upon and inure to the benefit of any successor or
successors of IFE and the personal representatives of you. The parties to this
Agreement hereby consent to the exclusive personal jurisdiction of the Circuit
Court of the City of Virginia Beach or, provided other jurisdictional
requirements are satisfied, the United States District Court for the Eastern
District of Virginia, Norfolk Division, for the adjudication of any proceedings
referenced in Paragraph 12 of this Agreement, or the enforcement of any final
and binding arbitration pursuant to Paragraph 13 of this Agreement, or for the
resolution of any other dispute arising from, relating to, or in any other way
connected with this Agreement or your employment hereunder.
<PAGE> 9
Larry W. Dantzler
As of June 1, 1997
Page 9
16. Severability
If any clause or provision of this Agreement shall be adjudged invalid or
unenforceable by a court of competent jurisdiction or by operation of any
applicable law, it shall not affect the validity of any other clause or
provision, which shall remain in full force and effect.
17. Confidential Information
You agree that any information received by you during the Term which concerns
the financial, business, or other affairs of IFE, its clients, or its affiliates
will be treated by you in full confidence and that you shall not, at any time
during or after the Term, reveal, directly or indirectly, to any persons, firms,
or organizations, or otherwise make use of such confidential information. The
obligation set forth in this Paragraph 17 shall survive the expiration or
termination of this Agreement.
18. Remedies Cumulative; No Waiver
All remedies, rights, undertakings, obligations, and agreements contained in
this Agreement shall be cumulative, and none of them shall be in limitation of
any other remedy, right, undertaking, obligation, or agreement of either party,
whether under this Agreement or otherwise. The failure of IFE to insist upon
strict performance of any provision of this Agreement shall not be construed as
a waiver of any subsequent breach of the same or similar nature.
[THIS SECTION INTENTIONALLY LEFT BLANK]
<PAGE> 10
19. Paragraph Headings
The titles of the paragraphs of this Agreement are for convenience only and
shall not in any way affect the interpretation of any paragraphs of this
Agreement or of the Agreement itself.
If this letter accurately sets forth our agreement, please sign where indicated
below.
Very truly yours,
International Family Entertainment, Inc.
/s/ Timothy B. Robertson
Timothy B. Robertson
President and Chief Executive Officer
READ AND AGREED:
/s/ Larry W. Dantzler
- --------------------------------
Larry W. Dantzler
<PAGE> 1
Exhibit 10.2
[INTERNATIONAL FAMILY ENTERTAINMENT LETTERHEAD]
As of June 1, 1997
Louis A. Isakoff, Esq.
1801 Eden Way
Virginia Beach, Virginia 23454
Dear Lou:
This letter will set forth the terms of the agreement between you and
International Family Entertainment, Inc. ("IFE"), regarding your employment with
IFE.
1. Employment
You will serve as IFE's Senior Vice President, General Counsel, and Secretary,
and as such you will perform those duties which are normal and customary in the
industry for like positions. You will be responsible for other similar areas
which relate thereto for IFE and its affiliates and will be responsible to
perform other such duties which are reasonably assigned to you by IFE's
President and Chief Executive Officer. You will report directly to IFE's
President and Chief Executive Officer and will serve as a member of IFE's
Executive Management Committee. You will perform full-time service on an
exclusive basis for IFE and its affiliates. Your principal base of employment
shall be in Virginia Beach, Virginia. You acknowledge that IFE is not required
to actually utilize your services hereunder, but that IFE's sole obligation
shall be to pay you the compensation and provide you the benefits set forth
herein, subject to all the terms and conditions of this Agreement.
2. Term
Your employment under this Agreement shall commence June 1, 1997, and, unless
sooner terminated pursuant to the terms of Paragraphs 6 or 7 of this Agreement,
shall continue for an initial period of five (5) years (as completed or earlier
terminated pursuant to the express terms hereof, the "Initial Period").
Following the completion of the Initial Period, unless thereupon terminated or
renewed pursuant to the terms of this Paragraph 2, your employment under this
Agreement shall continue from year to year, subject to earlier termination
pursuant to the terms of Paragraphs 6 or 7 of this Agreement (each subsequent
year, as completed or earlier terminated, an "Additional Period," and together
with the Initial Period, the "Term"). IFE may terminate this Agreement as of the
last day of the Initial Period or any Additional Period by giving you written
notice of such termination not less than ninety (90) days prior to such date.
<PAGE> 2
Louis A. Isakoff, Esq.
As of June 1, 1997
Page 2
IFE may elect to renew your employment by offering you a renewal
employment agreement (the "Renewal Agreement") not less than ninety (90) days
prior to the last day of the Initial Period or any Additional Period (the
"Renewal Notice Period"), upon terms and conditions no less favorable to you
than those set forth in this Agreement (including, but not limited to, title;
reporting relationship; services to be rendered; five (5) year minimum term;
termination, renewal, and severance provisions; scheduled base salary increases
and annual bonus percentage; benefits; etc.). The initial annual base salary
specified in such Renewal Agreement shall be not less than your annual base
salary for the previous calendar year, adjusted to reflect the greater of (i) a
five per cent (5%) increase in such annual base salary, or (ii) the increase, if
any, in the cost of living, determined by multiplying your then current annual
base salary by a fraction, the numerator of which is the Consumer Price Index
(U.S. City Average--[1967 = 100%]- -All Items, Bureau of Labor Statistics of the
U.S. Department of Labor) (the "CPI") for the month prior to the proposed
commencement date of such Renewal Agreement and the denominator of which is the
CPI for the month prior to the month in which your annual base salary was most
recently adjusted. You acknowledge and agree that IFE has no obligation to allow
this Agreement to renew, to offer you a Renewal Agreement, or to otherwise
continue your employment after expiration of the Initial Period or any
Additional Period, and you expressly acknowledge that no promises or
understandings to the contrary have been made or reached. In the event you do
not accept an offered Renewal Agreement as of the last day of the Initial Period
or Additional Period during which you first received such Renewal Agreement, you
shall be deemed to have rejected such Renewal Agreement and your employment
shall be terminated as of such date. In the event IFE has not offered you a
Renewal Agreement within the Renewal Notice Period, you may terminate this
Agreement upon thirty (30) days prior written notice to IFE, provided such
termination notice is received by IFE no less than thirty (30) days following
the conclusion of the applicable Renewal Notice Period, in which case the terms
of Paragraph 8(a) of this Agreement shall apply.
3. Base Compensation
As compensation for your services hereunder, IFE shall pay you, and you shall
accept, an initial annual base salary of Three Hundred Fifty Thousand Dollars
($350,000.00), less all appropriate deductions and withholdings, payable in
accordance with the schedule IFE may adopt or alter from time to time in its
discretion, but in any event not less frequently than monthly. IFE shall review
the performance of your duties hereunder on at least an annual basis. Your
annual base salary will be adjusted on January 1 of each calendar year of the
Term to reflect the greater of (i) a five per cent (5%) increase in such annual
base salary, or (ii) the increase, if any, in the cost of living, determined by
multiplying your then current annual base salary by a fraction, the numerator of
which is the CPI for the month of December of the most recently
<PAGE> 3
Louis A. Isakoff, Esq.
As of June 1, 1997
Page 3
completed calendar year and the denominator of which is the CPI for the month
prior to the month in which your annual base salary was most recently adjusted.
In addition, the Board of Directors of IFE may increase your annual base salary
at such times as it, in its sole discretion, deems appropriate.
4. Bonus Structure
a. Annual Bonus. In accordance with the executive bonus plan established
by IFE, as may be amended from time to time, in addition to annual base
salary, you shall be eligible to earn and receive an annual bonus based
on your achievement of certain goals during each annual review period
(which shall commence January 1 and conclude December 31 of each
calendar year of the Term). During the first forty-five (45) days of
each annual review period of the Term, IFE, with your consultation,
shall establish reasonable goals for you and your division to achieve
during such review period.
In the event IFE determines that the goals set for any annual review
period have been achieved, you shall be entitled to receive a targeted
bonus of thirty three and one-third per cent (33.33%) of your annual
base salary for such calendar year, with the exact amount of such bonus
to be determined in the discretion of IFE, subject to the terms of the
executive bonus plan then in effect, but in any event not less than
twenty per cent (20%) of your annual base salary for such calendar
year. In the event IFE determines that the goals set for any annual
review period have not been achieved during such annual review period,
you shall receive bonus compensation for such year, if any, as IFE, in
its discretion, deems appropriate, but in any event not less than
twenty per cent (20%) of your annual base salary for such calendar
year.
b. Apportionment. For those periods of your employment which do not
coincide with the calendar year, the amount of the annual bonus shall
be prorated for the number of months you are in the employ of IFE
during such period.
c. Payment. Payment of the annual bonus shall be made no later than
December 31 of the annual review period for which the annual bonus is
calculated.
d. Further Bonuses. From time to time, IFE may enter into supplemental
agreements or memorandums in writing with you for the award and payment
to you of additional compensation or bonuses upon such terms and
conditions as IFE shall deem to be in its business interest. In the
event of the execution by IFE of any such agreements or memorandums,
your right to additional compensation or bonuses shall be determined in
accordance with the applicable
<PAGE> 4
Louis A. Isakoff, Esq.
As of June 1, 1997
Page 4
provisions thereof, subject, however, to the provisions of this
sub-paragraph. In the absence of any such supplemental agreements or
memorandums, IFE shall not be obligated to pay you any additional
compensation or bonus whatsoever, irrespective of the payment of
additional compensation or bonus in any past or succeeding year or the
payment or additional compensation or bonus to other executives in any
year, but may do so in its sole discretion.
e. Incentive Compensation. From time to time, IFE may offer phantom stock,
stock appreciation rights, stock options in IFE and its affiliates
and/or other forms of long-term incentives upon such terms and
conditions as IFE shall determine to be in its business interests.
5. Reimbursement for Expenses
The parties recognize that in the course of performing your duties hereunder,
you will necessarily incur expenses in connection with your duties for such
items as entertainment, traveling, hotels, and similar items. You shall be
entitled to have paid or be reimbursed all reasonable expenses incurred by you
in the performance of your duties hereunder, subject to such requirements,
procedures, and rules as may be established by IFE for similarly situated
executives from time to time in its discretion, including, without limitation,
the requirement of submission of appropriate receipts for such expenses prior to
reimbursement.
6. Termination by IFE
IFE shall have the right to terminate this Agreement, and your employment
hereunder, at any time, for cause, immediately upon written or oral notice to
you. As used herein, termination of this Agreement "for cause" shall mean
termination due to your willful breach of contract, habitual neglect of duties,
or gross misconduct. This Agreement shall not otherwise be terminable by IFE.
Except as otherwise specifically set forth herein, in the event your employment
is terminated for cause, all benefits set forth in this Agreement shall cease as
of the last day of your employment hereunder.
7. Termination by Employee
In addition to your right to terminate this Agreement pursuant to Paragraph 2 of
this Agreement, you shall have the right to terminate this Agreement, and your
employment hereunder, at any time during the Term upon thirty (30) days prior
written notice to IFE.
<PAGE> 5
Louis A. Isakoff, Esq.
As of June 1, 1997
Page 5
8. Severance Payment
a. In the event this Agreement is terminated by IFE at the conclusion of
the Initial Period or any Additional Period pursuant to Paragraph 2 of
this Agreement, or in the event IFE fails to offer you a Renewal
Agreement and you elect to terminate this Agreement as set forth in
Paragraph 2 of this Agreement, then IFE's sole obligation shall be to
pay you (i) for all accrued but unused vacation (determined in
accordance with Paragraph 9(a) of this Agreement), which sum shall be
paid to you, less all appropriate deductions and withholdings, in a
single payment not more than thirty (30) days following the effective
date of such termination; and (ii) a severance payment equal to the sum
of (x) your then current base salary for twenty-four (24) months, plus
(y) the annual bonus paid to you for the prior calendar year multiplied
by two (2), which severance payment shall be paid to you, less all
appropriate deductions and withholdings, in equal, bi-weekly
installments over the twenty-four (24) month period commencing with the
date of termination (the "Severance Period"). During the Severance
Period, IFE shall provide you with comprehensive health, disability,
and life insurance policies providing benefits at least equivalent to
those you received on the last day of the Term hereof.
b. In the event you reject a Renewal Agreement offered you pursuant to
Paragraph 2 of this Agreement, or in the event IFE terminates this
Agreement pursuant to Paragraph 6 of this Agreement, or in the event
you terminate this Agreement pursuant to Paragraph 7 of this Agreement,
then IFE's sole obligation shall be to pay you for all accrued but
unused vacation (determined in accordance with Paragraph 9(a) of this
Agreement), which shall be paid to you, less all appropriate deductions
and withholdings, in a single payment not more than thirty (30) days
following the effective date of such termination.
c. In the event you become permanently and totally disabled, or if you die
during the Term of this Agreement, then you or your estate, as the case
may be, shall be paid (i) for all accrued but unused vacation
(determined in accordance with Paragraph 9(a) of this Agreement), which
sum shall be paid to you, less all appropriate deductions and
withholdings, in a single payment not more than thirty (30) days
following the effective date of such termination; (ii) the sum of (x)
your then current base salary through the end of the Term, and (y) your
annual bonus for the prior calendar year for each calendar year through
the end of the Term, which sum shall be paid to you, less all
appropriate deductions and withholdings, in equal, bi-weekly
installments through the end of the Term; and (iii) following the end
of the Term, a termination payment equal to the sum of (x) your then
current base salary for twenty-four (24) months, plus (y) the annual
<PAGE> 6
Louis A. Isakoff, Esq.
As of June 1, 1997
Page 6
bonus paid to you for the prior calendar year multiplied by two (2),
which termination payment shall be paid to you, less all appropriate
deductions and withholdings, in equal, bi-weekly installments over the
twenty-four (24) month period commencing as of the date of termination
(the "Termination Period"). The payments set forth in this paragraph
shall be reduced by the amount of any benefits payable to you or your
estate, as the case may be, under any disability or life insurance plan
provided by, and the premiums of which are paid by, IFE. During the
Termination Period, IFE shall provide you, if you are then alive, with
comprehensive health, disability, and life insurance benefits at least
comparable to those you received on the last day of the Term hereof.
d. Notwithstanding any other provision of this Agreement to the contrary,
in the event of termination of this Agreement for any reason, you agree
that IFE may offset from any payment made under this Paragraph 8 any
sums owed by you to IFE.
9. Other Benefits
a. Vacation. For each year of the Term of this Agreement, you will be
entitled to four (4) weeks vacation with pay, to be accrued and taken
in accordance with IFE's normal personnel policies regarding vacation
for similarly situated executives, as such policies may be modified
from time to time in the discretion of IFE. Notwithstanding the
foregoing, upon your accruing four (4) weeks of vacation time, vacation
time will cease to accrue and must be used before additional vacation
time will accrue.
b. Health Plans. IFE may, in its discretion, from time to time establish
and maintain employee health, medical, life, and disability insurance
benefit plans. During the Term of this Agreement, your eligibility to
participate in such plans shall be governed by the generally applicable
terms and conditions of the particular plan, as such terms and
conditions may be amended from time to time in the discretion of IFE.
c. 401(k) Plan. IFE may, in its discretion, from time to time, establish
and maintain, or participate in an affiliated company's, 401(k)
retirement plan. During the Term of this Agreement, your eligibility to
participate in such plan shall be governed by the generally applicable
terms and conditions of such plan, as such terms and conditions may be
amended from time to time in the discretion of IFE or such affiliated
company.
<PAGE> 7
Louis A. Isakoff, Esq.
As of June 1, 1997
Page 7
d. Additional Benefits. You expressly agree and acknowledge that following
the Term of this Agreement, you will be entitled to no additional
benefits except as otherwise specifically set forth in this Agreement,
and except as specifically provided under the benefit plans referred to
in this Paragraph 9 and those benefit plans in which you may
subsequently become a participant, subject in every case to the terms
and conditions of each such plan.
10. No Duty to Mitigate; Offset
It is expressly agreed and understood that in the event of the termination of
this Agreement by IFE you shall have no affirmative duty to mitigate the damages
payable to you by IFE and further that no amounts actually earned or accrued by
you for employment or similar services during the period of time subsequent to
such termination will be offset against any amounts to which you are otherwise
entitled hereunder.
11. Non-Compete
You agree that upon your voluntary termination of this Agreement you will not
work for a direct competitor of IFE for a period of twelve (12) months, unless
given specific agreement in writing from IFE; provided, however, that this
non-compete provision shall not apply in the event IFE fails to offer you a
Renewal Agreement and you elect to terminate this Agreement as set forth in
Paragraph 2 of this Agreement. Direct competitors shall include other cable or
satellite television networks, or television production and distribution
companies.
12. Remedy For Breach
(a) Notwithstanding the agreement to settle disputes by arbitration as
provided in Paragraph 13 of this Agreement, both parties recognize that
the services to be rendered under this Agreement by you are special,
unique, and of an extraordinary character, and that in the event of a
breach by you of any term or condition of this Agreement, IFE shall be
entitled, if it so elects, to institute and prosecute proceedings in
any court of competent jurisdiction to obtain the specific performance
thereof by you, or to enjoin you from performing services for any other
person, firm, or corporation, during the period herein contracted for,
and nothing herein contained shall be construed to prevent such remedy.
In the event IFE institutes proceedings against you pursuant to this
Paragraph 12 and is the prevailing party, you shall pay to IFE the
amount of any fees (including reasonable attorneys' fees), costs, or
expenses incurred by IFE in the prosecution of any such proceeding.
<PAGE> 8
Louis A. Isakoff, Esq.
As of June 1, 1997
Page 8
(b) The payments and benefits provided to you pursuant to this Agreement
shall constitute your sole and exclusive remedy against IFE in the
event of any claim you may have arising out of or in any way connected
with your employment by IFE or IFE's termination thereof. You do hereby
expressly waive any right you may have to seek punitive damages in
connection with any such claim.
13. Disputes
Except as provided in Paragraph 12 of this Agreement, any and all disputes,
controversies, or claims arising out of or relating to your employment or
cessation of employment with IFE shall be settled exclusively by final and
binding arbitration in Virginia Beach, Virginia, before an arbitrator selected
in accordance with the Employment Dispute Resolution Rules of the American
Arbitration Association ("AAA"). Such disputes include, but are not limited to,
claims arising under this Agreement as well as other employment-related legal
claims such as discrimination or tort. Any arbitration shall be conducted in
accordance with the Employment Dispute Resolution Rules of the AAA.
14. Entire Agreement; Modification
Except as specifically referenced herein, this instrument contains the entire
Agreement between you and IFE with respect to the subject matter hereof and
supersedes all prior or contemporaneous understandings or agreements. This
Agreement may be altered only by an agreement in writing signed by the party
against whom enforcement of any waiver, change, modification, or discharge is
sought.
15. Choice of Law; Binding Effect
This Agreement shall be governed by and construed in accordance with the laws of
the Commonwealth of Virginia without reference to conflicts of laws principles
and shall be binding upon and inure to the benefit of any successor or
successors of IFE and the personal representatives of you. The parties to this
Agreement hereby consent to the exclusive personal jurisdiction of the Circuit
Court of the City of Virginia Beach or, provided other jurisdictional
requirements are satisfied, the United States District Court for the Eastern
District of Virginia, Norfolk Division, for the adjudication of any proceedings
referenced in Paragraph 12 of this Agreement, or the enforcement of any final
and binding arbitration pursuant to Paragraph 13 of this Agreement, or for the
resolution of any other dispute arising from, relating to, or in any other way
connected with this Agreement or your employment hereunder.
<PAGE> 9
Louis A. Isakoff, Esq.
As of June 1, 1997
Page 9
16. Severability
If any clause or provision of this Agreement shall be adjudged invalid or
unenforceable by a court of competent jurisdiction or by operation of any
applicable law, it shall not affect the validity of any other clause or
provision, which shall remain in full force and effect.
17. Confidential Information
You agree that any information received by you during the Term which concerns
the financial, business, or other affairs of IFE, its clients, or its affiliates
will be treated by you in full confidence and that you shall not, at any time
during or after the Term, reveal, directly or indirectly, to any persons, firms,
or organizations, or otherwise make use of such confidential information. The
obligation set forth in this Paragraph 17 shall survive the expiration or
termination of this Agreement.
18. Remedies Cumulative; No Waiver
All remedies, rights, undertakings, obligations, and agreements contained in
this Agreement shall be cumulative, and none of them shall be in limitation of
any other remedy, right, undertaking, obligation, or agreement of either party,
whether under this Agreement or otherwise. The failure of IFE to insist upon
strict performance of any provision of this Agreement shall not be construed as
a waiver of any subsequent breach of the same or similar nature.
[THIS SECTION INTENTIONALLY LEFT BLANK]
<PAGE> 10
Louis A. Isakoff, Esq.
As of June 1, 1997
Page 10
19. Paragraph Headings
The titles of the paragraphs of this Agreement are for convenience only and
shall not in any way affect the interpretation of any paragraphs of this
Agreement or of the Agreement itself.
If this letter accurately sets forth our agreement, please sign where indicated
below.
Very truly yours,
International Family Entertainment, Inc.
/s/ Timothy B. Robertson
-------------------------------------
Timothy B. Robertson
President and Chief Executive Officer
READ AND AGREED:
/s/ Louis A. Isakoff, Esq.
- --------------------------------
Louis A. Isakoff, Esq.
<PAGE> 1
EXHIBIT 10.3
[INTERNATIONAL FAMILY ENTERTAINMENT LETTERHEAD]
As of June 1, 1997
K.J. "Gus" Lucas
9715 Tunney Avenue
Northridge, California 91324
Dear Gus:
This letter will set forth the terms of the agreement between you and
International Family Entertainment, Inc. ("IFE"), regarding your employment with
IFE.
1. Employment
You will serve as IFE's President, Family Channel Programming, and as such you
will perform those duties which are normal and customary in the industry for
like positions. You will be responsible for other similar areas which relate
thereto for IFE and its affiliates and will be responsible to perform other such
duties which are reasonably assigned to you by IFE. You will report directly to
the President and Chief Executive Officer of IFE and will serve as a member of
IFE's Executive Management Committee. You will perform full-time service on an
exclusive basis for IFE and its affiliates. Your principal base of employment
shall be in Los Angeles, California. You acknowledge that IFE is not required to
actually utilize your services hereunder, but that IFE's sole obligation shall
be to pay you the compensation and provide you the benefits set forth herein,
subject to all the terms and conditions of this Agreement.
2. Term
Your employment under this Agreement shall commence June 1, 1997, and, unless
sooner terminated pursuant to the terms of Paragraph 6 of this Agreement, shall
continue for an initial period of five (5) years (as completed or earlier
terminated pursuant to the express terms hereof, the "Initial Period").
Following the completion of the Initial Period, unless thereupon terminated or
renewed pursuant to the terms of this Paragraph 2, your employment under this
Agreement shall continue from year to year, subject to earlier termination
pursuant to the terms of Paragraph 6 of this Agreement (each subsequent year, as
completed or earlier terminated, an "Additional Period," and together with the
Initial Period, the "Term"). IFE may terminate this Agreement as of the last day
of the Initial Period or any Additional Period by giving you written notice of
such termination not less than ninety (90) days prior to such date. IFE may
elect to renew your employment by offering you a renewal employment agreement
(the
<PAGE> 2
K.J. "Gus" Lucas
As of June 1, 1997
Page 2
"Renewal Agreement") not less than ninety (90) days prior to the last day of the
Initial Period or any Additional Period (the "Renewal Notice Period"), upon
terms and conditions no less favorable to you than those set forth in this
Agreement (including, but not limited to, title; reporting relationship;
services to be rendered; five (5) year minimum term; termination, renewal, and
severance provisions; scheduled base salary increases and annual bonus
percentage; benefits; etc.). The initial annual base salary specified in such
Renewal Agreement shall be not less than your annual base salary for the
previous calendar year, adjusted to reflect the greater of (i) a five per cent
(5%) increase in such annual base salary, or (ii) the increase, if any, in the
cost of living, determined by multiplying your then current annual base salary
by a fraction, the numerator of which is the Consumer Price Index (U.S. City
Average--[1967 = 100%]-- All Items, Bureau of Labor Statistics of the U.S.
Department of Labor) (the "CPI") for the month prior to the proposed
commencement date of such Renewal Agreement and the denominator of which is the
CPI for the month prior to the month in which your annual base salary was most
recently adjusted. You acknowledge and agree that IFE has no obligation to allow
this Agreement to renew, to offer you a Renewal Agreement, or to otherwise
continue your employment after expiration of the Initial Period or any
Additional Period, and you expressly acknowledge that no promises or
understandings to the contrary have been made or reached. In the event you do
not accept an offered Renewal Agreement as of the last day of the Initial Period
or Additional Period during which you first received such Renewal Agreement, you
shall be deemed to have rejected such Renewal Agreement and your employment
shall be terminated as of such date. In the event IFE has not offered you a
Renewal Agreement within the Renewal Notice Period, you may terminate this
Agreement upon thirty (30) days prior written notice to IFE, provided such
termination notice is received by IFE no less than thirty (30) days following
the conclusion of the applicable Renewal Notice Period, in which case the terms
of Paragraph 7(a) of this Agreement shall apply.
3. Base Compensation
As compensation for your services hereunder, IFE shall pay you, and you shall
accept, an initial annual base salary of Four Hundred Fifty Thousand Dollars
($450,000.00), less all appropriate deductions and withholdings, payable in
accordance with the schedule IFE may adopt or alter from time to time in its
discretion, but in any event not less frequently than monthly. IFE shall review
the performance of your duties hereunder on at least an annual basis. Your
annual base salary will be adjusted on January 1 of each calendar year of the
Term to reflect the greater of (i) a five per cent (5%) increase in such annual
base salary, or (ii) the increase, if any, in the cost of living, determined by
multiplying your then current annual base salary by a fraction, the numerator of
which is the CPI for the month of December of the most recently completed
calendar year and the denominator of which is the CPI for the month prior to the
month in which your
<PAGE> 3
K.J. "Gus" Lucas
As of June 1, 1997
Page 3
annual base salary was most recently adjusted. In addition, the Board
of Directors of IFE may increase your annual base salary at such times as it, in
its sole discretion, deems appropriate.
4. Bonus Structure
a. Annual Bonus. In accordance with the executive bonus plan established
by IFE, as may be amended from time to time, in addition to annual base
salary, you shall be eligible to earn and receive an annual bonus based
on your achievement of certain goals during each annual review period
(which shall commence January 1 and conclude December 31 of each
calendar year of the Term). During the first forty-five (45) days of
each annual review period of the Term, IFE, with your consultation,
shall establish reasonable goals for you and your division to achieve
during such review period.
In the event IFE determines that the goals set for any annual review
period have been achieved, you shall be entitled to receive a targeted
bonus of thirty three and one-third per cent (33.33%) of your annual
base salary for such calendar year, with the exact amount of such bonus
to be determined in the discretion of IFE, subject to the terms of the
executive bonus plan then in effect, but in any event not less than
twenty per cent (20%) of your annual base salary for such calendar
year. In the event IFE determines that the goals set for any annual
review period have not been achieved during such annual review period,
you shall receive bonus compensation for such year, if any, as IFE, in
its discretion, deems appropriate, but in any event not less than
twenty per cent (20%) of your annual base salary for such calendar
year.
b. Apportionment. For those periods of your employment which do not
coincide with the calendar year, the amount of the annual bonus shall
be prorated for the number of months you are in the employ of IFE
during such period.
c. Payment. Payment of the annual bonus shall be made no later than
December 31 of the annual review period for which the annual bonus is
calculated.
d. Further Bonuses. From time to time, IFE may enter into supplemental
agreements or memorandums in writing with you for the award and payment
to you of additional compensation or bonuses upon such terms and
conditions as IFE shall deem to be in its business interest. In the
event of the execution by IFE of any such agreements or memorandums,
your right to additional compensation or bonuses shall be determined in
accordance with the applicable provisions thereof, subject, however, to
the provisions of this sub-paragraph. In
<PAGE> 4
K.J. "Gus" Lucas
As of June 1, 1997
Page 4
the absence of any such supplemental agreements or memorandums, IFE
shall not be obligated to pay you any additional compensation or bonus
whatsoever, irrespective of the payment of additional compensation or
bonus in any past or succeeding year or the payment or additional
compensation or bonus to other executives in any year, but may do so in
its sole discretion.
e. Incentive Compensation. From time to time, IFE may offer phantom stock,
stock appreciation rights, stock options in IFE and its affiliates
and/or other forms of long-term incentives upon such terms and
conditions as IFE shall determine to be in its business interests.
5. Reimbursement for Expenses
The parties recognize that in the course of performing your duties hereunder,
you will necessarily incur expenses in connection with your duties for such
items as entertainment, traveling, hotels, and similar items. You shall be
entitled to have paid or be reimbursed all reasonable expenses incurred by you
in the performance of your duties hereunder, subject to such requirements,
procedures, and rules as may be established by IFE for similarly situated
executives from time to time in its discretion, including, without limitation,
the requirement of submission of appropriate receipts for such expenses prior to
reimbursement.
6. Termination by IFE
IFE shall have the right to terminate this Agreement, and your employment
hereunder, at any time, for cause, immediately upon written or oral notice to
you. As used herein, termination of this Agreement "for cause" shall mean
termination due to your willful breach of contract, habitual neglect of duties,
or gross misconduct. This Agreement shall not otherwise be terminable by IFE.
Except as otherwise specifically set forth herein, in the event your employment
is terminated for cause, all benefits set forth in this Agreement shall cease as
of the last day of your employment hereunder.
7. Severance Payment
a. In the event this Agreement is terminated by IFE at the conclusion of
the Initial Period or any Additional Period pursuant to Paragraph 2 of
this Agreement, or in the event IFE fails to offer you a Renewal
Agreement and you elect to terminate this Agreement as set forth in
Paragraph 2 of this Agreement, then IFE's sole obligation shall be to
pay you (i) for all accrued but unused vacation (determined in
accordance with Paragraph 8(a) of this Agreement), which sum shall be
paid to you, less all appropriate deductions and withholdings, in a
single
<PAGE> 5
K.J. "Gus" Lucas
As of June 1, 1997
Page 5
payment not more than thirty (30) days following the effective date of
such termination; and (ii) a severance payment equal to the sum of (x)
your then current base salary for twenty-four (24) months, plus (y) the
annual bonus paid to you for the prior calendar year multiplied by two
(2), which severance payment shall be paid to you, less all appropriate
deductions and withholdings, in equal, bi-weekly installments over the
twenty-four (24) month period commencing with the date of termination
(the "Severance Period"). During the Severance Period, IFE shall
provide you with comprehensive health, disability, and life insurance
policies providing benefits at least equivalent to those you received
on the last day of the Term hereof.
b. In the event you reject a Renewal Agreement offered you pursuant to
Paragraph 2 of this Agreement, or in the event IFE terminates this
Agreement pursuant to Paragraph 6 of this Agreement, then IFE's sole
obligation shall be to pay you for all accrued but unused vacation
(determined in accordance with Paragraph 8(a) of this Agreement), which
shall be paid to you, less all appropriate deductions and withholdings,
in a single payment not more than thirty (30) days following the
effective date of such termination.
c. In the event you become permanently and totally disabled, or if you die
during the Term of this Agreement, then you or your estate, as the case
may be, shall be paid (i) for all accrued but unused vacation
(determined in accordance with Paragraph 8(a) of this Agreement), which
sum shall be paid to you, less all appropriate deductions and
withholdings, in a single payment not more than thirty (30) days
following the effective date of such termination; (ii) the sum of (x)
your then current base salary through the end of the Term, and (y) your
annual bonus for the prior calendar year for each calendar year through
the end of the Term, which sum shall be paid to you, less all
appropriate deductions and withholdings, in equal, bi-weekly
installments through the end of the Term; and (iii) following the end
of the Term, a termination payment equal to the sum of (x) your then
current base salary for twenty-four (24) months, plus (y) the annual
bonus paid to you for the prior calendar year multiplied by two (2),
which termination payment shall be paid to you, less all appropriate
deductions and withholdings, in equal, bi-weekly installments over the
twenty-four (24) month period commencing as of the date of termination
(the "Termination Period"). The payments set forth in this paragraph
shall be reduced by the amount of any benefits payable to you or your
estate, as the case may be, under any disability or life insurance plan
provided by, and the premiums of which are paid by, IFE. During the
Termination Period, IFE shall provide you, if you are then alive, with
comprehensive health, disability, and life insurance benefits at least
comparable to those you received on the last day of the Term hereof.
<PAGE> 6
K.J. "Gus" Lucas
As of June 1, 1997
Page 6
d. Notwithstanding any other provision of this Agreement to the contrary,
in the event of termination of this Agreement for any reason, you agree
that IFE may offset from any payment made under this Paragraph 7 any
sums owed by you to IFE.
8. Other Benefits
a. Vacation. For each year of the Term of this Agreement, you will be
entitled to four (4) weeks vacation with pay, to be accrued and taken
in accordance with IFE's normal personnel policies regarding vacation
for similarly situated executives, as such policies may be modified
from time to time in the discretion of IFE. Notwithstanding the
foregoing, upon your accruing four (4) weeks of vacation time, vacation
time will cease to accrue and must be used before additional vacation
time will accrue.
b. Health Plans. IFE may, in its discretion, from time to time establish
and maintain employee health, medical, life, and disability insurance
benefit plans. During the Term of this Agreement, your eligibility to
participate in such plans shall be governed by the generally applicable
terms and conditions of the particular plan, as such terms and
conditions may be amended from time to time in the discretion of IFE.
c. 401(k) Plan. IFE may, in its discretion, from time to time, establish
and maintain, or participate in an affiliated company's, 401(k)
retirement plan. During the Term of this Agreement, your eligibility to
participate in such plan shall be governed by the generally applicable
terms and conditions of such plan, as such terms and conditions may be
amended from time to time in the discretion of IFE or such affiliated
company.
d. Additional Benefits. You expressly agree and acknowledge that following
the Term of this Agreement, you will be entitled to no additional
benefits except as otherwise specifically set forth in this Agreement,
and except as specifically provided under the benefit plans referred to
in this Paragraph 8 and those benefit plans in which you may
subsequently become a participant, subject in every case to the terms
and conditions of each such plan.
<PAGE> 7
K.J. "Gus" Lucas
As of June 1, 1997
Page 7
9. No Duty to Mitigate; Offset
It is expressly agreed and understood that in the event of the termination of
this Agreement by IFE you shall have no affirmative duty to mitigate the damages
payable to you by IFE and further that no amounts actually earned or accrued by
you for employment or similar services during the period of time subsequent to
such termination will be offset against any amounts to which you are otherwise
entitled hereunder.
10. Remedy For Breach
(a) Notwithstanding the agreement to settle disputes by arbitration as
provided in Paragraph 11 of this Agreement, both parties recognize that
the services to be rendered under this Agreement by you are special,
unique, and of an extraordinary character, and that in the event of a
breach by you of any term or condition of this Agreement, IFE shall be
entitled, if it so elects, to institute and prosecute proceedings in
any court of competent jurisdiction to obtain the specific performance
thereof by you, or to enjoin you from performing services for any other
person, firm, or corporation, during the period herein contracted for,
and nothing herein contained shall be construed to prevent such remedy.
In the event IFE institutes proceedings against you pursuant to this
Paragraph 10 and is the prevailing party, you shall pay to IFE the
amount of any fees (including reasonable attorneys' fees), costs, or
expenses incurred by IFE in the prosecution of any such proceeding.
(b) The payments and benefits provided to you pursuant to this Agreement
shall constitute your sole and exclusive remedy against IFE in the
event of any claim you may have arising out of or in any way connected
with your employment by IFE or IFE's termination thereof. You do hereby
expressly waive any right you may have to seek punitive damages in
connection with any such claim.
11. Disputes
Except as provided in Paragraph 10 of this Agreement, any and all disputes,
controversies, or claims arising out of or relating to your employment or
cessation of employment with IFE shall be settled exclusively by final and
binding arbitration in Virginia Beach, Virginia, before an arbitrator selected
in accordance with the Employment Dispute Resolution Rules of the American
Arbitration Association ("AAA"). Such disputes include, but are not limited to,
claims arising under this Agreement as well as other employment-related legal
claims such as discrimination or
<PAGE> 8
K.J. "Gus" Lucas
As of June 1, 1997
Page 8
tort. Any arbitration shall be conducted in accordance with the Employment
Dispute Resolution Rules of the AAA.
12. Entire Agreement; Modification
Except as specifically referenced herein, this instrument contains the entire
Agreement between you and IFE with respect to the subject matter hereof and
supersedes all prior or contemporaneous understandings or agreements. This
Agreement may be altered only by an agreement in writing signed by the party
against whom enforcement of any waiver, change, modification, or discharge is
sought.
13. Choice of Law; Binding Effect
This Agreement shall be governed by and construed in accordance with the laws of
the Commonwealth of Virginia without reference to conflicts of laws principles
and shall be binding upon and inure to the benefit of any successor or
successors of IFE and the personal representatives of you. The parties to this
Agreement hereby consent to the exclusive personal jurisdiction of the Circuit
Court of the City of Virginia Beach or, provided other jurisdictional
requirements are satisfied, the United States District Court for the Eastern
District of Virginia, Norfolk Division, for the adjudication of any proceedings
referenced in Paragraph 10 of this Agreement, or the enforcement of any final
and binding arbitration pursuant to Paragraph 11 of this Agreement, or for the
resolution of any other dispute arising from, relating to, or in any other way
connected with this Agreement or your employment hereunder.
14. Severability
If any clause or provision of this Agreement shall be adjudged invalid or
unenforceable by a court of competent jurisdiction or by operation of any
applicable law, it shall not affect the validity of any other clause or
provision, which shall remain in full force and effect.
15. Confidential Information
You agree that any information received by you during the Term which concerns
the financial, business, or other affairs of IFE, its clients, or its affiliates
will be treated by you in full confidence and that you shall not, at any time
during or after the Term, reveal, directly or indirectly, to any persons, firms,
or organizations, or otherwise make use of such confidential information. The
obligation set forth in this Paragraph 15 shall survive the expiration or
termination of this Agreement.
<PAGE> 9
K.J. "Gus" Lucas
As of June 1, 1997
Page 9
16. Remedies Cumulative; No Waiver
All remedies, rights, undertakings, obligations, and agreements contained in
this Agreement shall be cumulative, and none of them shall be in limitation of
any other remedy, right, undertaking, obligation, or agreement of either party,
whether under this Agreement or otherwise. The failure of IFE to insist upon
strict performance of any provision of this Agreement shall not be construed as
a waiver of any subsequent breach of the same or similar nature.
17. Paragraph Headings
The titles of the paragraphs of this Agreement are for convenience only and
shall not in any way affect the interpretation of any paragraphs of this
Agreement or of the Agreement itself.
If this letter accurately sets forth our agreement, please sign where indicated
below.
Very truly yours,
International Family Entertainment, Inc.
/s/ Timothy B. Robertson
-------------------------------
Timothy B. Robertson
President and Chief Executive Officer
READ AND AGREED:
/s/ K.J. "Gus" Lucas 5/20/97
- --------------------------------
K.J. "Gus" Lucas
<PAGE> 1
EXHIBIT 10.4
[INTERNATIONAL FAMILY ENTERTAINMENT LOGO]
TIM ROBERTSON
President & CEO
As of June 1, 1997
Richard L. Sirvaitis
27 Anderson Road
Greenwich, Connecticut 06830
Dear Rick:
This letter will set forth the terms of the agreement between you and
International Family Entertainment, Inc. ("IFE"), regarding your employment with
IFE.
1. Employment
You will serve as IFE's President, IFE Ad Sales Worldwide, and as such you will
perform those duties which are normal and customary in the industry for like
positions. You will be responsible for other similar areas which relate thereto
for IFE and its affiliates and will be responsible to perform other such duties
which are reasonably assigned to you by IFE's President and Chief Executive
Officer. You will report directly to IFE's President and Chief Executive Officer
and will serve as a member of IFE's Executive Management Committee. You will
perform full-time service on an exclusive basis for IFE and its affiliates. Your
principal base of employment shall be in New York, New York. You acknowledge
that IFE is not required to actually utilize your services hereunder, but that
IFE's sole obligation shall be to pay you the compensation and provide you the
benefits set forth herein, subject to all the terms and conditions of this
Agreement.
2. Term
Your employment under this Agreement shall commence June 1, 1997, and, unless
sooner terminated pursuant to the terms of Paragraphs 6 or 7 of this Agreement,
shall continue for an initial period of five (5) years (as completed or earlier
terminated pursuant to the express terms hereof, the "Initial Period").
Following the completion of the Initial Period, unless thereupon terminated or
renewed pursuant to the terms of this Paragraph 2, your employment under this
Agreement shall continue from year to year, subject to earlier termination
pursuant to the terms of Paragraphs 6 or 7 of this Agreement (each subsequent
year, as completed or earlier terminated, an "Additional Period," and together
with the Initial Period, the "Term"). IFE may terminate this Agreement as of the
last day of the Initial Period or any Additional Period by giving you written
notice of such termination not less than ninety (90) days prior to such date.
IFE may elect to renew your
2877 Guardian Lane * P.O. Box 2050 * Virginia Beach, VA 23450-2050
(804) 459-6010 * FAX (804) 459-6421
<PAGE> 2
Richard L. Sirvaitis
As of June 1, 1997
Page 2
employment by offering you a renewal employment agreement (the "Renewal
Agreement") not less than ninety (90) days prior to the last day of the Initial
Period or any Additional Period (the "Renewal Notice Period"), upon terms and
conditions no less favorable to you than those set forth in this Agreement
(including, but not limited to, title; reporting relationship; services to be
rendered; five (5) year minimum term; termination, renewal, and severance
provisions; scheduled base salary increases and annual bonus percentage;
benefits; etc.). The initial annual base salary specified in such Renewal
Agreement shall be not less than your annual base salary for the previous
calendar year, adjusted to reflect the greater of (i) a five per cent (5%)
increase in such annual base salary, or (ii) the increase, if any, in the cost
of living, determined by multiplying your then current annual base salary by a
fraction, the numerator of which is the Consumer Price Index (U.S. City
Average--[1967 = 100%]--All Items, Bureau of Labor Statistics of the U.S.
Department of Labor) (the "CPI") for the month prior to the proposed
commencement date of such Renewal Agreement and the denominator of which is the
CPI for the month prior to the month in which your annual base salary was most
recently adjusted. You acknowledge and agree that IFE has no obligation to allow
this Agreement to renew, to offer you a Renewal Agreement, or to otherwise
continue your employment after expiration of the Initial Period or any
Additional Period, and you expressly acknowledge that no promises or
understandings to the contrary have been made or reached. In the event you do
not accept an offered Renewal Agreement as of the last day of the Initial Period
or Additional Period during which you first received such Renewal Agreement, you
shall be deemed to have rejected such Renewal Agreement and your employment
shall be terminated as of such date. In the event IFE has not offered you a
Renewal Agreement within the Renewal Notice Period, you may terminate this
Agreement upon thirty (30) days prior written notice to IFE, provided such
termination notice is received by IFE no less than thirty (30) days following
the conclusion of the applicable Renewal Notice Period, in which case the terms
of Paragraph 8(a) of this Agreement shall apply.
3. Base Compensation
As compensation for your services hereunder, IFE shall pay you, and you shall
accept, an initial annual base salary of Four Hundred Sixty Thousand Dollars
($460,000.00), less all appropriate deductions and withholdings, payable in
accordance with the schedule IFE may adopt or alter from time to time in its
discretion, but in any event not less frequently than monthly. IFE shall review
the performance of your duties hereunder on at least an annual basis. Your
annual base salary will be adjusted on January 1 of each calendar year of the
Term to reflect the greater of (i) a five per cent (5%) increase in such annual
base salary, or (ii) the increase, if any, in the cost of living, determined by
multiplying your then current annual base salary by a fraction, the numerator of
which is the CPI for the month of December of the most recently completed
calendar year and the denominator of which is the CPI for the month prior to the
month in which your annual base salary was most
<PAGE> 3
Richard L. Sirvaitis
As of June 1, 1997
Page 3
recently adjusted. In addition, the Board of Directors of IFE may increase your
annual base salary at such times as it, in its sole discretion, deems
appropriate.
4. Bonus Structure
a. Annual Bonus. In accordance with the executive bonus plan established
by IFE, as may be amended from time to time, in addition to annual base
salary, you shall be eligible to earn and receive an annual bonus based
on your achievement of certain goals during each annual review period
(which shall commence January 1 and conclude December 31 of each
calendar year of the Term). During the first forty-five (45) days of
each annual review period of the Term, IFE, with your consultation,
shall establish reasonable goals for you and your division to achieve
during such review period, which goals will include annual revenue
targets.
In the event IFE determines that the goals set for any annual review
period have been achieved, you shall be entitled to receive a targeted
bonus of thirty three and one-third per cent (33.33%) of your annual
base salary for such calendar year, with the exact amount of such bonus
to be determined in the discretion of IFE, subject to the terms of the
executive bonus plan then in effect, but in any event not less than
twenty per cent (20%) of your annual base salary for such calendar
year. In the event IFE determines that the goals set for any annual
review period have not been achieved during such annual review period,
you shall receive bonus compensation for such year, if any, as IFE, in
its discretion, deems appropriate, but in any event not less than
twenty per cent (20%) of your annual base salary for such calendar
year. In the event the annual revenue target for any annual review
period is exceeded by ten per cent (10%) or more, then in addition to
your annual bonus you shall receive an extraordinary bonus of One
Hundred Fifty Thousand Dollars ($150,000.00), payable in cash or, upon
mutual agreement between you and IFE, in stock.
b. Apportionment. For those periods of your employment which do not
coincide with the calendar year, the amount of the annual bonus shall
be prorated for the number of months you are in the employ of IFE
during such period.
c. Payment. Payment of the annual bonus shall be made no later than
December 31 of the annual review period for which the annual bonus is
calculated.
d. Further Bonuses. From time to time, IFE may enter into supplemental
agreements or memorandums in writing with you for the award and payment
to you of additional compensation or bonuses upon such terms and
conditions as IFE shall deem to be in its business interest. In the
event of the execution by IFE of any such agreements or memorandums,
your right to additional compensation or bonuses
<PAGE> 4
Richard L. Sirvaitis
As of June 1, 1997
Page 4
shall be determined in accordance with the applicable provisions
thereof, subject, however, to the provisions of this sub-paragraph. In
the absence of any such supplemental agreements or memorandums, IFE
shall not be obligated to pay you any additional compensation or bonus
whatsoever, irrespective of the payment of additional compensation or
bonus in any past or succeeding year or the payment or additional
compensation or bonus to other executives in any year, but may do so in
its sole discretion.
e. Incentive Compensation. From time to time, IFE may offer phantom stock,
stock appreciation rights, stock options in IFE and its affiliates
and/or other forms of long-term incentives upon such terms and
conditions as IFE shall determine to be in its business interests.
5. Reimbursement for Expenses
The parties recognize that in the course of performing your duties hereunder,
you will necessarily incur expenses in connection with your duties for such
items as entertainment, traveling, hotels, and similar items. You shall be
entitled to have paid or be reimbursed all reasonable expenses incurred by you
in the performance of your duties hereunder, subject to such requirements,
procedures, and rules as may be established by IFE for similarly situated
executives from time to time in its discretion, including, without limitation,
the requirement of submission of appropriate receipts for such expenses prior to
reimbursement.
6. Termination by IFE
IFE shall have the right to terminate this Agreement, and your employment
hereunder, at any time, for cause, immediately upon written or oral notice to
you. As used herein, termination of this Agreement "for cause" shall mean
termination due to your willful breach of contract, habitual neglect of duties,
or gross misconduct. This Agreement shall not otherwise be terminable by IFE.
Except as otherwise specifically set forth herein, in the event your employment
is terminated for cause, all benefits set forth in this Agreement shall cease as
of the last day of your employment hereunder.
7. Termination by Employee
In addition to your right to terminate this Agreement pursuant to Paragraph 2 of
this Agreement, you shall have the right to terminate this Agreement, and your
employment hereunder, at any time during the Term upon thirty (30) days prior
written notice to IFE.
<PAGE> 5
Richard L. Sirvaitis
As of June 1, 1997
Page 5
8. Severance Payment
a. In the event this Agreement is terminated by IFE at the conclusion of
the Initial Period or any Additional Period pursuant to Paragraph 2 of
this Agreement, or in the event IFE fails to offer you a Renewal
Agreement and you elect to terminate this Agreement as set forth in
Paragraph 2 of this Agreement, then IFE's sole obligation shall be to
pay you (i) for all accrued but unused vacation (determined in
accordance with Paragraph 9(a) of this Agreement), which sum shall be
paid to you, less all appropriate deductions and withholdings, in a
single payment not more than thirty (30) days following the effective
date of such termination; and (ii) a severance payment equal to the sum
of (x) your then current base salary for twenty-four (24) months, plus
(y) the annual bonus paid to you for the prior calendar year multiplied
by two (2), which severance payment shall be paid to you, less all
appropriate deductions and withholdings, in equal, bi-weekly
installments over the twenty-four (24) month period commencing with the
date of termination (the "Severance Period"). During the Severance
Period, IFE shall provide you with comprehensive health, disability,
and life insurance policies providing benefits at least equivalent to
those you received on the last day of the Term hereof.
b. In the event you reject a Renewal Agreement offered you pursuant to
Paragraph 2 of this Agreement, or in the event IFE terminates this
Agreement pursuant to Paragraph 6 of this Agreement, or in the event
you terminate this Agreement pursuant to Paragraph 7 of this Agreement,
then IFE's sole obligation shall be to pay you for all accrued but
unused vacation (determined in accordance with Paragraph 9(a) of this
Agreement), which shall be paid to you, less all appropriate deductions
and withholdings, in a single payment not more than thirty (30) days
following the effective date of such termination.
c. In the event you become permanently and totally disabled, or if you die
during the Term of this Agreement, then you or your estate, as the case
may be, shall be paid (i) for all accrued but unused vacation
(determined in accordance with Paragraph 9(a) of this Agreement), which
sum shall be paid to you, less all appropriate deductions and
withholdings, in a single payment not more than thirty (30) days
following the effective date of such termination; (ii) the sum of (x)
your then current base salary through the end of the Term, and (y) your
annual bonus for the prior calendar year for each calendar year through
the end of the Term, which sum shall be paid to you, less all
appropriate deductions and withholdings, in equal, bi-weekly
installments through the end of the Term; and (iii) following the end
of the Term, a termination payment equal to the sum of (x) your then
current base salary for twenty-four (24) months, plus (y) the annual
bonus paid to you for the prior calendar year multiplied by two (2),
which termination payment shall be paid to
<PAGE> 6
Richard L. Sirvaitis
As of June 1, 1997
Page 6
you, less all appropriate deductions and withholdings, in equal,
bi-weekly installments over the twenty-four (24) month period
commencing as of the date of termination (the "Termination Period").
The payments set forth in this paragraph shall be reduced by the amount
of any benefits payable to you or your estate, as the case may be,
under any disability or life insurance plan provided by, and the
premiums of which are paid by, IFE. During the Termination Period, IFE
shall provide you, if you are then alive, with comprehensive health,
disability, and life insurance benefits at least comparable to those
you received on the last day of the Term hereof.
d. Notwithstanding any other provision of this Agreement to the contrary,
in the event of termination of this Agreement for any reason, you agree
that IFE may offset from any payment made under this Paragraph 8 any
sums owed by you to IFE.
9. Other Benefits
a. Vacation. For each year of the Term of this Agreement, you will be
entitled to four (4) weeks vacation with pay, to be accrued and taken
in accordance with IFE's normal personnel policies regarding vacation
for similarly situated executives, as such policies may be modified
from time to time in the discretion of IFE. Notwithstanding the
foregoing, upon your accruing four (4) weeks of vacation time, vacation
time will cease to accrue and must be used before additional vacation
time will accrue.
b. Health Plans. IFE may, in its discretion, from time to time establish
and maintain employee health, medical, life, and disability insurance
benefit plans. During the Term of this Agreement, your eligibility to
participate in such plans shall be governed by the generally applicable
terms and conditions of the particular plan, as such terms and
conditions may be amended from time to time in the discretion of IFE.
c. 401(k) Plan. IFE may, in its discretion, from time to time, establish
and maintain, or participate in an affiliated company's, 401(k)
retirement plan. During the Term of this Agreement, your eligibility to
participate in such plan shall be governed by the generally applicable
terms and conditions of such plan, as such terms and conditions may be
amended from time to time in the discretion of IFE or such affiliated
company.
d. Car Allowance. During the Term of this Agreement, IFE shall pay to you
a car allowance of $525.00 per month.
<PAGE> 7
Richard L. Sirvaitis
As of June 1, 1997
Page 7
e Club Allowance. During the Term of this Agreement, IFE shall reimburse
or pay on your behalf your annual dues for one health club and one
country club, not to exceed $7,200.00 per annum, plus reasonable annual
increases.
f. Stock Options. Subject to the terms of the IFE Stock Incentive Plan,
you shall be granted options to purchase 25,000 shares of IFE's Class B
Common Stock, par value $.01 per share, on each of December 31, 1997,
and December 31, 1998, provided you are then employed by IFE. Each
grant will be subject to a vesting schedule of 20% per year for five
years, with an exercise price equal to the fair market value of IFE's
Class B Common Stock on the date of grant, and shall otherwise be
subject to the terms of a stock option agreement to be entered into by
and between you and IFE. Notwithstanding the foregoing, in the event of
a dissolution, liquidation, sale of substantially all the assets of
IFE, merger, consolidation, tender offer, going private transaction, or
change of control of IFE, the terms of this Paragraph 9 f. providing
for any grant of stock options shall, to the extent such stock options
are not theretofore granted, immediately upon the consummation of any
such dissolution, liquidation, sale, merger, consolidation, tender
offer, going private transaction, or change of control, be null and
void and of no further force or effect. In lieu thereof, you shall
receive a cash bonus equal to the product of (i) the number of shares
under stock options which would have been granted to you but for the
operation of the previous sentence, multiplied by (ii) the difference
between (x) the consideration offered to the general public for a share
of IFE Class B Common Stock, par value $.01 per share, in connection
with such dissolution, liquidation, sale, merger, consolidation, tender
offer, going private transaction, or change of control, and (y) the per
share exercise price of the award of stock options most recently
granted to you. Such amount shall be paid to you, less all appropriate
deductions and withholdings, in a single payment not more than 30 days
following the consummation of any such dissolution, liquidation, sale,
merger, consolidation, tender offer, going private transaction, or
change of control.
g. Additional Benefits. You expressly agree and acknowledge that following
the Term of this Agreement, you will be entitled to no additional
benefits except as otherwise specifically set forth in this Agreement,
and except as specifically provided under the benefit plans referred to
in this Paragraph 9 and those benefit plans in which you may
subsequently become a participant, subject in every case to the terms
and conditions of each such plan.
10. No Duty to Mitigate; Offset
It is expressly agreed and understood that in the event of the termination of
this Agreement by IFE you shall have no affirmative duty to mitigate the damages
payable to you by IFE and further that no amounts actually earned or accrued by
you for
<PAGE> 8
Richard L. Sirvaitis
As of June 1, 1997
Page 8
employment or similar services during the period of time subsequent to
such termination will be offset against any amounts to which you are otherwise
entitled hereunder.
11. Non-Compete
You agree that upon your voluntary termination of this Agreement you will not
work for a direct competitor of IFE for a period of twelve (12) months, unless
given specific agreement in writing from IFE; provided, however, that this
non-compete provision shall not apply in the event IFE fails to offer you a
Renewal Agreement and you elect to terminate this Agreement as set forth in
Paragraph 2 of this Agreement. Direct competitors shall include other cable or
satellite television networks, or television production and distribution
companies.
12. Remedy For Breach
(a) Notwithstanding the agreement to settle disputes by arbitration as
provided in Paragraph 13 of this Agreement, both parties recognize that
the services to be rendered under this Agreement by you are special,
unique, and of an extraordinary character, and that in the event of a
breach by you of any term or condition of this Agreement, IFE shall be
entitled, if it so elects, to institute and prosecute proceedings in
any court of competent jurisdiction to obtain the specific performance
thereof by you, or to enjoin you from performing services for any other
person, firm, or corporation, during the period herein contracted for,
and nothing herein contained shall be construed to prevent such remedy.
In the event IFE institutes proceedings against you pursuant to this
Paragraph 12 and is the prevailing party, you shall pay to IFE the
amount of any fees (including reasonable attorneys' fees), costs, or
expenses incurred by IFE in the prosecution of any such proceeding.
(b) The payments and benefits provided to you pursuant to this Agreement
shall constitute your sole and exclusive remedy against IFE in the
event of any claim you may have arising out of or in any way connected
with your employment by IFE or IFE's termination thereof. You do hereby
expressly waive any right you may have to seek punitive damages in
connection with any such claim.
13. Disputes
Except as provided in Paragraph 12 of this Agreement, any and all disputes,
controversies, or claims arising out of or relating to your employment or
cessation of employment with IFE shall be settled exclusively by final and
binding arbitration in Virginia Beach, Virginia, before an arbitrator selected
in accordance with the Employment Dispute Resolution Rules of the American
Arbitration Association ("AAA"). Such disputes include, but are not
<PAGE> 9
Richard L. Sirvaitis
As of June 1, 1997
Page 9
limited to, claims arising under this Agreement as well as other
employment-related legal claims such as discrimination or tort. Any arbitration
shall be conducted in accordance with the Employment Dispute Resolution Rules of
the AAA.
14. Entire Agreement; Modification
Except as specifically referenced herein, this instrument contains the entire
Agreement between you and IFE with respect to the subject matter hereof and
supersedes all prior or contemporaneous understandings or agreements. This
Agreement may be altered only by an agreement in writing signed by the party
against whom enforcement of any waiver, change, modification, or discharge is
sought.
15. Choice of Law; Binding Effect
This Agreement shall be governed by and construed in accordance with the laws of
the Commonwealth of Virginia without reference to conflicts of laws principles
and shall be binding upon and inure to the benefit of any successor or
successors of IFE and the personal representatives of you. The parties to this
Agreement hereby consent to the exclusive personal jurisdiction of the Circuit
Court of the City of Virginia Beach or, provided other jurisdictional
requirements are satisfied, the United States District Court for the Eastern
District of Virginia, Norfolk Division, for the adjudication of any proceedings
referenced in Paragraph 12 of this Agreement, or the enforcement of any final
and binding arbitration pursuant to Paragraph 13 of this Agreement, or for the
resolution of any other dispute arising from, relating to, or in any other way
connected with this Agreement or your employment hereunder.
16. Severability
If any clause or provision of this Agreement shall be adjudged invalid or
unenforceable by a court of competent jurisdiction or by operation of any
applicable law, it shall not affect the validity of any other clause or
provision, which shall remain in full force and effect.
17. Confidential Information
You agree that any information received by you during the Term which concerns
the financial, business, or other affairs of IFE, its clients, or its affiliates
will be treated by you in full confidence and that you shall not, at any time
during or after the Term, reveal, directly or indirectly, to any persons, firms,
or organizations, or otherwise make use of such confidential information. The
obligation set forth in this Paragraph 17 shall survive the expiration or
termination of this Agreement.
<PAGE> 10
Richard L. Sirvaitis
As of June 1, 1997
Page 10
18. Remedies Cumulative; No Waiver
All remedies, rights, undertakings, obligations, and agreements contained in
this Agreement shall be cumulative, and none of them shall be in limitation of
any other remedy, right, undertaking, obligation, or agreement of either party,
whether under this Agreement or otherwise. The failure of IFE to insist upon
strict performance of any provision of this Agreement shall not be construed as
a waiver of any subsequent breach of the same or similar nature.
19. Paragraph Headings
The titles of the paragraphs of this Agreement are for convenience only and
shall not in any way affect the interpretation of any paragraphs of this
Agreement or of the Agreement itself.
If this letter accurately sets forth our agreement, please sign where indicated
below.
Very truly yours,
International Family Entertainment, Inc.
/s/ Timothy B. Robertson
-----------------------------
Timothy B. Robertson
President and Chief Executive Officer
READ AND AGREED:
/s/ Richard L. Sirvaitis
- --------------------------------
Richard L. Sirvaitis
<PAGE> 1
Exhibit 10.5
[INTERNATIONAL FAMILY ENTERTAINMENT LETTERHEAD]
June 1, 1997
Craig R. Sherwood
1000 Rabbit Run
Chesapeake, Va 23320
RE: AMENDMENT OF EMPLOYMENT AGREEMENT
Dear Craig:
Reference is made to that certain Employment Agreement (the "Employment
Agreement"), dated as of December 22, 1993, by and between you and International
Family Entertainment, Inc. (the "Company"). In consideration of One Dollar
($1.00) and certain other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, you and the Company hereby agree
as follows:
A. Paragraph 6 a. of the Employment Agreement is hereby amended to read
in full as follows:
6. SEVERANCE -- PAYMENT UPON TERMINATION
a. EXPIRATION IF THE ORIGINAL TERM OF THIS AGREEMENT EXPIRES
AND IS NOT RENEWED BY IFE, THEN YOU SHALL RECEIVE AS
ADDITIONAL COMPENSATION A SEVERANCE PAYMENT EQUAL TO THE SUM
OF (i) YOUR THEN CURRENT BASE SALARY FOR TWENTY-FOUR (24)
MONTHS, AND (ii) THE PRIOR YEAR'S ANNUAL BONUS MULTIPLIED BY
TWO (2), WHICH SEVERANCE PAYMENT SHALL BE PAID TO YOU, LESS
ALL APPROPRIATE DEDUCTIONS AND WITHHOLDINGS, IN EQUAL,
BI-WEEKLY INSTALLMENTS OVER A TWENTY-FOUR (24) MONTH PERIOD
COMMENCING ON IFE'S NEXT REGULARLY SCHEDULED PAYDAY; PROVIDED,
HOWEVER, THAT NO SEVERANCE SHALL BE DUE IN THE EVENT IFE
OFFERS, AND YOU DECLINE, TO RENEW YOUR EMPLOYMENT UPON TERMS
AND CONDITIONS SUBSTANTIALLY SIMILAR TO THOSE CONTAINED IN
THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO, AN ANNUAL BASE
SALARY GREATER THAN OR EQUAL TO THE SUM OF YOUR ANNUAL BASE
SALARY ON THE DAY PRIOR TO THE EXPIRATION OF THE ORIGINAL TERM
OF THIS AGREEMENT PLUS AN INCREASE TO REFLECT THE COST OF
LIVING (DETERMINED IN ACCORDANCE WITH THE FORMULA SET FORTH IN
PARAGRAPH 3 OF THIS AGREEMENT).
<PAGE> 2
Craig R. Sherwood
March 27, 1997
Page 2
B. Paragraph 6 c. of the Employment Agreement is hereby amended to read
in full as follows:
c. TERMINATION BY COMPANY IFE SHALL HAVE THE RIGHT TO TERMINATE
THIS AGREEMENT AT ANY TIME, WITH OR WITHOUT CAUSE, UPON NINETY
(90) DAYS PRIOR WRITTEN NOTICE TO YOU. IF IFE TERMINATES THIS
AGREEMENT OTHER THAN FOR YOUR WILLFUL BREACH OF CONTRACT,
HABITUAL NEGLECT OF DUTIES, OR OTHER GROSS MISCONDUCT, YOU
SHALL RECEIVE AS ADDITIONAL COMPENSATION A SEVERANCE PAYMENT
EQUAL TO THE SUM OF (i) YOUR THEN CURRENT BASE SALARY FOR
TWENTY-FOUR (24) MONTHS, AND (ii) THE PRIOR YEAR'S ANNUAL
BONUS MULTIPLIED BY TWO (2), WHICH SEVERANCE PAYMENT SHALL BE
PAID TO YOU, LESS ALL APPROPRIATE DEDUCTIONS AND WITHHOLDINGS,
IN EQUAL, BI-WEEKLY INSTALLMENTS OVER A TWENTY-FOUR (24) MONTH
PERIOD COMMENCING ON IFE'S NEXT REGULARLY SCHEDULED PAYDAY. IF
IFE TERMINATES THIS AGREEMENT FOR YOUR WILLFUL BREACH OF
CONTRACT, HABITUAL NEGLECT OF DUTIES, OR OTHER GROSS
MISCONDUCT, NO SEVERANCE PAYMENT SHALL BE DUE. IN ADDITION TO
ANY SEVERANCE PAYMENT PAYABLE HEREUNDER, IN ANY EVENT OF
TERMINATION OR EXPIRATION OF THIS AGREEMENT, IFE SHALL PAY YOU
FOR ALL ACCRUED BUT UNUSED VACATION, WHICH AMOUNT SHALL BE
PAID TO YOU, LESS ALL APPROPRIATE DEDUCTIONS AND WITHHOLDINGS,
IN A SINGLE PAYMENT NOT MORE THAN THIRTY (30) DAYS FOLLOWING
THE EFFECTIVE DATE OF SUCH TERMINATION OR EXPIRATION.
NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT TO THE
CONTRARY, IN ANY EVENT OF TERMINATION OR EXPIRATION OF THIS
AGREEMENT, YOU AGREE THAT IFE MAY OFFSET FROM ANY SEVERANCE
PAYMENT OR PAYMENT FOR ACCRUED BUT UNUSED VACATION PAYABLE
HEREUNDER ANY SUMS OWED BY YOU TO IFE. YOU ACKNOWLEDGE AND
AGREE THAT IFE IS NOT REQUIRED TO ACTUALLY UTILIZE YOUR
SERVICES HEREUNDER, BUT THAT IFE'S SOLE OBLIGATION SHALL BE TO
PAY YOU THE COMPENSATION AND PROVIDE YOU THE BENEFITS SET
FORTH HEREIN, SUBJECT TO ALL THE TERMS AND CONDITIONS OF THIS
AGREEMENT. YOU ACKNOWLEDGE AND AGREE THAT IFE HAS NO
OBLIGATION TO RENEW THIS AGREEMENT OR TO CONTINUE YOUR
EMPLOYMENT AFTER THE EXPIRATION OF THIS AGREEMENT, SUBJECT TO
MAKING THE SEVERANCE PAYMENTS HEREIN SPECIFIED, AND YOU
EXPRESSLY ACKNOWLEDGE THAT NO PROMISES OR UNDERSTANDINGS TO
THE CONTRARY HAVE BEEN MADE OR REACHED.
C. Paragraph 6 d. of the Employment Agreement is hereby deleted in its
entirety.
<PAGE> 3
Craig R. Sherwood
March 27, 1997
Page 2
D. Paragraph 11 of the Employment Agreement is hereby amended by the
addition of an additional subparagraph, to read as follows:
THE PAYMENTS AND BENEFITS PROVIDED TO YOU PURSUANT TO THIS AGREEMENT
SHALL CONSTITUTE YOUR SOLE AND EXCLUSIVE REMEDY AGAINST IFE IN THE
EVENT OF ANY CLAIM YOU MAY HAVE ARISING OUT OF OR IN ANY WAY CONNECTED
WITH YOUR EMPLOYMENT BY IFE OR IFE'S TERMINATION THEREOF. YOU DO HEREBY
EXPRESSLY WAIVE ANY RIGHT YOU MAY HAVE TO SEEK PUNITIVE DAMAGES IN
CONNECTION WITH ANY SUCH CLAIM.
Please acknowledge your agreement to the foregoing provisions by
signing where indicated below. Except as specifically set forth herein, the
terms of the Employment Agreement shall remain in full force and effect.
INTERNATIONAL FAMILY
ENTERTAINMENT, INC.
By: /s/ Timothy B. Robertson
-------------------------------------
Timothy B. Robertson, President and
Chief Executive Officer
READ AND AGREED:
/s/ Craig R. Sherwood
- -------------------------------
Craig R. Sherwood
<PAGE> 1
Exhibit 10.6
[INTERNATIONAL FAMILY ENTERTAINMENT LETTERHEAD]
June 1, 1997
B. Randall Seiler
2153 Johnstown Road
Chesapeake, Va 23322
RE: AMENDMENT OF EMPLOYMENT AGREEMENT
Dear Randy:
Reference is made to that certain Employment Agreement (the "Employment
Agreement"), dated as of January 1, 1995, by and between you and International
Family Entertainment, Inc. (the "Company"). In consideration of One Dollar
($1.00) and certain other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, you and the Company hereby agree
as follows:
A. Paragraph 6 a. of the Employment Agreement is hereby amended to read
in full as follows:
6. SEVERANCE -- PAYMENT UPON TERMINATION
a. EXPIRATION IF THE ORIGINAL TERM OF THIS AGREEMENT EXPIRES
AND IS NOT RENEWED BY IFE, THEN YOU SHALL RECEIVE AS
ADDITIONAL COMPENSATION A SEVERANCE PAYMENT EQUAL TO THE SUM
OF (i) YOUR THEN CURRENT BASE SALARY FOR TWENTY-FOUR (24)
MONTHS, AND (ii) THE PRIOR YEAR'S ANNUAL BONUS MULTIPLIED BY
TWO (2), WHICH SEVERANCE PAYMENT SHALL BE PAID TO YOU, LESS
ALL APPROPRIATE DEDUCTIONS AND WITHHOLDINGS, IN EQUAL,
BI-WEEKLY INSTALLMENTS OVER A TWENTY-FOUR (24) MONTH PERIOD
COMMENCING ON IFE'S NEXT REGULARLY SCHEDULED PAYDAY; PROVIDED,
HOWEVER, THAT NO SEVERANCE SHALL BE DUE IN THE EVENT IFE
OFFERS, AND YOU DECLINE, TO RENEW YOUR EMPLOYMENT UPON TERMS
AND CONDITIONS SUBSTANTIALLY SIMILAR TO THOSE CONTAINED IN
THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO, AN ANNUAL BASE
SALARY GREATER THAN OR EQUAL TO THE SUM OF YOUR ANNUAL BASE
SALARY ON THE DAY PRIOR TO THE EXPIRATION OF THE ORIGINAL TERM
OF THIS AGREEMENT PLUS AN INCREASE TO REFLECT THE COST OF
LIVING (DETERMINED IN ACCORDANCE WITH THE FORMULA SET FORTH IN
PARAGRAPH 3 OF THIS AGREEMENT).
<PAGE> 2
B. Randall Seiler
March 27, 1997
Page 2
B. Paragraph 6 c. of the Employment Agreement is hereby amended to read
in full as follows:
c. TERMINATION BY COMPANY IFE SHALL HAVE THE RIGHT TO TERMINATE
THIS AGREEMENT AT ANY TIME, WITH OR WITHOUT CAUSE, UPON NINETY
(90) DAYS PRIOR WRITTEN NOTICE TO YOU. IF IFE TERMINATES THIS
AGREEMENT OTHER THAN FOR YOUR WILLFUL BREACH OF CONTRACT,
HABITUAL NEGLECT OF DUTIES, OR OTHER GROSS MISCONDUCT, YOU
SHALL RECEIVE AS ADDITIONAL COMPENSATION A SEVERANCE PAYMENT
EQUAL TO THE SUM OF (i) YOUR THEN CURRENT BASE SALARY FOR
TWENTY-FOUR (24) MONTHS, AND (ii) THE PRIOR YEAR'S ANNUAL
BONUS MULTIPLIED BY TWO (2), WHICH SEVERANCE PAYMENT SHALL BE
PAID TO YOU, LESS ALL APPROPRIATE DEDUCTIONS AND WITHHOLDINGS,
IN EQUAL, BI-WEEKLY INSTALLMENTS OVER A TWENTY-FOUR (24) MONTH
PERIOD COMMENCING ON IFE'S NEXT REGULARLY SCHEDULED PAYDAY. IF
IFE TERMINATES THIS AGREEMENT FOR YOUR WILLFUL BREACH OF
CONTRACT, HABITUAL NEGLECT OF DUTIES, OR OTHER GROSS
MISCONDUCT, NO SEVERANCE PAYMENT SHALL BE DUE. IN ADDITION TO
ANY SEVERANCE PAYMENT PAYABLE HEREUNDER, IN ANY EVENT OF
TERMINATION OR EXPIRATION OF THIS AGREEMENT, IFE SHALL PAY YOU
FOR ALL ACCRUED BUT UNUSED VACATION, WHICH AMOUNT SHALL BE
PAID TO YOU, LESS ALL APPROPRIATE DEDUCTIONS AND WITHHOLDINGS,
IN A SINGLE PAYMENT NOT MORE THAN THIRTY (30) DAYS FOLLOWING
THE EFFECTIVE DATE OF SUCH TERMINATION OR EXPIRATION.
NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT TO THE
CONTRARY, IN ANY EVENT OF TERMINATION OR EXPIRATION OF THIS
AGREEMENT, YOU AGREE THAT IFE MAY OFFSET FROM ANY SEVERANCE
PAYMENT OR PAYMENT FOR ACCRUED BUT UNUSED VACATION PAYABLE
HEREUNDER ANY SUMS OWED BY YOU TO IFE. YOU ACKNOWLEDGE AND
AGREE THAT IFE IS NOT REQUIRED TO ACTUALLY UTILIZE YOUR
SERVICES HEREUNDER, BUT THAT IFE'S SOLE OBLIGATION SHALL BE TO
PAY YOU THE COMPENSATION AND PROVIDE YOU THE BENEFITS SET
FORTH HEREIN, SUBJECT TO ALL THE TERMS AND CONDITIONS OF THIS
AGREEMENT. YOU ACKNOWLEDGE AND AGREE THAT IFE HAS NO
OBLIGATION TO RENEW THIS AGREEMENT OR TO CONTINUE YOUR
EMPLOYMENT AFTER THE EXPIRATION OF THIS AGREEMENT, SUBJECT TO
MAKING THE SEVERANCE PAYMENTS HEREIN SPECIFIED, AND YOU
EXPRESSLY ACKNOWLEDGE THAT NO PROMISES OR UNDERSTANDINGS TO
THE CONTRARY HAVE BEEN MADE OR REACHED.
<PAGE> 3
B. Randall Seiler
March 27, 1997
Page 2
C. Paragraph 6 d. of the Employment Agreement is hereby deleted in its
entirety.
D. Paragraph 11 of the Employment Agreement is hereby amended by the
addition of an additional subparagraph, to read as follows:
THE PAYMENTS AND BENEFITS PROVIDED TO YOU PURSUANT TO THIS AGREEMENT
SHALL CONSTITUTE YOUR SOLE AND EXCLUSIVE REMEDY AGAINST IFE IN THE
EVENT OF ANY CLAIM YOU MAY HAVE ARISING OUT OF OR IN ANY WAY CONNECTED
WITH YOUR EMPLOYMENT BY IFE OR IFE'S TERMINATION THEREOF. YOU DO HEREBY
EXPRESSLY WAIVE ANY RIGHT YOU MAY HAVE TO SEEK PUNITIVE DAMAGES IN
CONNECTION WITH ANY SUCH CLAIM.
Please acknowledge your agreement to the foregoing provisions by
signing where indicated below. Except as specifically set forth herein, the
terms of the Employment Agreement shall remain in full force and effect.
INTERNATIONAL FAMILY
ENTERTAINMENT, INC.
By: /s/ Timothy B. Robertson
--------------------------------------
Timothy B. Robertson, President and
Chief Executive Officer
READ AND AGREED:
/s/ B. Randall Seiler
- -------------------------------
B. Randall Seiler
<PAGE> 1
Exhibit 10.7
INTERNATIONAL FAMILY ENTERTAINMENT, INC.
EXECUTIVE RETIREMENT PLAN
International Family Entertainment, Inc. (the "Company") hereby adopts the
International Family Entertainment, Inc. Executive Retirement Plan (the "Plan")
for the benefit of its eligible employees and their spouses, in accordance with
the following terms and conditions.
SECTION 1. PURPOSE
The purpose of the Plan is to attract and retain qualified executive
employees of the Company and the subsidiaries thereof, to reward those
executives for their continued service on behalf of the Company and its
subsidiaries and to provide those executive employees and their spouses with
supplemental retirement benefits in a manner that conforms with industry
practice.
SECTION 2. DEFINITIONS
The following terms, when used in the Plan, shall have the meanings set
forth below, unless a different meaning clearly is intended in the context in
which any such term is used:
2.1. Board--means the Board of Directors of the Company.
2.2 Cause--means Termination of Employment as a consequence of (a) the
willful and continued failure of the Participant to substantially perform his
or her duties with the Company or any of its subsidiaries; (b) the engaging by
the Participant in conduct through which he or she intends to cause material
injury to the Company or any of its subsidiaries, monetarily or otherwise;
(c) the Participant's moral turpitude; (d) the Participant's commission of a
criminal act with respect to his or her employment or his or her commission of
a felony; (e) the
1
<PAGE> 2
Participant's dependence on alcohol or drugs; or (f) the Participant's
misappropriation or conversion of the assets or opportunities of the Company or
any of its subsidiaries.
2.3. Committee--means the Compensation Committee of the Company.
2.4. Disability--means the Participant's complete and permanent inability
by reason of illness or accident to perform the duties of the occupation in
which the Participant was employed when such disability commenced, as
reasonably determined by the Committee based on medical evidence acceptable to
it.
2.5. Involuntary Termination--means either action taken by the
Participant's employer to terminate the Participant's employment with the
Company and/or any subsidiary thereof or the failure of the Company to enter
into a new employment agreement with the Participant upon the expiration of
the term of the Participant's current employment agreement; provided, that any
termination of employment characterized as a constructive discharge under the
terms of a Participant's employment agreement with the Company or any
subsidiary thereof shall be treated under the Plan as an Involuntary
Termination.
2.6. Normal Retirement Date--means the first day of the month that
coincides with or next follows the date on which a Participant reaches age
sixty-five.
2.7. Participant--means an executive employee of the Company or of any
subsidiary thereof who is selected to participate in the Plan in accordance
with the provisions of Section 3 of the Plan.
2.8. Participation Agreement--means the agreement executed by and between
the Company and an eligible executive that designates the executive as a
Participant and sets forth the level of benefits to be paid to the Participant
in accordance with the terms of the Plan.
2
<PAGE> 3
2.9. Spouse--means the lawful spouse of the Participant, in accordance
with applicable law, as of the date of the Participant's death.
2.10. Termination of Employment--means the cessation of the
Participant's employment with the Company or of a subsidiary thereof by reason
of Voluntary Termination or Involuntary Termination.
2.11. Years of Service--means the number of full calendar years of
employment with the Company or any subsidiaries thereof, but only crediting
employment service completed by the Participant on or after January 1, 1997;
provided, that if a Participant's period of employment in the first calendar
year or in the last calendar year of his or her employment is less than a
complete calendar year, such year shall be treated as a complete calendar year
if the period of employment in either such year exceeds six months.
2.12. Vested Percentage--means, subject to Section 5(d), the portion of
the Participant's benefit under the Plan that is vested determined as follows:
Years of Service Vested Percentage
---------------- -----------------
Less than 1 0%
At least 1 but less than 2 20%
At least 2 but less than 3 40%
At least 3 but less than 4 60%
At least 4 but less than 5 80%
At least 5 100%
Notwithstanding the foregoing, regardless of a Participant's Years of Service,
the Participant's
3
<PAGE> 4
Vested Percentage shall be 100% upon the Participant's Termination of
Employment because of Disability.
2.13. Voluntary Termination--means any termination of the employment
of a Participant, including by reason of Disability, that occurs before the
Participant's Normal Retirement Date that is not an Involuntary Termination.
SECTION 3. ELIGIBILITY AND PARTICIPATION
Any executive employee of the Company or any subsidiary thereof who is
selected to participate in the Plan by the Committee is eligible to participate
in the Plan. Participation in the Plan will begin upon the date of execution of
a Participation Agreement by and between the eligible executive and the
Company.
SECTION 4. NORMAL RETIREMENT BENEFITS
Upon the retirement of a Participant on or after his or her Normal
Retirement Date, the Participant shall be entitled to receive a monthly
benefit, with payment thereof commencing in the first month next following the
month in which the Participant retires payable in accordance with the
provisions of Section 7 of the Plan. The amount of each monthly benefit payment
to be made under this Section 4 shall be equal to the Normal Retirement Benefit
indicated in the Participant's Participation Agreement. The payment of the
Normal Retirement Benefit payable hereunder shall continue for a period of ten
years measured from the date of the first payment made hereunder (the "Benefit
Term").
SECTION 5. TERMINATION OF EMPLOYMENT BENEFITS
(a) Voluntary Termination. Upon a Participant's Termination of
Employment on account of Voluntary Termination, a Participant shall be entitled
to receive a monthly benefit
4
<PAGE> 5
equal to the Participant's Vested Percentage multiplied by the benefit level
determined in accordance with the benefit schedule attached to the
Participant's Participation Agreement (the "Benefit Schedule") based on the
Participant's Years of Service completed as of the date of his or her
Termination of Employment, divided by 12. In the case of a Participant who has
attained the age of 55 on or before the date of his or her Termination of
Employment, the monthly benefit payable under this Section 5(a) shall commence
in the month that next follows the month in which occurs the date the
Participant terminates employment. In the case of a Participant who has not
attained the age of 55 on or before his or her Termination of Employment, the
monthly benefit payable under this Section 5(a) shall commence in the month in
which the Participant attains his or her Normal Retirement Date. All benefit
payments under this Section 5(a) shall be made in accordance with the
provisions of Section 7.
(b) Involuntary Termination. Upon a Participant's Termination of
Employment on account of Involuntary Termination, a Participant shall be
entitled to a monthly benefit, with the payment thereof commencing in the month
next following the month in which the Termination of Employment occurs or, if
later, in the month next following the month in which the last severance
benefit payment, if any, is made to the Participant. The monthly benefit
payable under this Section 5(b) shall be equal to the Participant's Vested
Percentage multiplied by the benefit level determined in accordance with the
Benefit Schedule based on the Participant's Years of Service completed as of
the date of his or her Termination of Employment, divided by 12. All benefit
payments under this Section 5(b) shall be made in accordance with the
provisions of Section 7.
5
<PAGE> 6
(c) Benefit Term. All benefit payments made under this Section 5 to a
Participant will be paid for the Benefit Term.
(d) Notwithstanding any provision of the Plan to the contrary, no
benefit shall be payable under the Plan to the Participant in the event of the
Participant's Termination of Employment for Cause.
SECTION 6. DEATH BENEFIT
No benefit shall be payable under the Plan to any person in the event
the Participant dies prior to the commencement of benefit payments to the
Participant under the Plan. Upon the Participant's death at any time after his
or her benefit payments under the Plan have commenced, the Participant's Spouse
(if he or she survives the Participant) shall be entitled to receive a death
benefit payable in monthly installments equal in amount to the benefit payments
that were payable to the Participant prior to his or her death under the terms
of either Section 4 or Section 5, as applicable. The death benefit payable
hereunder shall commence on the first day of the month following the
Participant's death and shall continue thereafter until the date all
installments that otherwise would have been payable to the Participant under
this Plan (reduced by payments already made to the Participant before the date
of the death) are paid to his or her Spouse, or, if earlier, the date of the
Spouse's death. If the Participant's Spouse does not survive the Participant,
then no benefits shall be payable from the Plan under this Section 6 upon the
Participant's death. All benefit payments under this Section 6 shall be made in
accordance with the provisions of Section 7.
6
<PAGE> 7
SECTION 7. PAYMENT OF BENEFITS
(a) All benefit payments paid hereunder shall be made under reasonable
procedures established by the Committee; provided, that at least one benefit
payment per month must be made to any Participant entitled to the payment of a
benefit under the Plan.
(b) Notwithstanding the foregoing, the Committee, acting in its sole
discretion, may elect to pay to any Participant or Spouse entitled to the
payment of benefits under the provisions of Sections 4, 5 or 6 of the Plan,
regardless of whether the benefit payments already have begun, a lump sum cash
payment equal to the present value of the aggregate payments due and payable
under the Plan to such Participant or Spouse. In calculating such present
value, the Committee shall use a reasonable interest rate based upon business
conditions then prevailing at the time the present value calculation is made.
SECTION 8. ADMINISTRATION
The Committee shall have absolute control over the administration of this
Plan, with all powers necessary to enable it to properly carry out its duties
in this respect, including, without limitation, the designation of executive
employees as Participants. The Committee shall have the power to interpret the
Plan, in its sole discretion, and to make all other determinations necessary or
desirable for the Plan's administration. All actions taken by the Committee in
the administration and interpretation of the Plan shall be final and binding on
all concerned. The Committee may appoint such agents as it may deem necessary
or advisable to assist it in the performance of its duties, and may delegate to
such agents those powers and duties, whether ministerial or discretionary,
which it deems expedient or appropriate.
7
<PAGE> 8
SECTION 9. AMENDMENT AND TERMINATION
This Plan may be terminated or amended by the Company at any time;
provided, that no such amendment or termination shall reduce or eliminate the
accrued benefit of any Participant under the Plan without the express written
consent of such Participant.
SECTION 10. MISCELLANEOUS
10.1. No Right to Employment. This Plan shall not constitute a contract
of employment for any definite term and shall not affect or impair the right of
either party to terminate the employment relationship at any time.
10.2. Unfunded Plan. The Plan shall be unfunded. The Company shall not be
required to establish any special or separate fund or to make any other
segregation of assets to assure the payment of any benefit under the Plan, nor
shall the Company be deemed to be a trustee of any rights granted under the
Plan. Nothing contained herein shall be construed to create for the Participant
or his or her Spouse any creditor's rights other than those of a general and
unsecured creditor of the Company.
10.3. No Assignment. No payments, benefits or rights under this Plan shall
be subject in any manner to anticipant, sale, transfer, assignment, mortgage,
pledge, encumbrance, charge or alienation by the Participant or his or her
Spouse. In the event of any attempted assignment, alienation, encumbrance or
transfer, the Company shall have no further liability under the Plan.
10.4. Participation in Other Plans. Nothing in this Plan will affect any
right which the Participant may otherwise have to participate in any retirement
plan or agreement which the Company may have adopted or may adopt hereafter.
8
<PAGE> 9
10.5. Headings. The headings and subheadings in the Plan have been
inserted for convenience of reference only and are to be ignored in any
construction of the Plan provisions.
10.6. Number and Gender. In the construction of the Plan, the singular
shall include the plural in all cases in which such meaning would be appropriate
and words used in the masculine shall apply to the feminine where applicable.
10.7. Plan Binding on All Parties. This Plan shall be binding upon the
parties hereto, their successors and assigns, and upon all Participants and
their Spouses, heirs, executors, administrators and assigns.
10.8. Severability. In the event any provision of this Plan shall be
held to be illegal, invalid, or unenforceable for any reason the illegality,
invalidity, or unenforceability of such provision shall not affect the remaining
provision of the Plan, but shall be fully severable and this Plan shall be
construed and enforced as if the illegal, invalid, or unenforceable provision
had never been included herein.
10.9. Legal Competency. The Committee may, in its discretion, make
payment either directly to an incompetent or disabled person, whether because of
minority or mental or physical disability, or to the guardian of such person, or
to the person having custody of such person, without further liability on the
part of the Company, the Committee, or any person, for the amounts of such
payment to the person on whose account such payment is made.
10.10. Indemnification. No member of the Committee or the Board shall be
personally liable by reason of any contract or other instrument executed by such
member or on such member's behalf in his or her capacity as a member of the
Committee for any mistake of judgement made in good faith, and the Company shall
indemnify and hold harmless each
9
<PAGE> 10
employee, officer or director of the Company to whom any duty or power relating
to the administration or interpretation of the Plan may be allocated or
delegated, against any cost or expense (including counsel fees) or liability
(including any sum paid in settlement of a claim) arising out of any act or
omission to act in connection with the Plan unless arising out of such person's
own fraud or bad faith.
10.11. Governing Law. This Plan shall be governed by and construed in
accordance with the laws of the State of Delaware, without reference to the
principles of conflicts of law thereof, except to the extent that those laws are
preempted by Federal law.
10.12 Expenses. Any expenses of administering the Plan shall be borne by
the Company.
10.13. Entire Agreement. This instrument contains the entire
understanding and agreement between the parties relating to the subject matter
hereof, except as otherwise provided herein.
10.14. Tax Withholding. The Company shall have the right to deduct from
each payment to be made hereunder any withholding or other taxes required by
law.
10.15. Effective Date. The effective date of the Plan shall be June 1,
1997.
IN WITNESS WHEREOF, International Family Entertainment, Inc. has caused
this Plan to be executed by its duly authorized officer, effective as of above.
INTERNATIONAL FAMILY ENTERTAINMENT, INC.
By: /s/ Timothy B. Robertson
_______________________________
Title: President & CEO
____________________________
10
<PAGE> 11
EXHIBIT B
Benefit Schedule
Years of Service Benefit Level
1 $195,000
2 $210,000
3 $225,000
4 $245,000
5 $260,000
6 $280,000
7 $300,000
8 $325,000
9 $350,000
10 $375,000
11 $400,000
12 $430,000
13 $460,000
14 $500,000
15 $535,000
16 $575,000
17 $620,000
18 $665,000
19 $715,000
20 $770,000
21 $825,000
22 or more $885,000
<PAGE> 1
Exhibit 10.8
PARTICIPATION AGREEMENT UNDER
THE
INTERNATIONAL FAMILY ENTERTAINMENT, INC.
EXECUTIVE RETIREMENT PLAN
THIS AGREEMENT, executed this 1st day of June, 1997, by and between
International Family Entertainment, Inc., a Delaware corporation, (the
"Company") and Louis A. Isakoff, an individual resident in the Commonwealth of
Virginia (the "Employee").
W I T N E S S E T H:
WHEREAS, the Company has set forth under the International Family
Entertainment, Inc. Executive Retirement Plan attached hereto as Exhibit A and
incorporated by reference herein (the "Plan") the terms and conditions upon
which the Company shall pay to certain executive employees benefits upon
retirement or other termination of employment;
WHEREAS, the Company recognizes the valuable services performed by the
Employee for the Company;
WHEREAS, the Employee wishes to be assured that he or she will be
entitled to certain benefits from the Company subsequent to his or her
retirement or other termination of employment; and
WHEREAS, the Company wishes to provide the Employee benefits under the
Plan and the Employee wishes to participate in the Plan;
<PAGE> 2
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties, intending legally to be bound, agree as follows:
1. The Employee is designated as a Participant in the Plan as of the
date first written above.
2. The Company agrees to provide the Employee benefits in accordance
with the terms of the Plan, a copy of which is attached hereto and the terms of
which are incorporated herein by this reference.
3. The Employee agrees to be a Participant in the Plan and to be bound
by its terms, conditions and restrictions.
4. The Normal Retirement Benefit payable to the Employee under Section
4 of the Plan is equal to $885,000, divided by 12.
5. The monthly benefit payable to the Employee under Section 5 of the
Plan is equal to his Vested Percentage (as determined under the Plan)
multiplied by the benefit level set forth in Exhibit B hereto based on the
Participant's Years of Service completed as of the date of his Termination of
Employment, divided by 12.
6. All capitalized terms not specifically defined herein shall have
the same meaning as ascribed thereto in the Plan.
IN WITNESS WHEREOF, the parties hereto have set their hands and
executed this Agreement as of the date first written above.
INTERNATIONAL FAMILY ENTERTAINMENT, INC.
By: /s/ Timothy B. Robertson
-------------------------------------
EMPLOYEE
/s/ Louis A. Isakoff
-----------------------------------------
<PAGE> 3
Exhibit A
See Exhibit 10.7.
-10-
<PAGE> 4
EXHIBIT B
Benefit Schedule
<TABLE>
<CAPTION>
Years of Service Benefit Level
<S> <C>
1 $195,000
2 $210,000
3 $225,000
4 $245,000
5 $260,000
6 $280,000
7 $300,000
8 $325,000
9 $350,000
10 $375,000
11 $400,000
12 $430,000
13 $460,000
14 $500,000
15 $535,000
16 $575,000
17 $620,000
18 $665,000
19 $715,000
20 $770,000
21 $825,000
22 or more $885,000
</TABLE>
<PAGE> 1
Exhibit 10.9
PARTICIPATION AGREEMENT UNDER
THE
INTERNATIONAL FAMILY ENTERTAINMENT, INC.
EXECUTIVE RETIREMENT PLAN
THIS AGREEMENT, executed this 1st day of June, 1997, by and between
International Family Entertainment, Inc., a Delaware corporation, (the
"Company" and Larry W. Dantzler, an individual resident in the Commonwealth of
Virginia (the "Employee").
W I T N E S S E T H:
WHEREAS, the Company has set forth under the International Family
Entertainment, Inc. Executive Retirement Plan attached hereto as Exhibit A (the
"Plan") the terms and conditions upon which the Company shall pay to certain
executive employees benefits upon retirement or other termination of employment;
WHEREAS, the Company recognizes the valuable services performed by the
Employee for the Company;
WHEREAS, the Employee wishes to be assured that he or she will be
entitled to certain benefits from the Company subsequent to his or her
retirement or other termination of employment; and
WHEREAS, the Company wishes to provide the Employee benefits under the
Plan and the Employee wishes to participate in the Plan;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties, intending legally to be bound, agree as follows:
<PAGE> 2
1. The Employee is designated as a Participant in the Plan as of the date
first written above.
2. The Company agrees to provide the Employee benefits in accordance with
the terms of the Plan, a copy of which is attached hereto and the terms of
which are incorporated herein by this reference.
3. The Employee agrees to be a Participant in the Plan and to be bound by
its terms, conditions and restrictions.
4. The Normal Retirement Benefit payable monthly to the Employee under
Section 4 of the Plan is equal to $885,000 divided by 12.
5. The monthly benefit payable to the Employee under Section 5 of the Plan
is equal to his Vested Percentage (as determined under the Plan) multiplied by
the benefit level set forth in Exhibit B hereto based on the Participant's
Years of Service completed as of the date of his Termination of Employment,
divided by 12.
6. All capitalized terms not specifically defined herein shall have the
same meaning as ascribed thereto in the Plan.
IN WITNESS WHEREOF, the parties hereto have set their hands and executed
this Agreement as of the date first written above.
INTERNATIONAL FAMILY ENTERTAINMENT, INC.
By: /s/ Timothy B. Robertson
--------------------------------
EMPLOYEE
By: /s/ Larry W. Dantzler
--------------------------------
<PAGE> 3
Exhibit A
See Exhibit 10.7.
-10-
<PAGE> 4
EXHIBIT B
Benefit Schedule
<TABLE>
<CAPTION>
Years of Service Benefit Level
<S> <C>
1 $195,000
2 $210,000
3 $225,000
4 $245,000
5 $260,000
6 $280,000
7 $300,000
8 $325,000
9 $350,000
10 $375,000
11 $400,000
12 $430,000
13 $460,000
14 $500,000
15 $535,000
16 $575,000
17 $620,000
18 $665,000
19 $715,000
20 $770,000
21 $825,000
22 or more $885,000
</TABLE>
