shall make his investments shall not be in direct competition with that of the Company, except that Executive may invest in an entity in competition with the Company if its stock is listed for trading on a national stock exchange or traded in the over-the-counter market and Executive’s holdings represent less than 5% of its outstanding stock; or (ii) acting as a director, trustee, officer or upon a committee of any other firm, trust or corporation if such positions do not unreasonably interfere with the services to be rendered by Executive hereunder and, as to future outside Board memberships, the Executive obtains the consent of the Company’s Board of Directors or the Company’s Nominating/Corporate Governance Committee; or (iii) being involved in educational, civic or charitable activities which do not unreasonably interfere with the services to be rendered by Executive hereunder.  During the Employment Term, the Executive shall, if elected or appointed, serve as a director of the Company.

(b)           As CEO, Executive shall report solely and directly to the Board.  The Executive shall at all times be the most senior executive of the Company.  He shall have such senior executive powers, duties, authorities and responsibilities as are consistent with Executive’s position and title and as have been historically performed by Executive, including acting as chairman of any meeting of the Board (unless an independent Chairman of the Board is elected and except for meetings of the Board’s independent Directors), supervising financing, acquisitions and similar transactions and strategic planning for the Company consistent with his title and position, supervising the chief operating officer of the Company and directly or indirectly all other employees of the Company, and managing all activities of the Company, including without limitation, organizational structure and non-officer compensation.  Without limitation on the foregoing, Executive shall have (i) complete senior management authority and responsibility with respect to the management and operations of the Company and its business, including implementation of the business strategy of the Company consistent with long-term strategy and policies approved by the Board, (ii) authority on behalf of the Company to employ and terminate employment of all Company personnel (other than the authority to terminate the employment of the CFO or General Counsel or any Internal Auditor without Board or relevant Committee approval), and (iii) authority to execute contracts on behalf of the Company in the discharge of his duties and responsibilities.

3.             COMPENSATION .

As compensation for Executive’s services to be rendered hereunder during the Employment Term, the Company will pay to Executive the following:

3.1           Base Salary .  An annual base salary (“Base Salary”) (payable in substantially equal installments at the Company’s normal pay periods) during the Employment Term of $626,045, which Base Salary was established effective as of April 1, 2006.  The Base Salary shall be subject to annual review commencing at the end of the first fiscal year of the Company ending during the Employment Term and at the end of each fiscal year thereafter, and may be increased (but not decreased) for subsequent fiscal years.

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3.2           Bonus .

(a)           In addition to the Base Salary, the Executive is also entitled to a bonus (the “Bonus”) for each fiscal year of the Company commencing during the Employment Term, in accordance with the Company’s recently adopted Pay-for-Performance Annual Incentive Plan and its successors for all future years.

(b)           The Board in its sole discretion may also award to Executive a performance bonus at any time in such amount and in such form as the Board may determine (the “Performance Bonus”) after taking into consideration other compensation paid or payable to Executive under this Agreement, as well as the financial and non-financial progress of the business of the Company and the contributions of the Executive toward that progress.

(c)           Any Bonus and Performance Bonus shall be payable as soon as practicable after the end of the fiscal year for which it is payable but in all events shall be made within two and one-half months (2½ months) after the later of the end of the calendar year or the Company’s fiscal year in which Executive’s right to such payment vests as provided in Section 8.

(d)           The Executive shall also be eligible for awards of stock options and any other stock or equity based awards that may be available to executives of the Company.

4.             LOCATION; EXPENSES; ADDITIONAL BENEFITS; INDEMNIFICATION .

4.1           Location .  Executive’s principal place of business shall be at the Company’s headquarters in the Los Angeles Metropolitan area, and Executive shall not be required to relocate outside of the Los Angeles Metropolitan area.

4.2           Expenses .  The Company shall pay directly, or reimburse the Executive for, all reasonable and necessary expenses and disbursements incurred by him for and on behalf of the Company in the performance of his duties under this Agreement.  For such purpose, the Executive shall submit to the Company itemized reports of such expenses in accordance with the Company’s policies.

4.3           Vacation .  The Executive shall be entitled to paid vacations during the Employment Term in accordance with the Company’s then prevalent practices for senior executive employees; provided, however, that Executive shall be entitled to such paid vacations for not less than four (4) weeks per annum.

4.4           Employee Benefit Plans .  The Executive shall be entitled to participate in, and to receive benefits under, any employee benefit plans of the Company (including, without limitation, pension, profit sharing, group life insurance and group medical insurance plans) as may exist from time to time for its executive employees.  Subject to the limitation contained in Section 4.7 below, the Company shall make the maximum pension and profit sharing contribution for the Executive legally permitted to be made by an employer and shall permit the Executive to contribute the maximum pension and profit sharing contribution legally permitted to be made by an employee each year during the Employment Period.

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4.5           Life and Disability Insurance .  The Company shall provide to Executive, and pay the premiums on, insurance on Executive’s life in the amount of $3 million as well as, on an after-tax basis, long-term disability insurance for the Executive covering at least 80% of his Base Salary during the Employment Term and for a period of twenty-four (24) months thereafter, each of which shall have the coverage reasonably requested by Executive; provided, however, that the foregoing coverage shall be subject to any insurance examinations of Executive required by the insurer.  Executive shall designate the beneficiaries under the disability and life insurance policies.

4.6           Perquisites .  Executive shall be entitled to receive all perquisites made available by the Company (and approved by the Company’s Board or Compensation Committee) from time to time during the Employment Term to other senior executives of the Company in the United States.  Without limiting the generality of the foregoing, Executive shall be entitled to a secretary, a car allowance and insurance in accordance with the Company’s policy, or, if more beneficial to Executive, as provided by the Company to any of its senior executives.  Payment of such perquisites shall comply with Section 8 hereof.

4.7           Indemnification .  As a director and officer of the Company, the Executive shall be entitled to the benefits of all provisions of the Certificate of Incorporation of the Company, as amended, and the Bylaws of the Company, as amended, that provide for indemnification of officers and directors of the Company as well as any Indemnification Agreement that the Company and Executive have entered or may enter into.  No such provisions shall be amended in any way to limit or reduce the extent of the indemnification available to Executive as an officer or director of the Company, except if and then to the extent required to comply with applicable laws or regulations.

In addition, and without limitation on the foregoing:

(a)           to the fullest extent permitted by law, the Company shall indemnify and save and hold harmless the Executive from and against any and all claims, demands, liabilities, costs and expenses, including judgments, fines or amounts paid on account thereof (whether in settlement or otherwise), and reasonable expenses, including attorneys’ fees actually and reasonably incurred (except only if and to the extent that such amounts shall be finally adjudged to have been caused by Executive’s willful breach of the express provisions of this Agreement) to the extent that the Executive is made a party to or witness in any action, suit or proceeding, or if a claim or liability is asserted against Executive (whether or not in the right of the Company), by reason of the fact that he was or is a director or officer, or acted in such capacity on behalf of the Company, or by reason of or arising out of or resulting from entering into this Agreement or the rendering of services by the Executive pursuant to this Agreement, whether or not the same shall proceed to judgment or be settled or otherwise brought to a conclusion.  The Company shall advance to Executive on demand all reasonable expenses incurred by Executive in connection with the defense or settlement of any such claim, action, suit or proceeding, and Executive hereby undertakes to repay such amounts if and to the extent that it shall be finally adjudged that the Executive is not entitled to be indemnified by the Company under this Agreement or under the provisions of the Certificate of Incorporation or Bylaws of the Company as of the date hereof that govern indemnification of officers or directors of the Company (but giving effect to future amendments that broaden or expand any such

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indemnification and obligations or right more favorably to Executive).  Executive shall also be entitled to recover any costs of enforcing his rights under this Section (including, without limitation, reasonable attorneys’ fees and disbursements) in the event any amount payable hereunder is not paid within thirty (30) days of written request therefore by Executive.  The rights of Executive under this Section shall survive the termination of this Agreement and shall be applicable for so long as Executive may be subject to any claim, demand, liability, cost or expense against which this paragraph 4.7 is intended to protect and indemnify him; and

(b)           the Company shall, at no cost to the Executive, use its best efforts to at all times include the Executive during the Employment Term and for a period of not less than seven (7) years thereafter, as an insured under any directors and officers liability insurance policy maintained by the Company, which policy shall provide such coverage in such amounts as the Board of Directors shall deem appropriate for coverage of all directors and officers of the Company.

4.8           Company’s share of the pension and profit sharing contribution referenced in Section 4.4 and insurance premiums referenced in Section 4.5 shall not exceed in any calendar year an aggregate of $50,000.

5.             CERTAIN ADDITIONAL PAYMENTS

(a)           Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment, benefit or distribution made or provided by the Company or its affiliated companies to or for the benefit of the Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 5) (a “Payment”) would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), then the Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.

(b)           Subject to the provisions of paragraph 5(c), all determinations required to be made under this paragraph 5(b), including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s public accounting firm (the “Accounting Firm”) which shall provide detailed supporting calculations both to the Company and the Executive within 15 business days of the receipt of notice from the Executive that there has been a Payment, or such earlier time as is requested by the Company.  In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting any Change in Control which may give rise to the Excise Tax, the Executive shall appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder).  All fees and

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expenses of the Accounting Firm shall be borne solely by the Company.  Any Gross-Up Payment, as determined pursuant to this paragraph 5(b), shall be paid by the Company to the Executive within five days of the receipt of the Accounting Firm’s determination.  If the Accounting Firm determines that no Excise Tax is payable by the Executive, it shall furnish the Executive with a written opinion that failure to report the Excise Tax on the Executive’s applicable federal income tax return would not result in the imposition of a negligence or similar penalty.  Any determination by the Accounting Firm shall be binding upon the Company and the Executive.  As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made (“Underpayment”), consistent with the calculations required to be made hereunder.  In the event that the Company exhausts its remedies pursuant to paragraph 5(c) and the Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive.

(c)           The Executive shall as soon as practicable notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment.  Such notification shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid.  The Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which the Executive gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due).  If the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall:

(1)           give the Company any information reasonably requested by the Company relating to such claim,

(2)           take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company,

(3)           cooperate with the Company in good faith in order effectively to contest such claim, and

(4)           permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses.  Without limitation on the foregoing provisions of this paragraph 5(c) the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Executive to pay the tax claimed and sue for a refund or

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contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided further, that if the Company directs the Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to the Executive on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and provided further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount.  Furthermore, the Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

(d)           If, after the receipt by the Executive of an amount advanced by the Company pursuant to paragraph 5(c), the Executive becomes entitled to receive, and receives, any refund with respect to such claim, the Executive shall (subject to the Company’s complying with the requirements of paragraph 5(c)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto).  If, after the receipt by the Executive of an amount advanced by the Company pursuant to paragraph 5(c), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then such advance shall be deemed paid to Executive and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.

(e)           Notwithstanding the foregoing, all Gross-Up Payments and adjustments shall be paid no later than the end of the calendar year following the year in which the Executive remits the related taxes as necessary to comply with Code Section 409A.

6.             EXCLUSIVE EMPLOYMENT, CONFIDENTIAL INFORMATION, ETC .

6.1           Non-Solicitation .  Executive’s employment hereunder is on an exclusive basis, and during the period of Executive’s employment hereunder and thereafter, in the event of Executive’s voluntary resignation without “Good Reason,” for a period of 12 months following the date of such resignation (the “Non-Solicitation Period”), Executive will not (x) directly or indirectly, engage, employ or solicit the employment of any person who is then or has been within six (6) months prior thereto, an employee of the Company or any of the Company’s affiliates or predecessors, or (y) request, advise or suggest to any customer or supplier to the Company that such person curtail, cancel or withdraw its business from the Company.

6.2           Confidential Information .  Executive shall not during the Employment Term or at any time thereafter use for Executive’s own purposes, or disclose to or for the benefit of any third party, any trade secret or other confidential information of the Company or any of its affiliates or predecessors (except as may be required by law or in the performance of Executive’s duties hereunder), and Executive will comply with any confidentiality obligations of the

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Company to third parties.  Notwithstanding the foregoing, confidential information shall be deemed not to include information which (i) is or becomes generally available to the public other than as a result of a disclosure by Executive or any other person who directly or indirectly receives such information from Executive or at Executive’s direction or (ii) is or becomes available to Executive on a non-confidential basis from a source which is entitled to disclose it to Executive.

6.3           Company Ownership .  The results and proceeds of Executive’s services hereunder, including, without limitation, any works of authorship resulting from Executive’s services during Executive’s employment with the Company or any of its affiliates or predecessors and any works in progress, shall be works-made-for-hire and the Company shall be deemed the sole owner throughout the universe of any and all rights of whatsoever nature therein, whether or not now or hereafter known, existing, contemplated, recognized or developed, with the right to use the same in perpetuity in any manner the Company determines in its sole discretion without any further payment to Executive whatsoever.  If for any reason any of such results and proceeds shall not legally be a work-for-hire or there are any rights which do not accrue to the Company under the preceding sentence, then Executive hereby irrevocably assigns and agrees to assigns any and all of Executive’s right, title and interest thereto, including, without limitation, any and all copyrights, patents, trade secrets, trademarks and/or other rights of whatsoever nature therein, whether or not now or hereafte