Exhibit 99.2
DREAMWORKS ANIMATION SKG,
INC.
1000 FLOWER STREET
GLENDALE, CA 91201
As of December 7,
2006
Mr. Roger A.
Enrico
100 Crescent Court
Suite 700
Dallas, TX 75201
Dear Roger:
Reference is made to that certain
executed Employment Agreement dated as of October 8, 2004 as
amended by the waiver dated December 5, 2005 (collectively,
the “Prior Agreement”) between DreamWorks Animation
SKG, Inc., a Delaware corporation (“Studio”), and you,
whereby Studio agreed to employ you and you agreed to accept such
employment upon the terms and conditions set forth therein. The
parties hereby agree to amend and restate the Prior Agreement in
its entirety as follows effective as of the date shown above (the
“Agreement”):
1. Term . The term of your
employment commenced on October 24, 2004 (the
“Commencement Date”) and shall continue for a five
(5) year period up to and including October 23, 2009.
This period shall hereinafter be referred to as the
“Employment Term”.
2. Duties/Responsibilities
.
a. General. Your title shall be
“Chairman of the Board” of Studio. You shall have such
duties and responsibilities as are consistent with the traditional
positions of Chairman of the Board of major corporations. In
addition, you will be involved in corporate strategic planning,
marketing strategy, management of promotional partnerships,
succession planning and employee development and will oversee
matters related to corporate governance and compliance with the
Sarbanes-Oxley Act of 2002. You shall also consult with the senior
executive officers of Studio with respect to the operations,
overall direction and projects of Studio.
b. Services. Your professional
services shall be non-exclusive to Studio. During the Employment
Term you shall devote approximately an average of up to two
(2) working days of services per week of your business time
and efforts to the affairs of Studio.
3. Non-Compete . To the
extent allowed under California law, you shall not perform services
for any person, firm or corporation and will not engage in any
activity which would be directly competitive with Studio during the
Employment Term. Nothing contained herein shall prevent you from
owning directly or indirectly up to 5% of the equity securities of
a publicly held company or a limited partnership, or from owning
directly or
indirectly up to 5% of a passive equity interest
in a private company, even if such company or partnership does
compete with Studio’s business.
4. Compensation .
a. Base Salary. For all services
rendered under this Agreement, Studio will pay you a base salary at
an annual rate of One Dollar ($1.00) and, subject to the approvals
and conditions described below, the equity-based compensation
described in Paragraph 4.b below.
b. Equity-Based
Compensation.
(i) You will be eligible, provided
you remain employed hereunder (subject to Paragraphs 9, 10, 11, 12
and 13), to receive, subject to annual approval by the Compensation
Committee of the Board of Directors of Studio (the
“Compensation Committee”), an annual equity incentive
award on each anniversary date of the Commencement Date until you
have been granted a total of four (4) such annual additional
equity incentive awards since the Commencement Date, reduced by the
waiver described in the next-to-last sentence of this paragraph (it
being understood that the actual granting of the award may occur
after each such anniversary date by up to five (5) months). It
is Studio’s present expectation that such annual awards will
have an annual aggregate grant-date value targeted at $2,000,000.
In the event that such awards consist of options and restricted
stock, they shall be divided, as determined by the Compensation
Committee, between options and restricted stock. In its sole
determination, the Compensation Committee may elect to substitute a
cash payment of $2,000,000 (“Cash Payment”) in lieu of
any annual equity incentive award referenced in this subparagraph,
provided payment of the Cash Payment to you will occur no later
than the actual granting of such award would have occurred. For
purposes of determining your entitlement, if any, under Paragraphs
9, 10, 11, 12 and 13 to the equity-based awards set forth in this
Paragraph 4.b(i), to the extent your employment was terminated
after you became eligible for an award approved by the Compensation
Committee but prior to the actual granting of such award, then you
shall be entitled to receive such award or the substituted Cash
Payment. You hereby acknowledge that effective as of
December 5, 2005 you waived your right to receive an annual
equity award (and your right to receive a cash payment in lieu of
such equity award) for the fiscal year ended December 31, 2005
with an aggregate grant date value of $2,000,000 under this
Paragraph 4.b(i). In addition, you waived your right to terminate
the Prior Agreement for “good reason” pursuant to
Paragraph 13 for the failure to make any of the annual equity
incentive awards in accordance with this Paragraph 4.b(i) and for
the Studio’s failure to make a cash payment in lieu of an
equity grant for the fiscal year ended December 31,
2005.
(ii) All equity-based awards
referred to in this Paragraph 4.b will (x) be valued using a
method or methods (including where appropriate a Black-Scholes or
other fair value method) as determined by the Compensation
Committee from time to time (y) become fully vested,
exercisable (if applicable) and nonforfeitable within a period not
to exceed four (4) years from the date of grant in a manner
determined by the Compensation Committee, contingent on both the
continuing performance of services to Studio (subject to Paragraphs
9, 10, 11, 12 and 13) and, in the discretion of the Compensation
Committee, the
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achievement of performance goals as
established by the Compensation Committee from time to time (it
being understood that (A) the period of time required for
achievement of any such performance goal may not exceed four
(4) years from the date of the grant of the applicable award
and (B) the performance goals and performance periods will be
no more burdensome than the performance goals and the performance
periods for applicable compensation awards made approximately
contemporaneously to the CEO, COO and the CFO of Studio), and
(z) otherwise be subject to such terms and conditions as may
be set forth in the 2004 Omnibus Incentive Compensation Plan (the
“Plan”) or determined by the Compensation Committee
from time to time and set forth or referred to in the agreement(s)
evidencing such award or awards.
(iii) Following the expiration of
the Employment Term (i.e., five (5) years after the
Commencement Date), but only if your employment hereunder has not
been terminated earlier, you will not be required to perform any
additional services to Studio in order for all of the equity-based
compensation awards granted to you during the Employment Term to be
fully vested, exercisable (if applicable) and nonforfeitable;
provided that such awards will continue to remain subject to the
achievement of performance goals (if any), as provided pursuant to
the Plan and to such other terms and conditions as may be
determined by the Compensation Committee and set forth or referred
to in the agreement(s) evidencing such award or awards; and
provided further that, subject to the foregoing, all options and
any similar equity-based awards will remain exercisable for the
balance of the term of the grant.
(iv) At all times, provided Studio
remains a public company, Studio will maintain registrations on
Form S-8 or any successor form under the Securities Act of 1933, as
amended (“Securities Act”), of shares of common stock
of Studio that may be received by you pursuant to equity incentive
awards referred to in this Paragraph 4.b to the extent such form is
applicable to such shares. It is understood that even though the
shares are registered at the time of issuance to you, such shares
will be subject to (a) any restrictions that apply to
“affiliates” under Rule 144 of the Securities Act,
(b) any blackout periods and other Studio policies relating to
directors and senior officers, and (c) any other limitations
on resale under applicable law.
5. Benefits . You acknowledge
that you will not be entitled to participate in Studio’s
benefit plans.
6. Business Expenses . During
the Employment Term, you shall be reimbursed for such reasonable
travel and other expenses incurred in the performance of your
duties hereunder as are customarily reimbursed for Chairmen of the
Board of publicly traded major motion picture, television and
record companies. Studio shall reimburse all of your costs and
expenses (including reasonable legal fees) in connection with the
preparation, review and negotiation of this Agreement and any
document, agreement or arrangement contemplated by this Agreement
or otherwise entered into by you in connection with the
commencement of employment with Studio. You shall be entitled to
first class travel expenses, including hotels in accordance with
Studio’s policy for its senior-most executives. In addition,
you shall be entitled to utilize private aircraft for
business-related air travel in accordance with the Studio’s
private aircraft policy.
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7. Indemnification
.
a. You shall be fully indemnified
and held harmless by Studio to the fullest extent permitted by law
from any claim, liability, loss, cost or expense of any nature
(including attorney’s fees of counsel selected by you,
judgments, fines, any amounts paid or to be paid in any settlement,
and all costs of any nature) incurred by you (all such
indemnification to be on an “after tax” or
“gross-up” basis) which arises in whole or in part out
of any alleged or actual action or conduct on your part in or in
connection with or related in any manner to your services (whether
as an employee, agent, officer, corporate director, member,
manager, shareholder, partner, or in any other capacity) to Studio
or any entity owned or controlled by Studio, or which owns or
controls Studio, or as to which you are providing services on
behalf of Studio or which may be doing business with Studio. To the
maximum extent allowed by law, all amounts to be indemnified
hereunder including attorneys’ fees shall be promptly
advanced by Studio until such time, if ever, as it is determined by
final decision pursuant to Paragraph 24 below that you are not
entitled to indemnification hereunder (whereupon you shall
reimburse Studio for all sums theretofore advanced).
b. Studio will cover you under
directors and officers liability insurance during and, while
potential liability exists, after the Employment Term in the same
amount and to the same extent, if any, as Studio covers its other
officers and directors.
8. Covenants .
a. Confidential Information. You
agree that you shall not, during the Employment Term or at any time
thereafter, use for your own purposes, or disclose to or for any
benefit of any third party, any trade secret or other confidential
information of Studio or any of its affiliates (except as may
required by law or in the performance of your duties hereunder
consistent with Studio’s policies) and that you will comply
with any confidentiality obligations of Studio known by you to a
third party, whether under agreement or otherwise. 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
you or any other person who directly or indirectly receives such
information from you or at your direction or (ii) is or
becomes available to you on a non-confidential basis from a source
which you reasonably believe is entitled to disclose it to you.
Studio may waive application of the foregoing restrictions and
obligations in its discretion from time to time.
b. Results and Proceeds. The results
and proceeds of your services hereunder, including, without
limitation, any works of authorship resulting from your services
during your employment and any works in progress, shall be
works-made-for-hire and Studio 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 Studio determines in its sole
discretion without any further payment to you whatsoever. If, for
any reason, any of
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such results and proceeds shall not legally be a
work-for-hire and/or there are any rights which do not accrue to
Studio under the preceding sentence, then you hereby irrevocably
assign and agree to assign any and all of your 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 hereafter
known, existing, contemplated, recognized or developed by Studio,
and Studio shall have the right to use the same in perpetuity
throughout the universe in any manner Studio may deem useful or
desirable to establish or document Studio’s exclusive
ownership of any and all rights in any such results and proceeds,
including, without limitation, the execution of appropriate
copyright and/or patent applications or assignments. To the extent
you have any rights in the results and proceeds of your services
that cannot be assigned in the manner described above, you
unconditionally and irrevocably waive the enforcement of such
rights. This Paragraph 8.b is subject to, and shall not be deemed
to limit, restrict, or constitute any waiver by Studio of any
rights of ownership to which Studio may be entitled by operation of
law by virtue of Studio or any of its affiliates being your
employer.
c. Promise Not To Solicit. You will
not during the period of the Employment Term or for the period
ending one (1) year after the earlier of expiration of the
Employment Term or your termination hereunder, without the prior
written consent of Studio, induce or attempt to induce any
employees, exclusive consultants, exclusive contractors or
exclusive representatives of Studio (or those of any of its
affiliates) to stop working for, contracting with or representing
Studio or any of its affiliates or to work for, contract with or
represent any of Studio’s (or its affiliates’)
competitors. Nothing in this Agreement will prevent you from
providing references for any employee.
9. Incapacity .
a. In the event you become totally
medically disabled and cannot substantially perform your duties at
any time during the Employment Term, the Board of Directors may at
any time after such disability has continued for ninety
(90) consecutive days require Studio to give you written
notice that it intends, subject to applicable state and federal
law, to suspend this Agreement. Upon receipt of such notice, prior
to any suspension hereunder, you shall be entitled to an expedited
arbitration to determine whether or not you are medically disabled
and have been disabled for at least ninety (90) consecutive
days, provided that you request such arbitration within ten
(10) business days of receipt of such notice from Studio. If
you do not so request such an arbitration, or if the arbitrator
rules that you are so disabled, you shall be placed on a
“medical payroll”. You will remain employed for the
first twenty-six (26) weeks of consecutive absence commencing
at the end of the later of the ten (10) day period or upon the
conclusion of the arbitration. Thereafter, if you are not able to
resume your duties hereunder, your employment will be
terminated.
b. Upon termination of employment as
provided in Paragraph 9.a, you will be entitled to retain all
grants of equity-based compensation made to you on or prior to the
date of termination and to receive and retain any approved grants
of equity-based compensation (or substituted Cash Payment) for
which you have become eligible but which have not been made, but
will not be entitled to receive any additional grants of
equity-based compensation
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thereafter. Unless otherwise specified in the
Plan or in the agreement evidencing the grant, after termination of
employment your grants of equity-based compensation will be
determined as follows. With respect to grants having
performance-based vesting criteria, your rights to receive or
exercise the awards provided by the grants will be determined after
the end of the performance period, if any, specified in the grant,
subject to the applicable performance criteria, if any, as if you
had continued to remain employed with Studio throughout such
performance period. With respect to grants having time-based
vesting criteria, your rights to receive or exercise the awards
provided by the grants will be determined promptly following your
termination of employment. You will be entitled to receive or
exercise a ratable portion of the amount of each award determined
in the preceding two sentences, calculated by multiplying such
amount by a fraction, the numerator of which is the sum of
(i) your actual period of service through the date of
termination plus (ii) one (1) year (but in no event will
the numerator exceed the denominator) and the denominator of which
is the total performance period (for grants having
performance-based vesting criteria) or the total vesting period
(for grants having time-based vesting criteria) specified in the
grant. To avoid any double-counting, any part of any equity-based
compensation award that has vested in accordance with the terms of
the applicable award agreement shall be credited against any part
of such award that you shall be entitled to receive or exercise
pursuant to the determination set forth in the preceding sentence.
The balance of such awards will be forfeited. Subject to this
Paragraph 9.b and to the other terms and conditions of the
grants, all Options and any similar equity-based awards will remain
exercisable for the remaining term of the grant.
10. Death .
a. If you die prior to the end of
the Employment Term, this Agreement shall be terminated as of the
date of death.
b. Upon termination of employment as
provided in Paragraph 10.a, the rights to equity-based
compensation of your estate or beneficiary will be determined in
the same manner and at the same time as provi
