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Exhibit
99.4
DREAMWORKS ANIMATION SKG,
INC.
1000 FLOWER
STREET
GLENDALE, CA
91201
October 25,
2007
Lew Coleman
c/o Munger, Tolles & Olsen
LLP
355 South Grand Avenue
35 th Floor
Los Angeles, CA 90071
Attn: Bob Johnson
Dear Lew:
Reference is made to that
certain executed Employment Agreement, dated as of December 5,
2005, between DreamWorks Animation SKG, Inc., a Delaware
corporation (“Studio” or “Employer”), and
you (the “Prior Agreement”) whereby Studio agreed to
employ you and you agreed to accept such employment upon the terms
and conditions set forth therein. In order to address the
requirements of Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”), the parties now hereby
agree to amend and restate the Prior Agreement in its entirety as
set forth in this agreement (the “Agreement”),
effective as of the date shown above:
1. Term . The
term of your employment commenced on December 5, 2005 (the
“Commencement Date”) and shall continue through
December 31, 2008. This period shall hereinafter be referred
to as the “Employment Term”.
2.
Duties/Responsibilities/Reporting .
a. General . Your
title shall be “President” of Studio. You shall have
such duties and responsibilities as are consistent with the
traditional position of President of publicly traded major
entertainment and media corporations. In addition, you are
currently serving as the Chief Financial Officer of
Studio.
b. Services . During
the Employment Term you shall render your exclusive full time
business services to Studio and/or its divisions, subsidiaries or
affiliates in accordance with the reasonable directions and
instructions of the Chief Executive Officer (“CEO”) of
Studio, all as hereinafter set forth.
c. Reporting . You
shall report only to Jeffrey Katzenberg (“Katzenberg”);
provided that if Katzenberg is not actively involved in the
business of Studio or otherwise incapable of involvement in the
day-to-day business of Studio, including by reason of death or
disability, then you shall report to the individual (who will be
Katzenberg’s successor) designated by the Board of Directors
of Studio
to assume such duties. All other
employees (other than the CEO and the Chairman) of Studio and such
affiliates and subsidiaries as may hereafter be established shall
report solely and directly to you or to you through such other
personnel as you may designate.
3. Exclusivity
. You shall not during the Employment Term perform services for any
person, firm or corporation (hereinafter referred to collectively
as a “person”) without the prior written consent of
Studio and will not engage in any activity which would interfere
with the performance of your services hereunder, or become
financially interested in any other person engaged in the
production, distribution or exhibition of motion pictures or
television programs (including, without limitation, motion pictures
produced for, distributed to or exhibited on free, cable, pay,
satellite and/or subscription television, music and/or
interactive), anywhere in the world. Nothing contained herein shall
prevent you from (i) owning publicly traded minority stock
interests not to exceed five percent (5%), limited partnership
interests or other passive investment interests in businesses
performing any of the aforesaid activities or (ii) serving on
the Board of Directors of the companies listed on Exhibit A
attached hereto.
4. Compensation
.
a. Base Salary . For
all services rendered under this Agreement, Studio will pay you a
yearly base salary at a rate of One Million Two Hundred Fifty
Thousand Dollars ($1,250,000) for each full year of the Employment
Term, payable in accordance with Studio’s applicable payroll
practices (“Base Salary”).
b. Equity-Based
Compensation .
(i) Upon the Commencement
Date, you received, pursuant to the 2004 Omnibus Incentive
Compensation Plan, stock appreciation rights with respect to
Studio’s Class A common stock (“SARs”)
having a grant-date value of $687,500 and restricted shares of
Studio’s Class A common stock (“Restricted
Stock”) having a grant date value of $2,062,500 (the
“Initial Grants”).
(ii) While you remain
employed hereunder, commencing at the end of 2006, in lieu of
receiving a larger base salary than the amount set forth in
Paragraph 4.a. of this Agreement, you will be entitled to
receive annual equity awards of SARs and Restricted Stock (or such
other form of equity-based compensation as the Compensation
Committee of the Board of Directors of Studio (the
“Compensation Committee”) may determine) having an
aggregate grant-date value of $500,000. For the avoidance of doubt,
the initial grant of such annual awards shall be guaranteed and not
subject to further approval by the Compensation Committee, but the
vesting of such SARs and Restricted Stock (or such other form of
equity-based compensation as the Compensation Committee may
determine) shall be subject to vesting conditions.
(iii) You will also be
eligible, while you remain employed hereunder, commencing at the
end of the year 2006 (the amount of the award for 2006 was
determined in the first quarter of 2007), subject to annual
approval by the Compensation Committee, to
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receive annual awards of SARs and
Restricted Stock (or such other form of equity-based compensation
as the Compensation Committee may determine). It is Studio’s
present expectation that such annual awards will have an aggregate
grant-date value, depending on company performance, ranging between
$1,000,000 (bonus target) and $1,750,000 (in the case of superior
company performance). In the event that such awards consist of SARs
and Restricted Stock, they shall be divided, as determined by the
Compensation Committee, between SARs and Restricted Stock. These
annual awards shall be in lieu of annual cash bonuses in the event
the Compensation Committee does not pay cash bonuses to
Studio’s most senior executives; provided that if the
Compensation Committee does elect to pay such cash bonuses in
addition to such annual awards, such awards shall also be in
addition to any cash bonuses granted by the Compensation
Committee.
(iv) In addition, you will be
eligible, while you remain employed hereunder, commencing at the
end of 2006, subject to annual approval by the Compensation
Committee, to receive annual equity incentive awards of SARs and
Restricted Stock (or such other form of equity-based compensation
as the Compensation Committee may determine). It is Studio’s
present expectation that such annual awards will have an annual
aggregate grant-date value targeted at $2,750,000. In the event
that such awards consist of SARs and Restricted Stock, they shall
be divided, as determined by the Compensation Committee, between
SARs and Restricted Stock.
(v) All SARs and Restricted
Stock (and any other 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) (a) for the grants under Paragraph 4.b(ii) and
(iii) become vested, exercisable (if applicable) and
nonforteitable twenty-five percent (25%) per year for a period
of four (4) years and (b) for the grant under Paragraph
4.b(iv) become fully vested, exercisable (if applicable) and
nonforfeitable within a period not to exceed four (4) years
from the date of any grant in a manner determined by the
Compensation Committee, and will be contingent on both the
continuing performance of services to Studio (subject to Paragraphs
4.b(vi), 9, 10, 11, 12 and 13) and the achievement of performance
goals as established by the Compensation Committee from time to
time, and (z) otherwise be subject to such terms and
conditions as may be set forth in the applicable equity
compensation plan of Studio (each such plan, a “Plan”)
or determined by the Compensation Committee from time to
time.
(vi) Following the expiration
of the Employment Term, 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 become fully vested, exercisable (if applicable)
and nonforfeitable. For purposes of this Agreement, an award will
be deemed to have vested when it is no longer subject to a
substantial risk of forfeiture (within the meaning of Treasury
Regulation Section 1.409A-1(d)). With respect to awards that
are subject to time-based vesting criteria, the full amount of such
awards will vest on December 31, 2008. With respect to
equity-based compensation awards that are subject to
performance-based vesting criteria, such awards will continue to
remain subject to the achievement of performance goals, as
provided
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pursuant to the Plan and the agreements
evidencing such awards and to such other terms and conditions as
may be determined by the Compensation Committee at the time of the
grant, provided that, in the event that a change of control (as
defined in Paragraph 25.a) occurs prior to the end of the
applicable performance period, the vesting of such awards shall be
determined in accordance with Paragraph 25.a. Subject to the
foregoing, all SARs and any similar equity-based awards will remain
exercisable for the balance of the term of the grant. In the case
of restricted stock units that are subject to time-based vesting
criteria, such awards will be settled within thirty (30) days
following December 31, 2008. In the case of restricted stock
units that are subject to performance-based vesting criteria,
except as otherwise set forth in Paragraph 25, such awards
will be settled on the seventieth (70th) day after the date
that such awards become vested.
5. Benefits .
In addition to the foregoing, during the period of your employment
with Studio hereunder, you shall be entitled to participate in such
other, medical, dental and life insurance, 401(k), pension and
other benefit plans as Studio may have or establish from time to
time for its most senior executives. During the Employment Term,
unless earlier terminated as set forth below, you shall be entitled
to utilize the Studio corporate jet for business-related air travel
(subject to Studio policy), you shall be entitled to coverage in
accordance with Studio’s standard leave of absence policy and
you shall be entitled to vacation days and/or personal days to be
taken subject to the demands of Studio (as determined by Studio)
and consistent with the amount of days taken by other senior level
executives; provided, however, no vacation time will be accrued
during the Employment Term. The foregoing, however, shall not be
construed to require Studio to establish any such plans or to
prevent the modification or termination of such plans once
established, and no such action or failure thereof shall affect
this Agreement.
6. Business
Expenses . Studio shall reimburse you for business expenses
on a regular basis in accordance with its policy regarding the
reimbursement of such expenses for executives of like stature to
you (including travel, at Studio’s request, which, in
accordance with company policy, is currently first class, a car
and/or cellular phone and including the reimbursement or direct
payment of business phone expenses on a regular basis in accordance
with Studio’s policy regarding the reimbursement or payment
of such expenses for executives of like stature to you). Expenses
shall be eligible for reimbursement hereunder to the extent that
they are incurred by you during the period of your employment with
Studio pursuant to this Agreement. All reimbursable expenses shall
be reimbursed to you as promptly as practicable and in any event
not later than the last day of the calendar year after the calendar
year in which the expenses are incurred, and the amount of expenses
eligible for reimbursement during any calendar year will not affect
the amount of expenses eligible for reimbursement in any other
calendar year. During the period of your employment with Studio
hereunder, Studio will provide you with a monthly car allowance of
One Thousand Dollars ($1,000), which allowance shall be paid to you
on a monthly basis and shall be administered in accordance with
Studio’s then-current policy for similarly situated
executives.
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7.
Indemnification . 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, directly or indirectly,
in whole or in part out of any alleged or actual conduct, action or
inaction on your part in or in connection with or related in any
manner to your status as an employee, agent, officer, corporate
director, member, manager, shareholder, partner of, or your
provision of services to, Studio or any of its affiliated entities
or any entities 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 reasonable 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). Any tax
gross-up payments that you become entitled to receive pursuant to
this Paragraph 7 will be paid to you (or to the applicable taxing
authority on your behalf) as promptly as practicable and in any
event not later than the last day of the calendar year after the
calendar year in which you remit the related taxes.
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.
b. Studio Ownership .
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 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
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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 that 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. Return of Property
. All documents, data, recordings, or other property, whether
tangible or intangible, including all information stored in
electronic form, obtained or prepared by or for you and utilized by
you in the course of your employment with Studio or any of its
affiliates shall remain the exclusive property of Studio. In the
event of the termination of your employment for any reason, and
subject to any other provisions hereof, Studio reserves the right,
subject to Paragraph 27.b, to the extent required by law, and in
addition to any other remedy Studio may have, to deduct from any
monies otherwise payable to you the following: (i) the full
amount of any specifically determined debt you owe to Studio or any
of its affiliates at the time of or subsequent to the termination
of your employment with Studio, and (ii) the value of Studio
property which you retain in your possession after the termination
of your employment with Studio following Studio’s written
request for such item(s) return and your failure to return such
items within thirty (30) days of receiving such notice. In the
event that the law of any state or other jurisdiction requires the
consent of an employee for such deductions, this Agreement shall
serve as such consent.
d. 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,
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.
9. Incapacity
.
a. In the event you are
unable to perform the services required of you hereunder as a
result of a physical or mental disability and such disability shall
continue for a period of ninety (90) or more consecutive days
or an aggregate of four (4) or more months during any twelve
(12) month period during the Employment Term, Studio shall
have the right, at its option and subject to applicable state and
federal law, to terminate your employment hereunder, and Studio
shall only be obligated to pay you (a) for a period commencing
on the termination of your employment by Studio and ending on the
earlier of the expiration of the Employment Term and the second
anniversary of the termination of your employment, payments at a
rate equal to 50% of your rate of Base Salary, and, except as
otherwise provided in this Paragraph 9.a, such payments will be
payable in accordance with Studio’s regular payroll
practices
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applicable to similarly situated active
employees, and (b) any additional compensation (including,
without limitation, any grants of equity-based compensation made to
you on or prior to the date of termination (it being understood you
will not be entitled to receive any grants of equity-based
compensation thereafter) as determined pursuant to Paragraph 9.b,
car allowance which has accrued prior to your termination, and
expense reimbursement for expenses incurred prior to your
termination) earned by you prior to the termination of your
employment. Notwithstanding the foregoing sentence, you further
will be entitled to continuation of medical, dental, life
insurance, car allowance, financial counseling and other benefits
(the “Continued Benefits”) for a period of twelve
(12) months after termination of your employment pursuant to
this paragraph (but not to exceed the end of the then current
Employment Term). Except as specifically permitted by
Section 409A of the Code and the regulations thereunder as in
effect from time to time (collectively, hereinafter, “Section
409A”), the Continued Benefits provided to you during any
calendar year will not affect the Continued Benefits to be provided
to you in any other calendar year. In the case of car allowance
payments, such payments will be equal to your monthly car allowance
at the time of termination of your employment and will be made to
you in equal monthly payments during such period in accordance with
Studio’s regular practice of paying a monthly car allowance
to similarly situated active employees. Whenever compensation is
payable to you hereunder, during or with respect to a time when you
are partially or totally disabled and such disability (except for
the provisions hereof) would entitle you to disability income or to
salary continuation payments from Studio according to the terms of
any plan now or hereafter provided by Studio or according to any
policy of Studio in effect at the time of such disability, the
compensation payable to you hereunder shall be offset on a
dollar-for-dollar basis by any such disability income or salary
continuation and shall not be in addition thereto. If disability
income is payable directly to you by an insurance company under an
insurance policy paid for by Studio, the compensation payable to
you hereunder shall be reduced on a dollar-for-dollar basis by the
amounts paid to you by said insurance company and shall not be in
addition thereto.
b. Unless otherwise specified
in the Plan or in the agreement evidencing the grant, in each case
as of the date of the grant, after termination of employment
pursuant to Paragraph 9.a, your grants of equity-based
compensation will be determined as follows. With respect to grants
having performance-based vesting criteria, the amount of such award
that is eligible to vest will be determined after the end of the
performance period specified in the grant, or satisfaction of such
other criteria pursuant to the Plan, subject to the applicable
performance or other criteria, as if you had continued to remain
employed with Studio throughout such perfor
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