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EXECUTIVE EMPLOYMENT AGREEMENT

Employment Agreement

EXECUTIVE EMPLOYMENT AGREEMENT | Document Parties: MOVIE GALLERY INC | MOVIE GALLERY US, LLC You are currently viewing:
This Employment Agreement involves

MOVIE GALLERY INC | MOVIE GALLERY US, LLC

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Title: EXECUTIVE EMPLOYMENT AGREEMENT
Governing Law: Alabama     Date: 10/17/2007
Industry: Recreational Activities     Sector: Services

EXECUTIVE EMPLOYMENT AGREEMENT, Parties: movie gallery inc , movie gallery us  llc
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EXECUTIVE EMPLOYMENT AGREEMENT

BETWEEN

MOVIE GALLERY US, LLC

AND

THOMAS D. JOHNSON, JR.

DATED

SEPTEMBER 22, 2007

 


TABLE OF CONTENTS

EXECUTIVE EMPLOYMENT AGREEMENT

 

PARAGRAPH    PAGE NO.
    1.    Background    3
    2.    Definitions    3
    3.    Employment    6
    4.    Responsibilities    6
    5.    Stock Compensation and Benefits; Reimbursements    6
    6.    Term; Termination    8
    7.    Proprietary Information    9
    8.    Covenant Not To Compete    10
    9.    Non-Disparagement    10
    10.    Injunctive Relief    10
    11.    Severability    10
    12.    Arbitration    11
    13.    Attorneys’ Fees    11
    14.    Headings    11
    15.    Notices    11
    16.    General Provisions    11
    17.    Entire Agreement    11

 

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EXECUTIVE EMPLOYMENT AGREEMENT

This EXECUTIVE EMPLOYMENT AGREEMENT (the “Agreement”) is entered into this 22nd day of September, 2007 by and between MOVIE GALLERY US, LLC, a Delaware limited liability company, with its principal offices at 900 West Main Street, Dothan, Alabama 36301 (the “Company”), and THOMAS D. JOHNSON, JR. (“Employee”), whose address is XXXXXXXXXXXXXXXX, and shall be effective on the Effective Date, as defined below.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements of the parties hereto, the parties do hereby covenant and agree as follows:

1. Background.

A. The Company is engaged in the Home Entertainment Business (as hereinafter defined).

B. The Company desires to secure and retain the services of Employee in the office of Executive Vice President and Chief Financial Officer and such services are considered by the Company to be valuable with regard to the Home Entertainment Business.

C. Employee is currently employed with the Company and desires to continue his employment with the Company, subject to and in accordance with the terms and conditions set forth herein.

2. Definitions.

As used in this Agreement, the following terms shall have the meaning as set forth below, and the parties hereto agree to be bound by the provisions hereof:

A. Area means the geographic area of the United States, Canada and Mexico, and such other geographic areas in which operations are performed, supervised, or assisted in by Employee on behalf of the Company or in which the Company operates, both as of the date hereof and as are anticipated to be conducted throughout the Term.

B. Board of Directors means the Board of Directors of the Company.

C. Change of Control means the occurrence of any of the following events:

(i) Merger or consolidation where the Company is not the consolidated, continuing or surviving company;

(ii) Transfer of all or substantially all of the assets or stock of the Company; or

 

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(iii) Change in control of the Company of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934 as in effect on the date thereof, and any person or persons acting in concert (as such term is used in Section 13(d) and 14(d)(2) of the Exchange Act) is or becomes the beneficial holder directly or indirectly of securities of the Company representing fifty percent (50%) or more of the combined voting power of Company’s then outstanding securities.

D. Chief Executive Officer means the Chief Executive Officer of the Company from time to time.

E. Company means Movie Gallery US, LLC, its parent corporation, Movie Gallery, Inc., and their respective subsidiaries and successors.

F. Constructive Termination means a separation from service with the Company during the Term due to Employee’s resignation within a period of two years after the occurrence of one of the following without Employee’s consent: (i) a material diminution in Employee’s base salary or target annual bonus, (ii) a material diminution in Employee’s authority, duties or responsibilities from those in which Employee was engaged as Executive Vice President and Chief Financial Officer of the Company on the Effective Date, (iii) a material change in the primary geographic location at which Employee provides services to the Company, or (iv) any material breach by the Company of this Agreement; provided, however that any such event shall constitute Constructive Termination only if (i) Employee provides initial notice of the Constructive Termination event to the Company within 90 days after the date of the event giving rise to Constructive Termination and (ii) the Company fails to cure the event giving rise to Constructive Termination within 30 days after its receipt of Employee’s initial notice of such event.

G. Effective Date means the date set forth above.

H. Home Entertainment Business means the business of renting and/or selling movies, games and other entertainment content, whether delivered, provided and/or displayed via a physical retail store, kiosk or vending machine, data transmission, the Internet, direct mail, or through any other form of display or delivery system (whether now know or developed hereafter, whether such system involves the delivery of a physical or tangible object and including any other technological evolutions thereof).

I. Initial Term means the basic term of this Agreement, which shall be twelve (12) months, beginning on the Effective Date and ending on the date which is twelve (12) months following the Effective Date.

J. Permanent Disability means a physical or mental condition which renders Employee incapable of performing his regular duties hereunder for a period of one hundred twenty (120) consecutive days. In the event of any disagreement between Employee and the Company as to whether Employee is suffering from Permanent Disability, the determination of Employee’s Permanent Disability shall be made by one or more board certified licensed physicians practicing the specialty of medicine applicable to Employee’s disorder in accordance with the provisions of this Subsection J. If either the Company or Employee desires to initiate the procedure provided in this Section, such party (the “Initiating Party”) shall deliver written notice to the other party (the “Responding Party”) in accordance with the provisions of this Agreement specifying that the Initiating Party desires to proceed with a

 

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medical examination and the procedures specified in this Section. Such notice shall include the name, address and telephone number of the physician selected by the Initiating party (the “Disability Examination Notice”). If the Responding Party fails within thirty (30) days after the receipt of the Disability Examination Notice to designate a physician meeting the standards specified herein, the physician designated by the Initiating Party in the Disability Examination Notice shall make the determination of Permanent Disability as provided in this Section. If the Responding Party by written notice notifies the Initiating Party within thirty (30) days of the receipt by the Responding Party of the Disability Examination Notice by notice specifying the physician selected by the Responding Party for purposes of this Section, then each of the two physicians as so designated by the respective parties shall each examine Employee. Examinations shall be made by each such physician within thirty (30) days of such physician’s respective designation. Each physician shall render a written report as to whether Employee is, in such physician’s opinion, suffering Permanent Disability. If the two physicians agree on the status of Employee for purposes of this Section, such determination shall be conclusive and dispositive for all purposes of this Section. If the two physicians cannot agree, the two physicians shall jointly select a third physician meeting the standards specified in this Section within thirty (30) days after the later report of the two physicians is submitted. The third physician shall render a written report on the status of Employee within thirty (30) days of selection and such report shall be dispositive for purposes of this Section. For purposes of this Subsection J, Employee agrees that he shall promptly submit to such examinations and tests as such physicians shall reasonably request for purposes of making a determination of Permanent Disability as provided herein. Failure or refusal of the Company to designate a licensed physician to make a determination of Permanent Disability as required in accordance with this Section or of Employee to submit to the examination as required by this Section shall constitute a conclusive admission by the Company or Employee, as appropriate, that Employee is suffering from a Permanent Disability as provided herein.

K. Renewal Term means the period, if any, following the Initial Term during which the Agreement is extended as set forth in Section 6B.

L. Severance Amount shall have the meaning as set forth in Section 5C.

M. Term means the Initial Term and any Renewal Term.

N. Termination Date means the following: (a) with respect to Termination With Cause, the date the Company notifies Employee of the actions giving rise to such termination and the termination of this Agreement based thereon; (b) with respect to the death of Employee, the date of his death; (c) with respect to Termination Without Cause, the date on which the Company gives Employee notice of Termination Without Cause; (d) with respect to Voluntary Termination, the date on which Employee unilaterally terminates his employment relationship with the Company; (e) with respect to the Permanent Disability of Employee, the date Employee is determined to be suffering from Permanent Disability, as provided in Subsection 2J; and (f) with respect to Constructive Termination, the date on which Constructive Termination occurs as provided in Subsection 2F.

O. Termination With Cause means the termination of this Agreement and Employee’s separation from service with the Company during the Term, only for the following:

(i) Theft or embezzlement with regard to material property of the Company;

 

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(ii) Criminal conviction punishable by imprisonment;

(iii) Material breach by Employee of any of his duties or obligations under this Agreement; or

(iv) Gross insubordination.

P. Termination Without Cause means a termination by the Company of this Agreement and Employee’s separation from service with the Company during the Term which is not a result of Termination With Cause, a Voluntary Termination or a Constructive Termination, including the expiration of the Term as a result of the Company electing not to renew this Agreement at the end of the Initial Term or any Renewal Term.

Q. Triggering Event means Employee’s separation from service with the Company during the Term due to (i) a Termination Without Cause or (ii) a Constructive Termination.

R. Voluntary Termination means unilateral termination by Employee of his employment with the Company prior to the end of the Term and in the absence of a Triggering Event, or as a result of Employee electing not to renew this Agreement at the end of the Initial Term or any Renewal Term. Notice by Employee to the Company of a breach by the Company of its obligations under this Agreement pursuant to Section 2F shall not constitute a Voluntary Termination for purposes of this Agreement.

3. Employment. The Company agrees to employ Employee in the office of Executive Vice President and Chief Financial Officer


 
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