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Exhibit
10.51
DREAMWORKS ANIMATION SKG,
INC.
1000 FLOWER
STREET
GLENDALE, CA
91201
December 13,
2007
William Damaschke
c/o Bloom Hergott Diemer Rosenthal
LaViolette & Feldman, LLP
150 S. Rodeo Drive, 3rd Floor
Beverly Hills, CA 90212
Attn: Alan Hergott
Dear Bill:
Upon the Commencement Date
(as defined below) DreamWorks Animation SKG, Inc.
(“Studio”) agrees to employ you and you agree to accept
such employment upon the terms and conditions set forth in this
agreement (“Agreement”). Upon Studio’s receipt of
executed copies (in form and substance satisfactory to Studio) of
this Agreement, this Agreement shall supersede the executed
Employment Agreement, dated as of October 1, 2002 (the
“Prior Agreement”) between Studio and you, and the
Prior Agreement shall be deemed terminated effective as of
December 13, 2007. Studio shall have no obligation under this
Agreement unless and until Studio has received from Employee a
fully executed copy of this Agreement (in form and substance
satisfactory to Studio).
1. Term . The
term of your employment hereunder shall commence on
December 13, 2007 (the “Commencement Date”) and
shall continue until December 31, 2012. This period shall
hereinafter be referred to as the “Employment
Term.”
2.
Duties/Responsibilities .
a. General . Your
title shall be “Co-President of Production and President of
Live Theatrical” 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 Operating Officer of Studio, all as
hereinafter set forth. Employee shall report to the Chief Operating
Officer of Employer (currently, Ann Daly). Notwithstanding the
foregoing, Studio may not require you to render services on a
permanent basis outside Los Angeles County without your consent. If
Studio moves its primary operations outside of Los Angeles County
and you do not consent to render permanent services at such new
location, then you may elect to terminate this
Agreement.
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 Studio’s 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 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.
4. Compensation
.
a. Base Salary . For
all services rendered under this Agreement, Studio will pay you a
yearly base salary at a rate of Nine Hundred Thousand Dollars
($900,000.00) for each full year of the Employment Term, payable in
accordance with Studio’s applicable payroll practices
(“Base Salary”). Within 15 days following execution of
this Agreement, you shall receive a cash payment (subject to
applicable withholding) of $447,692.30 as a signing
bonus.
b. Cash Incentive and
Equity-Based Compensation .
(i) You will be eligible,
while you remain employed hereunder, subject to annual approval by
the Compensation Committee, to receive an annual cash bonus award
pursuant to the terms of the Studio’s short term incentive
plan. It is Studio’s present expectation that such annual
awards will have an aggregate grant-date value, depending on
company performance, ranging between $400,000 (bonus target) and
$800,000 (in the case of superior company performance).
(ii) In addition, beginning
in 2008 you will be eligible, while you remain employed hereunder,
subject to annual approval by the Compensation Committee of the
Board of Directors of Studio (the “Compensation
Committee”), to receive annual equity incentive awards
consistent with other senior executives subject to Compensation
Committee approval. It is Studio’s present expectation that
such annual awards will have an annual aggregate grant-date value
targeted at $2,500,000.
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. In addition, Studio shall
cover the cost of personal financial consulting services to you.
During the Employment Term, unless earlier terminated as set forth
below, you shall be entitled to coverage in accordance with
Studio’s standard leave of absence policy and 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
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
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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.
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 entity 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 be 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
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.
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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
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 below, 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 and financial counseling
benefits (collectively, 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 Internal Revenue Code of 1986, as
amended (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
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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. With respect to any Continued Benefits for which
you may become eligible under this Paragraph 9.a or otherwise under
this Agreement, if requested by Studio during any continuation
period you shall elect to treat such Continued Benefits as being
provided pursuant to the applicable provisions of the Consolidated
Omnibus Budget Reconciliation Act of 1986 (“COBRA”) or
any similar applicable federal or state statute. 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 reduced 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 applicable equity compensation plan of Studio (each such
plan, a “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. 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 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 performance period. With
respect to grants having time-based vesting criteria, the full
amount of such award will be eligible to vest. A ratable portion of
the amount of each award that is eligible to vest will become
vested by multiplying such amount by a fraction, the numerator of
which is the sum of (i) your actual period of service in
months through the date of termination plus (ii) the lesser of
(A) twelve (12) months or (B) 50% of the remaining
Employment Term in months determined as of the date of termination
(but in no event will the numerator exceed the denominator), and
the denominator of which is the total performance period in months
(for grants having performance-based vesting criteria) or the total
vesting period in months (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 proceeding 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 stock options and any
similar equity-based awards will remain exercisable for the
remaining term of the grant. 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 (70 th ) day after the date that such awards become vested. With
respect to restricted stock units that are subject to time-based
vesting criteria, such awards will be settled within thirty
(30) days following your termination of employment.
10. Death . If
you die prior to the end of the Employment Term, this Agreement
shall be terminated as of the date of death and your beneficiary or
estate shall be entitled to receive (a) your Base Salary
accrued up to and including the date of death and, thereafter, for
a period commencing
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on such date and ending on the earlier
of the expiration of the Employment Term and the first anniversary
of such date, continued Base Salary payable in accordance with
Studio’s regular payroll practices applicable to similarly
situated active employees, (b) equity-based compensation to be
determined in the same manner and at the same time as provided in
Paragraph 9.b, under and in accordance with any Plan, and
(c) all other benefits pro-rated up to the date on which the
death occurs.
11. Termination for
Cause . Studio shall have the right to terminate this
Agreement at any time for cause. As used herein, the term
“cause” shall mean (i) misappropriation of any
material funds or property of Studio or any of its related
companies; (ii) failure to obey reasonable and material orders
given by the Chief Operating Officer of Studio or by the board of
directors of Studio (iii) any material breach of this
Agreement by you; (iv) conviction of or entry of a plea of
guilty or nolo contendre to a felony or a crime involving
moral turpitude; (v) any willful act, or failure to act, by
you in bad faith to the material detriment of Studio; or
(vi) material non-compliance with established Studio policies
and guidelines (after which you have been informed in writing of
such policies and guidelines and you have failed to cure
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