EXHIBIT 10.2
 

SEVERANCE AGREEMENT

    THIS SEVERANCE AGREEMENT is made and entered into as of the 10th day of
September 2010, by and between Cinedigm Digital Cinema Corp., a Delaware
corporation (the "Company"), and Charles Goldwater (the "Employee").

WITNESSETH:

    WHEREAS, in order to induce you to remain in the employ of the Company (all
references to such employment include employment by a subsidiary of the Company)
and in consideration of your continued service to the Company, the Company
agrees that you shall receive certain severance benefits in the event your
employment with the Company is terminated, as set forth in this Severance
Agreement (the “Agreement”).

    NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, and intending to be legally bound hereby, the parties agree as
follows:

    1.           Termination.  (a) The Company shall have the right to terminate
the Employee only upon the conviction in a recognized court of law in the United
States of Employee of theft or embezzlement of money or property, fraud,
unauthorized appropriation of any tangible or intangible assets or property or
any other felony involving dishonesty or moral turpitude.  The Company shall
have no obligations to the Employee for any period subsequent to the effective
date of any termination of this Agreement pursuant to this Section 1(a), except
for the payment of salary and benefits earned prior to such termination.

    (b)           In the event that the Company terminates the Employee's
employment for reason(s) other than those set forth in Section 1(a) or if the
Employee resigns for Good Reason (each, a “Severance Event”), so long as the
Employee continues to be in compliance with the provisions of Section 3(b)
below, then the Employee shall be entitled to receive twelve (12) months base
salary as of the effective date of such Severance Event (the “Effective Date”)
payable in accordance with regular payroll practices plus any earned but not yet
paid bonuses approved by the Compensation Committee of the Company’s Board of
Directors for the fiscal year preceding the Effective Date.  During such period,
the Employee shall have a duty to seek other employment, but shall not be
required to accept any position other than a position (i) as a senior executive
officer with the same general responsibilities that the Employee possessed at
the Company at the time of the Employee's termination from the Company and (ii)
with a company equal or larger in earnings and tangible net worth than the
Company at the time of the Employee's termination.  The Employee may, however,
accept any full-time position at any level and at any salary with any entity,
profit or non-profit, and the Employee, by accepting such employment, shall be
conclusively deemed to have fulfilled his duty to seek employment under this
Section 1(b).  The Company shall be entitled to reduce the salary (including
bonus) paid to the Employee during his employment by another entity by an amount
equal to the amount earned by the Employee from any such employment during such
period, provided, that, such salary reduction shall not apply to the extent
Employee takes a one-off consulting job.  In the event that a dispute shall
arise as to this Section 1(b), (i) the Company shall continue to pay the
Employee's
 
 
 

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salary (including bonus) into an escrow account not under the control of the
Company and (ii) the Company shall pay the legal fees and expenses incurred by
the Employee in litigating any dispute under this Section 1(b) in the event that
the Employee prevails in such dispute.
 
 
For these purposes, “Good Reason”  means, without the Employee's consent,  (i) a
material reduction in the Employee’s title, base pay or job responsibilities
compared with the Employee’s title, base pay or job responsibilities on the date
of this Agreement, or (ii) any requirement that the Employee relocate to a work
location more than fifty (50) miles from his current location or the City of Los
Angeles, California which is considered a material change; provided that, in the
event of an event or condition described in (i) or (ii) above, (a) the Employee
shall have provided notice to the Company within a period not to exceed 90 days
of the initial existence of the event or condition and (b) the Company had at
least 30 days to remedy the event or condition but did not do so.

2.           Stock Options; Restricted Stock Units.  Upon the occurrence of a
Severance Event:

(a) any vested stock options may continue to be exercised for a period of six
(6) months from the Effective Date;

(b) any unvested or partially-vested restricted stock units or stock options
having 3-year vesting provisions that are subject to acceleration upon the
achievement of specified stock price targets shall be converted, retroactive to
the relevant date of grant, to vesting schedules that provide for vesting in
three equal portions on the first three anniversaries of the relevant date of
grant, provided that such vesting applies only if the Employee was employed by
the Company in good standing on the relevant anniversary date; and

(c) all other unvested restricted stock units or stock options shall terminate
as of the Effective Date.

    3.           Confidential Information; Non-Competition; Enforceability.

    (a) The Employee shall not at any time, whether before or after the
termination of this Agreement, divulge, furnish or make accessible to anyone
(other than in the ordinary course of the business of the Company or any
subsidiary thereof) any knowledge or information with respect to confidential or
secret designs, processes, formulae, plans, devices, material, or research or
development work of the Company or any subsidiary thereof, or with respect to
any other confidential or secret aspect of the business of the Company or any
subsidiary thereof.

    (b) For a period of one (1) year from the Effective Date, the Employee shall
not, directly or indirectly, engage or become interested in (as owner,
stockholder, partner or otherwise) the operation of any business then similar to
or in competition (direct or indirect) with the Company within fifty (50) miles
of the City of Los Angeles, California.  If any court construes the covenant in
this Section 3(b) or any part thereof, to be unenforceable because of its
duration or the area covered thereby, the court shall have the power to reduce
the duration or area to the extent necessary so that such provision is
enforceable.  This paragraph 3(b) shall not apply
 
 
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to Employee’s ownership of less than 5% of the stock of a corporation whose
stock is traded on a nationally recognized stock exchange.

    (c) The covenants set forth in this Section 3 shall be deemed separable and
the invalidity of any covenant shall not affect the validity or enforceability
of any other covenant.  If any period of time or limitation of geographical area
stated in Section 3(b) is longer or greater than the maximum period or
geographical area permitted by law, then the period of time or geographical area
stated therein shall be deemed to be such maximum permissible period of time or
geographical area, as the case may be.  All parties recognize that the foregoing
covenants are a prime consideration for the Company to enter into this Agreement
and that the Company's remedies at law for damages in the event of any breach
shall be inadequate.  In the event that there is a breach of any of the
foregoing covenants, the Company shall be entitled to institute and prosecute
proceedings in any court of competent jurisdiction to enforce specific
performance of any such covenants by the Employee or to enjoin the Employee from
performing acts in breach of any such covenant.

    4.           Tax Withholding.  The Company shall withhold from any benefits
payable under this Agreement all federal, state, local or other taxes as shall
be required pursuant to any law or governmental regulation or ruling.

    5.           Effect of Prior Agreements.  This Agreement contains the entire
understanding between the parties hereto and supersedes any prior employment
agreement between the Company or any predecessor of the Company and the
Employee.

    6.           General Provisions.

    (a)           Nonassignability.  Neither this Agreement nor any right or
interest hereunder shall be assignable by the Employee or his beneficiaries or
legal representatives without the Company's prior written consent; provided,
however, that nothing in this Section 6(a) shall preclude (i) the Employee from
designating a beneficiary to receive any benefit payable hereunder following his
death, or (ii) the executors, administrators, or other legal representatives of
the Employee or his estate from assigning any rights hereunder to the person or
persons entitled thereto.

    (b)           No Attachment.  Except as required by law, no right to receive
payments under this Agreement shall be subject to anticipation, commutation,
alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation or
to execution, attachment, levy, or similar process or assignment by operation of
law, and any attempt, voluntary or involuntary, to effect any such action shall
be null, void and of no effect.

    (c)           Binding Agreement.  This Agreement shall be binding upon, and
inure to the benefit of, the Employee and the Company and their respective
permitted successors and assigns.

 
    (d)           Compliance with Section 409A. Notwithstanding any provision of
this Agreement to the contrary, distribution of any amounts that constitute
“deferred compensation”
 
 
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to the Employee due to his “separation from service” within the meaning of
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”),
shall not be made before six months after such separation from service or the
Employee’s death, if earlier (the “Six Month Limitation”). At the end of such
six-month period, payments that would have been made but for the Six Month
Limitation shall be paid in a lump sum, without interest, on the first day of
the seventh month following separation from service and remaining payments shall
commence, or continue, in accordance with the relevant provisions of this
Agreement;  provided, however, that in the event that any amounts of “deferred
compensation” payable to the Employee due to his “separation from service”
constitute “separation pay only upon an involuntary separation from service”
within the meaning of Section 409A of the Code (“Separation Pay”), then a
portion of such Separation Pay, up to two times the maximum amount that may be
taken into account under a qualified plan pursuant to Section 401(a)(17) of the
Code for the year in which the separation from service occurs (i.e., $490,000 in
the event of a separation from service during 2010), whether paid under this
Agreement or otherwise, may be paid to the Employee during the six-month period
following such separation from service.
 
    7.           Modification and Waiver.

    (a)           Amendment of Agreement.  This Agreement may not be modified or
amended except by an instrument in writing signed by the parties hereto, and
approved by a majority of the members of the Board who were not nominated by
Employee.

    (b)           Waiver.  No term or condition of this Agreement shall be
deemed to have been waived, nor shall there be any estoppel against the
enforcement of any provision of this Agreement, except by written instrument of
the party charged with such waiver or estoppel.  No such written waiver shall be
deemed a continuing waiver unless specifically stated therein, and each such
waiver shall operate only as to the specific term or condition waived and shall
not constitute a waiver of such term or condition for the future or as to any
act other than that specifically waived.

    8.           Severability.  If, for any reason, any provision of this
Agreement is held invalid, such invalidity shall not affect any other provision
of this Agreement not held so invalid, and each such other provision shall to
the full extent consistent with law continue in full force and effect. If any
provision of this Agreement shall be held invalid in part, such invalidity shall
in no way affect the rest of such provision not held so invalid, and the rest of
such provision, together with all other provisions of this Agreement, shall to
the full extent consistent with law continue in full force and effect

    9.           Headings.  The headings of sections herein are included solely
for convenience of reference and shall not control the meaning or interpretation
of any of the provisions of this Agreement.

    10.           Governing Law.  This Agreement has been executed and delivered
in the State of New York, and its validity, interpretation, performance, and
enforcement shall be governed by the laws of said State other than the conflict
of laws provisions of such laws.
 
 
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    IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
its officers thereunto duly authorized, and the Employee has signed this
Agreement, all as of the day and year first above written.

CINEDIGM DIGITAL CINEMA CORP.

By: /s/ Gary S.
Loffredo                                                                                            
Gary S. Loffredo
Title: Interim Co-Chief Executive Officer, Senior Vice President—Business
Affairs, General Counsel and Secretary

Employee

/s/ Charles
Goldwater                                                                                                          
Charles Goldwater

 
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