Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of March 31,
2009 (the “Effective Date”), by and between IMAGE ENTERTAINMENT INC., a
California corporation (“Image”), and Jeff M. Framer, an individual
(“Executive”).
RECITALS
WHEREAS, the Board of Directors of Image (“Board”) has determined that it is in
the best interests of Image to secure the services of Executive and to provide
Executive with the compensation and benefits set forth herein; and
WHEREAS, Executive desires to render to Image, on an exclusive basis,
Executive’s professional services with respect to Executive’s experience and
abilities, and Image desires to secure, on an exclusive basis, Executive’s
services, on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual promises and covenants contained
herein, the parties hereto agree as follows:
1. TERM OF AGREEMENT.
Except as otherwise expressly set forth herein, this Agreement shall remain in
full force and effect for the period commencing as of the date hereof and ending
on March 31, 2011 (the “Term”), subject to exercise of the Renewal Option
Periods set forth in Section 5 below. “Term” shall include any extensions agreed
upon in accordance with Section 5 below.
2. ENGAGEMENT.
Subject to the terms and conditions contained herein, Image hereby engages the
services of Executive (the “Services”) and Executive hereby accepts such
engagement and agrees to render such Services to Image for the Term. Executive
shall report directly to Image’s Board of Directors and shall have the title of
President.
(a) Extent of Services and Duties. Executive shall perform such duties
compatible with Executive’s position as Image’s Board of Directors may
reasonably require. In rendering Services to Image, Executive shall use
Executive’s best efforts and ability to maintain, further and promote the
interests and welfare of Image. At the request of Image, Executive shall serve
as an executive officer or director of Image or any entity controlled by Image
or in which it has a substantial direct or indirect interest, without additional
compensation, provided that Executive is included on any such entity’s directors
and officers insurance policy (if any) or is otherwise fully indemnified by
Image for all such additional duties to the full extent provided by law.

 

 

--------------------------------------------------------------------------------

 

(b) Exclusive Engagement. Executive hereby acknowledges and agrees that the
engagement of Executive by Image under this Agreement is exclusive and that
during the Term hereof Executive shall not, directly or indirectly, whether for
compensation or otherwise, engage in any business that is competitive with the
business of Image or that otherwise interferes in any significant respect with
Executive’s exclusive commitment and duties under this Agreement, or render any
services of a business, commercial or professional nature to any other person or
organization that is a competitor of Image or in a business similar to that of
Image, without the prior written consent of Image. Notwithstanding the
foregoing, Executive may make and manage personal business investments of his
choice and serve in any capacity with any civic, educational or charitable
organization without seeking or obtaining approval by the Board, provided that
such activities and services do not substantially interfere or conflict with the
performance of duties hereunder or create any conflict of interest with such
duties.
3. COMPENSATION.
(a) Base Salary. During the Term of this Agreement, Image hereby agrees to pay
Executive an annual base salary of $400,000.00 (“Base Salary”). The Base Salary
will be payable in equal biweekly installments or as otherwise provided in
accordance with the regular compensation pay schedules and procedures in effect
from time to time for Image, subject to all applicable withholding and
deductions. There shall be deducted from all compensation payable to Executive
hereunder such sums, including without limitation, social security, income tax
withholding and unemployment insurance, as Image is by law obligated to deduct
and additionally as Executive may duly authorize. Any increases in Executive’s
Base Salary during the Term of the Agreement shall be within the sole discretion
of Image’s Board of Directors.
(b) Bonus Compensation and Stock Options. Image’s Board of Directors intends to
create a bonus compensation plan and stock option plan for the benefit of
certain of Image’s executives. To the extent that a bonus compensation plan
and/or a stock option plan is finalized, such plans will be overseen at the
direction of Image’s Board. Any bonus compensation and any award of stock
options is not guaranteed. Rather they will be awarded at the discretion of the
Board and will be based on corporate profitability and Executive’s performance,
jointly.
4. FRINGE BENEFITS.
(a) Insurance Benefits. Image will provide Executive with premium coverage for
health and dental insurance for Executive, Executive’s spouse and Executive’s
dependent minor children, life and accidental death/dismemberment insurance for
Executive, and short and long-term disability insurance for Executive.
(b) Business/Travel Expenses. Executive shall be reimbursed in full for all
reasonable and actual out-of-pocket business and travel expenses incurred in the
performance of Executive’s Services in accordance with Image’s policies for the
reimbursement of such business and travel expenses.
(c) Vacation Time. Executive is entitled to four (4) weeks of paid vacation time
per year of the Term, but may accrue no more than the maximum cap set forth in
Image’s employee handbook (the “maximum cap”). Once Executive’s vacation accrual
reaches this maximum cap, Executive will cease accruing paid vacation time
unless and until Executive’s balance of accrued but unused vacation time falls
below the maximum cap.

 

2

--------------------------------------------------------------------------------

 

(d) Car Allowance. Executive shall receive an annual car allowance of $12,600
gross, paid bi-weekly.
5. RENEWAL OPTIONS.
This Agreement will expire on March 31, 2011, if not terminated earlier pursuant
to Sections 9 or 10 below, and unless this Agreement is renewed for one or more
one (1) year terms by the mutual agreement of Image and Executive at least
ninety (90) days in advance of this date of expiration (by December 31, 2010).
Upon expiration of the Term, provided the parties have not mutually agreed to
extend the Term, Image agrees to pay to Executive six (6) months of Base Salary
(without vacation accrual), any bonus compensation not previously paid for any
prior period, and six (6) months of medical and dental insurance continuation
under COBRA; provided, however, that such compensation and benefits will only be
provided to Executive upon Executive’s signature on a waiver and release
agreement substantially in the form set forth in Exhibit C hereto.
6. CONFIDENTIALITY.
(a) In consideration of the payments to be received hereunder, Executive agrees
that during the Term he will have access to and become acquainted with various
trade secrets and other confidential and proprietary information of Image and
other affiliated entities (the “Company”). Such trade secrets and other
confidential and proprietary information shall be referred to herein as “Trade
Secrets,” (as such term is defined below). Except as Executive’s duties may
require or as Image may otherwise consent to in writing, Executive will not at
any time disclose or use, either directly or indirectly, and either during or
subsequent to the Term hereof, any information, knowledge or data he receives in
confidence or acquires from the Company or which relates to the Trade Secrets of
the Company. For purposes of this Agreement “Trade Secrets” shall include, but
not be limited to:
(i) Financial information, such as the Company’s earnings, assets, debts,
prices, pricing structure, volumes of purchases or sales or other financial
data, whether relating to the Company generally, or to particular products,
services, geographic areas, or time periods;
(ii) Supply and service information, such as goods and services, suppliers’
names or addresses, terms of supply or service contracts, or of particular
transactions, or related information about potential suppliers, to the extent
that such information is not generally known to the public, and to the extent
that the combination of suppliers or use of a particular supplier, though
generally known or available, yields advantages to the Company, the details of
which are not generally known;

 

3

--------------------------------------------------------------------------------

 

(iii) Marketing information, such as details about ongoing or proposed marketing
programs or agreements by or on behalf of the Company, sales forecasts or
results of marketing efforts or information about impending transactions;
(iv) Licensing or Distribution information, such as details about ongoing or
proposed negotiations or agreements by or on behalf of the Company, terms and
details of such negotiations or agreements or results of licensing or
distribution efforts or information about impending transactions; or,
(v) Customer information, such as any compilation of past, existing or
prospective customers, customers’ proposals or agreements between customers and
status of customers accounts or credit, or related information about actual or
prospective customers.
(b) Executive acknowledges that any violation of the terms of this Section will
constitute a material breach of this Agreement and will cause the Company
immediate and irreparable harm and that the damages which the Company will
suffer may be difficult or impossible to measure. Therefore, upon any actual or
impending violation of this Section, the Company shall be entitled to the
issuance of a restraining order, preliminary and permanent injunction, without
bond, restraining or enjoining such violation by Executive or any entity or
person acting in concert with Executive. Such remedy shall be additional to and
not in limitation of any other remedy which may otherwise be available to the
Company.
7. OWNERSHIP
(a) Executive hereby acknowledges and agrees that all results and proceeds
arising out of or resulting from services Executive performs for the Company
(“Work Product”) shall be deemed works-made-for-hire for the Company within the
meaning of the copyright laws of the United States, and the Company shall be
deemed to be the sole author thereof in all territories and for all purposes. To
the extent any ownership rights in any Work Product or Trade Secrets might be
deemed to reside in Executive, Executive hereby assigns all such rights of every
kind and character, whether now existing or hereafter existing, to the Company
exclusively, for all purposes, without conditions or limitations, and without
the reservation of any rights by Executive, in perpetuity and throughout the
universe, in any form or media, whether now known or hereafter discovered or
invented. Executive acknowledges and agrees that the Company has hereby notified
Executive that the assignment provided for herein shall not apply to any
invention that qualifies fully for exemption from assignment under the
provisions of Section 2870 of the California Labor Code, a copy of which is
attached as “Exhibit A” hereto.
(b) All files (hard copy or saved on Executive’s computer, personal or shared
drives), records, documents, equipment, specifications, electronic mail and
other items relating to the Company’s business, whether prepared by Executive or
others (collectively, “Company Materials”), are and shall remain exclusively the
property of the Company. Upon the ending of Executive’s employment with Image
for any reason, and at such earlier time as may be requested by Image, Executive
shall forthwith deliver to Image all Company Materials and all materials in
Executive’s possession, custody or control and shall not download, delete,
transfer or transmit any Company Materials without Image oversight or approval
beforehand.

 

4

--------------------------------------------------------------------------------

 

8. INDEMNIFICATION OF EXECUTIVE.
Image will, to the maximum extent permitted by law, indemnify and hold Executive
harmless against expenses, including reasonable attorney’s fees, judgments,
fines, settlements and other amounts actually and reasonably incurred in
connection with any proceeding arising by reason of Executive’s employment by
Image. Image shall advance to Executive any expenses incurred in any proceeding
to the maximum extent permitted by law. Executive will be entitled to utilize
defense legal counsel of his choice, subject to the approval of Image, which
approval will not be unreasonably withheld. Image will at all times maintain
directors’ and officers’ liability insurance (“D&O Insurance”), or have
sufficient funds to self-insure, in amounts and on terms at least as favorable
as the D&O Insurance policy in effect on the date hereof.
9. TERMINATION.
Image has the right to terminate Executive’s employment with or without “Cause,”
(as defined below).
(a) In the event of “Cause” (as defined below), Image may terminate this
Agreement at any time effective upon delivery of written notice to Executive. In
such event, all of Image’s obligations hereunder will immediately terminate
without further liability. Moreover, Executive shall not be entitled to receive
any severance, fringe benefits, other compensation or other such rights
hereunder. For purposes of this Agreement “Cause” shall be defined as:
(i) Executive’s (a) fraud, dishonesty or felonious conduct or breach of
fiduciary duty; (b) willful misconduct or gross negligence in the performance of
Executive’s duties hereunder; (c) knowing and/or willful violation (including
conduct in respect of Executive’s supervisory responsibilities) of any law, rule
or regulation or other wrongful act that causes or is likely to cause harm, loss
or disrepute to the Company; or (d) conviction of a felony or misdemeanor (other
than minor traffic violations, a first time driving under the influence of
alcohol conviction, or an offense that does not affect the business or
reputation of the Company); or
(ii) Executive’s breach of any material provision of this Agreement or any other
material agreement between the Company and Executive, whenever executed; or
(iii) Executive’s failure to comply with all relevant and material obligations,
assumable and chargeable to an executive of his corporate rank and
responsibilities under the Sarbanes-Oxley Act.

 

5

--------------------------------------------------------------------------------

 

(b) Image has the right to terminate Executive’s employment without Cause at any
time, with or without advance notice. Upon a termination without Cause, Image
agrees to pay to Executive the Base Salary Executive would have earned from the
date of termination through the end of the Term plus six (6) months of Base
Salary (without vacation accrual), any bonus compensation not previously paid
for any prior period, and six (6) months of medical and dental insurance
continuation under COBRA (“Severance Pay”); provided, however, that such
Severance Pay will only be provided to Executive upon Executive’s signature on a
waiver and release agreement substantially in the form set forth in Exhibit C
hereto.
(c) Notwithstanding any other provision in this Agreement, solely to the extent
that a delay in payment is required in order to avoid the imposition of any tax
under Section 409A of the Internal Revenue Code (the “Code”), if a payment
obligation under this Agreement arises on account of Executive’s “separation
from service” (within the meaning of Section 409A of the Code) while Executive
is a “specified employee” (as determined for purposes of Section 409A(a)(2)(B)
of the Code in good faith by the Compensation Committee of the Board), then
payment of any amount or benefit provided under this Agreement that is
considered to be non-qualified deferred compensation for purposes of
Section 409A of the Code and that is scheduled to be paid within six (6) months
after such separation from service shall be paid without interest on the first
business day after the date that is six (6) months following Executive’s
separation from service.
10. EXECUTIVE’S RIGHT TO TERMINATE FOR GOOD REASON.
During the Term, Executive shall be entitled to terminate Executive’s employment
with Image for “Good Reason” (as defined below). For purposes of this Agreement
“Good Reason” shall mean any of the following events which occurs without
Executive’s express written consent within a twelve (12) month period following
a “Change in Control” (as defined in “Exhibit B” hereto):
(a) a material diminution in Executive’s authority, duties or responsibilities
with Image;
(b) a change in Executive’s principal office location to a location farther away
from Executive’s home which is more than 35 miles from Executive’s current
principal office location;
(c) any one or more reductions in Executive’s Base Salary that, individually or
in the aggregate, exceed 10% of Executive’s Base Salary; or
(d) any material breach by Image of this Agreement.

 

6

--------------------------------------------------------------------------------

 

If Executive believes that a Good Reason has occurred, Executive shall give
written notice of this Good Reason to the Board of Directors of the Successor
Entity (as that term is defined in “Exhibit B”) within ninety (90) days of the
occurrence of the incident(s) giving rise to the Good Reason. The Board of
Directors of the Successor Entity will thereafter have thirty (30) days to
address Executive’s assertion that a Good Reason has occurred. If the Board of
Directors of the Successor Entity does not address the incident(s) purportedly
giving rise to Good Reason to Executive’s reasonable satisfaction within thirty
(30) days, then Executive may resign for Good Reason within ninety (90) days
thereafter. Upon a resignation for Good Reason, provided that Executive signs a
waiver and release agreement substantially in the form set forth in Exhibit C
hereto to be given to Executive by the Successor Entity, Executive shall be
entitled to the same Severance Pay to which Executive is entitled if his
employment is terminated by Image without Cause, as set forth in Section 9(b),
above.
11. NON-SOLICITATION OF EMPLOYEES.
Executive agrees that he will not, either alone or jointly with any other person
or entity, whether as principal, partner, agent, shareholder, director,
employee, consultant or otherwise, at any time during a period of one (1) year
following Executive’s termination of employment, directly or indirectly solicit
the employment or engagement of any person who was employed by Image or any
affiliated entity during the twelve (12) months preceding the termination of
Executive’s employment, whether or not such person would commit any breach of
his or her contract of employment by reason of his or her leaving the service of
Image or any affiliated entity.
12. GENERAL PROVISIONS.
(a) Successors and Assigns. This Agreement is binding upon and shall inure to
the benefit of the parties hereto, and any of their heirs, legatees, devisees,
personal representatives, assigns and successors in interest of every kind and
nature whatsoever. Image may assign this Agreement and/or any of its rights or
privileges hereunder, in one or more assignments and this Agreement shall inure
to the benefit of all such successors and assigns. The parties agree that
Executive’s services are personal and that this Agreement is executed with
respect thereto. Executive shall have no right to sell, transfer or assign this
Agreement in any manner whatsoever.
(b) Entire Understanding; Amendment. Except as specifically set forth in this
Section, this Agreement (along with the Exhibits attached hereto and
incorporated herein by reference) constitutes the entire understanding between
the parties with respect to its subject matter and supersedes all prior
agreements and understandings, whether written or oral, with respect to its
subject matter. This Agreement specifically supersedes any and all prior
employment agreements between Executive and Image. Nothing in this Section shall
be deemed to supersede the Company’s Code of Conduct and/or any agreements
between Executive and Image with regard to the protection of Image’s
confidential, proprietary and/or trade secret information, all of which
survives. This Agreement may not be amended or modified, nor any provision
hereof waived, other than in a writing signed by Executive and an authorized
representative of Image.
(c) Severability. In case one or more of the provisions contained in this
Agreement (or any portion of any such provision) shall for any reason be held
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement (or any
portion of any such provision), but this Agreement shall be construed as if such
invalid, illegal or unenforceable provision (or portion thereof) had never been
contained herein.

 

7

--------------------------------------------------------------------------------

 

(d) Waiver. The failure by Image, at any time, to require performance by
Executive of any of the provisions hereof, shall not be deemed a waiver of any
kind nor shall it in any way affect Image’s rights thereafter to enforce the
same.
(e) Notices. All notices, requests, demands and other communications provided
for by this Agreement shall be in writing and shall be deemed to have been given
24 hours after deposit thereof for mailing at any general or branch United
States Post Office, enclosed in a registered or certified postpaid envelope and
addressed as follows:

         
 
  To Image:   IMAGE ENTERTAINMENT, INC
 
      20525 Nordhoff Street, Suite 200
 
      Chatsworth, CA 91311
 
      Attn: Director and Chairman of the Compensation
 
      Committee of the Board of Directors
 
       
 
  To Executive:   Jeff M. Framer
 
      c/o Image Entertainment, Inc.
 
      20525 Nordhoff Street, Suite 200
 
      Chatsworth, CA 91311

The parties hereto may designate a different place at which notice shall be
given; provided, however, that any such notice of change of address shall be
effective only upon receipt.
(f) Good Faith. The parties hereto shall perform, fulfill and discharge their
duties and obligations hereunder in a reasonable manner in good faith.
(g) Governing Law. This Agreement and all rights, obligations and liabilities
arising hereunder shall be construed and enforced in accordance with the laws of
the State of California.
(h) Attorneys’ Fees. To the maximum extent allowed by law, the prevailing party
in any dispute arising out of or relating to this Agreement shall be awarded all
costs and expenses stemming from such dispute, including without limitation,
reasonable attorneys’ fees.
(i) Advice of Counsel. The parties represent and warrant that in executing this
Agreement, they have each had the opportunity to obtain independent financial,
legal, tax and other appropriate advice, and are not relying upon any other
party (or the attorneys or other agents of such other party) for any such
advice.
(j) Subject Headings and Defined Terms. Subject headings and choice of defined
terms are included for convenience only and shall not be deemed part of this
Agreement.

 

8

--------------------------------------------------------------------------------

 

(k) Cumulative Rights and Remedies. The rights and remedies provided for in this
Agreement shall be cumulative; resort to one right or remedy shall not preclude
resort to another or to any other right or remedy provided for by law or in
equity.
IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement
as of the date first above written.

                  IMAGE ENTERTAINMENT, INC.       EXECUTIVE    
 
               
By:
  /s/ MARTIN W. GREENWALD
 
Martin W. Greenwald       /s/ JEFF M. FRAMER
 
Jeff M. Framer, an individual    

  Title: Chairman of the Board            

 

9

--------------------------------------------------------------------------------

 

Exhibit A
Section 2870 of the California Labor Code provides as follows:
“(a) Any provision in an employment agreement which provides that an employee
shall assign, or offer to assign, any of his or her rights in an invention to
his or her employer shall not apply to an invention that the employee developed
entirely on his or her own time without using the employer’s equipment,
supplies, facilities, or trade secret information, except for those inventions
that either:
(1) Relate at the time of conception or reduction to practice of the invention
to the employer’s business, or actual or demonstrably anticipated research or
development of the employer; or
(2) Result from any work performed by the employee for the employer.
(b) To the extent a provision in an employment agreement purports to require an
employee to assign an invention otherwise excluded from being required to be
assigned under subdivision (a), the provision is against the public policy of
this state and is unenforceable.”

 

10

--------------------------------------------------------------------------------

 

Exhibit B
“Change in Control” means the first to occur of any of the following events:
(i) The date on which any one person, or more than one person acting as a group,
becomes the beneficial owner (as that term is used in section 13(d) of the
Exchange Act), directly or indirectly, of more than fifty percent (50%) of the
capital stock of Image entitled to vote in the election of directors, other than
a group of two or more persons not (A) acting in concert for the purpose of
acquiring, holding or disposing of such stock or (B) otherwise required to file
any form or report with any governmental agency or regulatory authority having
jurisdiction over Image which requires the reporting of any change in control.
The acquisition of additional stock by any person who immediately prior to such
acquisition already is the beneficial owner of more than fifty percent (50%) of
the stock of Image entitled to vote in the election of directors is not a Change
in Control.
(ii) During any period of not more than twelve (12) consecutive months during
which Image continues in existence, individuals who, at the beginning of such
period, constitute the Board, and any new director (other than a director
designated by a person who has entered into an agreement with Image to effect a
transaction described in clause (i), (iii) or (iv) of this Exhibit whose
appointment to the Board or nomination for election to the Board was approved by
a vote of a majority of the directors then still in office, either were
directors at the beginning of such period or whose appointment or nomination for
election was previously so approved, cease for any reason to constitute at least
a majority of the Board.
(iii) The date on which any one person, or more than one person acting as a
group, acquires (or has acquired during the twelve month period ending on the
date of the most recent acquisition by such person or persons) ownership of
capital stock of Image possessing thirty percent (30%) or more of the total
voting power of the capital stock of Image entitled to vote in the election of
directors.
(iv) The date on which any one person, or more than one person acting as a
group, acquires (or has acquired during the twelve month period ending on the
date of the most recent acquisition by such person or persons) assets from Image
that have a total gross fair market value greater than 50% of the total gross
fair market value of all of Image’s assets immediately before the acquisition or
acquisitions; provided, however, transfer of assets which otherwise would
satisfy the requirements of this subsection (iv) will not be treated as a Change
in Control if the assets are transferred to:
(A) a shareholder of Image (immediately before the asset transfer) in exchange
for or with respect to its stock;
(B) an entity, 50% or more of the total value or voting power of which is owned,
directly or indirectly, by Image;

 

11

--------------------------------------------------------------------------------

 

(C) a person, or more than one person acting as a group, that owns, directly or
indirectly, 50% or more of the total value or voting power of all the
outstanding stock of Image; or
(D) an entity, at least 50% of the total value or voting power is owned,
directly or indirectly by a person, or more than one person acting as a group,
that owns, directly or indirectly, 50% or more of the total value or voting
power of all the outstanding stock of Image.
Each event comprising a Change in Control will result in a Successor Entity and
is intended to constitute a “change in ownership or effective control” or a
“change in the ownership of a substantial portion of the assets” of Image as
such terms are defined for purposes of Section 409A of the Internal Revenue Code
and “Change in Control” as used herein shall be interpreted consistently
therewith.

 

12

--------------------------------------------------------------------------------

 

Exhibit C
WAIVER AND RELEASE AGREEMENT
This Waiver and Release Agreement (the “Agreement”) is entered into on this
                    th day of                      by and between Jeff M. Framer
(“Employee”) and Image Entertainment, Inc. (the “Company”).
Recitals
WHEREAS, Employee is currently employed by the Company in the role of
                    , pursuant to an Employment Agreement, dated March 31, 2009
(the “Employment Agreement”);
WHEREAS, [                                        ];
WHEREAS, [                                        ];
WHEREAS, Employee acknowledges that, but for his agreement to execute this
Waiver and Release Agreement, he would not be eligible for the severance
benefits set forth in the Employment Agreement;
NOW THEREFORE, the parties hereby agree as follows:
Agreement
1. Separation of Employment. Employee’s last day of employment with the Company
shall be                      (the “Termination Date”). On and after the
Termination Date, Employee shall no longer be employed by the Company in any
capacity, nor shall Employee serve the Company as an officer and the Employment
Agreement shall terminate and be of no further force or effect.
2. Severance Benefits. In consideration for the promises set forth in this
Agreement, the Company agrees that, following the Company’s receipt of a duly
executed original of this Agreement, the Company shall:
(a) Continue to pay Employee’s base salary, minus all applicable federal, state
and local taxes, in accordance with the Company’s regular payroll practices,
through                     ; and
(b) Pay Employee any bonus compensation not previously paid for any prior period
in the amount of                     ; and
(c) Pay for the full amount of COBRA continuation coverage for Employee’s
medical and dental insurance for six (6) months following the Termination Date;
provided that Employee is eligible for COBRA and properly elects such
continuation coverage.

 

13

--------------------------------------------------------------------------------

 

3. Warranty. Employee acknowledges that, other than the Severance Benefits set
forth in Section 2, above, he has received all wages, accrued but unused
vacation pay, equity interests and other benefits due him as a result of his
employment with and termination from the Company.
4. Release of Known and Unknown Claims By Employee. In exchange for the
Severance Benefits set forth in Section 2 above, and in consideration of the
further agreements and promises set forth herein, Employee agrees
unconditionally and forever to release and discharge the Company including the
Company’s current and former officers, directors, shareholders, employees,
representatives, attorneys and agents, as well as all of their predecessors,
parents, subsidiaries, affiliates, successors in interest and assigns
(collectively, the “Releasees”) from any and all claims, actions, causes of
action, demands, rights, or damages of any kind or nature which Employee may now
have, or ever have, whether known or unknown, including any claims, causes of
action or demands of any nature arising out of or in any way relating to
Employee’s employment with, or termination from the Company on or before the
date Employee signs this Agreement.
This release specifically includes, but is not limited to, any claims for fraud;
breach of contract; breach of implied covenant of good faith and fair dealing;
inducement of breach; interference with contract; wrongful or unlawful discharge
or demotion; violation of public policy; assault and battery; invasion of
privacy; intentional or negligent infliction of emotional distress; intentional
or negligent misrepresentation; conspiracy; failure to pay wages, benefits,
vacation pay, severance pay, attorneys’ fees, or other compensation of any sort;
wrongful termination; retaliation; wrongful demotion; discrimination or
harassment on any basis protected by federal, state or local law including, but
not limited to race, color, sex, gender identity, national origin, ancestry,
religion, disability, handicap, medical condition, marital status, and sexual
orientation; any claim under Title VII of the Civil Rights Act of 1964, as
amended, the Americans with Disabilities Act, the California Fair Employment and
Housing Act, or Section 1981 of Title 42 of the United States Code; violation of
any safety and health laws, statutes or regulations; or any other wrongful
conduct, based upon events occurring prior to the date of execution of this
Agreement.
Employee further agrees knowingly to waive the provisions and protections of
Section 1542 of the California Civil Code, which reads:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH, IF KNOWN BY HIM OR HER, MUST HAVE MATERIALLY AFFECTED HIS OR HER
SETTLEMENT WITH THE DEBTOR.
The parties intend this release by Employee to be a full and comprehensive
general release waiving and releasing all claims, demands, and causes of action,
known or unknown, to the fullest extent permitted by law. Nothing in this
Agreement is intended to nor shall it be interpreted to release any claim which,
by law, may not be released.

 

14

--------------------------------------------------------------------------------

 

5. Additional Representations and Warranties By Employee. Employee represents
that Employee has no pending complaints or charges against the Releasees, or any
of them, with any state or federal court, or any local, state or federal agency,
division, or department based on any event(s) occurring prior to the date
Employee signs this Agreement. Employee further represents that Employee will
not in the future, file, participate in, encourage, instigate or assist in the
prosecution of any claim, complaints, charges or in any lawsuit by any party in
any state or federal court against the Releasees, or any of them, unless such
aid or assistance is ordered by a court or government agency or sought by
compulsory legal process, claiming that the Releasees, or any of them, have
violated any local, state or federal laws, statutes, ordinances or regulations
based upon events occurring prior to the execution of this Agreement. Nothing in
this Agreement shall be construed as prohibiting Employee from making a future
claim with the Equal Employment Opportunity Commission or any similar state
agency including, but not limited to the California Department of Fair
Employment and Housing; provided, however, that should Employee pursue such an
administrative action against the Releasees, or any of them, to the maximum
extent allowed by law, Employee agrees and acknowledges that Employee will not
seek, nor shall Employee be entitled to recover, any monetary damages from any
such proceeding.
6. Knowing and Voluntary. Employee represents and agrees that, prior to signing
this Agreement, Employee has had the opportunity to discuss the terms of this
Agreement with legal counsel of his choosing. Employee further represents and
agrees that he is entering into this Agreement knowingly and voluntarily.
Employee affirms that no promise was made to cause him to enter into this
Agreement, other than what is promised in this Agreement. Employee further
confirms that he has not relied upon any other statement or representation by
anyone other than what is in this Agreement as a basis for his agreement.
7. No Admission of Liability. By entering into this Agreement, neither the
Company nor Employee suggests or admits to any liability to one another or that
they violated any law or any duty or obligation to one another.
8. Confidentiality. Employee represents, warrants and agrees that neither he nor
any of his agents or representatives either has already disclosed or publicized
nor will at any time in the future disclose or publicize, or cause or permit to
be disclosed or publicized, the existence of this Agreement, any of the terms of
this Agreement, or the facts underlying this Agreement, to any person,
corporation, association or governmental agency or other entity except: (1) to
the extent necessary to report income to appropriate taxing authorities; (2) to
members of Employee’s immediate family; (3) in response to an order of a court
of competent jurisdiction or subpoena issued under the authority thereof; or
(4) in response to any inquiry or subpoena issued by a state or federal
governmental agency; provided, however, that notice of receipt of such judicial
order or subpoena shall be immediately communicated by Employee to the Company
telephonically, and confirmed immediately thereafter in writing, so that the
Company will have the opportunity to assert what rights it has to non-disclosure
prior to Employee’s response to the order, inquiry or subpoena. Employee further
represents, warrants and agrees that he has to date maintained and will continue
to maintain all non-public information regarding the Releasees, or any of them,
as strictly confidential and has not disclosed and shall not disclose such
information to any person or entity or cause such information to be disclosed to
any person or entity, either directly or indirectly, specifically or generally.

 

15

--------------------------------------------------------------------------------

 

9. Cooperation. Employee agrees to consult with the Company regarding on-going
matters that commenced during Employee’s employment with the Company and to
cooperate with the Company in connection with disputes between the Company and
third parties (including, but not limited to, current or former employees) when
requested by the Company. This cooperation may include, but is not limited to,
conferring with and assisting the Company in preparatory work in litigation
matters, providing factual information to the Company, and giving depositions
and testimony in judicial and administrative proceedings. Employee agrees that
he will not be paid by the Company for his cooperation, except that the Company
will reimburse Employee for his reasonable out-of-pocket expenses incurred in
connection therewith, provided that such expenses are approved in advance by the
Company.
10. No Disparagement. Employee represents, warrants and agrees that on or after
the Termination Date he has not disparaged or made derogatory or negative
comments nor will he at any time in the future disparage or make derogatory or
negative comments to any third party (including but not limited to employees of
the Company) concerning the Releasees, or any of them at any time. Nothing in
this Section shall preclude Employee from testifying truthfully in any
deposition or judicial or administrative proceeding.
11. Return of Property. By signing below, Employee represents and warrants that
he has returned to the Company all of the Company’s property, documents (hard
copy or electronic files), and information prior to signing this Agreement, he
has not nor will he copy or transfer any Company information, nor will he
maintain any Company information after the Termination Date.
12. Assignment. The Company may assign this Agreement and/or any of its rights
or privileges hereunder, in one or more assignments, and this Agreement shall
inure to the benefit of all such successors and assigns.
13. Governing Law. This Agreement shall be governed by the laws of the State of
California as applied to agreements made and wholly to be performed in
California.
14. Entire Agreement. This Agreement constitutes the entire understanding
between the parties with respect to its subject matter, superseding all prior
agreements and understandings, written or oral, with respect to its subject
matter; provided, however that this agreement shall not be deemed to supersede
the Company’s Code of Conduct and/or any agreements between the Company and
Employee with respect to the protection of the Company’s confidential,
proprietary and/or trade secret information all of which survives. This
Agreement may not be amended or modified, nor any provision hereof waived, other
than by a writing signed by Employee and an authorized representative of the
Company.

 

16

--------------------------------------------------------------------------------

 

15. Ambiguities. The general rule that ambiguities are to be construed against
the drafter shall not apply to this Agreement. In the event that any language of
this Agreement is found to be ambiguous, all parties shall have the opportunity
to present evidence as to the actual intent of the parties with respect to any
such ambiguous language.
16. Severability. If any sentence, phrase, paragraph, subparagraph or portion of
this Agreement is found to be illegal or unenforceable, such action shall not
affect the validity or enforceability of the remaining sentences, phrases,
paragraphs, subparagraphs or portions of this Agreement.
17. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, all of which together shall
constitute one and the same instrument.
PLEASE READ CAREFULLY. THIS AGREEMENT CONTAINS A RELEASE OF ALL KNOWN AND
UNKNOWN CLAIMS.
THE UNDERSIGNED AGREE TO THE TERMS OF THIS AGREEMENT AND VOLUNTARILY ENTER INTO
IT WITH THE INTENT TO BE BOUND THEREBY.
Dated:

         

 
 
Jeff M. Framer    
 
       
Dated:
  Image Entertainment, Inc.    
 
       
 
 
 
By:    
 
  Title:    

 

17