Exhibit 10.46
EXECUTION COPY
September 10, 2007
Mr. Joseph Drake
2795 McConnell Drive
Los Angeles, CA 90064

RE:   Employment Agreement

Dear Mr. Drake:
     On behalf of Lions Gate Films, Inc. (the “Company”), this letter agreement
(this “Agreement”) is to confirm the terms of your employment by the Company. We
refer to you herein as “Employee”. The terms of Employee’s employment are as
follows:
1. TERM, TITLE, POSITION AND RESPONSIBILITIES.

  a.   Term. The term of this Agreement will begin on the date first written
above and end on the fifth (5th) anniversary thereof (the “Term”).     b.  
Title and Position. During the Term of this Agreement, Employee will serve as
Co-Chief Operating Officer and President of Lions Gate Motion Picture Group of
the Company and in such capacity (the “Position”) shall be in charge of the
motion picture group, which consists of theatrical production, theatrical
distribution, theatrical physical services, theatrical acquisitions and
co-productions, and theatrical marketing and publicity, domestically and
internationally (excluding all aspects of home entertainment) of Lions Gate
Entertainment Corp. (“Parent”) and its subsidiaries, including Mandate Pictures,
LLC and any of its subsidiaries (collectively, the “Motion Picture Group”).
During the Term, Employee will serve as the chief executive officer of Mandate
Pictures, LLC, Mandate Holdings, LLC and Mandate Distribution, LLC.     c.  
Responsibilities and Approval Rights. Employee shall have the powers, authority
and responsibilities, and shall render such services, as are customarily
associated with the Position and as may be reasonably and lawfully requested by
the Company. Employee shall have the following specific management-related
approval rights:

  i.   Hiring and Firing Approval Rights.

  (1)   During the initial six (6) month period following the date of this
Agreement (the “Initial Period”), Employee and the

 

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Mr. Joseph Drake
September 10, 2007
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      Chief Executive Officer of Parent (“CEO”) shall exclusively have mutual
approval rights regarding the ability to hire and fire personnel directly or
indirectly reporting to Employee. For purposes of this Agreement, personnel
“directly or indirectly” reporting to Employee means personnel within the Motion
Picture Group who report directly to Employee, their direct reports within the
Motion Picture Group, and so on.

  (2)   After the Initial Period, Employee shall have the exclusive right to
hire and fire personnel directly or indirectly reporting to Employee.

  ii.   Overhead and Third Party Service Providers. Employee shall, subject to a
budget approved by the CEO, have the exclusive right to approve overhead
expenditures and hire and fire third party service providers with respect to the
Motion Picture Group. With respect to this subparagraph, the budget for the
Motion Picture Group shall be in accordance with past practices of the Company.
    iii.   Reporting. Employee shall directly report to the CEO, currently Jon
Feltheimer. All employees of Parent and its subsidiaries who are employed in the
Motion Picture Group shall report directly or indirectly to Employee.     iv.  
Greenlighting and Acquisition.

  (1)   All greenlight and acquisition decisions shall be mutual, in that
neither Parent nor any of its subsidiaries shall greenlight or acquire any
motion picture (“Greenlight/Acquisition”) unless the CEO has first meaningfully
consulted with Employee and they have together agreed on such
Greenlight/Acquisition; provided, that if after such consultation they cannot
reach such an agreement, the CEO shall have the final approval decision with
respect to such Greenlight/Acquisition.     (2)   Prior to the consultation and
approval described in clause (1) above, the Company agrees that all
Greenlight/Acquisition budgets, projections, reports and analyses of Parent or
any of its subsidiaries shall be generated by or submitted for review by
Employee and thereafter submitted to the CEO by Employee or by a designee of
Employee.

 

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Mr. Joseph Drake
September 10, 2007
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  (3)   No Greenlight/Acquisition pitch, presentation, proposal or decision from
internal staff of Parent or any of its subsidiaries shall occur unless it shall
have first received the approval of Employee. CEO and Employee shall communicate
to all of the staff of Parent and its subsidiaries (including the Company) that
all creative and financial decisions related to the Motion Picture Group
(including Greenlight/Acquisitions) will be subject to Employee’s review and
must be directed through Employee before being presented for approval. Employee
and CEO agree that all information related to the Motion Picture Group that is
submitted by third parties, including, without limitation, persons in public
relations, marketing, distribution, business affairs, finance and legal, must be
directed through Employee.

      Notwithstanding anything to the contrary herein, a breach of this
subsection (iv) shall not be a breach of this Agreement.

  d.   Service. During the Term, Employee shall devote Employee’s full business
time, energy and ability exclusively to the business, affairs and interests of
the Company, Parent, and its subsidiaries and matters related thereto, shall use
Employee’s reasonable efforts and abilities to promote their interests, and
shall perform the services contemplated by this Agreement in accordance with
policies generally applicable to senior executives of Parent and its
subsidiaries. Notwithstanding the foregoing, Employee shall be entitled to serve
as a director of Ghost House Mobile, LLC and to engage in passive investment
activities, charitable activities, political activities, and/or other activities
to which the Company agrees in writing, so long as the activities do not
directly conflict or interfere with the duties owed hereunder or meaningfully
detract from the business time devoted by Employee to the Company.

2. COMPENSATION.

  a.   Salary. Employee shall have an annual base salary of Eight Hundred and
Fifty Thousand Dollars ($850,000) (the “Base Salary”) during the Term of this
Agreement, payable in accordance with the Company’s normal payroll practices in
effect from time to time.     b.   Payroll. Nothing in this Agreement shall
limit the Company’s right to modify its payroll practices, as it deems
necessary, so long as such changes are generally applicable to senior executives
of Parent and its subsidiaries.     c.   Bonuses.

 

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Mr. Joseph Drake
September 10, 2007
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  i.   Discretionary Bonus. With respect to the first three (3) years of the
Term, Employee will be eligible for a discretionary bonus of up to Two Hundred
Thousand Dollars ($200,000) per year based on Parent’s fiscal year (April 1 to
March 31) (“Fiscal Year”) with proration for partial years, as recommended by
the CEO, payable at the same time bonuses are paid to other senior executives of
Parent and its subsidiaries, but no later than the last calendar day of the next
Fiscal Year after the Fiscal Year in which such bonus was earned. With respect
to the final two (2) years of the Term, Employee will be eligible for an
uncapped discretionary bonus (with proration for partial years), as recommended
by the CEO, payable at the same time bonuses are paid to other senior executives
of Parent and its subsidiaries, but no later than the last calendar day of the
next Fiscal Year after the Fiscal Year in which such bonus was earned.     ii.  
EBITDA Bonus. Employee shall be entitled to receive an annual bonus (“EBITDA
Bonus”) on Parent’s attainment of an EBITDA target (the “E Target”), in the
following amounts:

  (1)   If Parent exceeds the E Target by at least five percent (5%) but less
than fifteen percent (15%), Employee shall receive an EBITDA Bonus equal to One
Hundred Thousand Dollars ($100,000).     (2)   If Parent exceeds the E Target by
at least fifteen percent (15%), Employee shall receive an EBITDA Bonus equal to
Two Hundred Thousand Dollars ($200,000).

      Within sixty (60) days after the beginning of each fiscal year of Parent,
the Compensation Committee of Parent (“CCLG”) shall set such fiscal year’s E
Target. The Company shall notify Employee in writing of such E Target for the
fiscal year in which the E Target applies promptly after the E Target is set by
the CCLG. Notwithstanding the foregoing, the E Target shall not be greater than
the E Target for Steve Beeks (or his successor). Parent’s fiscal year commences
April 1 of each year. Parent shall establish a reserve amount for uncollectible
receivables equal to two percent (2%) (the “E Reserve”). The E Target shall
include the E Reserve. For each portion of a fiscal year that Employee is
employed by the Company, Employee shall be entitled to a pro-rata portion of the
EBITDA Bonus. Any bonus payable to Employee hereunder shall be paid within
thirty (30) days following the end of the audit for the applicable fiscal year
(or, if earlier, when EBITDA bonuses are paid to other senior executives of
Parent and its subsidiaries), but

 

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September 10, 2007
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      in no event later than the last calendar day of the Fiscal year following
the Fiscal year in which the EBITDA Bonus is earned.

3. OFFICE. Employee’s office shall be located at the Company’s corporate
headquarters, currently located at 2700 Colorado Avenue, Suite 200, Santa
Monica, CA 90404. Employee shall not be required to locate outside of Los
Angeles County without his prior written consent.
4. BENEFITS. In addition to those benefits set forth in Section 5 and elsewhere
in this Agreement, as an employee of the Company, Employee will be eligible to
receive and participate in, on terms and conditions that are no less favorable
on an item-by-item basis (i.e. a “most favored nation” or “MFN” basis), all
other benefits (including all benefit plans and programs) Steve Beeks (or his
successor) receives or participates in, including as such benefits are
increased, enlarged or amended after the date hereof, provided that such
benefits shall in no event be reduced or diminished except as provided in
Section 5(d). Furthermore, in terms of benefits, if Steve Beeks receives
(including pursuant to any amendment or extension of any existing agreement that
he has) any other rights not contemplated herein, or any rights that are
superior to any rights contemplated herein, Employee will receive such rights on
an MFN basis with Steve Beeks. To the extent that any reimbursements due to
Employee or in-kind benefits provided to Employee under Section 4 or Section 5
of this Agreement constitute “deferred compensation” under Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”), the programs or plans
under which such reimbursements are paid or such in-kind benefits are provided
shall be structured following the date hereof in accordance with Treasury
Regulations Section 1.409A-3(i)(1)(iv) to meet the requirements of a specified
date or fixed schedule of payments with respect to such reimbursements or
benefits.
5. VACATION AND TRAVEL.

  a.   Employee will not have or accrue a specific number of vacation days, but
will instead be permitted to take vacations in the reasonable discretion of
Employee so long as such vacations do not interfere with the demands and
requirements of Employee’s duties and responsibilities under this Agreement.
Notwithstanding the foregoing, if Steve Beeks (or his successor) is permitted to
accrue vacation time, the Employee shall be permitted to accrue vacation time on
a similar basis.     b.   Employee will be eligible to be reimbursed for any
business expenses in accordance with the Company’s Travel and Entertainment
policy (and in any event no worse than on an MFN basis with Steve Beeks or his
successor).     c.   In addition, Employee shall be entitled to (i) business or
first class travel in accordance with the policies generally applicable to
senior executives of Parent and its subsidiaries, (ii) all customary “perqs” of
division heads

 

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September 10, 2007
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      within Parent, (iii) a cell phone, which shall be provided by the Company;
(iv) a reserved parking space, and (v) reimbursement for all expenses reasonably
incurred in connection with his employment in accordance with the Company’s
business expense reimbursement policy.

  d.   The Company reserves the right to modify, suspend or discontinue any and
all of the above referenced benefits, plans, practices, policies and programs
(including those in Section 4) at any time (whether before or after termination
of employment) without notice to or recourse by Employee so long as action is
taken in general with respect to Steve Beeks (or his successor) and all other
similarly situated persons at Parent and its subsidiaries as Employee and does
not single out Employee.

6. STOCK AND OPTIONS GRANTS.

  a.   Grant of Time-Based RSUs.

  i.   Time-Based Grant. Effective as of the date hereof, Parent shall grant to
Employee (the “Time-Based Grant”) 262,500 restricted share units (the
“Time-Based RSUs”) of Parent, in accordance with the terms and conditions of the
Lions Gate Entertainment Corp. Restricted Share Unit Award Agreement being
entered by Parent and Employee concurrently herewith.     ii.   Vesting. Subject
to Section 6(e) and (f), and subject to Section 6(a)(iii) below, the Time-Based
RSUs shall vest as follows:

  (1)   the first 105,000 Time-Based RSUs will vest on the second (2nd)
anniversary of this Agreement; and     (2)   the remaining 157,500 Time-Based
RSUs will vest in three (3) equal annual installments commencing upon the third
(3rd) anniversary of this Agreement.

  iii.   Continuance of Employment. Other than as set forth elsewhere herein,
the vesting schedule in Section 6(a)(ii) above requires continued employment or
service through each applicable vesting date as a condition to the vesting of
the applicable installment of the Time-Based Grant and the rights and benefits
under this Agreement.

  b.   Grant of Performance RSUs.

  i.   Performance Grant. Effective as of the date hereof, Parent shall grant to
Employee (the “Performance Grant”) 262,500 restricted

 

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Mr. Joseph Drake
September 10, 2007
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      shares units (the “Performance RSUs”, and with the Time-Based RSUs, the
“RSUs”) of Parent in accordance with the terms and conditions of the Lions Gate
Entertainment Corp. Performance Share Unit Award Agreement being entered by
Parent and Employee concurrently herewith.

  ii.   Vesting. Subject to Section 6(e) and (f), and subject to
Section 6(b)(iii) below, the Performance RSUs shall be eligible to vest on the
following schedule (“Performance Vesting Dates”):

  (1)   the first 105,000 Performance RSUs will vest on the second (2nd)
anniversary of this Agreement; and     (2)   the remaining 157,500 Performance
RSUs will vest in three (3) equal annual installments commencing upon the third
(3rd) anniversary of this Agreement.         The vesting of the Performance RSUs
on such Performance Vesting Dates shall be subject to satisfaction of fiscal
year performance targets approved in advance by the CCLG (at the same time as
such targets are set for Steve Beeks (or his successor), but in any event within
the first sixty (60) days of the applicable vesting period); provided, however,
that the CCLG will set partial fiscal year targets for the stub periods at the
beginning and end of the Term (and the Company agrees that the partial targets
for the stub period at the beginning of the Term will be set promptly after the
date hereof). The Performance RSUs shall vest on a sliding scale basis if the
Company’s performance targets have not been fully met for a particular fiscal
year. For purpose of example only, if seventy-five percent (75%) of the
Company’s fiscal year performance targets have been met for a particular vesting
period, seventy-five percent (75%) of the Performance RSUs for that vesting
period would vest. Notwithstanding the foregoing, the CCLG may, in its sole
discretion, provide that any or all of the Performance RSUs scheduled to vest on
any such Performance Vesting Date shall be deemed vested as of such date even if
the applicable performance targets are not met. Furthermore, the CCLG may, in
its sole discretion, provide that any of the Performance RSUs scheduled to vest
on any such Performance Vesting Date that does not vest because the applicable
performance targets are not met may vest on any future Performance Vesting Date
if the performance targets applicable to such Performance Vesting Date are
exceeded. If the CCLG accelerates the vesting of any RSUs for Steve

 

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Mr. Joseph Drake
September 10, 2007
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      Beeks (or his successor) (other than in the event of death), it shall
accelerate the vesting of a comparable portion of RSUs for Employee.

  iii.   Continuance of Employment. Other than as set forth elsewhere herein,
the vesting schedule in Section 6(b)(ii) above requires continued employment or
service through each applicable vesting date as a condition to the vesting of
the applicable installment of the Performance Grant and the rights and benefits
under this Agreement.

  c.   Grant of Options.

  i.   Options. Effective as of the date hereof, Parent shall grant Employee the
right (the “Option”) to purchase 500,000 common shares of Parent, in accordance
with the terms and conditions of the Lions Gate Entertainment Corp. Nonqualified
Stock Option Agreement being entered by Parent and Employee concurrently
herewith.     ii.   Vesting. Subject to Section 6(e) and (f), and subject to
Section 6(c)(iii) below, the Option shall vest in five (5) equal annual
installments with the first (1st) vesting date on the first (1st) anniversary of
this Agreement.     iii.   Continuance of Employment. Other than as set forth
elsewhere herein, the vesting schedule in Section 6(c)(ii) above requires
continued employment or service through each applicable vesting date as a
condition to the vesting of the applicable installment of the Option and the
rights and benefits under this Agreement.

  d.   Registration. The shares underlying the Time-Based RSUs, Performance RSUs
and Options shall be registered with the Securities and Exchange Commission for
resale on a registration statement on Form S-8, or a successor form thereto, to
be filed by Parent within ninety (90) days of the date of this Agreement.     e.
  Acceleration of Grants and Options upon Death of Employee. In the event that
Employee dies during the Term of this Agreement, all RSUs and the Option granted
pursuant to Sections 6(a)-(c) of this Agreement shall accelerate and immediately
become fully vested.     f.   Change of Control.

  i.   If a Change of Control (as defined below) occurs during the Term of this
Agreement and concludes on or after the first (1st)

 

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Mr. Joseph Drake
September 10, 2007
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      anniversary of the commencement date of the Term, all RSUs and the Option
granted pursuant to Sections 6(a)-(c) of this Agreement shall accelerate and
immediately become fully vested.

  ii.   For the purposes of this Agreement, “Change of Control” shall mean,

  (1)   if any person, other than a trustee or other fiduciary holding
securities of Parent under an employee benefit plan of Parent, becomes the
beneficial owner, directly or indirectly, of securities of Parent representing
thirty-three percent (33%) or more of the outstanding shares of common stock of
Parent as a result of one or more related transactions in the context of a
merger, consolidation, sale or other disposition of equity interests or assets
of Parent;     (2)   if, as a result of one or more related transactions in the
context of a merger, consolidation, sale or other disposition of equity
interests or assets of Parent, there is a sale or disposition of thirty-three
percent (33%) or more of Parent’s assets (or consummation of any transaction, or
series of related transactions, having similar effect);     (3)   if, as a
result of one or more related transactions in the context of a merger,
consolidation, sale or other disposition of equity interests or assets of
Parent, there occurs a change or series of changes in the composition of the
Board of Directors (the “Board”) as a result of which half or less than half of
the directors are incumbent directors;     (4)   if, as a result of one or more
related transactions in the context of a merger, consolidation, sale or other
disposition of equity interests or assets of Parent, a shareholder or group of
shareholders acting in concert obtain control of thirty-three percent (33%) or
more of the outstanding shares;     (5)   if, as a result of one or more related
transactions in the context of a merger, consolidation, sale or other
disposition of equity interests or assets of Parent, a shareholder or group of
shareholders acting in concert obtain control of half of the Board;     (6)   if
there is a dissolution or liquidation of Parent; or

 

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Mr. Joseph Drake
September 10, 2007
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  (7)   if there is any transaction or series of related transactions that has
the substantial effect of any or more of the foregoing.

  iii.   If Steve Beeks (or his successor) is afforded a definition of “Change
of Control” that is more favorable to Steve Beeks than the definition above,
then the definition above shall be modified to reflect such other definition on
an MFN basis with Steve Beeks (or his successor).

7. HANDBOOK. Employee agrees that the Company Employee Handbook outlines other
policies, which will apply to Employee’s employment, and Employee acknowledges
receipt of such handbook. Please note, however, that the Company retains the
right to revise, modify or delete any policy or benefit plan it deems
appropriate, so long as such changes are generally applicable to senior
executives of Parent and its subsidiaries.
8. TERMINATION.

  a.   The employment and the Term shall terminate upon the happening of any one
or more of the following events:

  i.   The mutual written agreement between the Company and Employee;     ii.  
The death of Employee;     iii.   Employee having become so physically or
mentally disabled as to be incapable, even with reasonable accommodation, of
satisfactorily performing Employee’s duties hereunder for a period of twelve
(12) consecutive weeks or sixteen (16) weeks in any year, provided that the
disability is not cured within ten (10) days of receiving written notice of the
proposed termination;     iv.   The determination on the part of the Company
that “cause” exists for termination of this Agreement; “cause” being defined as
any of the following (provided that if Steve Beeks (or his successor) is
afforded a definition of “cause” that is more favorable to Steve Beeks than the
definition below, then the definition below shall be modified to reflect such
other definition on an MFN basis with Steve Beeks (or his successor)):

  (1)   Employee’s conviction of a felony or plea of nolo contendere to a
felony, except in connection with a traffic violation;

 

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September 10, 2007
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  (2)   commission, by act or omission, of any material act of dishonesty in the
performance of Employee’s duties hereunder;     (3)   material breach of this
Agreement by Employee; or     (4)   any act of material misconduct by Employee
having a substantial adverse effect on the business or reputation of the
Company, which shall include, but not be limited to theft, fraud or other
illegal conduct, refusal or unwillingness to perform employment duties, sexual
harassment, violation of any fiduciary duty, and violation of any duty of
loyalty.

      Prior to terminating Employee’s employment for “cause,” the Company shall
provide Employee with written notice of the grounds for the proposed
termination. If the grounds for termination are subject to cure, Employee shall
have fifteen (15) days after receiving such notice in which to cure such grounds
to the extent such cure is possible. If no cure is possible or Employee has
failed to cure, Employee’s employment shall terminate upon the fifteenth (15th)
day following notice of termination.     v.   Termination by the Company
“without cause”;         Termination by the Company “without cause” shall be
defined as Employee being terminated by the Company for any reason other than as
set forth in subparagraphs (a)(i)-(iv) above.     vi.   Termination by Employee
for “good reason”;         Termination by Employee for “good reason” shall be
defined as any of the following (provided that if Steve Beeks (or his successor)
is afforded a definition of “good reason” that is more favorable to Steve Beeks
than the definition below, then the definition below shall be modified to
reflect such other definition on an MFN basis with Steve Beeks (or his
successor)): (i) material diminution in position, authority or duties of
Employee; (ii) material change in any of reporting relationships, except as set
forth below in the last sentence of this paragraph; (iii) reduction in Base
Salary, RSUs, Option, or benefits (except, with respect to benefits only, to the
extent there is a comparable reduction in benefits for all Parent employees),
(iv) material breach by the Company of this Agreement, provided, that if the
grounds for termination for “good reason” are subject to cure, the Company

 

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September 10, 2007
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      shall have fifteen (15) days after receiving notice from Employee in which
to cure such grounds to the extent such cure is possible; and (v) material
change in Employee’s position, authority or duties following a significant
merger, acquisition or similar transaction involving Parent or the Company or
any significant subsidiary of Parent (“Significant Transaction”).
Notwithstanding clause (ii) above, the insertion in the reporting structure of
one (1) Chief Operating Officer or similar intermediary between the CEO and
Employee in connection with a Significant Transaction will not in and of itself
constitute “Good Reason” unless accompanied by a material diminution in
position, authority or duties of Employee or any of the other elements of the
definition of “Good Reason.”

  b.   Payments on Termination.

  i.   In the event of a termination pursuant to Section 8(a)(v) “without cause”
or pursuant to Section 8(a)(vi) for “good reason”, (a) Employee shall be
entitled to receive (A) accrued but unpaid Base Salary, (B) theretofore
unreimbursed expenses, and (C) the following:

      (A) a lump sum payment of fifty percent (50%) of each EBITDA Bonus (on the
basis that Parent exceeds the E Target by five percent (5%)) that would have
been earned through the conclusion of the Term, if any, as if this Agreement had
not been terminated and (B) a lump-sum payment equal to fifty percent (50%) of
the balance of the Base Salary still owing to Employee under Section 2 hereof at
the time of termination as if this Agreement had not been terminated, in each
case payable within ten (10) business days of such separation (subject to
Section 8(f)), but in no event will this payment be less than the greater of
either (X) six (6) months’ Base Salary or (Y) the amount Employee would receive
from Parent’s severance policy for non-contract employees that is currently in
effect at the time of termination.         In addition, (A) all unvested Options
that would vest on the next vesting date, and fifty percent (50%) of the Options
that would vest on the subsequent vesting date, will vest upon such termination,
(B) all Performance RSUs that would vest on the next vesting date will vest if
earned (provided that any performance components directly tied to Employee’s
individual performance will be ignored), (C) if termination is during the first
year of the Term, seventy-

 

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September 10, 2007
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      five percent (75%) of the Time-Based RSUs that would vest on the next
vesting date will vest upon such termination, and (D) if termination is after
the first (1st) year of the Term, all Time-Based RSUs that would vest on the
next vesting date, and fifty percent (50%) of the Time-Based RSUs that would
vest on the subsequent vesting date, will vest upon such termination.

  ii.   Death or Disability or Cause: Neither the Company nor Employee shall
have any remaining duties or obligations hereunder in connection with a
termination pursuant to Section 8(a)(ii), (iii) or (iv), except that: (A) on
termination for death pursuant to Section 8(a)(ii), Employee shall be entitled
to receive all accrued but unpaid Base Salary, a pro rated Discretionary Bonus
for the portion of the year employed, theretofore unreimbursed expenses, and
accrued vacation pay, if any, and all Options and RSUs would vest upon such
termination; (B) on termination for Disability pursuant to Section 8(a)(iii),
Employee shall be entitled to receive such compensation, and to receive such
other benefits (including vesting of Options and RSUs), in each case on an MFN
basis with all other employees of Parent, the Company and their subsidiaries
other than the CEO and Vice Chairman, currently Jon Feltheimer and Michael
Burns, respectively, that such persons would be entitled to receive on
termination for disability, and (C) on termination for “cause” pursuant to
Section 8(a)(iv), Employee shall be entitled to receive accrued but unpaid Base
Salary, theretofore unreimbursed expenses, and accrued vacation pay, if any.
Payments made under this Section 8(b)(ii) shall be in accordance with the
following: (x) on termination for death, the Company will make such payments as
soon as practicable following the Employee’s death but no later than 120 days
following Employee’s death; and (y) on termination for Disability, subject to
Section 8(f) of this Agreement, the Company will make such payments, or such
payments shall commence, as soon as practicable after the Employee’s separation
from service, but no later than 120 days following Employee’s separation from
service.     iii.   If, in connection with a Change of Control, Employee’s
employment is terminated by the Company within six (6) months of the Change of
Control for any reason other than “cause” or is terminated by Employee for “good
reason” within six (6) months of the Change of Control Employee shall be
entitled to receive (A) accrued but unpaid Base Salary, (B) theretofore
unreimbursed expenses, (C) payment of each EBITDA Bonus (on the basis that
Parent exceeded the E Target by five percent (5%)) that would

 

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September 10, 2007
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      have been earned through the conclusion of the Term as if this Agreement
had not been terminated, (D) accrued vacation pay, if any, and (E) a lump-sum
payment in the amount equal to the greater of (x) two (2) times Employee’s then
Base Salary or (y) fifty percent (50%) of Employee’s then Base Salary that would
have been earned through the conclusion of the Term as if this Agreement had not
been terminated. Subject to Section 8(f) of this Agreement, such payments under
this Section 8(b)(iii) shall be made no later than the tenth (10th) business day
after such separation.

  c.   Surviving Provisions. Notwithstanding the foregoing, the parties shall
continue to be bound by Sections 10, 11, 12, 13, 14, 15, 16, and 17 if the
employment or the Term is terminated for any reason.     d.   Excess Parachute
Payments. Employee is entitled to receive on an MFN basis no less favorable
treatment than any other existing senior executive of Parent and its
subsidiaries in connection with benefits provided under this Agreement that
would be subject to an excise tax under Section 4999 of the Internal Revenue
Code. Any tax gross-up payment under this Section shall be paid to Employee by
the end of Employee’s taxable year following the taxable year in which Employee
pays the related taxes. Additionally, to the extent Employee is entitled to the
reimbursement of expenses incurred due to a tax audit or litigation addressing
the existence or amount of a tax liability, such reimbursement shall be made to
Employee by the end of Employee’s taxable year following the taxable year in
which the taxes that are the subject of the audit or litigation are paid or, if
no such taxes are paid, the end of the taxable year following the taxable year
in which the audit is completed or there is a final and nonappealable settlement
or other resolution of the litigation.”     e.   Offset. The Company has no
right to offset against any amounts owed to or other rights of Employee, his
estate or his permitted successors or assigns.     f.   Section 409A Compliance.
Notwithstanding any other provisions of the Agreement, any payment or benefit
otherwise required to be made after Employee’s termination of employment that
the Company reasonably determines is subject to Section 409A(a)(2)(B)(i) of the
Code, shall not be paid or payment commenced until the later of (a) six months
after the date of Employee’s “separation from service” (within the meaning of
Section 409A of the Code) and (b) the payment date or commencement date
specified in the Agreement or other applicable document for such payment(s). On
the earliest date on which such payments can be made or commenced without
violating the requirements of Section

 

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Mr. Joseph Drake
September 10, 2007
Page 15 of 20

      409A(a)(2)(B)(i) of the Code, Employee shall be paid, in a single cash
lump sum, an amount equal to the aggregate amount of all payments delayed
pursuant to the preceding sentence. In addition, Employee and the Company agree
to cooperate to make such amendments to the terms of the Agreement as may be
necessary to avoid the imposition of penalties and additional taxes under
Section 409A of the Code with respect to any payments or benefits under the
Agreement.

9. EXCLUSIVITY AND SERVICE. Employee hereby agrees to comply with all reasonable
requirements, directions and requests, and with all reasonable rules and
regulations made by the Company in connection with the regular conduct of its
business, in any case that are generally applicable to senior executives of
Parent and its subsidiaries. Except only as otherwise provided in this
Agreement, Employee further agrees to render services during Employee’s
employment hereunder whenever, wherever and as often as the Company may
reasonably require in a competent, conscientious and professional manner, and as
instructed by the Company in all matters, including those involving artistic
taste and judgment, but there shall be no obligation on the Company to cause or
allow Employee to render any services, or to include all or any of Employee’s
work or services in any motion picture or other property or production.
10. INTELLECTUAL PROPERTY. Employee agrees that the Company shall own all rights
of every kind and character throughout the universe, in perpetuity to any
material and/or idea suggested or submitted by Employee or suggested or
submitted to Employee by a third party that occurs during the Term or any other
period of employment with the Company, its parent, affiliates, or subsidiaries
that are within the scope of Employee’s employment and responsibilities
hereunder. Employee agrees that during the Term and any other period of
employment with the Company, its parent, affiliates, or subsidiaries, the
Company shall own all other results and proceeds of Employee’s services that are
related to Employee’s employment and responsibilities. Employee shall promptly
and fully disclose all intellectual property generated by Employee during the
Term and any other period of employment with the Company, its parent,
affiliates, or subsidiaries in connection with Employee’s employment hereunder.
     All copyrightable works that Employee creates in connection with Employee’s
obligations under this Agreement and any other period of employment with the
Company, its parent, affiliates, or subsidiaries shall be considered “work made
for hire” and therefore the property of the Company. To the extent any work so
produced or other intellectual property so generated by Employee is not deemed
to be a “work made for hire,” Employee hereby assigns and agrees to assign to
the Company (or as otherwise directed by the Company) Employee’s full right,
title and interest in and to all such works and other intellectual property.
Employee agrees to execute any and all applications for domestic and foreign
copyrights or other proprietary rights and to do such other acts (including
without limitation the execution and delivery of instruments of further
assurance or confirmation) requested by the Company to assign the intellectual
property to the Company and to permit the Company to enforce any copyrights or
other

 

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Mr. Joseph Drake
September 10, 2007
Page 16 of 20
proprietary rights to the intellectual property. Employee further agrees not to
charge the Company for time spent in complying with these obligations. This
Section 10 shall apply only to that intellectual property which related at the
time of conception to the Company’s then current or anticipated business or
resulted from work performed by Employee for the Company. Employee hereby
acknowledges receipt of written notice from the Company pursuant to California
Labor Code Section 2872 that this Agreement (to the extent it requires an
assignment or offer to assign rights to any invention of Employee) does not
apply to an invention which qualifies fully under California Labor Code
Section 2870.
11. ASSIGNMENT AND DELEGATION. Employee shall not assign any of Employee’s
rights or delegate any of Employee’s duties granted under this Agreement. Any
such assignment or delegation shall be deemed void ab initio.
12. TRADE SECRETS. The parties acknowledge and agree that during the Term of
this Agreement and in the course of the discharge of Employee’s duties hereunder
and at any other period of employment with the Company, its parent, affiliates,
or subsidiaries, Employee shall have and has had access to information
concerning the operation of the Company and its affiliated entities, including,
without limitation, financial, personnel, sales, planning and other information
that is owned by the Company and regularly used in the operation of the
Company’s business and (to the extent that such confidential information is not
subsequently disclosed) that this information constitutes the Company’s trade
secrets. Notwithstanding the above, the parties acknowledge and agree that trade
secrets shall not include any information that Employee can demonstrate (i) was
publicly available at the time of its disclosure to Employee, (ii) was already
in Employee’s possession at the time of disclosure, (iii) was rightfully
received by Employee from a third party not subject to obligations of
confidentiality, or (iv) was independently developed by Employee without use of
any trade secrets.
     Employee agrees that Employee shall not disclose any such trade secrets,
directly or indirectly, to any other person or use them in any way, either
during the Term of this Agreement or at any other time thereafter, except as is
required in the course of Employee’s employment for the Company. Employee shall
not use any such trade secrets in connection with any other employment and/or
business opportunities following the Term. In addition, Employee hereby
expressly agrees that Employee will not disclose any confidential matters of the
Company that are not trade secrets prior to, during or after Employee’s
employment including the specifics of this Agreement. Employee shall not use any
such confidential information in connection with any other employment and/or
business opportunities following the Term. In addition, in order to protect the
Confidential Information, Employee agrees that during the Term and for a period
of one (1) year thereafter, Employee will not, directly or indirectly, induce or
entice any other executive or employee of the Company to leave such employment
excluding such Employee’s executive assistant.

 

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Mr. Joseph Drake
September 10, 2007
Page 17 of 20
13. ARBITRATION. Any dispute, controversy or claim arising out of or in respect
of this Agreement (or its validity, interpretation or enforcement), the
employment relationship or the subject matter hereof shall at the request of
either party be submitted to and settled by binding arbitration conducted before
a single arbitrator in Los Angeles in accordance with the Federal Arbitration
Act, to the extent that such rules do not conflict with any provisions of this
Agreement. Said arbitration shall be under the jurisdiction of Judicial
Arbitration and Mediation Services, Inc. (“JAMS”) in Los Angeles, California.
All such actions must be brought within the statute of limitations period
applicable to the claim as if that claim were being filed with the judiciary or
forever be waived. Failure to institute an arbitration proceeding within such
period shall constitute an absolute bar to the institution of any proceedings
respecting such controversy or claim, and a waiver thereof. The arbitrator shall
have the authority to award damages and remedies in accordance with applicable
law. Any award, order, or judgment pursuant to such arbitration shall be deemed
final and binding and may be entered and enforced in any state or federal court
of competent jurisdiction. Each party agrees to submit to the jurisdiction of
any such court for purposes of the enforcement of any such award, order, or
judgment. The Company shall pay for the administrative costs of such hearing and
proceeding.
14. NOTICES. All notices to be given pursuant to this Agreement shall be
effected by mail or personal delivery in writing as follows:
Company:
Lions Gate Films, Inc.
2700 Colorado Avenue, Suite 200
Santa Monica, CA 90404
Attn: General Counsel
Employee:
Joseph Drake
2795 McConnell Drive
Los Angeles, CA 90064
15. WAIVER. Failure to require compliance with any provision or condition
provided for under this Agreement at any one time, or several times, shall not
be deemed a waiver or relinquishment of such provision or condition at any other
time.
16. INDEMNIFICATION. Except with respect to claims resulting from Employee’s
willful misconduct or acts outside the scope of his employment hereunder,
Employee shall be indemnified by the Company and by Parent (whether during or
after the Term) in respect of all claims arising from or in connection with his
position or services as an officer of the Company to the maximum extent
permitted in accordance with Parent’s Certificate of Incorporation, its Bylaws
and under applicable law, and shall

 

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Mr. Joseph Drake
September 10, 2007
Page 18 of 20
be covered by Parent’s applicable directors and officers insurance policy, which
coverage shall be no less favorable than that accorded any other officer or
director or Parent.

17.   INTEGRATION, AMENDMENT, SEVERABILITY, AND INTERPRETATION

  a.   This Agreement expresses the binding and entire Agreement between
Employee and the Company with respect to the subject matter hereof and shall
replace and supersede all prior arrangements and representations, either oral or
written, as to the subject matter hereof.     b.   All modifications or
amendments to the Agreement must be made in writing and signed by both parties.
    c.   If any portion of this Agreement is held unenforceable under any
applicable statute or rule of law then such portion only shall be deemed omitted
and shall not affect the validity of enforceability of any other provision of
this Agreement.     d.   This Agreement shall be governed by the laws of the
State of California.     e.   As used herein, (i) the term “or” is not
exclusive; (ii) words in the singular include the plural, and words in the
plural include the singular; (iii) “herein,” “hereof,” and other similar words
refer to this Agreement as a whole and not to any particular section,
subsection, paragraph, clause, or other subdivision; (iv) “including” will be
deemed to be followed by “, but not limited to,”; and (v) “shall,” “will,” or
“agrees” are mandatory, and “may” is permissive. The headings and subheadings in
this Agreement are only for convenience and are not to be considered in
construing this Agreement. This Agreement has been negotiated by the parties
with the assistance of their respective counsel, and the language used in this
Agreement expresses their mutual intent. Any rule of construction to the effect
that ambiguities are to be resolved against the drafting party will not apply in
interpreting this Agreement.

[Remainder of Page Intentionally Left Blank]

 

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     Please acknowledge your confirmation of the above terms by signing below
where indicated and returning this letter to me.

            Very truly yours,

Lions Gate Films, Inc.
      /s/ Wayne Levin       Name:   Wayne Levin      Title:   Vice President   
 

AGREED AND ACCEPTED
AS OF SEPTEMBER 10, 2007:

    /s/ Joseph Drake   Joseph Drake  

[Joe Drake Employment Agreement]