**Exhibit 10.51**

**DREAMWORKS ANIMATION SKG, INC.**

**1000 FLOWER STREET**

**GLENDALE, CA 91201**

December 13,2007 

William Damaschke 

c/o Bloom Hergott Diemer RosenthalLaViolette & Feldman, LLP 

150 S. Rodeo Drive, 3rd Floor 

Beverly Hills, CA 90212 

Attn: Alan Hergott 

DearBill: 

Upon the Commencement Date (as defined below) DreamWorks Animation SKG, Inc. (“Studio”) agrees to employ you and you agreeto accept such employment upon the terms and conditions set forth in this agreement (“Agreement”). Upon Studio’s receipt of executed copies (in form and substance satisfactory to Studio) of this Agreement, this Agreement shallsupersede the executed Employment Agreement, dated as of October 1, 2002 (the “Prior Agreement”) between Studio and you, and the Prior Agreement shall be deemed terminated effective as of December 13, 2007. Studio shall have noobligation under this Agreement unless and until Studio has received from Employee a fully executed copy of this Agreement (in form and substance satisfactory to Studio). 

1. **Term**. The term of your employment hereunder shall commence on December 13, 2007 (the “Commencement Date”) and shall continue until December 31, 2012. This period shall hereinafterbe referred to as the “Employment Term.” 

2. **Duties/Responsibilities**. 

a. General. Your title shall be “Co-President of Production and President of Live Theatrical” of Studio. 

b. Services. During the Employment Term you shall render your exclusive full time business services to Studio and/or its divisions, subsidiariesor affiliates in accordance with the reasonable directions and instructions of the Chief Operating Officer of Studio, all as hereinafter set forth. Employee shall report to the Chief Operating Officer of Employer (currently, Ann Daly).Notwithstanding the foregoing, Studio may not require you to render services on a permanent basis outside Los Angeles County without your consent. If Studio moves its primary operations outside of Los Angeles County and you do not consent to renderpermanent services at such new location, then you may elect to terminate this Agreement. 

3. **Exclusivity**. You shall notduring the Employment Term perform services for any person, firm or corporation (hereinafter referred to collectively as a “person”) without the prior written consent of Studio and will not engage in any activity which would interfere withthe performance of Studio’s services hereunder, or become financially interested in any other person engaged in the production, distribution or exhibition of motion pictures or television programs (including, without limitation, motion picturesproduced for, distributed to or exhibited on free, cable, pay, satellite and/or subscription television, music and/or interactive), anywhere in the world. Nothing contained herein shall prevent you from owning publicly traded minority stockinterests not 

to exceed five percent (5%), limited partnership interests or other passive investment interests in businesses performing any of the aforesaid activities.

4. **Compensation**. 

a. Base Salary. For all services rendered under this Agreement, Studio will pay you a yearly base salary at a rate of Nine Hundred Thousand Dollars ($900,000.00) for each full year of the Employment Term, payable in accordance withStudio’s applicable payroll practices (“Base Salary”). Within 15 days following execution of this Agreement, you shall receive a cash payment (subject to applicable withholding) of $447,692.30 as a signing bonus. 

b. Cash Incentive and Equity-Based Compensation. 

(i) You will be eligible, while you remain employed hereunder, subject to annual approval by the Compensation Committee, to receive an annual cash bonus award pursuant to the terms of the Studio’s short termincentive plan. It is Studio’s present expectation that such annual awards will have an aggregate grant-date value, depending on company performance, ranging between $400,000 (bonus target) and $800,000 (in the case of superior companyperformance). 

(ii) In addition, beginning in 2008 you will be eligible, while you remain employed hereunder, subject toannual approval by the Compensation Committee of the Board of Directors of Studio (the “Compensation Committee”), to receive annual equity incentive awards consistent with other senior executives subject to Compensation Committee approval.It is Studio’s present expectation that such annual awards will have an annual aggregate grant-date value targeted at $2,500,000. 

5.**Benefits**. In addition to the foregoing, during the period of your employment with Studio hereunder, you shall be entitled to participate in such other, medical, dental and life insurance, 401(k), pension and other benefit plans asStudio may have or establish from time to time for its most senior executives. In addition, Studio shall cover the cost of personal financial consulting services to you. During the Employment Term, unless earlier terminated as set forth below, youshall be entitled to coverage in accordance with Studio’s standard leave of absence policy and shall be entitled to vacation days and/or personal days to be taken subject to the demands of Studio (as determined by Studio) and consistent withthe amount of days taken by other senior level executives; provided, however, no vacation time will be accrued during the Employment Term. The foregoing, however, shall not be construed to require Studio to establish any such plans or to prevent themodification or termination of such plans once established, and no such action or failure thereof shall affect this Agreement. 

6.**Business Expenses**. Studio shall reimburse you for business expenses on a regular basis in accordance with its policy regarding the reimbursement of such expenses for executives of like stature to you (including travel, at Studio’srequest, which, in accordance with company policy, is currently first class, a cellular phone and including the reimbursement or direct payment of business phone expenses on a regular basis in accordance with Studio’s policy regarding thereimbursement or payment of such expenses for executives of like stature to you). Expenses shall be eligible for reimbursement hereunder to the extent that they are incurred by you during the period of your employment with Studio pursuant to thisAgreement. All reimbursable expenses shall be reimbursed to you as promptly as practicable and in any event not later than the last day of the calendar year after the calendar year in which the expenses are incurred, and the amount of expenseseligible for reimbursement during any calendar year will not affect the amount of expenses eligible for reimbursement in any other calendar year. During the period of your employment with Studio 

 

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hereunder, Studio will provide you with a monthly car allowance of One Thousand Dollars ($1,000), which allowance shall be paid to you on a monthly basis andshall be administered in accordance with Studio’s then-current policy for similarly situated executives. 

7.**Indemnification**. You shall be fully indemnified and held harmless by Studio to the fullest extent permitted by law from any claim, liability, loss, cost or expense of any nature (including attorney’s fees of counsel selected byyou, judgments, fines, any amounts paid or to be paid in any settlement, and all costs of any nature) incurred by you (all such indemnification to be on an “after-tax” or “gross-up” basis) which arises, directly or indirectly, inwhole or in part out of any alleged or actual conduct, action or inaction on your part in or in connection with or related in any manner to your status as an employee, agent, officer, corporate director, member, manager, shareholder, partner of, oryour provision of services to, Studio or any of its affiliated entities, or any entity to which you are providing services on behalf of Studio or which may be doing business with Studio. To the maximum extent allowed by law, all amounts to beindemnified hereunder including reasonable attorneys’ fees shall be promptly advanced by Studio until such time, if ever, as it is determined by final decision pursuant to Paragraph 24 below that you are not entitled to indemnificationhereunder (whereupon you shall reimburse Studio for all sums theretofore advanced). Any tax gross-up payments that you become entitled to receive pursuant to this Paragraph 7 will be paid to you (or to the applicable taxing authority on your behalf)as promptly as practicable and in any event not later than the last day of the calendar year after the calendar year in which you remit the related taxes. 

8. **Covenants**. 

a. Confidential Information. You agree that you shall not, during theEmployment Term or at any time thereafter, use for your own purposes, or disclose to, or for any benefit of any third party, any trade secret or other confidential information of Studio or any of its affiliates (except as may be required by law orin the performance of your duties hereunder consistent with Studio’s policies) and that you will comply with any confidentiality obligations of Studio known by you to a third party, whether under agreement or otherwise. Notwithstanding theforegoing, confidential information shall be deemed not to include information which (i) is or becomes generally available to the public other than as a result of a disclosure by you or any other person who directly or indirectly receives suchinformation from you or at your direction or (ii) is or becomes available to you on a non-confidential basis from a source which you reasonably believe is entitled to disclose it to you. 

b. Studio Ownership. The results and proceeds of your services hereunder, including, without limitation, any works of authorship resulting fromyour services during your employment and any works in progress, shall be works-made-for-hire and Studio shall be deemed the sole owner throughout the universe of any and all rights of whatsoever nature therein, whether or not now or hereafter known,existing, contemplated, recognized or developed, with the right to use the same in perpetuity in any manner Studio determines in its sole discretion without any further payment to you whatsoever. If, for any reason, any of such results and proceedsshall not legally be a work-for-hire and/or there are any rights which do not accrue to Studio under the preceding sentence, then you hereby irrevocably assign and agree to assign any and all of your right, title and interest thereto, including,without limitation, any and all copyrights, patents, trade secrets, trademarks and/or other rights of whatsoever nature therein, whether or not now or hereafter known, existing, contemplated, recognized or developed by Studio, and Studio shall havethe right to use the same in perpetuity throughout the universe in any manner Studio may deem useful or desirable to establish or document Studio’s exclusive ownership of any and all rights in any such results and proceeds, including, withoutlimitation, the execution of appropriate copyright and/or patent applications or assignments. 

 

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To the extent that you have any rights in the results and proceeds of your services that cannot be assigned in the manner described above, youunconditionally and irrevocably waive the enforcement of such rights. This Paragraph 8.b is subject to, and shall not be deemed to limit, restrict, or constitute any waiver by Studio of any rights of ownership to which Studio may be entitled byoperation of law by virtue of Studio or any of its affiliates being your employer. 

c. Return of Property. All documents, data,recordings, or other property, whether tangible or intangible, including all information stored in electronic form, obtained or prepared by or for you and utilized by you in the course of your employment with Studio or any of its affiliates shallremain the exclusive property of Studio. In the event of the termination of your employment for any reason, and subject to any other provisions hereof, Studio reserves the right, subject to Paragraph 27.b, to the extent required by law, and inaddition to any other remedy Studio may have, to deduct from any monies otherwise payable to you the following: (i) the full amount of any specifically determined debt you owe to Studio or any of its affiliates at the time of or subsequent tothe termination of your employment with Studio, and (ii) the value of Studio property which you retain in your possession after the termination of your employment with Studio following Studio’s written request for such item(s) return andyour failure to return such items within thirty (30) days of receiving such notice. In the event that the law of any state or other jurisdiction requires the consent of an employee for such deductions, this Agreement shall serve as suchconsent. 

d. Promise Not To Solicit. You will not, during the period of the Employment Term or for the period ending one(1) year after the earlier of expiration of the Employment Term or your termination hereunder, induce or attempt to induce any employees, exclusive consultants, exclusive contractors or exclusive representatives of Studio (or those of any ofits affiliates) to stop working for, contracting with or representing Studio or any of its affiliates or to work for, contract with or represent any of Studio’s (or its affiliates’) competitors. 

9. **Incapacity**. 

a. In theevent you are unable to perform the services required of you hereunder as a result of a physical or mental disability and such disability shall continue for a period of ninety (90) or more consecutive days or an aggregate of four (4) ormore months during any twelve (12) month period during the Employment Term, Studio shall have the right, at its option and subject to applicable state and federal law, to terminate your employment hereunder, and Studio shall only be obligatedto pay you (a) for a period commencing on the termination of your employment by Studio and ending on the earlier of the expiration of the Employment Term and the second anniversary of the termination of your employment, payments at a rate equalto 50% of your rate of Base Salary, and, except as otherwise provided in this Paragraph 9.a, such payments will be payable in accordance with Studio’s regular payroll practices applicable to similarly situated active employees, and (b) anyadditional compensation (including, without limitation, any grants of equity-based compensation made to you on or prior to the date of termination (it being understood you will not be entitled to receive any grants of equity-based compensationthereafter) as determined pursuant to Paragraph 9.b below, car allowance which has accrued prior to your termination, and expense reimbursement for expenses incurred prior to your termination) earned by you prior to the termination of youremployment. Notwithstanding the foregoing sentence, you further will be entitled to continuation of medical, dental, life insurance, car allowance and financial counseling benefits (collectively, the “Continued Benefits”) for a period oftwelve (12) months after termination of your employment pursuant to this paragraph (but not to exceed the end of the then-current Employment Term). Except as specifically permitted by Section 409A of the Internal Revenue Code of 1986, asamended (the “Code”), and the regulations thereunder as in effect from time to time (collectively, hereinafter, “Section 409A”), the Continued Benefits provided to you during any 

 

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calendar year will not affect the Continued Benefits to be provided to you in any other calendar year. In the case of car allowance payments, such paymentswill be equal to your monthly car allowance at the time of termination of your employment and will be made to you in equal monthly payments during such period in accordance with Studio’s regular practice of paying a monthly car allowance tosimilarly situated active employees. With respect to any Continued Benefits for which you may become eligible under this Paragraph 9.a or otherwise under this Agreement, if requested by Studio during any continuation period you shall elect to treatsuch Continued Benefits as being provided pursuant to the applicable provisions of the Consolidated Omnibus Budget Reconciliation Act of 1986 (“COBRA”) or any similar applicable federal or state statute. Whenever compensation is payable toyou hereunder, during or with respect to a time when you are partially or totally disabled and such disability (except for the provisions hereof) would entitle you to disability income or to salary continuation payments from Studio according to theterms of any plan now or hereafter provided by Studio or according to any policy of Studio in effect at the time of such disability, the compensation payable to you hereunder shall be reduced on a dollar-for-dollar basis by any such disabilityincome or salary continuation and shall not be in addition thereto. If disability income is payable directly to you by an insurance company under an insurance policy paid for by Studio, the compensation payable to you hereunder shall be reduced on adollar-for-dollar basis by the amounts paid to you by said insurance company and shall not be in addition thereto. 

b. Unless otherwise specified in the applicable equity compensation plan of Studio (each such plan, a “Plan”) or in the agreement evidencing the grant, in each case as of the date of the grant, aftertermination of employment pursuant to Paragraph 9.a, your grants of equity-based compensation will be determined as follows. For purposes of this Agreement, an award will be deemed to have vested when it is no longer subject to a substantialrisk of forfeiture (within the meaning of Treasury Regulation Section 1.409A-1(d)). With respect to grants having performance-based vesting criteria, the amount of such award that is eligible to vest will be determined after the end of theperformance period specified in the grant, or satisfaction of such other criteria pursuant to the Plan, subject to the applicable performance or other criteria, as if you had continued to remain employed with Studio throughout such performanceperiod. With respect to grants having time-based vesting criteria, the full amount of such award will be eligible to vest. A ratable portion of the amount of each award that is eligible to vest will become vested by multiplying such amount by afraction, the numerator of which is the sum of (i) your actual period of service in months through the date of termination plus (ii) the lesser of (A) twelve (12) months or (B) 50% of the remaining Employment Term in monthsdetermined as of the date of termination (but in no event will the numerator exceed the denominator), and the denominator of which is the total performance period in months (for grants having performance-based vesting criteria) or the total vestingperiod in months (for grants having time-based vesting criteria) specified in the grant. To avoid any double-counting, any part of any equity-based compensation award that has vested in accordance with the terms of the applicable award agreementshall be credited against any part of such award that you shall be entitled to receive or exercise pursuant to the determination set forth in the proceeding sentence. The balance of such awards will be forfeited. Subject to this Paragraph 9.band to the other terms and conditions of the grants, all stock options and any similar equity-based awards will remain exercisable for the remaining term of the grant. In the case of restricted stock units that are subject to performance-basedvesting criteria, except as otherwise set forth in Paragraph 25, such awards will be settled on the seventieth (70th) day after the date thatsuch awards become vested. With respect to restricted stock units that are subject to time-based vesting criteria, such awards will be settled within thirty (30) days following your termination of employment. 

10. **Death**. If you die prior to the end of the Employment Term, this Agreement shall be terminated as of the date of death and yourbeneficiary or estate shall be entitled to receive (a) your Base Salary accrued up to and including the date of death and, thereafter, for a period commencing 

 

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on such date and ending on the earlier of the expiration of the Employment Term and the first anniversary of such date, continued Base Salary payable inaccordance with Studio’s regular payroll practices applicable to similarly situated active employees, (b) equity-based compensation to be determined in the same manner and at the same time as provided in Paragraph 9.b, under and inaccordance with any Plan, and (c) all other benefits pro-rated up to the date on which the death occurs. 

11. **Termination forCause**. Studio shall have the right to terminate this Agreement at any time for cause. As used herein, the term “cause” shall mean (i) misappropriation of any material funds or property of Studio or any of its relatedcompanies; (ii) failure to obey reasonable and material orders given by the Chief Operating Officer of Studio or by the board of directors of Studio (iii) any material breach of this Agreement by you; (iv) conviction of or entry of aplea of guilty or *nolo contendre* to a felony or a crime involving moral turpitude; (v) any willful act, or failure to act, by you in bad faith to the material detriment of Studio; or (vi) material non-compliance with establishedStudio policies and guidelines (after which you have been informed in writing of such policies and guidelines and you have failed to cure such non-compliance); provided that in each such case (other than (i) or (iv) or a willful failure in(ii) or repeated breaches, failures or acts of the same type or nature) prompt written notice of such cause is given to you by specifying in reasonable detail the facts giving rise thereto and that continuation thereof will result intermination of employment, and such cause is not cured within ten (10) business days after receipt by you of the first such notice. If you are terminated as set forth in this Paragraph 11, then payment of the specified Base Salary and anyadditional noncontingent cash compensation (including, without limitation, any equity-based compensation which has vested and expense reimbursement for expenses incurred prior to your termination) theretofore earned by you shall be payment in fullof all compensation payable hereunder. If Studio terminated you hereunder, then you shall immediately reimburse Studio for all paid but unearned sums. 

12. **Involuntary Termination**. Studio may terminate your employment other than for cause or on account of incapacity, in which case you will receive, for a period commencing on the date of such terminationand ending on the expiration of the Employment Term, (i) continued Base Salary payable in accordance with Studio’s regular payroll practices applicable to similarly situated active employees, and (ii) Continued Benefits. In the eventthat any cash bonuses have been paid to you during the Employment Term, you shall also be entitled to receive, with respect to each complete or partial calendar year prior to the expiration of the Employment Term with respect to which, as of thedate of termination of your employment, Studio has not yet paid annual cash bonuses (if any) under its short term incentive plan to similarly situated active employees (each such year, a “Bonus Entitlement Year”), an annual cash payment(such payment, a “Bonus Equivalent Payment”) in an amount equal to the average annual cash bonuses (including any $0 bonuses) that have been paid (whether or not deferred) to you, if any, during the Employment Term. In the event that youbecome entitled to a Bonus Equivalent Payment in accordance with the preceding sentence, such Bonus Equivalent Payment will be made to you no earlier than January 1 and no later than December 31 of the calendar year following the BonusEntitlement Year to which such Bonus Equivalent Payment relates, and the Bonus Equivalent Payment relating to the calendar year for the last year of the Employment Term shall be pro-rated based on the number of days prior to the expiration of theEmployment Term during such calendar year. In the event of termination of your employment without cause pursuant to this Paragraph 12, all the equity-based compensation held by you shall accelerate vesting (with respect to grants havingperformance-based vesting criteria, on the basis that any mid-range or “target” goals rather than premium goals are deemed to have been achieved) and will, subject to the other terms and conditions of the grants, remain exercisable for theremainder of the term of the grant; however, you will not be entitled to receive any future equity-based compensation. All such outstanding restricted stock units (whether subject to time-based or 

 

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performance-based vesting criteria) will be settled not later than thirty (30) days following your termination of employment. If your services areterminated pursuant to this paragraph, you shall not be obligated to secure other employment to mitigate damages incurred by Studio or any payment due you as a result of your termination hereunder; provided that any compensation earned from anyemployment obtained by you during the remainder of the Employment Term will reduce on a dollar-for-dollar basis Studio’s payment obligations under this Agreement, except if your services are terminated following a “change of control”as provided in Paragraph 25 hereof. You agree that you will have no rights or remedies in the event of your termination without cause other than those set forth in the Agreement to the maximum extent required by law. 

13. **Termination for Good Reason**. You shall be entitled to terminate your employment at any time for “good reason.” As usedherein, the term “good reason” shall mean only: (i) any material breach of this Agreement by Studio; (ii) any diminution in title; (iii) failure to be the Company’s most senior creative executive (other than theCompany’s Chief Executive Officer or the Chief Operating Officer (or their successors)) with respect to feature animation and live theatrical projects; (iv) any time that Studio shall direct or require that you report to any person otherthan the Chief Operating Officer of the Studio; or (v) any time that Studio shall direct or require that your principal place of business be anywhere other than the Los Angeles area. Notwithstanding anything to the contrary contained herein,you will not be entitled to terminate your employment for good reason for purposes of this Agreement as the result of any event specified in the foregoing clauses (i) through (v) unless, within ninety (90) days following theoccurrence of such event, you give Studio written notice of the occurrence of such event, which notice sets forth the exact nature of the event and the conduct required to cure such event. Studio shall have thirty (30) days from the receipt ofsuch notice within which to cure (such period, the “Cure Period”). If, during the Cure Period, such event is remedied, then you will not be permitted to terminate your employment for good reason as a result of such event. If, at the end ofthe Cure Period, the event that constitutes good reason has not been remedied, you will be entitled to terminate your employment for good reason during the sixty (60) day period that follows the end of the Cure Period. If you do not terminateyour employment during such sixty (60) day period, you will not be permitted to terminate your employment for good reason as a result of such event. In the event of your voluntary termination for good reason, you shall be entitled to thepayments, benefits (including the post-term continuation of the applicable benefits) and equity-based compensation provided under Paragraph 12 for involuntary termination without cause. If your services are terminated pursuant to this paragraph, youshall not be obligated to secure other employment to mitigate damages incurred by Studio or any payment due you as a result of your termination hereunder. You agree that you will have no rights or remedies in the event of your termination for goodreason other than those set forth in the Agreement to the maximum extent allowed by law. 

14. **Name/Likeness**. 

a. During the Employment Term, Studio shall have the right to use your name, biography and likeness in connection with its business as follows: You shallpromptly submit to Studio a biography of yourself. Provided that you timely submit such biography, Studio shall not use any other biographical information other than contained in such biography so furnished, other than references to your priorprofessional services and your services hereunder, without your prior approval (which approval shall not be unreasonably withheld). If you fail to promptly submit a biography, then you shall not have the right to approve any biographical materialused by Studio. You shall have the right to approve any likeness of you used by Studio. Nothing herein contained shall be construed to authorize the use of your name, biography or likeness to endorse any product or service or to use the same forsimilar commercial purposes. 

 

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b. If Studio produces and releases the initial dramatico-musical live stage first-class productioncurrently entitled “Shrek - The Musical” (the “Shrek Musical”), subject to your full performance of all services and material obligations in connection with the Shrek Musical, and provided that you are not in breach or default ofa representation, warranty or other material term or condition hereunder, you shall be accorded credit as a Producer in connection with the Shrek Musical, in a form and with placement to be determined by Studio, but consistent with standard livestage industry parameters for credits of this type; provided, however, that, at a minimum, such credit shall be accorded if Sam Mendes also receives a Producer credit. 

15. **Section 317 and 508 of the Federal Communications Act**. You represent that you have not accepted or given, nor will you accept or give, directly or indirectly, any money, services or othervaluable consideration from or to anyone other than Studio for the inclusion of any matter as part of any film, television program or other production produced, distributed and/or developed by Studio and/or any of its affiliates. 

16. **Equal Opportunity Employer**. You acknowledge that Studio is an equal opportunity employer. You agree that you will comply with Studiopolicies regarding employment practices and with applicable federal, state and local laws prohibiting discrimination or harassment. 

17.**Notices**. All notices required to be given hereunder shall be given in writing, by personal delivery or by mail and confirmed by fax at the respective addresses of the parties hereto set forth above, or at such address as may bedesignated in writing by either party, and in the case of Studio, to the attention of the General Counsel of Studio. A courtesy copy of any notice to you hereunder shall be sent to Bloom Hergott Diemer Rosenthal LaViolette & Feldman, LLP,150 S. Rodeo Drive, Third Floor, Beverly Hills, CA 90212, Fax: (310) 859-2788, Attn: Alan Hergott. Any notice given by mail shall be deemed to have been given three (3) business days following such mailing. 

18. **Assignment**. This is an Agreement for the performance of personal services by you and may not be assigned by you (other than the rightto receive payments which may be assigned to a company, trust or foundation owned or controlled by you) and any purported assignment in violation of the foregoing shall be deemed null and void. Studio may assign this Agreement or all or any part ofits rights hereunder to any entity which acquires all or substantially all of the assets of Studio and this Agreement shall inure to the benefit of such assignee, provided your duties do not materially change. 

19. **California Law**. This Agreement and all matters or issues collateral thereto shall be governed by the laws of the State of Californiaapplicable to contracts entered into and performed entirely therein. 

20. **No Implied Contract**. The parties intend to be boundonly upon execution of this Agreement and no negotiation, exchange or draft or partial performance shall be deemed to imply an agreement. Neither the continuation of employment nor any other conduct shall be deemed to imply a continuing agreementupon the expiration of this Agreement. 

21. **Entire Understanding**. This Agreement contains the entire understanding of theparties hereto relating to the subject matter herein contained, and can be changed only by a writing signed by both parties hereto. 

 

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22. **Void Provisions**. If any provision of this Agreement, as applied to either party or toany circumstances, shall be adjudged by a court to be void or unenforceable, the same shall be deemed stricken from this Agreement and shall in no way affect any other provision of this Agreement or the validity or enforceability of this Agreement.In the event any such provision (the “Applicable Provision”) is so adjudged void or unenforceable, you and Studio shall take the following actions in the following order: (i) seek judicial reformation of the Applicable Provision;(ii) negotiate in good faith with each other to replace the Applicable Provision with a lawful provision; and (iii) have an arbitration as provided in Paragraph 24 hereof determine a lawful replacement provision for the ApplicableProvision; provided, however, that no such action pursuant to either of clauses (i) or (iii) above shall increase in any respect your obligations pursuant to the Applicable Provision. 

23. **Survival; Modification of Terms**. Your obligations under Paragraph 8 hereof shall remain in full force and effect for the entire periodprovided therein, notwithstanding the termination of the Employment Term pursuant to Paragraph 11 hereof or otherwise. Studio’s obligations under Paragraphs 6 (with respect to expenses theretofore incurred), 7, [14.b] and 25.b hereof shallsurvive indefinitely the termination of this Agreement regardless of the reason for such termination. Further, Paragraphs 9, 10, 12 and 13 will continue to govern your entitlement, if any, to benefits and equity-based compensation after thetermination of the Employment Term, and Paragraph 24 will continue to govern any Claims (as defined below) by one party against the other. 

24. **Arbitration of Disputes**. Any controversy or claim by you against Studio or any of its parent companies, subsidiaries, affiliates (and/or officers, directors, employees, representatives or agents of Studio and such parentcompanies, subsidiaries and/or affiliates), including any controversy or claim arising from, out of or relating to this Agreement, the breach thereof, or the employment or termination thereof of you by Studio which would give rise to a claim underfederal, state or local law (including, but not limited to, claims based in tort or contract, claims for discrimination under state or federal law, and/or claims for violation of any federal, state or local law, statute or regulation), or any claimagainst you by Studio (individually and/or collectively, “Claim(s)”) shall be submitted to an impartial mediator (“Mediator”) selected jointly by the parties. Both parties shall attend a mediation conference in Los AngelesCounty, California and attempt to resolve any and all Claims. If the parties are not able to resolve all Claims, then upon written demand for arbitration to the other party, which demand shall be made within a reasonable time after the Claim hasarisen, any unresolved Claims shall be determined by final and binding arbitration in Los Angeles, California, in accordance with the Model Employment Procedures of the American Arbitration Association (collectively, “Rules”) by a neutralarbitrator experienced in employment law, licensed to practice law in California, in accordance with the Rules, except as herein specified. In no event shall the demand for arbitration be made after the date when the institution of legal and/orequitable proceedings based upon such Claim would be barred by the applicable statute of limitations. Each party to the arbitration will be entitled to be represented by counsel and will have the opportunity to take depositions in Los Angeles,California of any opposing party or witnesses selected by such party and/or request production of documents by the opposing party before the arbitration hearing. By mutual agreement of the parties, additional depositions may be taken at otherlocations. In addition, upon a party’s showing of need for additional discovery, the arbitrator shall have discretion to order such additional discovery. You acknowledge and agree that you are familiar with and fully understand the need forpreserving the confidentiality of Studio’s agreements with third parties and compensation of Studio’s employees. Accordingly, you hereby agree that to the extent the arbitrator determines that documents, correspondence or other writings(or portions thereof) whether internal or from any third party, relating in any way to your agreements with third parties and/or compensation of other employees are necessary to the determination of any Claim, you and/or your representatives maydiscover and examine such documents, correspondence or other 

 

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writings only after execution of an appropriate confidentiality agreement. Each party shall have the right to subpoena witnesses and documents for thearbitration hearing. A court reporter shall record all arbitration proceedings. With respect to any Claim brought to arbitration hereunder, either party may be entitled to recover whatever damages would otherwise be available to that party in anylegal proceeding based upon the federal and/or state law applicable to the matter. The arbitrator shall issue a written decision setting forth the award and the findings and/or conclusions upon which such award is based. The decision of thearbitrator may be entered and enforced in any court of competent jurisdiction by either Studio or you. Notwithstanding the foregoing, the result of any such arbitration shall be binding but shall not be made public (including by filing a petition toconfirm the arbitration award), unless necessary to confirm such arbitration award after non-payment of the award for a period of at least fifteen (15) days after notice to Studio of the arbitrator’s decision. Each party shall pay the feesof their respective attorneys (except as otherwise awarded by the arbitrator), the expenses of their witnesses, and all other expenses connected with presenting their Claims or defense(s). Other costs of arbitration shall be borne by Studio. Exceptas set forth below, should you or Studio pursue any Claim covered by this Paragraph 24 by any method other than said arbitration, the responding party shall be entitled to recover from the other party all damages, costs, expenses, and reasonableoutside attorneys’ fees incurred as a result of such action. The provisions contained in this Paragraph 24 shall survive the termination of your employment with Studio. Notwithstanding anything set forth above, you agree that any breach orthreatened breach of this Agreement (particularly, but without limitation, with respect to Paragraphs 3 and 8, above) may result in irreparable injury to Studio, and therefore, in addition to the procedures set forth above, Studio may be entitled tofile suit in a court of competent jurisdiction to seek a Temporary Restraining Order and/or preliminary or permanent injunction or other equitable relief to prevent a breach or contemplated breach of such provisions. 

25. **Change of Control**. In the event of a “change of control,” all equity-based compensation held by you that is granted on orafter July 25, 2007 shall accelerate vesting (with respect to grants having performance-based vesting criteria, on the basis that any mid-range or “target” goals rather than premium goals are deemed to have been achieved) and, subjectto the other terms and conditions of the grants, remain exercisable for the remainder of the term of the grant. In addition, upon the occurrence of a “change in control,” if any of the Company’s Chief Executive Officer, Presidentor Chief Operating Officer (or any of their respective successors) is entitled to accelerated vesting with respect to any of his or her equity-based compensation at such time, then all other equity-based compensation held by you, regardless of whensuch equity-based compensation was granted, shall accelerate vesting (with respect to grants having performance-based criteria, on the basis that any mid-range or “target” goals rather than premium goals are deemed to have been achieved)and, subject to the other terms and conditions of the grants, remain exercisable for the remainder of the term of the grant. In addition, all other equity-based compensation held by you shall also accelerate vesting in the event of a“change in control” if provision is not made for assumption of or substitution for such equity-based compensation, as described in Section 8 of the 2004 Omnibus Incentive Compensation Plan (or the applicable provision of any successorplan). All such outstanding restricted stock units (whether subject to time-based or performance-based vesting criteria) will be settled not later than the tenth (10th) day following the date of such change of control. 

a. For purposes of this Agreement, “change of control” shall mean the occurrence of any of the following events: 

(i) during any period of fourteen (14) consecutive calendar months, individuals who were directors of Studio on the first day of suchperiod (the “Incumbent Directors”) cease for any reason to constitute a majority of the Board of Directors of Studio (the “Board”); provided, however, 

 

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that any individual becoming a director subsequent to the first day of such period whose election, or nomination for election, by Studio’s stockholderswas approved by a vote of at least a majority of the Incumbent Directors shall be considered as though such individual were an Incumbent Director, but excluding, for purposes of this proviso, any such individual whose initial assumption of officeoccurs as a result of an actual or threatened proxy contest with respect to election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a “person” (as such term is used inSection 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (each, a “Person”), in each case other than the management of Studio, the Board or the holders of Studio’s Class B common stock parvalue $0.01; 

(ii) the consummation of (A) a merger, consolidation, statutory share exchange or similar form ofcorporate transaction involving (x) Studio or (y) any of its subsidiaries, but in the case of this clause (y) only if Studio Voting Securities (as defined below) are issued or issuable (each of the events referred to in this clause(A) being hereinafter referred to as a “Reorganization”) or (B) the sale or other disposition of all or substantially all the assets of Studio to an entity that is not an affiliate (a “Sale”), in each such case, if suchReorganization or Sale requires the approval of Studio’s stockholders under the law of Studio’s jurisdiction of organization (whether such approval is required for such Reorganization or Sale or for the issuance of securities of Studio insuch Reorganization or Sale), unless, immediately following such Reorganization or Sale, (1) all or substantially all the individuals and entities who were the “beneficial owners” (as such term is defined in Rule 13d-3 under theExchange Act (or a successor rule thereto)) of the securities eligible to vote for the election of the Board (“Studio Voting Securities”) outstanding immediately prior to the consummation of such Reorganization or Sale beneficially own,directly or indirectly, more than 50% of the combined voting power of the then outstanding voting securities of the corporation resulting from such Reorganization or Sale (including, without limitation, a corporation that as a result of suchtransaction owns Studio or all or substantially all Studio’s assets either directly or through one or more subsidiaries) (the “Continuing Corporation”) in substantially the same proportions as their ownership, immediately prior to theconsummation of such Reorganization or Sale, of the outstanding Studio Voting Securities (excluding any outstanding voting securities of the Continuing Corporation that such beneficial owners hold immediately following the consummation of theReorganization or Sale as a result of their ownership prior to such consummation of voting securities of any company or other entity involved in or forming part of such Reorganization or Sale other than Studio), (2) no Person (excluding(x) any employee benefit plan (or related trust) sponsored or maintained by the Continuing Corporation or any corporation controlled by the Continuing Corporation, (y) Jeffrey Katzenberg and (z) David Geffen) beneficially owns,directly or indirectly, 20% or more of the combined voting power of the then outstanding voting securities of the Continuing Corporation and (3) at least a majority of the members of the board of directors of the Continuing Corporation wereIncumbent Directors at the time of the execution of the definitive agreement providing for such Reorganization or Sale or, in the absence of such an agreement, at the time at which approval of the Board was obtained for such Reorganization or Sale;

(iii) the stockholders of Studio approve a plan of complete liquidation or dissolution of Studio; or 

(iv) any Person, corporation or other entity or “group” (as used in Section 14(d)(2) of the Exchange Act) (other than(A) Studio, (B) any trustee or other fiduciary holding securities under an employee benefit plan of Studio or an affiliate or (C) any company owned, directly or indirectly, by the stockholders of Studio in substantially the sameproportions as their ownership of the voting power of Studio Voting Securities) becomes the beneficial owner, directly or indirectly, of securities of Studio representing 20% or more of the combined voting power of Studio Voting Securities but onlyif the percentage so owned exceeds the aggregate percentage of the combined 

 

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voting power of Studio Voting Securities then owned, directly or indirectly, by Jeffrey Katzenberg and David Geffen**;**provided, however, that forpurposes of this subparagraph (iv), the following acquisitions shall not constitute a change of control: (x) any acquisition directly from Studio or (y) any acquisition by any employee benefit plan (or related trust) sponsored ormaintained by Studio or an Affiliate. 

b. In the event that it is determined that any payment (other than the Gross-Up Payments providedfor in this Paragraph 25.b) or distribution by Studio or any of its affiliates to you or for your benefit, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or pursuant to or by reason of any otheragreement, policy, plan, program or arrangement, including without limitation any stock option or similar right, or the lapse or termination of any restriction on or the vesting or exercisability of any of the foregoing (a “Payment”),would be subject to the excise tax imposed by Section 4999 of the Code (or any successor provision thereto), by reason of being considered “contingent on a change in the ownership or effective control” of Studio, within the meaning ofSection 280G of the Code (or any successor provision thereto) or to any similar tax imposed by state or local law, or any interest or penalties with respect to such tax (such tax or taxes, together with any such interest and penalties, beinghereafter collectively referred to as the “Excise Tax”), then you will be entitled to receive (or have paid to the applicable taxing authority on your behalf) an additional payment or payments (collectively, a “Gross-UpPayment”). Any Gross-Up Payment that you become entitled to pursuant to this Paragraph 25.b will be paid to you (or to the applicable taxing authority on your behalf) as promptly as practicable and in any event not later than the last day ofthe calendar year after the calendar year in which the applicable Excise Tax is paid. The Gross-Up Payment will be in an amount such that, after payment by you of all taxes (including any interest or penalties imposed with respect to such taxes),including any Excise Tax imposed upon the Gross-Up Payment, you retain (or receive the benefit of a payment to the applicable taxing authority of) an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payment. For purposes ofdetermining the amount of the Gross-Up Payment, you will be considered to pay (i) federal income taxes at the highest generally applicable rate (plus any applicable Excise Tax) in effect in the year in which the Gross-Up Payment will be madeand (ii) state and local income taxes at the highest generally applicable rate (plus any applicable Excise Tax) in effect in the state or locality in which the Gross-Up Payment would be subject to state or local tax, net of the maximumreduction in federal income tax that could be obtained from deduction of such state and local taxes. 

26. **Miscellaneous**. Youagree that Studio may deduct and withhold from your compensation hereunder the amounts required to be deducted and withheld under the provisions of the Federal and California Income Tax Acts, Federal Insurance Contributions Act, CaliforniaUnemployment Insurance Act, any and all amendments thereto, and other statutes heretofore or hereafter enacted requiring the withholding of compensation. All of Studio’s obligations in this Agreement are expressly conditioned upon youcompleting and delivering to Studio an Employment Eligibility Form (“Form I-9”) (in form satisfactory to Studio) and in connection therewith, you submitting to Studio original documentation demonstrating your employment eligibility.

27. **Section 409A**. 

a. It is intended that the provisions of this Agreement comply with Section 409A, and all provisions of this Agreement shall be construed and interpreted in a manner consistent with the requirements for avoiding taxes or penaltiesunder Section 409A. 

b. Neither you nor any of your creditors or beneficiaries shall have the right to subject any deferredcompensation (within the meaning of Section 409A) payable under this Agreement or 

 

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under any other plan, policy, arrangement or agreement of or with Studio or any of its affiliates (this Agreement and such other plans, policies,arrangements and agreements, the “Company Plans”) to any anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment. Except as permitted under Section 409A, any deferred compensation (withinthe meaning of Section 409A) payable to you or for your benefit under any Company Plan may not be reduced by, or offset against, any amount owing by you to Studio or any of it affiliates. 

c. If, at the time of your separation from service (within the meaning of Section 409A), (i) you shall be a specified employee (within themeaning of Section 409A and using the identification methodology selected by Studio from time to time) and (ii) Studio shall make a good faith determination that an amount payable under a Company Plan constitutes deferred compensation(within the meaning of Section 409A) the payment of which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A in order to avoid taxes or penalties under Section 409A, then Studio (or its affiliate,as applicable) shall not pay such amount on the otherwise scheduled payment date but shall instead accumulate such amount and pay it, together with interest credited at the Applicable Federal Rate in effect as of the date of your termination ofemployment, on the first business day after such six-month period. 

d. Notwithstanding any provision of this Agreement or any Company Planto the contrary, in light of the uncertainty with respect to the proper application of Section 409A, Studio reserves the right to make amendments to any Company Plan as Studio deems necessary or desirable to avoid the imposition of taxes orpenalties under Section 409A. In any case, except as provided in Paragraph 25.b of this Agreement, you are solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on you or for your account inconnection with any Company Plan (including any taxes and penalties under Section 409A), and neither Studio nor any affiliate shall have any obligation to indemnify or otherwise hold you harmless from any or all of such taxes or penalties.

e. For purposes of Section 409A, each of (i) the installments at a rate equal to 50% of your Base Salary, as provided inParagraph 9, and (ii) the installments of continued Base Salary, as provided in Paragraphs 10 and 12, will be deemed to be a separate payment as permitted under Treasury Regulation Section 1.409A-2(b)(2)(iii). 

 

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If the foregoing correctly sets forth your understanding, please sign one copy of this letter and returnit to the undersigned, whereupon this letter shall constitute a binding agreement between us. 

 
Very truly yours,DREAMWORKS ANIMATION SKG, INC.By: /s/ Lewis W. ColemanIts: President and Chief Financial Officer
 
ACCEPTED AND AGREED AS OF THEDATE FIRST ABOVE WRITTEN:/s/ William DamaschkeWILLIAM DAMASCHKE
 

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