Employment Agreement - Brett West



 







EXHIBIT 10.1(z)




EMPLOYMENT AGREEMENT




     THIS AGREEMENT (“Agreement”) is made and entered into as of March 30, 2006 (the
“Effective Date”) by and between Showtimes.com, Inc., a Delaware corporation (the
“Company” or “Employer”), Brett West (the “Employee”), and Hollywood Media
Corp., a Florida corporation (“HMC”).



RECITALS





	A.	 	The Company is a subsidiary of HMC and is involved in conducting HMC’s “Source Business”
which business is currently comprised of, among other things, three related lines of business:
CinemaSource, EventSource and ExhibitorAds, and also includes the Front Row Marketing (“FRM”)
business acquired in July 2004 and the business conducted by the “CinemasOnline” entities
acquired in November 2005). The Source Business includes, without limitation, (i) the
compilation, production and licensing of movie showtimes data (the “CinemaSource” business)
and data relating to local entertainment and other events in numerous communities (the
“EventSource” business), and (ii) advertising and promotional services and products for movie
exhibitors (the “ExhibitorAds” business).
	 
	B.	 	Employee is currently employed as President of the Company.
	 
	C.	 	Company and Employee mutually desire to agree upon the terms of Employee’s future employment
with the Company and related matters as provided in this Agreement.





AGREEMENT




     NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, the
parties agree as follows:



     1. Term and Employment Period. The Company shall employ the Employee and the Employee
shall serve the Company, on the terms and conditions set forth herein, for the period commencing on
and as of the Effective Date and terminating on March 31, 2009 (the “Initial Term”), unless
terminated earlier in accordance with the terms of this Agreement; provided, however, that the
Company shall have the option, in its sole discretion, to extend the term of Employee’s employment
up to an additional three (3) years (the “Extension Term”) by providing Employee with
notice no less than six (6) months prior to the expiration of the Initial Term. The Initial Term
(together with the Extension Term if elected) of the Employee’s employment is collectively referred
to as the “Employment Period” or “Term.” Effective as of the Effective Date of
this Agreement, the Employment Agreement dated as of May 18, 1999 between the Employee and the
Company (the “Prior Agreement”) is hereby terminated and cancelled in all respects, and no
party thereto or hereto has any obligation to the other under the Prior Agreement.



     2. Duties and Responsibilities of Employee. During the Term, the Employee shall serve
as President of the Company, shall report to HMC’s Chief Executive Officer, President or Chief
Operating Officer (as determined by HMC’s Chief Executive Officer) and shall diligently and
faithfully perform all duties and responsibilities as may be assigned to him from time to time by
or upon the authority of the Company’s Board of Directors or by HMC’s Chief Executive Officer,
President or Chief Operating Officer. Such duties shall specifically include (i) the duty promptly
to report, to HMC’s Chief Executive Officer, President or Chief Operating Officer, any event or
occurrence in the Company’s business that would reasonably be expected to be material to such
business, (ii) the Employee’s duty to hire (or promote internally), train and maintain as part of
the Company’s management personnel, a manager for the Source Business meeting HMC’s qualifications
such that such manager would be competent to perform the duties and responsibilities of the
Employee and to operate the Source Business in the event that the Employee ceases serving as
President of the Company (and this manager would serve as the Employee’s “right-hand person” in
operating the Source Business during the Term of this Agreement, working with and reporting to the
Employee), and (iii) the duty to obtain the prior



 









 







written consent of HMC’s Chief Executive Officer, President or Chief Operating Officer to the entry
into any contract or arrangement by or on behalf of the Company or its business (a) involving any
payment or series of payments by or to the Company of more than $15,000, whether in one or a series
of transactions, or (b) which is for a term of more than two years and is not cancelable by the
Company on sixty (60) days’ or less prior written notice (without penalty or payment of any kind).
During the Term, the Employee shall devote all of the Employee’s working time to the performance of
the services required under this Agreement and shall not engage in any other business matters,
except that the Employee may develop and own a separate business and/or may serve on corporate,
industry, educational, religious, civic or charitable boards or committees and/or make and attend
to passive personal investments (“Permitted Collateral Activities”) so long as (i) none of
the Permitted Collateral Activities is a “Competing Activity” (as defined in Section 9 hereof),
(ii) each Permitted Collateral Activity is outside the parameters defined in “New Business
Opportunity” (as defined in Section 9), (iii) such Permitted Collateral Activities do not impair or
interfere with Employee’s performance of his duties hereunder, (iv) Employee devotes no less time
and attention to the Company’s business and interests than he has devoted during the years of his
employment with the Company prior to this Agreement, (v) such Permitted Collateral Activities are
conducted in a manner that does not impair the Company’s business or its employees, and do not
impose any expenses or costs upon the Company, HMC or any other HMC Entity (HMC and its
subsidiaries, together with its nonconsolidated businesses including MovieTickets.com and Netco
Partners, are sometimes referred to herein as the “HMC Entities” or individually as an “HMC
Entity”), and (vi) the Permitted Collateral Activities do not involve any employees or
consultants of, or utilize any assets, resources or equipment of, the Company or other HMC Entity.
The Employee shall at all times perform his duties and responsibilities under this Agreement and
conduct the Company’s business in compliance with all applicable laws, rules, regulations or
ordinances and in compliance with any judgments, orders or decrees or other legal obligations
binding on the Company.



     3. Compensation.



          (a) Base Salary; Advance Payments; Stock Options; Stock Grant.



          Base Salary. Employee shall be paid a base salary during the period he is
employed hereunder beginning on the Effective Date at the annual rate of three hundred
thousand dollars ($300,000) (the “Base Salary”), with such Base Salary payable in
installments consistent with the Company’s normal payroll schedule, subject to applicable
withholding and other taxes. On April 1, 2007 and on each annual anniversary of April 1,
2007 while Employee is employed hereunder during the Term (each such date, a “Salary
Adjustment Date”), the Base Salary shall be increased to the corresponding annual rate
specified in the following table commencing as of the applicable Salary Adjustment Date (as
indicated in the table, the amount of the increase in 2011 depends on achievement of the
EBITDA Bonus for the 2010 Bonus Year under Section 3(b) below):



	 	 	 	 	 	 	 	 
	 
	 	Salary Adjustment Date	 	 	Base Salary	 
	 	April 1, 2007

	 	 	$	350,000	 	 
	 	April 1, 2008

	 	 	$	400,500	 	 
	 	April 1, 2009

	 	 	$	460,000	 	 
	 	April 1, 2010

	 	 	$	500,000	 	 
	 	April 1, 2011

	 	 	$535,000 if EBITDA Bonus earned for
2010 Bonus Year, otherwise $517,500
	 
	 





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Advances. The Employee shall receive the “Advance Payments” as provided
under Section 3(c)(v) below.




Stock Options upon Extension. In the event that the Company exercises its option to
extend this Agreement for an Extension Term under Section 1 of this Agreement, then the
Employee shall be granted fully exercisable stock options to purchase 125,000 shares of
common stock of HMC under HMC’s stock option plan, having an exercise price per share equal
to the grant date market value per share of common stock as determined under the terms of
the applicable stock option plan, all of which options shall expire five years after the
applicable grant date.




Quarterly Stock Grant. On each “Grant Date” in the table below this paragraph, if
the Employee is employed under this Agreement on such applicable date, the Employee shall be
granted such number of fully vested shares of common stock of HMC (a “Stock Grant”)
under HMC’s stock incentive plan as calculated by the formula in
this paragraph below, which shares shall be granted as of such Grant Date (and promptly delivered to the Employee no
later than 10 days following the applicable Grant Date). The Employee shall comply, in
connection with any sales of such shares, or shares issued under the stock options
referenced above, with any request by HMC of the Employee to coordinate such sales with or
through one or more market makers or other registered broker/dealers designated by HMC. The
number of shares to be issued with respect to any particular Grant Date shall be equal to
the quotient of (i) the corresponding Stock Payment Amount for the particular Grant Date
from the table below (either $125,000 or $131,000, as the case may be), divided by (ii) the
last reported sale price of HMC’s common stock per share as reported by Nasdaq for the date
prior to the Grant Date. As stated in the provisions of Section 3(b) below in the paragraph
under the caption “Proceeds of Stock Sales”, such provisions apply to each Stock Grant as
expressly provided therein.



	 	 	 	 	 	 	 	 
	 
	 	Grant Date	 	 	Stock Payment Amount	 
	 	April 1, 2006
	 	 	$	125,000	 	 
	 	July 1, 2006
	 	 	$	125,000	 	 
	 	October 1, 2006
	 	 	$	131,000	 	 
	 	January 1, 2007
	 	 	$	131,000	 	 
	 





          (b) Annual Bonus if Meet EBITDA Budget. “Exhibit A” attached to this
Agreement and the terms thereof are incorporated herein and constitute part of this Agreement. In
addition to the Base Salary and other compensation set forth above, for each “Bonus Year”
(as defined in Exhibit A hereto) ending during the Employee’s employment hereunder, Employee shall
be entitled to receive a bonus (an “EBITDA Bonus”) for such Bonus Year, subject to the
following terms and conditions: If the “Company EBITDA” (as defined in Exhibit A) achieved
for such Bonus Year is not less than the applicable “EBITDA Budget” for such Bonus Year
specified in Exhibit A (as adjusted), then the EBITDA Bonus for such Bonus Year shall be the sum of
(i) $50,000, plus (ii) 20% of the amount (if any) by which (A) the remainder of the Company EBITDA
for such Bonus Year after deducting $50,000, exceeds (B) the applicable EBITDA Budget for such
Bonus Year, except that the portion of the EBITDA Bonus under this clause (ii) shall not
exceed the applicable “Bonus Cap” in the following table for the corresponding Bonus Year:



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	 	Bonus Year	 	 	Bonus Cap	 
	 	2005
	 	 	$	125,000	 	 
	 	2006
	 	 	$	150,000	 	 
	 	2007
	 	 	$	175,000	 	 
	 	2008
	 	 	$	200,000	 	 
	 	2009
	 	 	$	225,000	 	 
	 	2010
	 	 	$	250,000	 	 
	 	2011
	 	 	$	270,000	 	 
	 





For example, if the Company EBITDA for a particular Bonus Year was $3,000,000 and the
applicable EBITDA Budget for such year was $2,500,000, then the EBITDA Bonus for such Bonus Year
would be the sum of (i) $50,000, plus (ii) (0.20 x ($2,950,000 — $2,500,000)), which calculation
results in an EBITDA Bonus of $140,000 (subject to limitation under the Bonus Cap if applicable).
The EBITDA Bonus for any Bonus Year under this paragraph (b) shall be due and payable on May 31 of
the year following the Bonus Year (such May 31 date being referred to as the “Payment
Date”), and is payable in cash or in registered shares of HMC’s common stock (as provided
below), or partially in cash and partially in stock, as determined by HMC in its sole discretion
(it being contemplated that registered stock, if issued, may be issued pursuant to one of HMC’s
shareholder-approved compensation plans or otherwise in compliance with Nasdaq listing (or other
stock listing) requirements applicable to HMC, as determined by HMC in its sole discretion). If
HMC elects to pay an EBITDA Bonus or portion thereof in shares of stock, HMC shall issue and
deliver or cause to be issued and delivered to the Employee, on a date (the “Issue Date”)
which shall be on or within 10 days after the Payment Date, such number of shares (the “Bonus
Shares”) of common stock of HMC (or its successor) equal to the quotient of (i) the dollar
amount of the bonus to be paid in stock (the “Stock Payment Amount”), divided by (ii) the
“Fair Market Value” (as defined below) per share of such common stock as of the Issue Date. The
issuance of such shares is subject to withholding if applicable as provided under Section 3(g)
hereof. The Employee agrees to comply with applicable securities laws in connection with any sales
of Bonus Shares and any shares issued under Section 3(a) above or 3(c) below, or any acquisition or
sale of shares of stock of HMC whether under this Agreement or otherwise.



“Fair Market Value” of a share of common stock on any date of reference shall mean the
arithmetic average of the “Closing Price” (as defined below) of the common stock on the five
consecutive business days ending on and including the third business day immediately preceding such
date of reference. For the purpose of determining Fair Market Value, the “Closing Price” of
the common stock on any business day shall be (i) if the common stock is listed or admitted for
trading on any United States national securities exchange, or if actual transactions are otherwise
reported on a consolidated transaction reporting system, the last reported sale price of the common
stock on such exchange or reporting system, (ii) if the common stock is quoted on the National
Association of Securities Dealers Automated Quotations System (“NASDAQ”), or any similar system of
automated dissemination of quotations of securities prices in common use, the last reported sale
price of the common stock on such system or, if sales prices are not reported, the mean between the
closing high bid and low asked quotations for the common stock for such day on such system, or
(iii) if neither clause (i) or (ii) is applicable, the mean between the high bid and low asked
quotations for the common stock for such day as reported by the National Quotation Bureau,
Incorporated if at least two securities dealers have inserted both bid and asked quotations for the
common stock on at least five of the ten preceding business days. If neither (i), (ii), or (iii)
above is applicable, then Fair Market Value shall be determined in good faith by HMC’s Board of
Directors.



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Proceeds of Stock Sales. With respect to any particular issuance of shares of common stock
to the Employee (“Payment Shares”) under the following terms of this Agreement (a) a
“Quarterly Stock Grant” under section 3(a) above, or (b) in payment of an EBITDA Bonus as provided
in this Section 3(b) above, or (c) in payment of a Sale Bonus, Term Bonus or Supplemental Bonus as
provided in Section 3(c)(iii) or 3(c)(iv) below as the case may be, or (d) in payment of an Advance
Payment as provided in Section 3(c)(v) below; if (i) the Employee sells all such Payment Shares
(not including shares withheld by HMC to cover tax withholding requirements, if any) during and
before the end of the applicable “Selling Period” (which “Selling Period” for any
particular issuance shall commence on the date of issuance and end on the earlier of the
180th day following the issuance date or on November 30 of the calendar year in which
the shares are issued), (ii) the Employee complies in connection with such sales with any request
by HMC of the Employee to coordinate such sales with or through one or more market makers or other
registered broker/dealers designated by HMC, and (iii) the Employee’s total proceeds from such
sales (net of brokerage costs) are less than the applicable “adjusted Stock Payment Amount” (after
adjusting the Stock Payment Amount by deducting the dollar amount of the withholding taken by HMC,
if any), then HMC shall pay Employee in cash an amount equal to the amount by which the applicable
“adjusted Stock Payment Amount” exceeds the sum of (i) such net proceeds from the sale of such
Payment Shares and (ii) the value of any and all cash, stock, dividends and/or any other
consideration paid on such Payment Shares to Employee, which cash payment, if applicable, shall be
paid within 30 days following Employee’s notice to HMC that such payment is due (and the Employee
shall give such notice to HMC within 30 days after completion of such sales within the required
Selling Period but in no event later than November 30 of the year in which the shares are issued).
The Employee agrees to comply, in connection with any sales of such shares, with any request by HMC
of the Employee to coordinate such sales with or through one or more market makers or other
registered broker/dealers designated by HMC.



          (c) Other Bonuses. In addition to the annual bonuses set forth above, Employee may be
eligible for either the Sale Bonus under Section 3(c)(i) or the Term Bonus under Section 3(c)(ii)
hereof, subject to the following terms and conditions (and the parties confirm that these terms for
calculating the Sale Bonus and Term Bonus are components of a negotiated compensation arrangement
and are not intended to reflect the actual or potential value of HMC’s Source Business to Hollywood
Media or to a third party):




	 	(i)	 	Bonus Upon Sale of Company. If at any time during and
prior to expiration of the Term, (1) Employee is then currently employed under
this Agreement and there has not been any prior “Company Sale” (as defined in
this paragraph below) during the term of this Agreement, and (2) all or
substantially all of the Company’s assets (including (a) assets comprising 90%
or more of the book value of the Company’s assets and (b) contracts generating
at least 90% of the Company’s revenues) or all of Company’s outstanding capital
stock is sold to a third-party unaffiliated with either the Company or HMC (a
“Company Sale”), then Employee shall be eligible to receive a bonus (a
“Sale Bonus”) equal to the positive sum (if any) of: (a) ten percent
(10%) of the amount by which (i) the “Existing Business Purchase Price” (as
defined below) exceeds (ii) the “Existing Business Base Value” (as defined
below), plus (b) fifteen percent (15%) of the amount by which (i) the “Acquired
Business Purchase Price” (as defined below) exceeds (ii) the “Acquired Business
EBITDA Value” (as defined below), plus (c) twenty percent (20%) of the “New
Business Purchase Price” (if any, as defined below), minus (d) the
amount of the Aggregate Advance under paragraph (v) below, and minus (e)
any prior Term Bonus. It is hereby understood and agreed that the sale of all or
substantially all of the assets or stock of HMC, shall not be considered a
“Company Sale” for purposes hereof. The Sale Bonus, if any, shall be payable as
provided in paragraph (iii) below. To clarify certain aspects of the foregoing
portion of this paragraph, the parties confirm and agree that the Employee’s
potential Sale Bonus shall be calculated in connection with the first Company
Sale (and not with respect to any subsequent Company Sale), and in no event
shall the Employee receive more than one Sale Bonus under this Agreement.




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	 	(ii)	 	Bonus Upon Expiration of Employment Period or Termination
without Cause. At the time of the first to occur of (a) the Employee’s
employment hereunder on March 31, 2009 (the last day of the Initial Term), or
(b) the date of the Company’s termination of the Initial Term under Section
12(c) hereof, as the case may be (the “Expiration Date”), then Employee
shall be eligible to receive a bonus (a “Term Bonus”) equal to the
positive sum (if any) of: (a) ten percent (10%) of the amount by which (i) the
“Existing Business EBITDA Value” (as defined below) exceeds (ii) the Existing
Business Base Value, plus (b) fifteen percent (15%) of the amount by which the
Acquired Business EBITDA Value exceeds the “Acquired Business Base Value” (as
defined below), plus (c) twenty percent (20%) of the New Business EBITDA Value,
minus (d) the amount of the Aggregate Advance under paragraph (v) below,
and minus (e) any prior Sale Bonus. The Term Bonus, if any, shall be
payable as provided in paragraph (iii) below.
	 
	 	 	 	In addition to payment of the Term Bonus under the foregoing paragraph, if the
Company elects an Extension Term (of any duration, as specified by the
Company) as provided under Section 1 hereof, then at the time of the first to
occur of (a) the Employee’s employment hereunder on the last day of such
Extension Term period designated by the Company, or (b) the date of the
Company’s termination of such Extension Term under Section 12(c) hereof, as
the case may be (the “Expiration Date”), the Employee shall be
eligible to receive another Term Bonus equal to the positive amount, if any,
obtained by subtracting (A) the amount of the prior Term Bonus (if any) under
the preceding paragraph, and the amount of any prior Sale Bonus occurring
before or after such prior Term Bonus, from (B) the sum of: (a) ten percent
(10%) of the amount by which (i) the Existing Business EBITDA Value exceeds
(ii) the Existing Business Base Value, plus (b) fifteen percent (15%) of the
amount by which the Acquired Business EBITDA Value exceeds the Acquired
Business Base Value, plus (c) twenty percent (20%) of the New Business EBITDA
Value.
	 
	 	 	 	For purposes hereof:
	 
	 	 	 	“Existing Business Purchase Price” means the “Net Purchase Price” (as
defined below) less (a) the “Acquired Business Purchase Price” (as defined
below) and less (b) the “New Business Purchase Price” (as defined below).
	 
	 	 	 	“Net Purchase Price” means the purchase price paid to the Company
and/or HMC at closing for the purchase of the Company less the sum of (a) any
and all debt, payables and other liabilities of the Company not assumed or
acquired by purchaser at the close of such sale (in other words, all such
liabilities that remain liabilities of HMC or any subsidiary or affiliate of
HMC following the closing), and (b) any and all legal fees, accountants’ fees,
investment banker, brokerage or finders fees and other transaction costs and
fees and closing costs incurred or paid by HMC or any subsidiary of HMC.
	 
	 	 	 	“EBITDA Period” means, (i) with respect to the calculation of a Sale
Bonus, the full calendar year ending prior to the year in which occurs the
consummation of the Company Sale, and (ii) with respect to the calculation of
a Term Bonus, the full calendar year ending prior to the applicable Expiration
Date.
	 
	 	 	 	“Acquired Business Purchase Price” means the portion of the Net
Purchase Price calculated by multiplying the Net Purchase Price by a fraction,
the numerator of which shall be the “Acquired Business EBITDA” (as defined
below) for the EBITDA Period, and the denominator of which shall be the
“Company EBITDA” for the EBITDA Period.




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	 	 	 	“New Business Purchase Price” means the portion of the Net Purchase
Price calculated by multiplying the Net Purchase Price by a fraction, the
numerator of which shall be the “New Business EBITDA” (as defined below) for
the EBITDA Period, and the denominator of which shall be the “Company EBITDA”
for the EBITDA Period.
	 
	 	 	 	“Acquired Business EBITDA” means the portion of the Company EBITDA for
the EBITDA Period contributed by “Acquired Divisions” (as defined below), as
reflected in the Company’s financial statements and accounting records used
for calculating Company EBITDA for the EBITDA Period.
	 
	 	 	 	“New Business EBITDA” means the portion of the Company EBITDA for the
EBITDA Period contributed by “New Business Divisions” (as defined below), as
reflected in the Company’s financial statements and accounting records used
for calculating Company EBITDA for the EBITDA Period.
	 
	 	 	 	“Acquired Divisions” means any operating business lines of the Company
(which are separately accounted for as a separate business line by the
Company) that are acquired, after the date of this Agreement, by purchase of
an operating business entity or operating business assets (except that
the following business of the Company shall be included as Acquired Divisions
notwithstanding acquisition thereof prior to the date of this Agreement: (1)
the Front Row Marketing (“FRM”) business acquired in July 2004, and (2) the
business conducted by the “CinemasOnline” entities acquired in November 2005).
	 
	 	 	 	“New Business Divisions” means any new business division(s) of the
Company’s business created after the date of this Agreement and meeting the
following requirements: (i) the division is one for which the Company’s
financial statements include separate income statements (i.e. profit and loss
statements or statements of operations from which EBITDA (earnings before
interest, taxes, depreciation and amortization) can be computed for such
division) which are consolidated for purposes of preparing the Company’s
financial statements used for calculating Company EBITDA, (ii) the Employee
and the Company both agree in writing that such division qualifies as a “New
Business Division”, and (iii) the division does not include operations that
were purchased or acquired; except that the following business of the
Company shall be included as “New Business Divisions” notwithstanding creation
thereof prior to the date of this Agreement: Brochures/handouts for
Exhibitors, and csXpress and csPremiere.
	 
	 	 	 	“Existing Business Base Value” means $10,300,000.
	 
	 	 	 	“Acquired Business EBITDA Value” means the product of (a) the Acquired
Business EBITDA, multiplied by (b) seven (7).
	 
	 	 	 	“New Business EBITDA Value” means the product of (a) the New Business
EBITDA, multiplied by (b) seven (7).
	 
	 	 	 	“Total Business EBITDA Value” means the product of (a) the Company
EBITDA for the applicable EBITDA Period, multiplied by (b) seven (7).
	 
	 	 	 	“Existing Business EBITDA Value” means the Total Business EBITDA Value
less (a) the Acquired Business EBITDA Value and less (b) the New Business
EBITDA Value.




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	 	 	 	“Acquired Business Base Value” means the aggregate purchase price paid
(whether paid in cash, property, securities or otherwise, including assumed or
acquired debts and liabilities as well as professional fees and costs in the
transaction, such as legal, accounting or investment banking services) for any
and all purchases or acquisitions, after the date of this Agreement (as well
as for the acquisitions of CinemasOnline and FRM, whether paid or incurred
before or after the date of this Agreement), of any company, business or
business assets acquired for the Company’s business, except as otherwise
provided in paragraph (d) below.
	 
	 	(iii)	 	Payment of Sale Bonus or Term Bonus. The Sale Bonus or
Term Bonus, if any, shall be payable in cash or unregistered shares of HMC’s
common stock (as provided below), or partially in cash and partially in
unregistered shares of stock, as determined by HMC in its sole discretion (it
being acknowledged that any stock payment issued would need to be issued in
compliance with Nasdaq listing (or other stock listing) requirements applicable
to HMC, as determined by HMC in its sole discretion). The cash portion of any
Sale Bonus or Term Bonus is referred to below as the “Cash Amount”. HMC
must notify the Employee of the amount of the Cash Amount, or the percentage of
the Sale Bonus or Term Bonus that will be the Cash Amount, prior to (a) the
closing of the Company Sale (in the case of a Sale Bonus) or (b) the Expiration
Date (in the case of a Term Bonus), as the case may be (the “Payment
Date”). The Cash Amount of any Sale Bonus would be paid within 10 days
after the applicable Payment Date, and the Cash Amount of any Term Bonus would
be paid in twelve (12) equal consecutive monthly installment payments, with the
first installment payable on the one month anniversary date of the applicable
Payment Date, except that if a Term Bonus has not been paid in full by March 15
of the calendar year following the year in which the applicable Expiration Date
occurs, then the outstanding balance of the Term Bonus shall be paid on or
before such March 15th date. If HMC elects to pay a bonus or portion of a bonus
in unregistered shares of stock, HMC shall issue and deliver or cause to be
issued and delivered to the Employee, on a date (the “Issue Date”) which
shall be on or within 10 days after the Payment Date, such number of shares of
common stock of HMC (or its successor) equal to the quotient of (i) the dollar
amount of the bonus to be paid in stock (the “Stock Payment Amount”),
divided by (ii) the “Fair Market Value” (as defined above) per share of such
common stock as of the Issue Date. HMC may in its sole discretion determine to
pay a portion of a Sale Bonus or a Term Bonus using shares of stock registered
under its stock compensation plans or otherwise registered. The
issuance of such shares is subject to withholding if applicable as provided under Section 3(g)
hereof.
	 
	 	(iv)	 	Supplemental Bonus if a Company Sale occurs following
Termination without Cause. If the Company terminates the Term without Cause
under Section 12(c) hereof, and if either (a) at the date of such termination
HMC has executed and delivered a signed, written letter of intent or definitive
agreement to consummate a “Company Sale” (as defined above) and the closing of
such Company Sale occurs within one year following the termination date, or (b)
at the date of such termination HMC is in negotiations (but has not executed a
definitive agreement or letter of intent) with a potential purchaser to
consummate a Company Sale and the closing of a Company Sale to such purchaser
occurs within 180 days following the termination date; then the Employee shall
be eligible to receive a bonus (a “Supplemental Bonus”) equal to the
amount by which (i) the “Sale Bonus” that would have been payable to the
Employee in respect of such consummated Company Sale (assuming that the
Employee’s employment was not terminated and that the Employee was employed
hereunder at the time of closing of such Company Sale) exceeds (ii) the
aggregate Term Bonuses paid or payable to




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	 	 	 	Employee under Section 3(c)(ii) hereof. The Supplemental Bonus, if any, shall
be payable as provided below.
	 
	 	 	 	Payment of Supplemental Bonus. The Supplemental Bonus, if any, shall
be payable in cash or unregistered shares of HMC’s common stock (as provided
below), or partially in cash and partially in unregistered shares of stock, as
determined by HMC in its sole discretion (it being acknowledged that any stock
payment issued would need to be issued in compliance with Nasdaq listing (or
other stock listing) requirements applicable to HMC, as determined by HMC in
its sole discretion). HMC must notify the Employee of the amount (or the
percentage) of the Supplemental Bonus to be paid in cash, prior to the closing
of the corresponding Company Sale. The cash portion of any Supplemental Bonus
would be due and payable on the applicable “Payment Date”, which Payment Date
shall be the earlier of (x) the ninetieth (90th) day following the closing of
the corresponding Company Sale, or (y) March 15 of the calendar year following
the year in which the Company Sale occurs. If HMC elects to pay such bonus or
portion thereof in unregistered shares of stock, HMC shall issue and deliver
or cause to be issued and delivered to the Employee, on a date (the “Issue
Date”) which shall be on or within 10 days after the Payment Date (but in
no event later than the March 15th date referenced in this
paragraph above), such number of shares of common stock of HMC (or its
successor) equal to the quotient of (i) the dollar amount of the bonus to be
paid in stock (the “Stock Payment Amount”), divided by (ii) the “Fair
Market Value” (as defined above) per share of such common stock as of the
Issue Date. HMC may in its sole discretion determine to pay a portion of the
Supplemental Bonus using shares of stock registered under its stock
compensation plans or otherwise registered. The issuance of such shares is
subject to withholding if applicable as provided under Section 3(g) hereof.
	 
	 	(v)	 	Payment of Quarterly Advances on future Bonus. The
parties acknowledge that the purpose of this paragraph (v) is to provide an
agreed method for the Employee to receive advances of a portion of the potential
value of the Term Bonus or Sale Bonus prior to the time when a Term Bonus or
Sale Bonus otherwise becomes payable under this Agreement, and for that purpose
it is agreed that the Employee shall receive, on or before the applicable
“Payment Date” in the following table, the corresponding “Advance
Payment” in the amount set forth beside that date in the table, payable as
provided in this paragraph below, except that an Advance Payment (or
portion thereof) shall not be paid if (a) the Employee is not employed under
this Agreement on such Payment Date, or (b) the “Aggregate Advance” (as defined
below) exceeds or would exceed the amount of the Term Bonus that would be
payable assuming that the Term ended as of the applicable Payment Date for such
Advance Payment, or (c) the Aggregate Advance exceeds or would exceed the amount
of the Sale Bonus that would be payable upon the closing of a “Company Sale”
contemplated by a bona fide letter of intent or definitive agreement, if any,
signed by HMC and the acquiror and which is in effect as of the applicable
Payment Date for such Advance Payment, or (d) the Employee already received a
Sale Bonus or Term Bonus. The term “Aggregate Advance” means the
aggregate total of the Advance Payments made to Employee. Each Advance Payment
is payable in cash or registered shares of HMC’s common stock (as provided
below), or partially in cash and partially in stock, as determined by HMC in its
sole discretion. If HMC elects to pay any of an Advance Payment in shares of
stock, HMC shall issue and deliver to the Employee, on a date (the “Issue
Date”) which shall be on or within 10 days after the Payment Date, such
number of shares of common stock of HMC (or its successor) equal to the quotient
of (i) the dollar amount of the Advance Payment to be paid in stock (the
“Stock Payment Amount”), divided by (ii)




Page 9









 






	 	 	 	the “Fair Market Value” (as defined below) per share of such common stock as
of the applicable Issue Date. The issuance of such shares is subject to
withholding if applicable as provided under Section 3(g) hereof. The Employee
shall comply, in connection with any sales of such shares, with any request by
HMC of the Employee to coordinate such sales with or through one or more
market makers or other registered broker/dealers designated by HMC.





	 	 	 	 	 	 
	 
	 	Payment Date: Advance Payment	 	 	Payment Date: Advance Payment	 
	 	April 10, 2006: $162,500
	 	 	Oct. 10, 2007: $37,500	 
	 	July 10, 2006: $50,000
	 	 	Jan. 10, 2008: $37,500	 
	 	Oct. 10, 2006: $50,000
	 	 	April 10, 2008: $24,875	 
	 	Jan. 10, 2007: $50,000
	 	 	July 10, 2008: $24,875	 
	 	April 10, 2007: $37,500
	 	 	Oct. 10, 2008: $24,875	 
	 	July 10, 2007: $37,500
	 	 	Jan. 10, 2009: $24,875	 
	 






	 	 	 	Offset of Excess Advance Payments. If the calculation of the Sale
Bonus or Term Bonus under Section 3(c)(i) or Section 3(c)(ii) above, as the
case may be, results in a negative number (or results in a larger negative
number) due to the subtraction of the Aggregate Advance in the applicable
calculation formula in such Sections, then the amount of such negative number
(or such increase in a negative number, as the case may be) may be applied by
the Company and/or HMC to offset against any other payments due to Employee by
the Company and/or HMC under this Agreement, and if there is any remaining
balance of such negative amount after such offset, the Employee shall promptly
repay such balance to the Company (such payment to be made not later than 10
days following the Company’s demand).
	 
	 	 	 	Offset or Repayment of Advance Payments if Termination by Employee before
end of Initial Term or Termination by Company for Cause. If either (a)
the Employee terminates his employment hereunder prior to the end of the
Initial Term (not including a termination caused by Employee’s death) or (b)
the Employee’s employment is terminated for “Cause” under Section 12(b) hereof
or terminated due to disability under Section 12(a) hereof; then the Employee
shall repay the full amount of the Advance Bonus to the Company within ten
(10) days after such event (and any such due and unpaid amount may be offset
by the Company and/or HMC against any amounts otherwise payable to the
Employee).
	 
	 	(d)	 	Employee’s Acceptance or Rejection of Acquisitions.
Notwithstanding anything to the contrary in this Agreement or Exhibit A hereto,
and subject to the following terms and conditions of this paragraph, in the
event that the Employee gives a timely “Rejection Notice” (as defined below)
regarding a “Proposed Acquisition” (as defined below), then (i) there shall be
no adjustment to the EBITDA Budget in respect of the consummation of such
Proposed Acquisition as otherwise contemplated in Exhibit A hereto, and (ii)
there shall be no increase in the “Acquired Business Base Value” in respect of
the purchase price for




Page 10









 






	 	 	 	such Proposed Acquisition as otherwise contemplated in the definition of
“Acquired Business Base Value” above. A Rejection Notice will not be timely
given unless delivered in writing to the Chief Executive Officers of each of the
Company and HMC prior to the signing of an agreement to consummate the Proposed
Acquisition, and the Rejection Notice must unequivocally state that the Employee
rejects the acquisition for purposes of the bonus calculations under this Section
3(b). “Proposed Acquisition” means a proposed acquisition by the Company
of any company, business or business assets to be acquired for the Company’s
business. During the term of Employee’s employment hereunder, the Company will
inform Employee about any Proposed Acquisition prior to the time a definitive
agreement to consummate the acquisition is signed by the Company, provided,
however, that the Employee will be deemed to have notice and be informed about
any Proposed Acquisition with respect to which the Employee participates in
negotiations thereof.
	 
	 	(e)	 	Re-investment of free cash flow. The Company
acknowledges its intent to make available up to approximately 30% of the
Company’s annual “free cash flow” (this means annual Company EBITDA less capital
expenditures and other uses of cash not reflected in Company EBITDA) to be
available to be re-invested in the Company’s business through capital
expenditures or for working capital or otherwise invested or used in the
acquisition of parallel type businesses, in each case if reasonably necessary
and subject to the Company’s and HMC’s rights to use such cash for other
significant cash needs of the HMC Entities and subject to the mutual approval of
the Company’s business plan in each case by Employee, the Company and HMC. The
funds invested will be capitalized and amortized if and to the extent reasonably
permitted under generally accepted accounting principles in the U.S.A. (GAAP)
for purposes of calculating Company EBITDA.
	 
	 	(f)	 	Shares to be Issued under Shareholder-Approved Plans.
The parties acknowledge that, except for shares required to be granted or issued
under stock options pursuant to Section 3(a) of this Agreement, HMC is not
obligated to issue any shares of stock to Employee unless HMC elects to do so in
its sole discretion as provided in various terms of this Agreement. The parties
also contemplate and agree that, due to various Nasdaq and SEC requirements, if
HMC elects to issue shares as provided under this Agreement, then HMC will do so
only pursuant to a duly approved issuance pursuant to one of HMC’s
shareholder-approved equity compensation plans (except to the extent in any case
that HMC determines in its discretion that such legal requirements are not
applicable in such case), provided, however, that any shares issued to Employee
pursuant to this Agreement will not be subject to any restrictions or
limitations on resale imposed by such equity compensation plans unless such
restrictions are required by applicable law. Such shares are subject to
withholding if applicable as provided under Section 3(g) hereof.
	 
	 	(g)	 	Tax Withholding Requirements. Notwithstanding anything to
the contrary in this Agreement, the Company or other payor of any compensation
to Employee under this Agreement may withhold from such amounts, or from any
other amounts owed by the Company or such other payor to the Employee, and pay
over to the appropriate government tax authorities such amounts (“Withholding
Taxes”) as may be necessary to comply with applicable Federal, state and local
tax withholding requirements relating to taxes imposed on the Employee,
including, without limitation, those requirements set forth in Subtitle C,
Chapter 21, and Subtitle C, Chapter 24, Subchapter A of the Internal Revenue
Code and the income tax withholding provisions relating to applicable state
income taxes. Unless HMC and the Employee otherwise agree, in the event that
the Company or HMC is required to withhold Withholding Taxes by reason of
payments made or to be made to Employee in the form of shares of common stock,
such withholding shall be satisfied through a reduction in




Page 11









 






	 	 	 	the number of shares otherwise to be transferred to the
Employee by a quantity of shares the fair market value of which (as determined in the manner prescribed in
Section 3(b) of this Agreement) is equal to the amount of Withholding Taxes
required to be withheld and paid over to the tax authorities by reason of the
payment of shares to the Employee. Any amount so withheld pursuant to this
provision of the Agreement (whether from a cash payment or a payment in the form
of shares of common stock) shall be treated for purposes of this Agreement as if
paid to the Employee.
	 
	 	(h)	 	No Fractional Shares. Notwithstanding anything to the
contrary in this Agreement, HMC shall not be required to issue any
fractional shares of capital stock to Employee, and in the event that
a calculation of shares issuable to Employee under this Agreement results in a fraction of a
share, the fraction shall be rounded up or down to the nearest whole share, as
the case may be.
	 
	 	(i)	 	Tax Code Section 409A. The parties believe that the
provisions of this Agreement are in compliance with the requirements of Internal
Revenue Code section 409A as presently in effect and as interpreted by IRS
Notice 2005-1 and the Treasury regulations proposed for issuance under such
section. In the event that, by reason of an amendment to such provision or the
issuance of additional guidance by the U.S. Treasury or the Internal Revenue
Service, it appears likely that any of the payment obligations hereunder subject
to the requirements of section 409A is not in compliance with those
requirements, the parties will cooperate in good faith to endeavor to amend the
Agreement, and/or take such other action as may be necessary to, meet those
requirements in a manner that fairly and equitably preserves, to the extent
reasonably achievable and mutually agreeable, the economic benefits of the
parties intended under this Agreement.
	 
	 	 	 	Agreement to Comply with Section 409A Requirement for timing of payment of
compensation by reason of separation of service. The parties acknowledge
that the requirements of Section 409A of the Code referenced above include a
requirement that payment of certain compensation payable in connection with
separation of service cannot be made prior to the end of a six-month period
following the termination of service. The parties hereby expressly agree that,
notwithstanding anything to the contrary in this Agreement, if any payment to the
Employee is required under Section 409A to be paid by reason of a separation from
service, such payment shall not be made before the date which is six months after
the date of separation from service (or, if earlier, the date of death of the
Employee).





     4. Place of Performance. Except for required travel on the Company’s business, the
Employee shall be based at the Company’s offices in Ridgefield, Connecticut or, as the Company may
from time to time determine in its sole discretion, at such other location within a thirty-mile
radius thereof or at the Company’s offices located in New York City if from time to time such
temporary relocation is requested by the Company’s or HMC’s chief executive officer. The Employee
shall also attend periodic meetings at HMC’s headquarters (currently in Boca Raton, Florida) upon
request of HMC’s chief executive officer.



     5. Vacation. Employee shall be entitled to vacation in accordance with the HMC’s
general vacation policy for employees of HMC and its subsidiaries, commensurate with other such
employees holding similar titles.



     6. Employee Benefits. Employee shall be eligible to participate in all employee
benefit plans and benefit programs of Company in effect during the Employment Period to the same
extent as other active executive employees of the Company at his level (but excluding the Company’s
stock option plans or other equity compensation plans). The Company may, without notice, change,
modify, amend, or terminate any



Page 12









 







employee benefit plans and benefit programs that may be in effect either on the Effective Date or
as may be adopted later.



     7. Trade Secrets. Employee acknowledges and agrees that, among Employee’s duties for
Company, Employee will be employed by Company in a position which could provide the opportunity for
conceiving, designing and/or reducing to practice improvements, developments, ideas or discoveries,
whether patentable or unpatentable (collectively hereinafter referred to as “Trade Secrets”).
Employee acknowledges that all Trade Secrets which occur as a result of Employee’s employment prior
to and during the Term shall be and remain the sole and exclusive property of the Company.
Employee hereby assigns, and agrees to assign, to Company all of Employee’s right, title and
interest in and to any and all Trade Secrets which occur as a result of Employee’s employment with
the Company prior to and during the Term.



Employee’s Initials  /s/ BW     




     8. Copyrights. Employee agrees that all right, title and interest in any and all
copyrights, copyright registrations and copyrightable subject matter which occur as a result of
Employee’s employment with the Company prior to and during the Term shall be the sole and exclusive
property of the Company, and agrees that such works comprise works made for hire. Employee hereby
assigns, and agrees to assign, to the Company all right, title and interest in any and all
copyrights, copyright registrations and copyrightable subject matter which occur as a result of
Employee’s employment with the Company prior to and during the Term.



Employee’s Initials  /s/ BW     





	9.	 	Non-Competition and Non-Solicitation.





     (a) Covenant Not to Compete.



     (i) Except to the extent otherwise expressly permitted in this Section 9(a) below, at all
times while the Employee is employed by the Company or other HMC Entity (and during the “Tail
Period” (if any, as defined below)), the Employee shall not directly or indirectly engage in or
compete with, nor directly or indirectly have any interest in, or assist or render services
(whether or not for compensation, and whether as a director, officer, managing member, partner,
shareholder, creditor, employee, agent, advisor or consultant) to or for any sole proprietorship,
corporation, company, limited liability company, partnership, association, venture or business or
any other person or entity (whether as an employee, officer, director, partner, shareholder,
managing member, venturer, agent, security or equity holder, creditor, consultant or otherwise)
that directly or indirectly (or through any affiliated entity) that engages in or competes or
expects to compete with, any “Competing Activity” (as defined in this paragraph below);
provided, however, that this Section 9(a) shall not prohibit the Employee’s ownership, solely as an
investment, of securities of any issuer that are registered under Section 12(b) or 12(g) of the
Securities Exchange Act of 1934, as amended, and that are listed or admitted for trading on any
United States national securities exchange or that are quoted on the National Association of
Securities Dealers Automated Quotations System, or any similar system or automated dissemination of
quotations of securities prices in common use, so long as the Employee does not (a) directly or
indirectly own (legally or beneficially) or control more than one percent (1.0%) of any class of
capital stock or other equity of such issuer, or (b) control, acquire a controlling interest in or
become a member of a group which exceeds such one percent ownership limitation or exercises direct
or indirect control of such issuer. “Competing Activity” means any business anywhere in the
world, whether or not conducted through the Internet or other method, described in either of the
following clauses (x) and (y): (x) business comprising any one or more of such types or classes or
nature of any businesses that are or were conducted (or contemplated to be conducted) by the
Company (including business conducted by the Company’s subsidiaries, or by any other subsidiaries
of HMC comprising part of the Source Business) at any time during the Term of this Agreement, and
(y) in addition, business comprising any one or more of such other types or classes or nature of
any businesses that are or were conducted (or contemplated to be conducted) by HMC or any other HMC
Entity (other than the Company) at



Page 13









 







any time during the Term of this Agreement in which the Employee had some significant level of
involvement, and any natural extensions or evolutions of the businesses referenced in the foregoing
clause (x) or this clause (y).



     (ii) The “Tail Period” shall be any period up to three (3) years as specified by the
Company before or within forty-five (45) days after employment is terminated with or without Cause
by Employer or by the Employee for any reason (or without any reason) or by reason of the
expiration of the Employment Period, but such period shall continue only so long as Employer
continues to pay the applicable “Tail Payment” (as provided below) if any, provided,
however, that notwithstanding the foregoing provisions of this sentence to the contrary, (A) if
the Company fails to give an Acceptance Notice (as defined below) in response to a “New Business
Notice” (as defined below) from the Employee, then (subject to the conditions that the Employee is
not in material breach of this Agreement, the Company does not have “Cause” to terminate the
Employee’s employment hereunder, and the Employee’s employment is not terminated by the Employee)
the “Specified New Business” (as defined below) that is the subject of such New Business Notice
(but not any other Competing Activity) shall be deemed not to constitute a Competing Activity from
and after the last day of employment (subject to the last sentence of this paragraph), (B) if the
Employee terminates his employment in accordance with the following paragraphs of this Section 9(a)
(a “Conforming Termination”) in order to pursue a “Specified New Business”, then (subject
to the conditions that the Employee is not in material breach of this Agreement, and the Company
does not have “Cause” to terminate the Employee’s employment hereunder) the Tail Period shall be
three (3) years and there shall be no requirement for any Tail Payment, and the Specified New
Business that is the subject of the New Business Notice given by Employee in connection with such
termination (but not any other Competing Activity) shall be deemed not to constitute a Competing
Activity from and after the last day of employment (subject to the last sentence of this
paragraph), and (C) if the Employee’s employment is terminated by the Company for “Cause” (as
defined in Section 12 hereof), or terminated by the Employee, the Tail Period shall be three (3)
years and there shall be no requirement for any Tail Payment. Notwithstanding the provisions of
the foregoing clauses (A) and (B) of this paragraph (ii), if the Employee conducts the Specified
New Business (to which either such clause relates) in a fashion that is substantially inconsistent
with the applicable New Business Notice, then such activities shall not be excluded from
constituting a Competing Activity under either such foregoing clauses (A) and (B).



Amount of Tail Payment: The Tail Payment, if applicable as provided above, during the Tail
Period shall be paid at a rate equivalent to fifty percent (50%) of Employee’s base salary at the
time employment terminates (and payable in accordance with the normal payroll schedule),
except that (a) if the termination occurs during the Initial Term the Tail Payment rate
shall be not less than the rate of $225,000 per year, and (b) if the termination occurs during the
Extension Term the Tail Payment rate shall be not less than the rate of $250,000 per year; and
further provided that (x) if the Employee’s employment is terminated by the Company without
“Cause” (as defined in Section 12 hereof) then the Tail Payment rate shall be the greater of
$350,000 per year or one hundred (100%) of Employee’s base salary at the time employment terminates
(and payable in accordance with the normal payroll schedule), and (y) as stated in clauses (B) and
(C) of the preceding paragraph (ii), there is no Tail Payment in the case of a termination as
stated in such clauses.



     (iii) For purposes of this Agreement, “New Business Opportunity” means any
opportunity, venture, idea or concept developed by Employee that would utilize (in a material and
meaningful manner) existing assets, owned by the Company, HMC, or any of their respective
subsidiaries (but excluding MovieTickets.com and Tekno Books and Netco Partners and any other
business unit now or in the future not wholly owned by HMC), or aligns or relates with or is
competitive to a business of HMC or its subsidiaries, or is a business vertically or horizontally
related to a business of the Company or one of HMC’s other businesses (but excluding
MovieTickets.com and Netco Partners), in each case in a material and meaningful manner.
Notwithstanding anything to the contrary in this Agreement, whenever the Employee shall be aware of
a New Business Opportunity (whether or not developed by the Employee) during the term of employment
hereunder, the Employee shall promptly bring such opportunity to the attention of the Company’s
Board of Directors in writing, or orally (if confirmed in writing), and give a copy to HMC’s chief
executive officer. All such new



Page 14









 







business opportunities shall be offered to the Company and HMC. Nothing in this Agreement
grants Employee any right to utilize any assets or resources of any HMC Entity.



     (iv) If the Employee desires to invoke his rights if applicable under either of clauses (A) or
(B) of Section 9(a)(ii) above (which clauses provide for certain exceptions to the Employee’s
covenant not to compete following termination of his employment), such that the Employee would not
be prohibited (as provided above) from engaging (following termination of employment) in a
particular New Business Opportunity (a “Specified New Business”) in the event that the
Company does not pursue such business for itself, the Employee shall first deliver to the Company’s
Board of Directors (and a copy to HMC’s Chief Executive Officer), a written description of the
Specified New Business (the “New Business Notice”) with reasonable particularity as to the
specific nature and activities contemplated to be involved in conducting the Specified New Business
including without limitation the products, services, customers, markets, pricing, fixed and
variable costs, budgets, capital expenditures, competitors, barriers to entry, risks and potential
losses and liabilities, together with a feasibility analysis including business and financial
descriptions, estimates and projections based on reasonably supportable assumptions (and in any
event such Specified New Business shall be an opportunity which the Employee believes in good faith
following his reasonable diligence is (and which the New Business Notice reasonably presents as) a
viable profitable business opportunity for the Company and shall be presented in the New Business
Notice in a fashion that is not misleading). If the Employee desires to pursue clause (B) of
Section 9(a)(ii) above, then such New Business Notice shall include the Employee’s written notice
to the Company that, if the Company does not itself pursue the Specified New Business, then the
Employee will or might terminate his employment in order to engage himself in the Specified New
Business. If (i) the Company does not deliver notice to the Employee, within the 45-day period
following its receipt of the New Business Notice, that the Company’s Board of Directors has acted
to approve the Company’s taking steps to prepare for engagement in business of the sort described
in the New Business Notice (an “Acceptance Notice”), and (ii) following such 45-day period
the Employee gives written notice (“Resignation Notice”) to the Company of the Employee’s
resignation from the Company’s employment (as well as his resignation from all other positions with
the Company and other HMC Entities) effective as of a specified date not less than sixty (60) nor
more than ninety (90) days after delivery of the Resignation Notice; then, the termination of the
Employee’s employment accordingly at the date specified in such Resignation Notice shall constitute
a Conforming Termination (provided, however, that if the Company elects to terminate
Employee’s employment at an earlier time following receipt of the Resignation Notice, such
termination by the Company at such earlier time shall constitute a Conforming Termination).



     (b) Covenant Not to Solicit or Interfere. The term “Company Party” means
the Company and any affiliate (excluding natural persons), subsidiary or parent company of the
Company, and HMC and any other HMC Entity. Employee agrees that during the Term, and for a period
of two (2) years after the expiration or earlier termination of the Term (and thereafter for the
duration of the Tail Period under Section 9(a)(ii) above if the Tail Period exceeds two (2) years),
the Employee shall not, without the prior written consent of the Company’s Board of Directors
(which consent may be granted or withheld in the Board’s sole and absolute discretion), directly or
indirectly through the actions of any other individual or entity, whether for his own benefit or
for that of another individual or entity, (i) solicit or recruit, or attempt to solicit or recruit,
any individual who is now or at any time during the Term an employee of any Company Party, or
induce or attempt to induce any such employee to terminate his or her employment with such Company
Party; or (ii) solicit or recruit, or attempt to solicit or recruit, any individual or entity who
is then, or at any time during the Term was, a customer or client of any Company Party which
engages in a Competing Activity, or advise or induce any such individual or entity not to continue
as a customer or client of such Company Party which engages in a Competing Activity, and shall not
interfere with any renewal discussions or make any presentations or pitches or calls to any such
customer or client.



     (c) Blue Pencilling. In the event any provision of this Section 9 is held by an
arbitrator or court of competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions shall nevertheless continue in full force without being impaired or invalidated in any way. Without in any way
limiting the generality of the preceding sentence, in the event the covenant not to compete
contained herein and/or the



Page 15









 







non-solicitation covenant contained herein, in the view of a court or arbitrator asked to rule upon
the issue, is deemed unenforceable by reason of covering too large an area, too long a period of
time or too many business activities, then the same shall be deemed to cover only the largest area, the longest time
period or the most business activities, as the case may be, which will not render it unenforceable
(as determined by the court
or arbitrator, as applicable).



     (d) It is expressly recognized and agreed that the covenants set forth in this Section 9
are for the purposes of restricting the activities of Employee only to the extent necessary for the
protection of the legitimate business interests of the Company and the other HMC Entities, and
Company and Employee agree that said covenants are reasonable for that purpose.



     10. Proprietary Information. Employee acknowledges and agrees that certain non-public
information obtained by Employee relating or pertaining to the Company Parties’ businesses,
projects, products, services, trade secrets, confidential information (including customer lists,
supplier lists, methods of operations and financial information), unpublished know-how (whether
patented or unpatented) and other business information not easily accessible to other persons
whether or not in the trade (collectively, the “Proprietary Information”), are proprietary in
nature; provided, however, there shall be excluded from the meaning of Proprietary Information any
information which is or becomes generally known within the industry through some non-confidential
source other than Employee. Employee acknowledges that the Proprietary Information shall be
considered by Employee to be confidential, and Employee covenants and agrees not publish, disclose
or reveal (whether directly or indirectly) any part of the Proprietary Information to any entity or
person or use the same for his own purposes or personal gain or the purposes of others, during the
term of this Agreement or after its termination or expiration. Upon termination (voluntary or
otherwise) of Employee’s employment with the Company, Employee will return to the Company all
things belonging to the Company, and all documents, records, notebooks and tangible articles
containing or embodying any Proprietary Information, including copies thereof, then in Employee’s
possession or control, whether prepared by Employee or others, will be left with the Company and
shall not be retained by Employee (including but not limited to any such information or copies
contained in any computer or electronic, magnetic or other form of media or memory including but
not limited to a hard drive, cd, dvd or diskette).



Employee’s Initials  /s/ BW     




     11. Remedies. Employee acknowledges that Employee’s services are of a special,
unique, unusual, extraordinary and intellectual character with regard to the operation, management
and development of the Company’s businesses and that with respect to each and every breach or
violation or threatened breach or violation by Employee of any terms and conditions of this
Agreement by Employee (including but not limited to Sections 7, 8, 9 and 10 above), the Company’s
and HMC’s (or other Company Party’s) remedies at law may be inadequate and that the Company and HMC
(and/or other Company Party), in addition to all other remedies available to it at law or in equity
(including without limitation, specific performance of the provisions hereof), shall be entitled to
seek to enjoin the commencement or continuance thereof and may, with notice to Employee, apply to
any court of competent jurisdiction for entry of equitable relief, including, without limitation,
an immediate restraining order or injunction. Employee further agrees that Sections 7, 8, 9 and
10 shall be enforceable by Company and HMC (and/or other Company Party) whether or not there is any
claim of breach of any other term of this Agreement, and the parties hereto acknowledge and agree
that if any of such provisions of this Agreement were violated or not performed by Employee in
accordance with their specific terms or were otherwise breached, irreparable damage to the Company
and HMC and their subsidiaries and businesses (and/or other Company Party) would occur and it would
be extremely impracticable and difficult to measure damages. Accordingly, in addition to any other
rights and remedies to which the parties may be entitled by law or equity, the Company and HMC
(and/or other Company Party) shall be entitled to an injunction or injunctions to prevent or cure
Employee’s breaches of the provisions of this agreement and to enforce specifically the terms and
provisions hereof including without limitation Sections 7, 8, 9 and 10 hereof, and Employee
expressly waives (a) any defense that a remedy in damages will be adequate and (b) any



Page 16









 







requirement, in an action for specific performance, injunction or other relief, for the
posting of a bond. The Company and HMC (and/or other Company Party) may pursue any of the remedies
described in this Section 11 concurrently or consecutively in any order as to any such breach or
violation, and the pursuit of one of such remedies at any time will not be deemed an election of
remedies or waiver of the right to pursue any of the other of such remedies. In the event that a
court of any jurisdiction holds this Agreement wholly or partially unenforceable because of the
breadth of its scope or otherwise, it is the intention of the Company and the Employee and HMC that
such a holding shall not bar or in any way affect the Company’s or HMC’s (and/or other Company
Party’s) right to relief in the courts of any other jurisdiction within the scope of this
Agreement.



Employee’s Initials  /s/ BW     





	12.	 	Termination.





          (a) Death or Disability. In the event Employee dies or becomes “disabled” (as defined
below) during the Employment Period, the Employee’s employment shall terminate on the date on which
death occurs or on which the Employee becomes disabled, and the sole remaining obligations of the
Company under this Agreement shall be to pay to Employee or Employee’s named beneficiary or heirs
(1) any unpaid salary amounts due Employee for the period through and until the date of Employee’s
disability or death, (2) any unpaid EBITDA Bonus (earned under Section 3(b) hereof) for any Bonus
Year ended on or prior to the employment termination date, and (3) the Pro-Rata Bonus (as defined
in paragraph (c) below), if any, and (4) in the event of termination of employment due to
Employee’s death within 6 months before the end of the Initial Term or due to his death within 6
months before the end of the Extension Term, as the case may be, then payment also of the
applicable Term Bonus for such term, if any, that would have been payable if he had not died and he
had continued his employment through the end of such term, as the case may be (subject in any event
to deduction of the prior Advance Payments in calculating the Term Bonus payable). For purposes of
this Agreement, Employee shall be considered “disabled” when, as the result of physical or mental
injury or illness, Employee becomes physically or mentally incapable of fulfilling the duties,
responsibilities and obligations of the Employee under this Agreement for a period of ninety (90)
or more consecutive days.



          (b) Cause. The Company may terminate Employee’s employment and all the Company’s and
HMC’s obligations hereunder by written notice to Employee, for “Cause” (as defined below). For
purposes of this Agreement, “Cause” shall be defined as willful misconduct or intentional
or continual failure to perform stated and material duties after reasonable notice and opportunity
to cure any failure or default, a breach of fiduciary duties where such breach is made known to
Employee and Employee is given a reasonable opportunity to remedy or cure the breach; or if: (1)
Employee commits any acts of dishonesty, fraud, misrepresentation or moral turpitude; (2) Employee
violates any of the material policies or terms of the employee handbook previously provided to
Employee which constitutes conduct described in subparagraph (3) or (4) of this Section 12(b); (3)
Employee engages in any conduct that may give rise to liability of the Company or HMC under
applicable laws, including but not limited to, laws relating to discrimination and harassment in
employment; or (4) Employee engages in conduct detrimental to the business, reputation, character
or standing of the Company or HMC. The Company shall notify Employee in writing of its intent to
terminate Employee’s employment for Cause. The Employee’s termination for Cause shall not be
effective prior to the time when and if a resolution is duly adopted by an affirmative vote of a
majority or more of the members of the Board of Directors of the Company stating that, in the good
faith opinion of such affirming Board members, the Employee’s conduct constitutes Cause (as defined
herein) for termination of employment for Cause; provided, however, that the Employee shall have
been given the opportunity to cure any act or omission that constitutes Cause if capable of cure
and, together with counsel, prior to the adoption of the Board’s resolution, shall have been given
the opportunity to be heard by the Board. In the event the Company terminates employment of
Employee for Cause (as defined above), or in the event Employee leaves the employment of Company on
Employee’s own initiative, the Company and HMC shall be obligated to: (1) pay Employee any unpaid
salary amounts due Employee for the period through and until the date of termination of Employee’s
employment, (2) pay Employee any unpaid EBITDA Bonus (earned under Section 3(b) hereof) for any
Bonus Year ended prior



Page 17









 







to the employment termination date, (3) reimburse the Employee for his out-of-pocket business
expenses incurred on behalf of the Company or HMC for which reimbursement is requested and payable
in accordance with HMC’s expense reimbursement policies, and (4) make payment to Employee if
required under any employee benefit plans in accordance with their terms; and neither the Company
nor HMC shall be obligated to make any further salary, bonus or other payments to Employee
(although either the Company or HMC has the right to pay a Tail Payment if applicable under Section
9(a)(ii) hereof).



          (c) Other. The Company may at any time terminate Employee’s employment for reasons
other than for Cause, in the sole discretion of the Company, by written notice to Employee. In the
event that Employee’s employment is terminated by the Company other than for Cause, death or
disability, the Company shall be obligated to: (1) continue to pay Employee his salary then in
effect for the shorter of (i) the remainder of the Employment Period then in effect and (ii) a
period of twelve (12) months after the date of termination; except that if the Company EBITDA for
the last Bonus Year ended prior to the termination date is greater than 80% of the applicable
EBITDA Budget for such year, then the period of post-termination salary payment under this clause
(ii) shall be equal to 50% of the remainder of the Employment Period then in effect (but only if
such 50% period is longer than the 12-month period otherwise provided in this clause (ii)), (2) pay
Employee any unpaid EBITDA Bonus (earned under Section 3(b) hereof) for any Bonus Year ended on or
prior to the employment termination date, (3) pay Employee a pro-rata portion of the bonus
described in Section 3(b) hereof (the “Pro-Rata Bonus”) for the Bonus Year in which the
termination of employment occurs (the “Termination Year”), which Pro-Rata Bonus shall be
calculated and paid as provided below, (4) pay Employee the Term Bonus in respect of such
termination, as determined and payable as provided in Section 3(c)(ii) hereof, and the Supplemental
Bonus (if any) as determined and payable as provided in Section 3(c)(iv) hereof, (5) reimburse the
Employee for his out-of-pocket business expenses incurred on behalf of the Company or HMC for which
reimbursement is requested and payable in accordance with HMC’s expense reimbursement policies, and
(6) make payment to Employee if required under any employee benefit plans in accordance with their
terms; and neither the Company nor HMC shall be obligated to make any further salary, bonus or
other payments to Employee.



The Pro-Rata Bonus shall be calculated and paid as provided under Section 3(b) but in accordance
with the following adjustments. The “Company EBITDA” for purposes of applying the formula to
calculate the EBITDA Bonus in Section 3(b) shall be equal to the product of (A) the Company EBITDA,
as calculated for the period from January 1 of the Termination Year through the date of termination
of Employee’s employment, multiplied by (B) a fraction, the numerator of which is 365, and the
denominator of which is the number of days from and including January 1st of the
Termination Year through the date of termination (the “Employment Days”); and the resulting EBITDA
Bonus shall be multiplied by the following fraction to calculate the Pro-Rata Bonus: a fraction,
the numerator of which is the number of Employment Days and the denominator of which is 365 days.
For example, if the termination date was September 30 of the Termination Year, then the Employment
Days would be 273; and if the Company EBITDA for the period through September 30 of the Termination
Year was $2,750,000, and if the applicable EBITDA Budget for the Termination Year was $3,000,000,
then the Pro-Rata Bonus in such case would be $161,068 [this $161,068 result is computed by
multiplying the $2,750,000 Company EBITDA through September 30 by the fraction 365/273, resulting
in “Company EBITDA” of $3,676,740 for purposes of applying the bonus formula in Section 3(b), which
results in a bonus number equal to the sum of (i) $50,000, plus (ii) (0.20 x ($3,626,740 -
$3,000,000)), which calculation results in an EBITDA Bonus of $175,348 (or the applicable Bonus
Cap, if smaller) that is then multiplied by the fraction 273/365 resulting in a Pro-Rata Bonus of
$131,150 (or less, if the Bonus Cap applied) in this assumed case.]



          (d) Payment of Bonuses. This is to clarify that any EBITDA Bonus or Pro-Rata Bonus
required to be paid under the foregoing paragraphs of this Section 12, are payable in cash or
registered shares of HMC’s common stock, or partially in cash and partially in registered stock, as
determined by HMC in its sole discretion. If HMC elects to pay any portion of such a bonus in
shares of stock, HMC shall issue and deliver to the Employee (or to the applicable payee in the
case of Section 12(a) above), on or within 10 days after the



Page 18









 







applicable payment date (the “Issue Date”) for such payment, such number of shares of common stock
of HMC (or its successor) equal to the quotient of (i) the dollar amount of the bonus to be paid in
stock (the “Stock Payment Amount”), divided by (ii) the “Fair Market Value” (as defined in this
Agreement above) per share of such common stock as of such Issue Date. Any such stock issuances are
subject to withholding if applicable as provided under Section 3(g) hereof. The Employee shall
comply, in connection with any sales of such shares, with any request by HMC of the Employee to
coordinate such sales with or through one or more market makers or other registered broker/dealers
designated by HMC.



     13. General.



          (a) Notices. All notices, requests, consents and other communications, required or
permitted to be given hereunder, shall be in writing and shall be deemed to have been duly given
when personally delivered or sent by registered or certified mail, return receipt requested, or
when sent by overnight delivery service with obtained signature for delivery, or by facsimile upon
confirmation of successful transmission of the facsimile (if hard copy is sent by one of the
foregoing methods).



	 	 	 
	if to Employee at:

	 	390 West Mountain Road,
	 

	 	Ridgefield, CT 06877
	 

	 	Attention: Brett West
	 

	 	Telecopier No.: (203) 438-0043
	 
	 	 
	and if to Company at:

	 	Showtimes.com, Inc.
	 

	 	2255 Glades Road
	 

	 	Suite 221A
	 

	 	Boca Raton, FL 33431
	 

	 	Attention: Mitchell Rubenstein, Co-Chief Executive Officer
	 

	 	Telecopier No.: (561) 998-2974
	 
	 	 
	 

	 	with a copy to:
	 

	 	Showtimes.com, Inc.
	 

	 	2255 Glades Road
	 

	 	Suite 221A
	 

	 	Boca Raton, FL 33431
	 

	 	Attention: Brian Walsh, Associate General Counsel
	 
	 	 
	and if to HMC at:

	 	Hollywood Media Corp.
	 

	 	2255 Glades Road
	 

	 	Suite 221A
	 

	 	Boca Raton, FL 33431
	 

	 	Attention: Mitchell Rubenstein, Chief Executive Officer
	 

	 	Telecopier No.: (561) 998-2974
	 
	 	 
	 

	 	with a copy to:
	 

	 	Hollywood Media Corp.
	 

	 	2255 Glades Road
	 

	 	Suite 221A
	 

	 	Boca Raton, FL 33431
	 

	 	Attention: Brian Walsh, Associate General Counsel






          (b) Assignment; Etc. This Agreement shall inure to the benefit of, and shall be
binding upon, the Company and its successors and assigns, including any person or entity with which
the Company may merge, consolidate, or transfer more than 50% of its assets (including assignment
of this Agreement). Insofar



Page 19









 





as the Employee is concerned, this Agreement, being personal, cannot be assigned by Employee, and
Employee shall not assign or delegate any rights or obligations hereunder and any attempted or
purported assignment or delegation shall be void.



     Continuation of Agreement in a Sale, Optional 6-month term. Nothing in this Agreement
shall preclude or impair the Company from (a) consolidating or merging into or with another entity,
or (b) transferring all or any substantial portion of its assets (which may include this Agreement)
to another person or entity which assumes this Agreement and the obligations of the Company
hereunder in writing. Upon such consolidation, merger, or transfer of assets and assumption, the
term “the Company” as used herein, shall mean such surviving or consolidated entity or such
assignee, as the case may be, and this Agreement shall continue in full force and effect, except
that (i) upon and following any such event (a “Change Transaction”), or in the event that a person
or entity not previously affiliated with the Company or HMC acquires more than 50% of the Company’s
capital stock (or more than 50% of the voting power of such capital stock) (also referred to as a
“Change Transaction”), HMC shall have no obligations under this Agreement (it being agreed,
however, that HMC and other HMC Entities shall continue to be protected from Employee’s competing
activities under Section 9 hereof during the Term and subsequent Tail Period), (ii) upon and
following such assignment and assumption of this Agreement in the case of asset transfer, the party
which is the “Company” hereunder as of the time immediately prior to the closing of such
transaction (the “Prior Company”) shall have no obligations under this Agreement other than the
payment of salary through the period ending on the date of closing of the asset transfer, and
payment of the Sale Bonus if one is due in respect of such transaction (and the assignee (the “New
Company”) will not be obligated to pay such Sale Bonus unless the New Company also expressly
assumes the obligation to pay such Sale Bonus, in which event the New Company but not the Prior
Company shall be obligated to pay the Sale Bonus), and (iii) the entity which is the “Company”
hereunder as of the time immediately preceding a Change Transaction shall have the right to
designate and change in its discretion the last day of the Term of this Agreement to a specified
date (the “Ending Date”) not more than 180 days following the date of closing of the Change
Transaction, by giving written notice of the Ending Date to the Employee not less than 15 days
prior to the closing of the Change Transaction, and if such notice is given the Employment Period
will continue until and will expire on the Ending Date (and the Employee’s salary during such
period will stay at the same rate as in effect at the time of the closing of the Change
Transaction).



     Termination of Agreement in a Sale, at Company’s Option. Notwithstanding anything to
the contrary in this Agreement, in the event of the closing of a transaction (a “Sale
Transaction”) in which the Company or its business is acquired by a person or entity not
previously affiliated with the Company or HMC, including any transaction in which: (1) the Company
is merged or consolidated with another entity, (2) 50% or more of the Company’s assets are
purchased, or (3) more than 50% of the Company’s capital stock (or more than 50% of the voting
power of such capital stock) is acquired, then the entity which is the “Company” hereunder as of
the time immediately preceding the Sale Transaction shall have the right to terminate this
Agreement effective as of the time immediately preceding the closing of the Sale Transaction, by
giving written notice to the Employee not less than 15 days prior to the closing of the Sale
Transaction (but such termination shall be effective only if the closing occurs). If such notice
is given and the closing of the Sale Transaction and such termination of this Agreement occurs,
then such termination shall constitute a termination without “Cause” to which Section 12(c) applies
(and the Employee shall accordingly receive the amounts payable under Section 12(c)) except that if
such transaction constitutes a “Company Sale” under Section 3(c)(i) hereof then (x) the Employee
shall be paid the Sale Bonus if one is due in respect of such transaction, and (y) the Term Bonus
shall not be payable in respect of such transaction or termination notwithstanding Section 12(c) or
any provision hereof to the contrary.



     Nothing in this Agreement nor the existence hereof shall restrict or prohibit (i) the ability
of the Company to sell, assign, mortgage, pledge or hypothecate any of its assets, nor (ii) the
ability of any holder (other than the Employee, as provided herein) of the Company’s capital stock
or other securities or debt to sell, assign, mortgage, pledge or hypothecate any of such rights or
assets.



Page 20









 





          (c) Governing Law; Venue; Service. This Agreement shall be governed and construed in
accordance with the laws of the State of Florida without regard to the principles or policies of
conflicts of laws of such state. Any claim or controversy arising out of or relating to this
Agreement or a breach hereof shall, upon the request of any party involved, be submitted to and
settled by arbitration in the County of Palm Beach, Florida, as further provided in paragraph (g)
below. The decision made pursuant to such arbitration shall be binding and conclusive on all
parties involved; and a judgment upon such decision may be entered in the highest court of any
state or federal forum having jurisdiction, and the parties agree to be subject to the jurisdiction
of the respective federal and state courts located in Palm Beach County, Florida, and that service
of process on any party may be accomplished by notice as provided in Section 13(a) above.
Notwithstanding the foregoing provisions of this paragraph (c) or the provisions of paragraph (g)
below, the request by either party for specific performance or preliminary or permanent injunctive
relief to enforce this Agreement, whether prohibitive or mandatory, shall not be subject to
mandatory arbitration under this Agreement and may be adjudicated only by the courts of the State
of Florida or the U.S. District Court in Florida which are located in Palm Beach County, Florida,
and all parties hereby consent to the personal jurisdiction of such court.



          (d) Captions. The section headings contained herein are for reference purposes only
and shall not in any way affect the meaning or interpretation of this Agreement.



          (e) Entire Agreement. This Agreement contains the entire agreement between the
parties hereto and supersedes all prior agreements and understandings, oral or written, between the
parties hereto with respect to the subject matter hereof.



          (f) Amendment. This Agreement may not be amended or modified other than by written
instrument executed by all of the parties hereto, or in the case of waiver, by the party waiving
compliance.



          (g) Arbitration. Except for claims for specific performance or preliminary or
permanent injunctive relief which are required to be heard by a court as provided in paragraph (c)
above, all parties including the Employee and the Company and HMC agree that any and all disputes
and claims arising out of or related to Employee’s employment by the Company or the termination
thereof or otherwise under this Agreement, shall be submitted to binding arbitration in Palm Beach
County, Florida pursuant to the then-existing model employment dispute rules of the American
Arbitration Association (“Rules”), before three (3) arbitrators to be selected pursuant to the
then-existing Rules. Employee hereby acknowledges, understands and agrees that, in agreeing to
submit such disputes and/or claims to arbitration, both Employee and Company and HMC each give up
the right to have the dispute(s) or claims(s) heard in a court of law by a judge or jury. However,
nothing herein shall in any way limit either Employee’s or Company’s or HMC’s statutory rights
and/or remedies, all of which are reserved and may be alleged in the arbitration process, and
nothing herein shall in any way limit Company’s or HMC’s rights under Section 11 hereof. By signing
this Agreement, Employee understands that Employee may not have a jury decide any dispute or claim
required to be submitted to arbitration hereunder, but that any such dispute or claim shall be
decided only by the arbitrators. The arbitrators shall issue a written decision, including the
arbitrators’ written findings and conclusions upon which any award is based. Each party shall bear
its own costs and expenses and an equal share of the arbitrators’ and administrative fees of
arbitration. Any arbitration award made hereunder may be docketed for enforcement in any court of
competent jurisdiction as provided in paragraph (c) above.



          (h) Waiver. The failure of any party at any time or times to require performance of
any provision hereof shall in no manner affect the right at a later time to enforce the same. No
waiver by any party of the breach of any term or covenant contained in this Agreement, whether by
conduct or otherwise, in any one or more instances, shall be deemed to be, or construed as, a
further or continuing waiver of any such breach, or waiver of the breach of any other term or
covenant contained in this Agreement.



          (i) Agents for Company for this Agreement. The parties agree that Brett West (the
Employee) shall not and is not permitted to take any action or make any decision for or on behalf
or in the name



Page 21









 







of the Company and/or HMC or any other HMC Entity with respect to the Company’s or any other
such entity’s exercise of its rights under or with respect to this Agreement.



          (j) Severability. Invalidity or unenforceability of any provision of this Agreement
shall in no way affect the validity or enforceability of any other provisions.



          (k) SEC Filing. Employee acknowledges that HMC may file this Agreement as part of its
filing requirements with the U.S. Securities and Exchange Commission and Employee consents to such
filing as determined and made by HMC in its sole discretion.



          (l) Confidentiality of this Agreement. Employee agrees to hold in strict confidence,
and not to disclose, discuss, communicate or reveal the existence and/or terms of this Agreement or
the rights or obligations arising hereunder, to any person or entity (including any and all
employees and personnel of HMC and/or its subsidiaries and affiliates, other than HMC’s CEO or
President or attorneys employed by HMC’s legal department), other than to Employee’s spouse,
advisors, accountants and lawyers who also agree to hold the existence of this Agreement and the
terms hereof in confidence, without the clear and express prior written consent of HMC.



          (m) Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be enforceable against the parties actually executing such counterparts, and all of
which together shall constitute one instrument.



     14. Survival After Termination of Employment. The provisions of Sections 3, 7, 8, 9,
10, 11, 12, 13 and this Section 14 shall survive any termination of the Employee’s employment under
this Agreement for any reason, whether by the Company, HMC or the Employee.



     IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the date first
written above.



	 	 	 
	COMPANY:

	 	EMPLOYEE:
	 
	 	 
	Showtimes.com, Inc.
	 	 
	 
	 	 
	By: /s/ Laurie S. Silvers

	 	/s/ Brett West
	 

	 	 
	Name: Laurie S. Silvers

	 	Brett West
	Title: Co-Chief Executive Officer
	 	 
	 
	 	 
	HMC:
	 	 
	 
	 	 
	Hollywood Media Corp.
	 	 
	 
	 	 
	By: /s/ Scott Gomez
	 	 
	 
Name: Scott Gomez
	 	 
	Name:
Scott Gomez
 Title: Chief Accounting Officer
	 	 






Page 22









 






EXHIBIT “A”




Incentive Compensation




     1. For purposes of this Agreement, “Company EBITDA” for any specified period means the
Company’s Net Income for such specified period, plus (i) federal income taxes deducted in
determining Net Income for that period, (ii) any interest on indebtedness for borrowed money
deducted in determining Net income for that period, and (iii) any depreciation expense and
amortization expense deducted in determining Net Income for that period.




	     2.	 	For purposes of this Agreement, “EBITDA Budget” is as follows for the
following “Bonus Years” (subject to adjustment as provided):





          EBITDA Budget:



	 	 	 	 	 
	Bonus Year	 	 	 
	(12 months ending	 	 	 
	December 31:)	 	EBITDA Budget:	 
	2005:
	 	$	2,200,000	 
	2006:
	 	$	2,640,000	 
	2007:
	 	$	3,168,000	 
	2008:
	 	$	3,801,600	 
	2009:
	 	$	4,561,920	 
	2010:
	 	$	5,474,305	 
	2011:
	 	$	6,569,165	 







Each Bonus Year is a 12 consecutive month (one calendar year) period ending on
December 31 of the year indicated. The parties agree that in the event that
the Company or HMC or any of their respective subsidiaries purchases or
acquires (by stock purchase, merger, asset purchase or otherwise) any business
unit or operations or assets of Tribune Company or Tribune Media Services,
such acquisition shall result in an adjustment to the EBITDA Budget in the
same manner as any other acquisition under Section 3 below.



     3. Adjustment of EBITDA Budget. Unless otherwise provided in Section 3(d) of this
Agreement in a particular case, from time to time if and when the Company or HMC closes an
acquisition, after the date of this Agreement, of a business to be included in the calculation of
Company EBITDA (“Acquired Business”), the Projected EBITDA (as defined below) expected to result
from the Acquired Business shall be added to the EBITDA Budget (as then in effect) for the periods
from and after the date of the closing, as adjusted for an assumed growth rate for Projected EBITDA
of 20% per year (resulting in increasing adjustments to the EBITDA Budget from year to year
accordingly), and the resulting adjusted EBITDA Budget numbers shall thereupon be the EBITDA Budget
for such periods. The term “Projected EBITDA” means the annual increase in Company EBITDA
expected to result from the acquisition (after adjustment to reflect cost reductions, revenue
growth, and other expected adjustments planned to occur in connection with or following the closing
of the acquisition), as determined and presented to the Company’s and/or HMC’s Board of Directors
or Compensation Committee in good faith by HMC’s principal accounting officer (which person
currently is Scott



Page 23









 







Gomez, HMC’s Chief Accounting Officer), with input from the Employee, Brett West. The
Company’s Board of Directors and HMC’s Chief Executive Officer shall in good faith review the
EBITDA Budget from time to time, with input from the Employee, to take into account the effect of
any significant corporate transaction closing after the date of this Agreement (e.g., an
acquisition (other than an Acquired Business addressed above) or disposition by the Company of a
significant subsidiary or any significant assets, a recapitalization or refinancing of the Company,
etc.) and shall take such action, if any, as they shall in good faith deem and agree to be
necessary to adjust the EBITDA Budget in light of any such transaction and the EBITDA Budget as so
adjusted shall become the EBITDA Budget for purposes of this Agreement. The parties further agree
that the EBITDA Budget shall be adjusted in the manner contemplated above to adjust for the recent
CinemasOnline Acquisition which closed prior to this Agreement in November 2005.



     4. Company EBITDA shall be determined in good faith by HMC’s principal accounting officer
based upon (a) generally accepted accounting principles in the U.S.A. (“GAAP”) and (b) the
Company’s financial statements prepared in accordance with GAAP. Employee shall have the right to
review any documents related to the calculation of Company EBITDA and to receive a written
explanation of how the Company EBITDA was determined for each Bonus Year.



Signatures confirming this Exhibit A, dated March 30, 2006:




	 	 	 
	/s/ Brett West
	 	 
	 
Employee: Brett West
	 	 
	 
Employee: Brett West
	 	 
	 
	 	 
	 
	 	 
	Company: Showtimes.com, Inc.
	 	 
	 
	 	 
	By: /s/ Laurie S. Silvers
	 	 
	 
 
	 	 
	Name: Laurie S. Silvers
	 	 
	Title: Co-Chief Executive Officer
	 	 
	 
	 	 
	HMC: Hollywood Media Corp.
	 	 
	 
	 	 
	By: /s/ Scott Gomez
	 	 
	 

	 	 
	Name: Scott Gomez
	 	 
	Title: Chief Accounting Officer
	 	 







Page 24