<PAGE>   1
                                                                   EXHIBIT 10.77


                              EMPLOYMENT AGREEMENT

     This Employment Agreement is made and entered into as of this 1st day of
April, 2000, by and among THE HARVEY ENTERTAINMENT COMPANY, a California
corporation ("Parent"), PM Entertainment, Inc., a California corporation
("Company"), and GEORGE SHAMIEH ("Employee").

     Whereas, concurrent with the execution of this Agreement, Parent is
acquiring all of the issued and outstanding shares of capital stock of Company;

     Whereas, Roger Burlage ("Burlage") is currently Chairman of the Board and
Chief Executive Officer of Parent and will also serve as Chairman of the Board
of Company; and

     Whereas, Company and Parent desire to engage the services of Employee,
whose experience, knowledge and abilities are extremely valuable to Company and
Parent, and Employee desires to enter the employ of Company,

     Now, therefore, the Parties hereto agree as follows:

     1. Position and Duties: Reporting.

          (a) Company and Parent hereby employ Employee, and Employee hereby
accepts employment, reporting directly to Burlage and serving as President of
Company during the Term hereof as specified in Paragraph 6 below, with powers
and duties consistent with such position, including but not limited to, the
responsibility for the operations of Company. All decisions involving major
expenditures and matters that could have a material adverse impact on Company
will be subject to the approval of Burlage. All employees and independent
contractors of Company will report to Employee. Employee will have the sole
authority to retain and terminate employees and independent contractors of
Company, subject to review and discussion with Burlage, except that all
department heads of Finance, Human Resources, MIS and Legal shall have dual
reporting lines to Employee and the appropriate executive at Parent, and any
personnel decisions involving these department heads will be subject to review
between Employee and the appropriate Parent executive. Employee shall perform
such additional, different and/or incidental duties, and accept the election or
appointment to such other offices as Burlage reasonably designates, consistent
with Employee's position as President of the Company. Employee shall perform
such duties and responsibilities incidental to his employment as may from
time-to-time be reasonably designated by Burlage, consistent with Employee's
position, stature and experience, and shall faithfully observe Company's written
policies and procedures consistent with the provisions hereof (which policies
and procedures will be those of Parent as well). The provisions of this
Paragraph 1(a) shall be subject to the terms of Paragraph 6 hereof.

<PAGE>   2

          (b) Except as set forth below in Paragraph 10(b), or if for any
reason, Employee ceases to be employed by Company, Employee shall devote his
full working time to the promotion of Company's business and welfare in
accordance with this Agreement and Paragraph 1(b)(ii), below, and as such his
services in the entertainment industry shall be exclusive to Company hereunder
during the Term. Notwithstanding any contrary provisions hereof, Employee may
engage in other business activities with Company's prior written consent
provided the same shall not adversely affect the performance of Employee's
services hereunder and; provided, further, during the Term hereunder, Employee
shall not, except as allowed pursuant to Paragraph 10(b) or if for any reason
Employee ceases to be employed by the Company, directly or indirectly:

               (i) Engage in any business for his own account which is
competitive with the businesses of Company or Company's subsidiaries
(collectively, "Competitive Business") so long as Company or Company's
subsidiaries (as the case may be) continue to engage in such business;

               (ii) Enter the employ of, or render any services to, any person
engaged in a Competitive Business; or

               (iii) Become interested in a Competitive Business in any capacity
including, without limitation, as an individual, partner, shareholder, officer,
director, principal, agent, trustee or consultant.

In addition, during the Term and the one-year period following termination of
his employment hereunder, Employee shall not, directly or indirectly (x) induce
any customer or supplier of Company or Company's subsidiaries to terminate its
relationship with Company or Company's subsidiaries (as the case may be), or (y)
solicit or induce any of Parent's or Company's or any of their subsidiaries or
employees to terminate their employment with Company. Notwithstanding anything
to the contrary (including without limitation Paragraph 2(b)(iii) or the
introduction to this paragraph), without the consent of Company, Employee may
acquire and/or retain, solely as an investment, and take customary actions to
maintain and preserve Employee's ownership of:

                    (A) securities of any issuer which are registered under
Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended, and
which are publicly traded, as long as Employee is not part of any control group
of such issuer (except in a passive capacity); and

                    (B) any securities of a partnership, trust, corporation or
other person, the ownership of income-producing real estate or other passive
investments, so long as Employee remains a passive investor in that entity and
does not become part of any control group thereof (except in a passive capacity)
and so long as such entity is not, directly or indirectly, in competition with
Company or its subsidiaries.


                                      -2-
<PAGE>   3

     2. Compensation.

          (a) Annual Guaranteed Salary. During the Term, Company shall pay to
Employee a salary, in equal installments not less frequently than monthly, at
the rate of $450,000 per year for each year of the Term.

          (b) Incentive Compensation. Employee shall be eligible for
consideration to receive an annual performance bonus based on Company's
performance, which bonus (if any) shall be at the greater of an amount
determined by Parent's Board of Directors in its sole discretion or the amount
set forth under the following schedule, taking into consideration the pre-tax
earnings of Company before interest, depreciation and amortization ("EBITDA") as
determined according to generally accepted accounting principles, consistently
applied ("GAAP"), and Employee's then current annual salary:

<TABLE>
<CAPTION>

         Pre-Tax EBITDA                                  Performance Bonus
         Above                  To and Including         Percentage of Salary
         --------------         ----------------         --------------------
         <S>                    <C>                      <C>
         0                      $2,000,000                     0%
         $2,000,000             $3,000,000                     5%
         $3,000,000             $5,000,000                     7%
         $5,000,000             $7,000,000                     9%
         $7,000,000             $10,000,000                    11%
         $10,000,000+                                          13%

</TABLE>

For example in the event, the EBITDA of Company for the first year of the Term
is $10,000,000, then Employee would be entitled to a minimum performance bonus
equal to eleven (11%) percent of his then annual salary.

          (c) Additionally, Employee shall be entitled to an additional Accounts
Receivable bonus based on the collection of the $15,095,775 in Accounts
Receivable attached on Exhibit A. This additional bonus shall be equal to $6.625
for every $100 of such Accounts Receivable collected each calendar quarter, pro
rated for any smaller amounts. This bonus shall be paid within forty-five (45)
days after the end of each calendar quarter based on the amount of Accounts
Receivable collected during the preceding quarter and shall survive termination
of the Term.

     3. Stock Options. Employee shall have the right to participate in all stock
option plans, stock appreciation rights plans, stock purchase plans and similar
plans from time to time made available to any other senior executive employee of
Parent and/or Company of equal or lesser level to Employee. With the exception
of the number of options, such participation shall be on terms no less favorable
than those provided to any other senior executive employee of equal or lesser
level to Employee in Company. Any such stock options, stock appreciation rights,
stock purchase rights and similar rights granted to Employee shall vest
immediately if Employee is terminated other than for Cause or resigns for Good
Reason (as defined below). The time Employee has to



                                      -3-
<PAGE>   4


exercise his options after such termination or resignation shall be governed by
Company's 1997 Stock Option Plan. On the Effective Date Company will grant
Employee options ("Options") to purchase eighty thousand (80,000) shares of
Common Stock of Parent at a price equal to the greater of the Common Stock
closing price on the Effective Date or $6.75 per share. The vesting period of
such Options will be made in accordance with the 1997 Stock Option Plan or as
determined by the Stock Option Committee, unless accelerated under Paragraph
6(b), below.

     4. Expenses. Company will reimburse or pay Employee for all usual,
reasonable and necessary expenses paid or incurred by Employee in the
performance of his duties hereunder, including without limitation business class
(or first class if no business class is offered) travel on all flights,
consistent with Company's expense reimbursement policies applicable to the most
senior executive officers and subject to receipt by Company of appropriate
documentary proof of all expenditures for which reimbursement is sought.

     5. Employee Benefits. Employee shall be entitled to participate to the full
extent of the participation by any other senior executive employee of Company or
Parent of comparable level or below to Employee in all other profit-sharing,
pension, vacation, health insurance, life insurance and disability or other
plans, benefits or policies available to the senior executive employees of
comparable level or below to Employee established by Parent and/or Company (in
its sole and absolute discretion) from time to time and not duplicative of those
provided herein. Employee shall be entitled to four weeks of vacation annually.

     6. Term.

          (a) The period of Employee's employment by Company hereunder (the
"Term" shall commence on the Effective Date and shall terminate upon the first
to occur of the following events: (i) three (3) years from the Effective Date as
set forth in Paragraph 2(c) herein, (ii) the death of Employee, (iii) the
inability of Employee to perform his duties hereunder, by reason of physical
injury, mental incapacity or otherwise, for a period of four (4) consecutive
months or six (6) months in the aggregate, as certified by a physician selected
jointed by Employee and Company ("disability"), (iv) the discharge of Employee
for Cause or (v) the resignation of Employee for Good Reason. "Cause" shall
mean, and be limited to, (x) acts of deliberate dishonesty constituting either
the commission of a felony or the misappropriation of corporate assets for
personal benefit, (y) willful failure to observe or follow reasonable and
explicit instructions or directives of Company, (z) willful malfeasance or
willful failure to act to avoid material nonfeasance, if in either case such
malfeasance would have a material adverse effect on Company, or (aa) written
notice of a material violation of Parent's or Company's policies and procedures
which goes uncured for twenty (20) days or which, if not curable, will result in
a material adverse effect on Company.


                                      -4-
<PAGE>   5

     To terminate Employee for Cause, Company shall give Employee written notice
specifying the claimed Cause and, provided such Cause is curable, permit
Employee to correct the claimed Cause as soon as practical thereafter but no
later than seven (7) business days after receipt of the applicable notice. In no
event, however, shall Company be required to permit Employee to cure an
occurrence of Cause described in clause (x) of this Paragraph 6(a) . Upon the
termination of Employee's employment pursuant to clause (i), (ii), (iii) or (v)
of this Paragraph 6(a), Employee shall have no further liability to Company or
Parent under this Agreement except as provided in Paragraph 7 as to mitigation
and Paragraph 9 as to confidential information. Company shall have no further
liability to Employee under this Agreement, except as provided in Paragraph 6(b)
below and (1) under Section 2(b), (2) any salary or other benefits accrued or
earned by Employee to the date of termination but not paid shall be paid by
Company to Employee or his estate, (3) an Employee shall be entitled to such
benefits, if any, under Sections 4 and 5 hereof to which he has become entitled
prior to the date of his termination of employment and (4) as set forth in
Paragraph 6(b) below.

          (b) If Employee resigns for Good Reason (as defined herein), Employee
shall have the right to deem such resignation as a termination of his employment
by Company without Cause with the consequences provided in this Paragraph 6(b).
"Good Reason" shall mean (1) without Good Cause, Employee's responsibilities or
duties are materially altered or decreased from those described herein, or (2)
Employee is not paid any amount to which he is entitled, or (3) Employee's
benefits are substantially and adversely altered, or (4) if for any reason,
Burlage ceases to be Chairman of the Board or Chief Executive Officer of Parent,
or ceases to be the executive to whom Employee directly reports and within one
hundred twenty (120) days thereafter, Employee gives written notice of his
intention to resign. If Employee's employment is terminated by Company without
Cause, or Employee resigns for Good Reason, subject to Paragraph 7 below,
Company shall (A) pay Employee, until the ending date of the period of
employment hereunder (determined as provided in Paragraph 6(a) hereof) such
salary and benefits to which Employee would have been entitled had Employee not
been terminated without Cause or resigned without Good Reason before the third
anniversary of the Effective Date, (B) accelerate to immediate vesting of his
options, stock appreciation rights, stock purchase rights and similar rights as
provided under Paragraph 3 or 4 above, and (C) reimburse Employee for all
otherwise reimbursable expenses incurred or committed to be incurred by Employee
as of the date of such termination.

     7. Mitigation.

          (a) Subject to subparagraph (b) below, Employee shall use his best
efforts to mitigate the damages he may suffer in the event of termination by
Company without Cause or resignation by Employee for Good Reason; provided,
however, in no event shall Employee be required to accept employment (1) for
significantly less compensation than Employee is entitled to be paid hereunder,
(2) for a position outside the independent film production industry, or which
carries significantly fewer duties or



                                      -5-
<PAGE>   6

responsibilities than serving as President of Company, or (3) outside the Los
Angeles area, or (4) for a company whose reputation is not as good as Company's
reputation in the independent film production industry. If Employee furnishes
his services for other engagements or employment after such termination without
Cause or resignation by Employee for Good Reason, the total compensation
actually earned or received by Employee together with any welfare or other
benefits earned by Employee, shall reduce the amounts and benefits which Company
would otherwise be required to pay or provide to Employee over the same period
of time. Employee shall give written notice to Company (promptly after accepting
employment or furnishing his services after such termination of his employment
with Company) of any amounts earned or received by Employee and any benefits
provided to Employee pursuant to his new employment agreement.

          (b) If Company fails to achieve EBITDA, as determined in accordance
with GAAP, of at least $1,500,000 during the second or third fiscal year of the
Term, ("Minimum Performance"), and Company terminates Employee without Cause or
Employee resigns for Good Reason, Employee shall use his best efforts to
mitigate any damages he may suffer as set forth above. If during the second or
third fiscal year of the Term, Company's EBITDA (determined according to GAAP)
exceeds $1,500,000, but is less than $2,000,000 and Company terminates Employee
without Cause, or Employee resigns for Good Reason, then Employee shall mitigate
any damages he may suffer as set forth above; however, regardless of the amount
of mitigation by Employee, Company will pay Employee no less than 50% of the
compensation and provide Employee with at least 50% of the benefits he would
have received had the Term extended until the third anniversary of the Effective
Date. If during the second or third fiscal year of the Term, Company's EBITDA
(determined according to GAAP) exceeds $2,000,000 and Company terminates
Employee's employment without Cause or Employee resigns for Good Reason, then
Employee shall not be required to mitigate any damages he may suffer.

     8. Nondisclosure of Confidential Information.

          (a) "Confidential Information" shall include, but not be limited to,
all of Company's, Parent's or any subsidiaries' performance, sales, financial,
pricing, cost, manufacturing, contractual and marketing information, ideas,
knowledge and data, and all processes, products, formulae, designs, practices,
techniques, trade secrets, research, know-how, merchandising agreements,
licensing agreements, distribution agreements, customer lists, technical
requirements of customers and identity and purchasing terms of suppliers, other
than information (i) generally available to the public other than as a result of
Employee's breach of this Section 8; (ii) known to Employee prior to the time
Employee began working for Company (regardless of whether pursuant to any
agreement); (iii) known to Employee as result of a disclosure not in breach of
any confidentiality obligation owed directly or indirectly to Company, Parent or
any subsidiary or affiliate of either, or relating to ACI or ACI Properties.


                                      -6-
<PAGE>   7

          (b) Employee agrees to assign all rights he might otherwise possess in
any Confidential Information to Company. Except as required in the performance
of his duties hereunder, Employee shall not at any time during or after the
Term, directly or indirectly use, communicate, disclose or disseminate, lecture
upon/publish articles or otherwise put in the public domain, any Confidential
Information except as required by law or legal process.

          (c) All documents, records, notebooks, notes, memoranda, computer
records and other repositories of or containing Confidential Information made or
compiled by Employee at any time or made available to Employee prior to or
during the Term including any and all copies thereof shall be the property of
Company, shall be held by Employee in trust solely for the benefit of Company,
and shall be delivered to Company by Employee on the termination of the Term or
at any other time on the request of Company.

     9. Warranties/Indemnities. Employee hereby represents and warrants that:
(i) neither his entering into this Agreement nor furnishing to Company all of
the services herein set forth will constitute the breach of any other Agreement
to which he is a party; (ii) he has no reason to believe he is not in good
health or that he suffers from any disability or other condition which will or
could interfere with the full performance of his obligations hereunder.

     10. Ownership of Properties.

          (a) Company, as employer, shall own, and Employee hereby transfers and
assigns to Company, all rights in and to any material and/or ideas written,
suggested or submitted by Employee during the Term and all other results and
proceeds of his services for Company pursuant to this Agreement, other than the
ACI Properties (as defined below) Employee's personal diary, journal, calendar
and memoirs ("Properties"). Company and its licensees and assigns shall have the
right to adapt, change, revise, delete from, add to and/or rearrange the
Properties or any part thereof written or submitted by Employee and to combine
the same with other works to any extent, and to change or substitute the title
thereof, and in this connection Employee hereby waives any so-called "moral
rights" of authors. Employee agrees to at Company's expense execute and deliver
to Company such assignments or other instruments as Company may require from
time to time to evidence its ownership of the Properties, failing which Company
shall have the irrevocable right to do so as Employee's attorney-in-fact.

          (b) (i) Employee is the sole owner of a company known as ACI, which
the Parties hereby agree and acknowledge is a Competitive Business. The parties
hereto agree that notwithstanding any other terms of this Agreement or
applicable law, Employee shall be allowed to continue to own, develop, produce,
cast, arrange financing for, film, market, distribute, license and otherwise
exploit all feature films which are currently in development by ACI as set forth
on the Schedules "A" and "B" attached hereto (collectively the "ACI
Properties"). Schedules "A" and "B" shall include the


                                      -7-
<PAGE>   8

following information on each project: working title, description of project,
legal status including rights received or granted. Neither Company, Parent nor
any affiliate or subsidiary of either shall have any rights in or to the ACI
Properties nor the proceeds therefrom except as set forth below. In
consideration for releasing Employee from his duties to the extent necessary to
complete such films and by allowing the use of Company assets to distribute such
films, including licensing such films, delivery, distribution, billing and
collection services and other distribution functions (including release in home
video), Company shall be entitled to a fee equal to (i) one third (1/3) of net
revenues earned and received by ACI before or during the Term from ACI
Properties set forth on Schedule "B" that are owned by ACI and (ii) one third
(1/3) of gross fees less non-recouped distribution expenses earned and received
by ACI before or during the Term from ACI Properties set forth on Schedule "B"
that are distributed but not owned by ACI (collectively, "Company's ACI share").
The Company shall not be entitled to any share of the fees earned by ACI from
the ACI Properties set forth on Schedule "A". Once the ACI Properties have been
completed, Employee agrees that he shall not be involved in the production of
any films not produced by Company or Parent without the express written consent
of Burlage. Employee understands and acknowledges that Burlage may withhold such
consent for any reason. ACI will provide the Company with customary accountings
on each of the ACI Properties set forth on Schedule "B" on a quarterly basis for
the first two years after the release of each such title and then no less than
annually thereafter. Employee agrees that he will reimburse the Company for any
out-of-pocket third party costs or expenses incurred by Company on behalf of the
ACI Properties.

               (ii) If the Term is terminated by the Company for any reason,
then no further fees shall be owed by ACI to the Company after the date of
termination. If the Term is terminated by the Employee for any reason allowed
under this Agreement, then ACI shall remain obligated to continue paying the
above fees to the Company on any fees earned prior to the date of termination
and received during the six (6) months immediately following such date.

          (c) If during the Term or the two years immediately following the end
of the Term (unless the Term is terminated by Company without Cause or Employee
resigns with Good Reason) and Employee intends to dispose of any of his rights
in the ACI Properties, he will afford Parent a right of First Negotiation and
Last Refusal for the acquisition of such rights. The right of First Negotiation
and Last Refusal shall apply on a property-by-property basis and shall be
exercised by the following procedure: Employee shall give Parent written notice
setting forth the rights available with respect to such ACI Property
("Negotiation Notice"), which Negotiation Notice shall set forth the essential
terms pursuant to which Employee desires effect such transfer of rights
("Transfer"). Parent shall respond to such Negotiation Notice within five (5)
business days following Parent's receipt thereof ("Response Period"). If Parent
fails to respond within such Response Period, or if Parent notifies Employee
during such Response Period that Parent does not desire to negotiate with
respect to such Transfer, Employee shall be free to negotiate and conclude
agreements with third parties regarding such Transfer


                                      -8-
<PAGE>   9

without further obligation to Parent in connection therewith. If Parent notifies
Employee during such Response Period that Parent desires to negotiate with
respect to such Transfer, then upon such notice Employee shall be obligated to
negotiate in good faith with Parent for a period of seven (7) business days
("Negotiation Period") for an agreement with respect to such Transfer. If an
agreement is not reached prior to the expiration of the Negotiation Period, then
upon said expiration, Employee shall be free to negotiate with third parties;
provided that before Employee enters into an agreement with any third party, it
must offer Parent the right to enter into a similar agreement on all of the same
material terms and conditions as the proposed third party, and Parent shall have
five (5) business days to accept or decline such terms. At all times with
respect to the exercise of Parent's rights described herein, Employee shall not
propose to Parent, and Parent shall not be obligated to accept, any terms which
cannot be met as easily by one person as by another, or which cannot be
liquidated.

          (d) Employee shall indemnify and hold harmless Parent, Company, their
subsidiaries, affiliates, successors, assigns, subdistributors and licensees,
and their respective officers, directors, agents and employees, from and against
any claim, loss, damage and expense (including legal fees and expenses)
("Claim") arising out of or in connection with ACI's production or exploitation
of the ACI Properties.

     11. Right to Injunction/Remedies. Employee acknowledges that Company's
remedies at law for a breach by him of the provisions of Paragraphs 1, 8 and 10
hereof may be inadequate. Accordingly, in the event of the breach or threatened
breach by Employee of any such provisions, Company shall be entitled to seek
injunctive relief in addition to any other remedy it may have. In the event of
any breach by Company of this Agreement, Employee shall be limited to his remedy
at law for damages, if any, and shall not have the right to enjoin the
production, distribution, advertising or other exploitation of any motion
pictures or other productions.

     12. Assignment. No party may assign, transfer or convey this Agreement or
any interest therein. Subject to Employee's right to terminate this Agreement
under Section 6(b), this Agreement and all of Company's rights and obligations
hereunder may be assigned or transferred by it (a) in connection with a direct
or indirect change of control of Company or (b) in connection with an internal
corporate restructuring of the Company. Such permitted transfer or assignment,
must be in whole but not in part, to and shall be binding upon and inure to the
benefit of any assignee or successor of Company, but any such assignment or
transfer shall not relieve Company of any of its obligations.

     13. Arbitration.

          (a) Without limiting Company's right to seek injunctive relief as
described in Paragraph 11, in the event of a disagreement or dispute between
Company and Employee related to this Agreement, the matter will be finally
settled in Los Angeles, California by arbitration by a single arbitrator (unless
the parties cannot agree on such


                                      -9-
<PAGE>   10

arbitrator in which case each party will select an arbitrator and the two
arbitrators so selected shall select the third arbitrator) in a proceeding
conducted under the rules of the American Arbitration Association or any similar
successor body, the arbitrator also apportioning the costs of the arbitration.
The decision of the arbitrator(s) in writing shall be final and binding upon the
parties and will not be subject to appeal. If either party fails to abide by
such decision, the other party may seek the order of any federal or state court
having jurisdiction thereof which shall enter judgment on the decision of the
arbitrator(s), and the party so failing to abide shall be responsible for the
payment of the expenses of the court proceeding and all resulting enforcement
expenses, including actual attorneys' fees. The parties agree to use their best
efforts to complete any arbitration hereunder expeditiously.

          (b) The prevailing party in any arbitration shall be entitled to be
reimbursed for attorneys fees and costs in connection with the pursuit of such
arbitration.

     14. Indemnification. Employee shall be entitled to the benefit of
indemnification by Company to the fullest extent permitted by applicable law at
the time of assertion of any liability against Employee, and Company shall at
all times maintain the maximum reasonably priced directors and officers
liability insurance coverage.

     15. Notices. All notices hereunder shall be in writing and shall be given
either by personal delivery, telegram or telecopy (toll prepaid) or by
registered or certified mail (postage prepaid) to the appropriate party at the
address listed below, and the date of such personal delivery, mailing,
telegraphing or telecopying shall be the date of the giving of such notice.

      If to Company:                The Harvey Entertainment Company
                                    1999 Avenue of the Stars
                                    Suite 2050
                                    Los Angeles, California 90067
                                    Attention:  Chairman of the Board
                                    Facsimile:        (310) 444-4102
                                    Confirmation:     (310) 444-4100

      with a copy to:               The Harvey Entertainment Company
                                    1999 Avenue of the Stars
                                    Suite 2050
                                    Los Angeles, California 90067
                                    Attention:  Legal Department
                                    Facsimile:        (310) 444-4103
                                    Confirmation:     (310) 444-4100

      If to Employee:               George Shamieh
                                    c/o PM Entertainment
                                    9545 Wentworth Street

                                      -10-
<PAGE>   11


                                    Sunland, California 91040
                                    Facsimile:        (818) 951-4930
                                    Confirmation:     (818) 504-6332

      With a copy to:               Paul, Hastings, Janofsky & Walker LLP
                                    555 S. Figueroa St., 23rd Floor
                                    Los Angeles, California 90071
                                    Attention:  Roxanne E. Christ, Esq.
                                    Facsimile:        (213) 627-0705
                                    Confirmation:     (213) 683-6270


     16. Miscellaneous.

          (a) In the event there is any conflict between the provisions of this
Agreement and any statute, law or regulation, the latter shall prevail;
provided, however, that in such event the provision(s) of this Agreement so
affected shall be curtailed and limited only to the minimum extent necessary to
permit compliance with the minimum mandatory requirement(s) thereof, and no
other provision(s) of this Agreement shall be affected thereby, and all such
other provisions will continue in full force and effect.

          (b) This Agreement shall be governed by the laws of the State of
California applicable to agreements executed and to be wholly performed therein
and shall not be modified except by a written document executed by the parties
hereto.

          (c) This Agreement together with the Schedules hereto, expresses the
entire understanding of the parties hereto and replaces any and all former
agreements, negotiations or understandings, written or oral, relating to the
subject matter hereof.

          (d) The remedies herein provided are cumulative and the exercise of
one shall not preclude the exercise of any other.

          (e) No waiver by either party hereto of any failure by the other party
to keep or perform any covenant or condition of this Agreement shall be deemed a
waiver of any preceding, succeeding or continuing breach of the same, or any
other covenant or condition.

          (f) Paragraph headings are for the convenience of the parties only and
shall not be used in construing meaning.

          (g) This Agreement shall not be construed to create a joint venture or
partnership between the parties, and shall not be interpreted in favor of or
against either party on grounds that said party drafted this Agreement.

          (h) This Agreement shall be executed in a number of identical
counterparts, each of which shall be construed as an original for all purposes,
but all of which taken together shall constitute one and the same Agreement.

     17. This Employment Agreement shall become effective (the "Effective Date")
as of the start of business on the day after the close of the acquisition of PM
Entertainment Group, Incorporated by The Harvey Entertainment Company currently
expected to close during the first quarter of 2000.


                                      -11-
<PAGE>   12

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.



EMPLOYEE:                                 THE HARVEY ENTERTAINMENT COMPANY


/s/ George Shamieh
-------------------------                 By: /s/ Roger A. Burlage
GEORGE SHAMIEH                                --------------------------------
                                          Title: Chairman of the Board
                                                 -----------------------------


                                          PM ENTERTAINMENT, INC.



                                          By: /s/ Roger A. Burlage
                                              -------------------------------
                                          Title: Chairman of the Board
                                                 ----------------------------






                                      -12-
<PAGE>   13

                                    Exhibits*

<TABLE>
<CAPTION>
Description                                                  Exhibit
-----------                                                  -------
<S>                                                          <C>
Accounts Receivable                                             A
</TABLE>

                                    Schedules

<TABLE>
<CAPTION>
Description*                                                Schedule
------------                                                --------
<S>                                                         <C>
ACI Projects                                                    A
ACI Projects                                                    B
</TABLE>



*The Schedules and Exhibits are omitted from this filing. The Company agrees to
furnish supplementally a copy of any Schedule or Exhibit to the Commission upon
request.