**EXECUTION COPY**Exhibit 10.2**EMPLOYMENT AGREEMENT**     This Employment Agreement (this “**Agreement**”) is made and entered into on October 3, 2005 (the“**Effective Date**”), by and among EMAK Worldwide, Inc. (the “**Parent**”), Equity Marketing, Inc., aDelaware corporation (the “**Company**”), and Jonathan Banks (“**Executive**”).**1.**      **Engagement and Duties.**     (a)      Upon the terms and subject to the conditions set forth in this Agreement, the Companyhereby engages and employs Executive as an officer of the Company, with the title and designation“Co-Chief Executive Officer” and also as a member of the Company Board. Executive hereby acceptssuch engagement and employment. In addition, by executing this Agreement, Executive herebyresigns, and the Company and the Parent hereby accept Executive’s resignation, from any and allpositions that he currently holds with the Company and the Parent, although this will not affectExecutive’s participation in the benefit plans of Parent.     (b)      During the Employment Term, the Executive, as Co-Chief Executive Officer, shall reportto the Chief Executive Officer of the Parent (“**Parent CEO**”). The Executive shall, subject to theshared authority of Kim H. Thomsen, as Executive’s Co-Chief Executive Officer (the “**Other CEO**”)and subject to the reasonable direction and control of the Parent CEO, have general and activesupervision and control of the Company and shall perform all duties and enjoy all powers commonlyincident to the position of chief executive officer and otherwise as may be delegated to him fromtime to time by the Company Board or the Parent Board consistent with the position of CEO,including, without limitation, succession planning for Executive’s position and the developmentand implementation of transition plans for key client relationships at the end of the EmploymentTerm.     (c)      Executive agrees to devote his full-time business time, energy and efforts to thebusiness of the Company and will use his best efforts and abilities faithfully and diligently topromote the Company Group’s business interests.
 

 
     (d)      For so long as Executive is employed by the Company and for one year thereafter,Executive shall not, directly or indirectly, as owner, partner, joint venturer, shareholder,employee, broker, agent, principal, trustee, corporate officer, director, licensor, or in anyother capacity whatsoever engage in, become financially interested in, be employed by, render anyconsultation or business advice with respect to, or have any connection with, any businessengaged in the development, design, manufacture, sale, marketing, utilization or exploitation ofany products or services which are designed for the same purpose as, are similar to, or areotherwise competitive with, products or services of the Company Group provided as of the end ofthe Employment Term, in any geographic area where, prior to or at the time of the termination ofhis employment, the business of the Company Group was being conducted in any manner whatsoever;provided, however, that the Executive may own any securities of any corporation which is engagedin such business and is publicly owned and traded but in an amount not to exceed at any one timeone percent (1%) of any class of stock or securities of such corporation. Subject to theforegoing prohibition and provided such services or investments do not violate any applicablelaw, regulation or order, or interfere in any way with the faithful and diligent performance byExecutive of the services to the Company otherwise required or contemplated by this Agreement orduly requested by the Parent Board, the Company and the Parent expressly acknowledge thatExecutive may:          (i)      make and manage personal business investments of Executive’s choice without consulting theParent Board;          (ii)      serve in any capacity with any civic, educational, charitable or trade organization; and          (iii)      serve as a member of the board of directors of other companies or businesses with theapproval of the Parent Board, which approval will not be unreasonably withheld.**2.**     **Definitions.**     For the purposes of this Agreement, the following terms shall have the meanings set forthbelow:
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     “**2008 Severance Compensation**” shall have the meaning set forth in Section 5(e) of thisAgreement.     “**Affiliate**” shall mean, with respect to any Person, any individual, partnership, limitedliability company, corporation, trust, estate, real estate investment trust, association or anyother entity, directly or indirectly, through one or more intermediaries, controlling, controlledby or under common control with such Person. The term “control,” as used in the immediatelypreceding sentence, means, with respect to a corporation or other entity, the right to exercise,directly or indirectly, more than 10% of the voting rights attributable to the controlledcorporation or other entity, and with respect to any individual, partnership, limited liabilitycompany, trust, association or other entity, the possession, directly or indirectly, of the powerto direct or cause the direction of the management or policies of the controlled entity.     “**Base Salary**” shall have the meaning set forth in Section 3(a) of this Agreement.     **“Board of Directors”**shall mean the Board of Directors of the Parent.     “**Change of Control**” shall be deemed to have occurred if:     (a)      any Person is or becomes the “beneficial owner” (as defined in Rule 13d-3 under theSecurities Exchange Act of 1934, as amended), directly or indirectly of securities of the companyrepresenting more than 50% of the combined voting power of the Parent’s then outstanding votingsecurities;     (b)      during any period of twenty-four (24) consecutive months, individuals, who at thebeginning of such period constitute the Board of Directors, and any new director whose electionby the Board of Directors, or whose nomination for election by the Parent’s stockholders, wasapproved by a vote of at least one-half (1/2) of the directors then in office (other than inconnection with a contested election), cease for any reason to constitute at least one-half (1/2)of the Board of Directors; or     (c)      the stockholders of the Parent approve (i) a plan of complete liquidation of the Parent;or (ii) the sale or other disposition by the Parent of all or substantially all of the Parent’sassets; or     (d)      the consummation of a merger, consolidation or reorganization of the Parent with anyother entity other than:
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          (i)      a merger, consolidation or reorganization which results in the voting securities of theParent outstanding immediately prior thereto continuing to represent (either by remainingoutstanding or by being converted into voting securities of the surviving entity) more than 50% ofthe combined voting power of the surviving entity’s outstanding voting securities immediately aftersuch merger, consolidation or reorganization; or          (ii)      a merger, consolidation or reorganization which would result in the directors of theParent (who were directors immediately prior thereto) continuing to constitute at least 50% of alldirectors of the surviving entity immediately after such merger, consolidation or reorganization.     (e)      the Parent enters into a definitive agreement with respect to any of the foregoingtransactions during the Employment Term or the SARs Term, and the transaction contemplated by suchdefinitive agreement is actually consummated by Parent.For purposes of paragraph (d) above, “surviving entity” shall mean only an entity in which all ofthe Parent’s stockholders immediately before such merger, consolidation or reorganization(determined without taking into account any stockholders properly exercising appraisal or similarrights) become stockholders by the terms of such merger, consolidation or reorganization, and thephrase “directors of the Parent (who were directors immediately prior thereto)” shall include onlyindividuals who were directors of the Parent, as applicable, at the beginning of the twenty-four(24) consecutive month period preceding the date of such merger, consolidation or reorganization.     “**Code**” shall mean the Internal Revenue Code of 1986, as amended and as the same may be furtheramended from time to time.     “**Common Stock**” shall have the meaning set forth in Section 3(b)(i)(B) of this Agreement.     “**Company Board**” shall mean the Board of Directors of the Company     “**Company Group”**shall mean the Company, including all parent, subsidiary and Affiliates of theCompany (including all subsidiaries and Affiliates of the Parent), and each Person with respect towhich the Company or the Parent directly or indirectly has Control.
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     “**Consumer Price Index Adjustment**” shall be determined as follows: the Consumer Price Index forthe Los Angeles — Riverside — Orange County, CA (All Items), as published by the United StatesDepartment of Labor, Bureau of Labor Statistics (1982-84=100) (the “**Index**”) which is most recentlyavailable at the commencement of the new year (the “**New Index**”) shall be compared with the Indexmost recently available twelve months prior to the New Index (the “**Previous Index**”). If the NewIndex has increased over the Previous Index, the Consumer Price Index Adjustment shall be set bymultiplying the Base Salary of the prior year by a fraction, the numerator of which is the NewIndex and the denominator of which is the Previous Index; provided, however, that if the Index ischanged so that the base year used for the New Index differs from that used for the Previous Index,the New Index shall be converted in accordance with the conversion factor published by the UnitedStates Department of Labor, Bureau of Labor Statistics.     “**Control**” shall mean, with respect to any Person, (i) the beneficial ownership of any of theoutstanding voting securities of such Person, or (ii) the power, directly or indirectly, by proxy,voting trust or otherwise, to elect any of the outstanding directors, trustees or other managingpersons of such Person.     “**Direct Allocations**” shall mean (i) the Company’s share of the cost of the Parent’s sharedservice centers (*i.e.*, creative, operations, warehouse, Hong Kong, product integrity, etc.) basedon estimated usage or time spent working on behalf of the Company, and (ii) corporate overhead(*i.e.*, occupancy, finance & accounting, MIS, legal & business affairs, human resources, insurance,etc.) allocated to the Company based on estimated usage/service levels; provided that themethodology for determining Direct Allocations shall be the same as that used by the Company andParent in preparing budgets and accounting statements prior to the date hereof. The partiesacknowledge and agree that Direct Allocations have historically under Parent’s practice and shallcontinue to exclude the Parent’s expenses of being a public company (e.g., expenses of filingperiod reports under the Securities Exchange Act of 1934, investor relations expenses, preparationand distribution of proxy statements, annual meeting expenses, Board of Directors fees andexpenses, etc.).     “**EBITDA**” shall mean earnings before interest, taxes, depreciation, and amortization of theCompany, as reported on the Parent’s internal unaudited statement of operations for the Companyusing the Company’s actual expenses for its own operations and only Direct
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Allocations. For purposes of calculating EBITDA, the following costs shall be excluded: (i)the compensation payable pursuant to Sections 3(b)(i) and (ii) of this Agreement, as well as theidentical compensation provisions of the Other CEO’s employment agreement; and (ii) thediscretionary bonuses paid to employees of the Company. For purposes of calculating EBITDA, allrevenues received and expenses incurred by Parent or its subsidiaries in servicing the clients onSchedule 2, as amended from time to time by mutual agreement, shall be included subject to anymutually agreed allocations or limitations set forth in Schedule 2. Additional clients shall beadded to Schedule 2 at any time when the Company commences to provide services to them. AttachmentA hereto sets forth the methodology for determining EBITDA.     “**Employment Term**” shall mean the Effective Date through December 31, 2007, unless earlierterminated as provided herein.     “**For Cause**” shall mean, in the context of a basis for termination of Executive’s employmentwith the Company, that:     (a)      Executive materially breaches any obligation, duty or agreement under this Agreement,which breach is not either waived by the Company or cured or corrected by Executive within 15 daysof written notice thereof from the Company (except for breaches of Sections 1(d), 6 or 7 of thisAgreement, which cannot be cured and for which the Executive shall have no opportunity to cure);     (b)      Executive is grossly negligent in the course of providing services to the Company, orcommits any act of personal dishonesty, fraud or breach of fiduciary duty or trust against theCompany;     (c)      Executive is convicted of, or pleads guilty or nolo contendere with respect to, theft,fraud or felony under federal or applicable state law;     (d)      Executive commits any act or acts of personal conduct that, following due investigationand determination by the Parent Board of probable cause, gives rise to a likelihood of liabilityunder federal or applicable state law for discrimination or sexual or other forms of harassment orother similar liabilities with respect to subordinate employees; or     (e)      Executive commits continued and repeated material violations of specific directions of theParent CEO, which directions are consistent with past practices, with this Agreement and withExecutive’s position as a chief executive officer, or continued and repeated substantive failure toperform duties assigned by or pursuant to this Agreement; provided that no
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termination shall be deemed “For Cause” under this subsection (e) unless Executive firstreceives written notice from the Parent CEO advising him of the specific acts or omissions allegedto constitute violations of written directions or a material failure to perform his duties, andsuch violations or material failure continue after he shall have had a reasonable opportunity tocorrect the acts or omissions so complained of.     “**Minimum EBITDA Threshold**” shall mean the dollar amount set forth on Schedule 1 attachedhereto under the heading Minimum EBITDA Threshold for the applicable fiscal year of the Company.     “**Other CEO**” shall have the meaning set forth in Section 1(b) of this Agreement.     “**Other Than For Cause**” shall mean, in the context of termination of Executive’s employmentwith the Company, any termination by the Company other than pursuant to Sections 4(a), (b), (c) or(e) hereof.     “**Parent**” has the meaning set forth in the preamble of this Agreement.     “**Parent Board**” shall mean the Board of Directors of the Parent.     “**Parent CEO**” has the meaning set forth in Section 1(b) of this Agreement.     “**Person**” shall mean an individual or a partnership, corporation, trust, association, limitedliability company, governmental authority or other entity.     “**Prior Employment Agreement**” shall mean that certain employment agreement entered into betweenthe Parent and Executive dated as of December 12, 2003.     “**SARs Term**” shall mean the Effective Date through the fifth anniversary of the termination ofthis Agreement, unless earlier terminated as provided herein or in the SAR Agreement.**3.**      **Compensation; Executive Benefit Plans.**     (a)      Base Salary and Signing Bonus. The Company shall pay to Executive a base salary(the “**Base Salary**”) at an annual rate of $300,000 during the period from April 1, 2005 toDecember 31, 2005. The Base Salary shall be payable in installments throughout the year in thesame manner and at the same times the Company pays base salaries to other executive officers ofthe Company. Commencing April 1, 2006, the Base Salary shall be adjusted upward annually in anamount at the discretion of the Parent Board; provided, however, that such upward annualadjustment shall be greater than or equal to the Consumer Price Index
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Adjustment. In addition to Executive’s base salary, on or before execution of thisAgreement, Executive shall receive a one-time signing bonus of $100,000. Executive acknowledgesreceipt of such signing bonus on September 23, 2005.     (b)      Bonus. During the Employment Term, the Executive’s bonus program shall consistof the following:          (i)      Annual Bonus.               (A)      Executive shall be eligible to receive an annual bonus no later than 75 days after the endof each Company fiscal year that is included within the Employment Term. The annual bonus shall bebased upon the Company achieving certain EBITDA thresholds for the most recently completed fiscalyear. The annual bonus shall be calculated as follows: for each fiscal year, in order forExecutive to receive an annual bonus, the Company must exceed the Minimum EBITDA Threshold for suchfiscal year. If the Company’s EBITDA exceeds the Minimum EBITDA Threshold, Executive may earnone-half (1/2) of the specified percentage of each applicable tranche based upon the Company’sEBITDA (each an “**EBITDA Tranche**”). The parties acknowledge that the remaining one-half (1/2) ofthe specified percentage of each EBITDA Tranche may be payable to the Other CEO pursuant to heremployment agreement with the Company. Schedule 1 attached hereto sets forth the applicableMinimum EBITDA Threshold, the EBITDA Tranches and the percentages earned for each applicable EBITDATranche as well as two sample calculations to illustrate the calculation of Executive’s annualbonus.               (B)      The annual bonus shall be payable to Executive as follows: (1) twenty-five percent (25%)shall be payable in cash; (2) twenty-five percent (25%) shall be payable in shares of the Parent’scommon stock, $.001 par value per share (“**Common Stock**”); and (3) the remaining fifty percent (50%)may be paid in either cash and/or Common Stock, at the election of Executive.               (C)     The number of shares of Common Stock issued to Executive pursuant to this Section 3(b)(i)shall be a number of shares equal to the quotient of the dollar amount of the annual bonus to bepaid in Common Stock divided by the average closing price of
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the Common Stock, for the 30 trading days immediately preceding the date of issuance. To theextent that any shares of Common Stock are issued to Executive pursuant to this Section 3(b)(i),the Parent shall be entitled to offset the amount of any applicable withholding taxes required bythe Code and any other applicable laws against the cash portion of such annual bonus due to theExecutive pursuant to this Section 3(b)(i) and, if the cash portion of such annual bonus isinsufficient to cover the amount of such withholding taxes, against the payment of the Executive’sbase salary.          (ii)      Stock Appreciation Rights. On the Effective Date, Executive and the Parent shallenter into a Stock Appreciation Rights Agreement (the “**SAR Agreement**”) in the form of Exhibit Aattached hereto. Pursuant to the SAR Agreement, Executive shall be granted free-standing stockappreciation rights in 200,000 shares of Common Stock (“**SARs**”). The grant price of the SARs shallbe $8.03 per share, which the parties hereto hereby acknowledge and agree is the average closingprice of the Common Stock for the five trading days ending the week of September 23, 2005. Asprovided in the SAR Agreement, the SARs shall vest and become exercisable only upon a Change ofControl of the Parent (assuming that Executive has served the Company in accordance with the termsof this Agreement including post-employment service as provided below, through the date of theChange of Control) and only if the Company has experienced positive growth in EBITDA over theperiod commencing January 1, 2005 and ending upon the earlier of December 31, 2007 or the date of aChange of Control. In the event that a Change of Control of the Parent does not occur during theEmployment Term, the SARs shall continue in full force and effect for a period of five (5) yearsfollowing the termination of this Agreement; provided that Executive: (x) continuously served theCompany in accordance with the terms of this Agreement through the Employment Term and thereaftercontinues to serve as a member of the Company Board, and (y) continues to abide by the provisionsof Sections 1(d), 6 and 7 of this Agreement.     (c)      Reimbursement. Executive shall be entitled to reimbursement from the Companyfor the reasonable costs and expenses that he incurs in connection with the performance of hisduties and obligations under this Agreement in a manner consistent with the Company’s practicesand policies for reimbursements for executive officers.
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     (d)      Additional Reimbursement. During the Employment Term, the Company shallreimburse Executive on a basis comparable to the current practice of the Company, for leasinggarage space, telephone and home office equipment for his use in performing his employment dutiesand obligations under this Agreement.     (e)      Group Benefit Plans. Executive shall be eligible to participate in the Parent’sgroup health, dental, life, disability, retirement (including 401(k)) and pension benefit plans,subject to the terms, conditions and limitations contained in the applicable plan documents andinsurance policies.     (f)      Vacation. In accordance with the Company’s policy for executives at the rank ofvice president and above, no specific amount of vacation time will be accrued by Executive.Executive shall be entitled to take the amount of vacation time he and the Parent CEO determineto be appropriate in light of his workload from time to time. Any vacation time shall bescheduled to minimize interference with the exercise of Executive’s duties under this Agreement.     (g)      Insurance. During the Employment Term, the Company shall pay to or on behalf ofthe Executive such amounts as are required on an after-tax basis to maintain all premiums on (i)supplemental disability insurance paying at least $14,000 per month, and (ii) term life insurancehaving a face value payable on death of no less than $700,000 on the life of the Executive withthe Executive (or his estate) as beneficiary.     (h)      Withholding. The Company may deduct from any compensation payable to Executivethe minimum amounts sufficient to cover applicable federal, state and/or local income taxwithholding, old-age and survivors’ and other social security payments, state disability andother insurance premiums and payments.     (i)      Fringe Benefits. During the Employment Term, Executive shall be entitled to anautomobile allowance of $1,000 per month and a cellular phone allowance of $150 per month. Suchallowances shall be paid in a manner consistent with the Company’s practices and policiestherefor. During the Employment Term, Executive shall also be entitled to reimbursement forexpenses of travel (including business class airline upgrades) and hotel
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accommodations while traveling on Company business in accordance with the policies of theCompany as in effect from time to time. The Company agrees to reimburse Executive up to a totalof $15,000 for the cost of reasonable attorneys’ fees incurred in connection with the negotiationand preparation of this Agreement.     (j)      [INTENTIONALLY LEFT BLANK]     (k)      Current Options, Restricted Stock, etc. As of the date hereof, Executive hasreceived and shall be entitled to retain: (i) 25,000 options to purchase Common Stock at $9.94per share expiring March 3, 2010 and reflected in Parent’s records as grant number 265; (ii)3,000 options to purchase Common Stock at $10.90 per share expiring May 17, 2011 and reflected inParent’s records as grant number 305; (iii) 4,000 restricted stock units vesting April 1, 2007and reflected in Parent’s records as grant number 458; and (iv) 10,000 restricted stock unitsvesting April 1, 2008 and reflected in Parent’s records as grant number 567.**4.**      **Termination of Employment.**          Executive’s employment pursuant to this Agreement shall commence on the Effective Date andshall terminate on the earliest to occur of the following:     (a)      upon the death of Executive;     (b)      upon delivery to Executive of written notice of termination by the Company if Executiveshall suffer a physical or mental disability which renders Executive unable to perform his dutiesand obligations under this Agreement for at least 120 days, whether or not consecutive, in any12-month period (“**Disability**”);     (c)      upon delivery to Executive of written notice of termination by the Company For Cause; or     (d)      upon delivery to Executive of written notice of termination by the Company Other ThanFor Cause; or     (e)      upon the earlier to occur of (i) the end of the Employment Term, or (ii) the firstanniversary of a Change of Control.
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**5.**      **Severance Compensation.**     (a)      If Executive’s employment is terminated pursuant to Section 4(a) (death) or Section 4(b)(Disability), the Company shall pay to the Executive or his estate his full Base Salary throughthe end of the month of Executive’s death or Disability, and Executive or his estate shall beentitled to a prorated share of any bonus or benefits as provided under Section 3 hereof for thecalendar year during which his death or Disability occurred. Notwithstanding the foregoing, if(i) Executive’s employment is terminated due to a Disability, and (ii) Executive is denied all orsome disability benefits under the applicable disability policy, then Executive shall be entitledto continue to receive his Base Salary from the Company in accordance with Section 3(a) of thisAgreement through December 31, 2007, payable at the same time and in the same manner as ifExecutive’s employment had not terminated. Any disability benefits that Executive does receiveshall be offset against any amounts payable to Executive pursuant to the preceding sentence.Executive agrees to cooperate fully with the Company and the disability insurance carrier withrespect to any claim for disability benefits.     (b)      If Executive’s employment is terminated pursuant to Section 4(c) (by the Company ForCause), Executive’s Base Salary and all benefits under Section 3 shall cease as of the date oftermination, and Executive shall not be entitled to any bonus for the calendar year during whichhis employment shall be terminated or at any time thereafter. In the event of termination ofExecutive’s employment pursuant to Section 4(c) (by the Company For Cause), and subject toapplicable law and regulations, the Company shall be entitled to offset against any payments dueExecutive the loss and damage, if any, which shall have been suffered by the Company as a resultof the acts or omissions of Executive giving rise to termination under Section 4(c). Theforegoing shall not be construed to limit any cause of action, claim or other rights which theCompany may have against Executive in connection with such acts or omissions.     (c)      If Executive’s employment is terminated pursuant to Section 4(d) (by the Company OtherThan For Cause) prior to December 31, 2007, Executive shall be entitled to continue to receive(i) his Base Salary in accordance with Section 3(a) of this Agreement, through December 31, 2007,payable at the same time and in the same manner as if Executive’s employment had not terminated,(ii) the benefits provided under Sections 3(b)(ii),
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3(e), 3(g), 3(i) and 3(j) of this Agreement, through December 31, 2007, payable at the sametime and in the same manner as if Executive’s employment had not terminated, (iii) hiscompensation under Section 5(e), (iv) any rights he may have under the plans and agreements setforth under Section 3(k) according to their terms, and (v) the annual bonus payable to Executivepursuant to Section 3(b)(i) for the fiscal year in which Executive’s employment is terminatedpursuant to Section 4(d) (by the Company Other Than For Cause) and the annual bonus for the nextfiscal year. If for some reason the Executive is not eligible to participate in the Company’sgroup plans, the Company shall pay the COBRA premiums associated with Executive’s obtainingcomparable benefits. Executive shall have no duty to seek other employment upon suchtermination, and if Executive does so, any income therefrom, shall not be credited againstamounts due hereunder.     (d)      If Executive terminates his employment in breach of this Agreement prior to December 31,2007, Executive shall as of the date of termination cease to be entitled to Base Salary, benefitsor bonuses. In addition, the Company shall be entitled to seek any other available remediespursuant to this Agreement or otherwise for such breach, and to offset against any amounts dueExecutive any damages suffered as a result of such breach.     (e)      At December 31, 2007 unless Executive is terminated for Cause, and provided thatExecutive has fulfilled all of his material obligations hereunder for the entire Employment Term,Executive shall be entitled to severance compensation (the “**2008 Severance Compensation**”) in anamount equal to Executive’s annual bonus for fiscal year 2008, calculated in accordance withSection 3(b)(i) and Schedule 1 attached hereto as if Executive continued to be employed by theCompany for fiscal year 2008. The amount of Executive’s 2008 Severance Compensation shall becalculated and paid to Executive quarterly in arrears through fiscal year 2008. Within thirty(30) days after the end of each quarter in fiscal year 2008, the amount of the 2008 SeveranceCompensation shall be calculated in accordance with the procedures set forth in Section 3(b)(i)by annualizing the current EBITDA of the Company on the last business day of such quarter.Executive shall be entitled to receive payment of 25%, 50% and 75% of such calculated 2008Severance Compensation within thirty-five (35) days following the end of the first, second andthird quarters, respectively, less any amounts of 2008 Severance Compensation previously paid toExecutive. Within 90 days
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of the end of the Company’s fiscal year 2008, the final amount of Executive’s 2008 SeveranceCompensation shall be calculated and the Company shall pay to Executive the remainder of anyamounts not having been previously paid to Executive pursuant to this Section 5(e).     (f)      Executive acknowledges that the Company has the right to terminate Executive’semployment Other Than For Cause and that such termination shall not be a breach of this Agreementor any other express or implied agreement between the Company and Executive. Accordingly, in theevent of such termination, Executive shall be entitled only to the compensation and benefitsspecifically provided for in this Agreement in the event of such termination, and shall not haveany other rights to any compensation or damages from the Company for breach of contract.     (g)      Executive acknowledges that in the event of termination of his employment for anyreason, he shall not be entitled to any severance or other compensation from the Company exceptas specifically provided in this Section 5. Without limitation on the generality of theforegoing, this Section supersedes any plan or policy of the Company which provides for severanceto its officers or employees, and Executive shall not be entitled to any benefits under any suchplan or policy.**6.**      **Covenant Not To Solicit.**     (a)      During the Employment Term and through the third anniversary of the end of theEmployment Term, Executive will not directly or indirectly, either alone or by action in concertwith others: (i) induce any employee of any member of the Company Group to engage in any activityin which Executive is prohibited from engaging by Section 1(d) of this Agreement or to terminatehis or her employment with any member of the Company Group; or (ii) offer employment or induceany Person to employ or offer employment to anyone who is or was within the 12 months prior tothe date of the proscribed action employed by any member of the Company Group; or (iii) induce orattempt to induce any customer, supplier, licensee or other Person with a business relationshipwith any member of the Company Group to discontinue or reduce its business with any member of theCompany Group, or in any way interfere with the relationship between any such customer, supplier,licensee or other Person and any member of the Company Group; or (iv) solicit or accept anybusiness whatsoever
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from any of the customers with which the Company did business during the Executive’sengagement or employment by the Company. The Parent CEO shall have the authority to waive theprovisions of Section 6(a)(ii) insofar as it relates to the personal assistant who was assignedto Executive. (All of the provisions of this Section 6(a) shall continue to apply through thethird anniversary of the end of the Employment Term (the “**Post-Employment Period**”)).     (b)      Executive acknowledges that the Company Group conducts business on a world-wide basis,that its sales and marketing prospects are for continued expansion into world markets and that,therefore, the territorial and time limitations set forth in Section 1(d) and in this Section 6are reasonable and properly required for the adequate protection of the business of the CompanyGroup. In the event any such territorial or time limitation is deemed to be unreasonable by acourt of competent jurisdiction, Executive agrees to the reduction of the territorial or timelimitation to the largest area or the longest period which such court deems reasonable.     (c)      If any portion of the restrictions set forth in Section 1(d) and in this Section 6should, for any reason whatsoever, be declared invalid by a court of competent jurisdiction, thevalidity or enforceability of the remainder of such restrictions shall not thereby be adverselyaffected.     (d)      The existence of any claim or cause of action by Executive against the Company (otherthan Company’s failure to pay Executive the compensation owing pursuant to this Agreement) shallnot constitute a defense to the enforcement by the Company of the restrictive covenants set forthin Section 1(d) and in this Section 6, but such claim or cause of action shall be litigatedseparately.**7.**     **Confidentiality.**     Executive will not at any time (whether during or after his employment with the Company)disclose or use for his own benefit or purposes or the benefit or purposes of any other Person,other than any member of the Company Group, any trade secrets, information or data of a proprietaryor sensitive nature, any information, data or conclusions relating to any audit pursuant to Section9, or other confidential information relating to customers, development
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programs, costs, marketing, trading, investment, sales activities, promotion, credit andfinancial data, financial methods, plans, or the business and affairs of the Company Groupgenerally. Executive agrees that upon termination for any reason of this Agreement, he willimmediately return to the Company all such confidential memoranda, books, papers, plans,information, letters and other data of a proprietary or sensitive nature, and all copies thereof ortherefrom, in any way relating to the business of the Company Group. Executive further agrees thathe will not retain or use at any time any trade name, trademark or other proprietary businessdesignation used or owned in connection with the business of any member of the Company Group.Executive further agrees that he shall take all reasonable measures to prevent any of his auditors,agents and representatives from disclosing any of the type of information described above.**8.**      **Copyright and Trademarks.**     (a)      All right, title and interest, of every kind whatsoever, in the United States andthroughout the world, in (i) any work, including the copyright thereof (for the full terms andextensions thereof in every jurisdiction), created by the Executive at any time during theEmployment Term, and all material embodiments of the work subject to such rights; and (ii) allinventions, ideas, discoveries, designs and improvements, patentable or not, made or conceived bythe Executive at any time during the Employment Term, shall be and remain the sole property ofthe Company Group without payment of any further consideration to the Executive or any otherperson than as set forth herein, and each such work shall, for purposes of United Statescopyright law, be deemed created by the Executive pursuant to his duties under this Agreement andwithin the scope of his employment and shall be deemed a work made for hire; and Executive agreesto assign, at the Company’s expense, and the Executive does hereby assign, all of his right,title and interest in and to all such works, copyrights, materials, inventions, ideas,discoveries, designs and improvements, patentable or not, and any copyrights, letters patent,trademarks, trade secrets, and similar rights, and the applications therefor, which may exist orbe issued with respect thereto to the Company Group. For the purposes of this Section 8, “works”shall include all materials created during the Employment Term, whether or not ever used by orsubmitted to the Company Group, including, without limitation, any work which may be the subjectmatter of a copyright under the United States copyright law. In addition to its other rights,the Company Group may copyright any such work in any of their names in the United States inaccordance with the
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requirements of the United States copyright law and the Universal Copyright Convention andany other convention or treaty to which the United States is or may become a party.Notwithstanding the foregoing, Executive is hereby notified and acknowledges that this Section8(a) does not apply (i) to an invention which qualifies fully under the provisions of Section2870 of the California Labor Code and/or (ii) to any work(s) which were developed entirely onExecutive’s own time without using the Company Group’s equipment, supplies, facilities, or tradesecrets, except as to any of these which are related to the Company Group’s business or actual ordemonstrably anticipated research or development of the Company Group.     (b)      Whenever the Company Group shall so request, whether during or after the EmploymentTerm, the Executive shall execute, acknowledge and deliver all applications, assignments or otherinstruments; make or cause to be made all rightful oaths; testify in all legal proceedings;communicate all known facts which relate to such works, copyrights, inventions, ideas,discoveries, designs and improvements; perform all lawful acts and otherwise render all suchassistance as the Company Group may deem necessary to apply for, obtain, register, enforce andmaintain any copyrights, letters patent and trademark registrations of the United States or anyforeign jurisdiction or under the Universal Copyright Convention (or any other convention ortreaty to which the United States is or may become a party), or otherwise to protect the CompanyGroup’s interests therein, including any which the Company Group shall deem necessary inconnection with any proceeding or litigation involving the same. The Company Group shallreimburse the Executive for all reasonable out-of-pocket costs incurred by the Executive intestifying at the Company Group’s request or in rendering any other assistance requested by theCompany Group pursuant to this Section 8 plus (if Executive is not then an employee of theCompany Group) reasonable compensation based on his prior compensation by the Company Group. Allregistration and filing fees and similar expenses shall be paid by the Company Group.**9.**     **Specific Performance; Audit.**     (a)      Executive acknowledges and agrees that the Company’s remedies at law for a breach orthreatened breach of any of the provisions of Sections 1(d), 6 or 7 would be inadequate and, inrecognition of this fact, Executive agrees that, in the event of such a breach
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or threatened breach, in addition to any remedies at law, the Company shall be entitled toobtain equitable relief in the form of specific performance, temporary restraining order,temporary or permanent injunction or any other equitable remedy which may then be available. Inaddition, the Executive recognizes that the services to be rendered by him under this Agreementare of a special, unique, unusual, extraordinary and intellectual character involving skill ofthe highest order and giving them peculiar value, the loss of which cannot be adequatelycompensated in damages. Consequently, in the event of a breach of this Agreement by theExecutive, the Company shall be entitled to injunctive relief or any other legal or equitableremedies. The Executive agrees that the Company also may recover by appropriate action theamount of the actual damage caused the Company by any failure, refusal or neglect of theExecutive to perform his agreements, representations and warranties contained in this Agreement.The remedies provided in this Agreement shall be deemed cumulative and the exercise of one shallnot preclude the exercise of any other remedy at law or in equity for the same event or any otherevent.     (b)      Executive shall have the right to engage an independent accounting firm of nationalreputation, mutually acceptable to Executive and Parent, to audit the books and records of theCompany upon which the calculation of the annual bonus pursuant to Section 3(b)(i) is based.Executive shall pay all costs and expenses of such audit unless such examination shows anunderpayment of at least five percent (5%) or more of the total amount payable (and at least$5,000 in actual dollar amount) during the period covered by the audit, in which case the costsof the audit shall be paid by the Company. Executive hereby acknowledges and agrees that neitherExecutive nor such independent accounting firm may disclose any information relating to suchaudit to any other Person, and may not use such information for any purpose other than forconfirming or determining the amount of Executive’s bonus pursuant to Section 3(b)(i) hereof.**10.**      **Resolution of Disputes.**     (a)      Except as provided in subsection (c) below, any controversy or claim between or amongthe parties, relating to Executive’s employment with the Company, including but not limited tothose arising out of or relating to this Agreement or any agreements or instruments relatinghereto or delivered in connection herewith and any claim based on or
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arising from an alleged tort, shall at the request of any party be determined byarbitration. The arbitration shall be conducted in Los Angeles, California, in accordance withthe United States Arbitration Act (Title 9 of the United States Code), notwithstanding any choiceof law provision in this Agreement, and under the National Rules for the Resolution of EmploymentDisputes of the American Arbitration Association (“**AAA**”). The parties shall have the right toreview and approve a panel of prospective arbitrators supplied by AAA, but the arbitration shallbe conducted by a single arbitrator selected from the approved panel by AAA or by stipulation ofthe parties. The arbitrator shall give effect to statutes of limitation in determining anyclaim. Any controversy concerning whether an issue is arbitrable shall be determined by thearbitrator. The arbitrator shall be entitled to order specific performance of the obligationsimposed by this Agreement. Judgment upon the arbitration award may be entered in any courthaving jurisdiction.     (b)      All decisions of the arbitrator shall be final, conclusive and binding on all partiesand shall not be subject to judicial review. All costs of the arbitration shall be borne by theparty which is not the Prevailing Party (as defined in Section 12(h) of this Agreement). Ifrequired, each party shall advance 50% of any costs of the arbitration required to be advanced,subject to the right of the non-Prevailing Party to reimbursement.     (c)      Subsection (a) above does not prohibit a party from seeking and obtaining injunctiverelief from a court of competent jurisdiction pending the outcome of arbitration. A partybringing an action for injunctive relief shall not be deemed to have waived its right to demandarbitration of all disputes.**11.**     **Miscellaneous.**     (a)      Notices. All notices, requests, demands and other communications (collectively,“**Notices**”) given pursuant to this Agreement shall be in writing, and shall be delivered bypersonal service, courier, facsimile transmission or by United States first class, registered orcertified mail, addressed to the following addresses:         (i) If to the Company, to:      Equity Marketing, Inc.      6330 San Vicente Blvd.  
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           Los Angeles, California 90048      Attn: General Counsel           (ii) If to the Parent, to:      EMAK Worldwide, Inc.      6330 San Vicente Blvd.      Los Angeles, California 90048      Attn: General Counsel           (iii) If to Executive, to:      Jonathan Banks                    Los Angeles, CA 90049     (iv) With a copy to:             Guth Christopher LLP      10866 Wilshire Blvd., Suite 1250      Los Angeles, California 90024      Attn: Theodore E. Guth, Esq.       Any Notice, other than a Notice sent by registered or certified mail, shall be effective whenreceived; a Notice sent by registered or certified mail, postage prepaid return receipt requested,shall be effective on the earlier of when received or the third day following deposit in the UnitedStates mails (or on the seventh day if sent to or from an address outside the United States). Anyparty may from time to time change its address for further Notices hereunder by giving notice tothe other party in the manner prescribed in this Section.     (b)      Entire Agreement. This Agreement and the SAR Agreement (collectively, the“**Agreements**”) contain the sole and entire agreement and understanding of the parties with respectto the entire subject matter of the Agreements, and any and all prior discussions, negotiations,commitments and understandings, whether oral, written or implied, related to the subject matterof the Agreements and any and all prior discussions, negotiations, commitments, agreements(including the Prior Employment Agreement) and understandings,
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whether oral, written or implied, related thereto, are hereby extinguished and superseded.No representations, oral or otherwise, express or implied, other than those contained in theAgreements have been relied upon by any party to the Agreements.     (c)      Severability. In the event that any provision or portion of this Agreementshall be determined to be invalid or unenforceable for any reason, in whole or in part, theremaining provisions of this Agreement shall be unaffected thereby and shall remain in full forceand effect to the fullest extent permitted by law.     (d)      Governing Law. This Agreement has been made and entered into in the State ofCalifornia and shall be construed in accordance with the laws of the State of California.     (e)      Captions. The various captions of this Agreement are for reference only andshall not be considered or referred to in resolving questions of interpretation of thisAgreement.     (f)      Counterparts. This Agreement may be executed in any number of counterparts,each of which shall be deemed to be an original, but all of which together shall constitute oneand the same instrument.     (g)      Business Day. If the last day permissible for delivery of any notice under anyprovision of this Agreement, or for the performance of any obligation under this Agreement, shallbe other than a business day, such last day for such notice or performance shall be extended tothe next following business day (provided, however, under no circumstances shall this provisionbe construed to extend the date of termination of this Agreement).     (h)      Attorneys’ Fees. If any action, proceeding or arbitration is brought to enforceor interpret any provision of this Agreement, the Prevailing Party shall be entitled to recoveras an element of its costs, and not its damages, its reasonable attorneys’ fees, costs andexpenses. The “**Prevailing Party**” is the party who would have been entitled to recover its costsunder the California Code of Civil Procedure had the action been maintained in the Superior Courtof California regardless of whether there is final judgment. A party not entitled to recover itscosts may not recover attorneys’ fees. No sum for attorneys’ fees shall
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be counted in calculating the amount of a judgment for purposes of determining whether aparty is entitled to recover its costs or attorneys’ fees.     (i)      Advice from Independent Counsel. The parties hereto understand that thisAgreement is legally binding and may affect such party’s rights. Each party represents to theother that it has received legal advice from counsel of its choice regarding the meaning andlegal significance of this Agreement.     (j)      Interpretation. Should any provision of this Agreement require interpretation,it is agreed that any court or arbitrator interpreting or construing the same shall not apply apresumption that the terms hereof shall be more strictly construed against any Person by reasonof the rule of construction that a document is to be construed more strictly against the Personwho itself or through its agent prepared the same, it being agreed that all Parties haveparticipated in the preparation of this Agreement.     (k)      Survival. The termination of the Executive’s employment hereunder shall notaffect the enforceability of Sections 1(d), 6, 7 and 8.     (l)      Waiver of Jury Trial. IF NOTWITHSTANDING THE AGREEMENT THAT ALL DISPUTES BESUBMITTED TO BINDING ARBITRATION, A DISPUTE IS SUBMITTED TO A COURT, EACH PARTY HERETO WAIVES THERIGHT TO A TRIAL BY JURY IN ANY DISPUTE IN CONNECTION WITH OR RELATING TO THIS AGREEMENT, ANYRELATED AGREEMENT OR ANY MATTERS DESCRIBED OR CONTEMPLATED HEREIN OR THEREIN, AND AGREE TO TAKEANY AND ALL ACTION NECESSARY OR APPROPRIATE TO EFFECT SUCH WAIVER. IN THE EVENT OF LITIGATION,THIS AGREEMENT MAY BE FILED AS WRITTEN CONSENT TO A WAIVER OF TRIAL BY JURY.
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**EXECUTIONCOPY**     IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement on his own behalfor caused this Agreement to be executed on its behalf as of the date first written above.      **EQUITY MARKETING, INC.**