Sample Business Contracts


Employment Agreement - Image Entertainment Inc. and Jeff Framer

Employment Forms

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                             EMPLOYMENT AGREEMENT

      THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of
                                  ---------

this 1st day of July, 1994, by and between IMAGE ENTERTAINMENT INC., a

California corporation ("Image"), and JEFF FRAMER, an individual ("Executive").
                         -----                                     ---------

                                   RECITALS

      A.    Image is engaged in the business of licensing, manufacturing,
            promoting, marketing and selling laserdisc format programming.

      B.    Executive has unique experience with respect to sales and marketing,
            management and other aspects of the business of Image.

      C.    Executive desires to render to Image, on an exclusive basis,
            Executive's professional services with respect to Executive's
            experience and abilities, and Image desires to secure, on an
            exclusive basis, Executive's services, on the terms and conditions
            set forth below.

      NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, the parties hereto agree as follows:

1.    TERM OF AGREEMENT.

      Except as otherwise expressly set forth herein, this Agreement shall
      remain in full force and effect for a 2-year term commencing on the date
      hereof and ending on June 30, 1996 (the "Term"); provided, however, that
                                               ----    --------  -------

      unless Executive receives written notice on or before June 30, 1995 that
      this Agreement will not be renewed at June 30, 1996 the Term will
      automatically extend to June 30, 1997. In the event of any additional
      extensions, Image must give Executive at least 1 year's prior written
      notice if the Term will not be further extended.

2.    ENGAGEMENT.

      Subject to the terms and conditions contained herein, Image hereby engages
      the services of Executive (the "Services") and Executive hereby accepts
                                      --------

      such engagement and agrees to render Executive's Services to Image for the
      Term. Executive shall report directly to the President of Image and shall
      have the title of "CHIEF FINANCIAL OFFICER."

      a.    EXTENT OF SERVICES AND DUTIES.  Executive shall perform such duties,
            compatible with Executive's position as an "Executive Officer" (as
            defined below) and as a majority of the Board of Directors of Image
            may reasonably require. In rendering Services to Image, Executive
            shall use Executive's best efforts and ability to maintain, further
            and promote the interests and welfare of Image. For purposes of this
            Agreement "Executive Officer" shall include any person similarly
                       -----------------

            designated as an "Executive Officer" in that person's Employment
            Agreement with Image.
<PAGE>

      b.    EXCLUSIVE ENGAGEMENT.  Executive hereby acknowledges and agrees that
            the engagement of Executive by Image under this Agreement is
            exclusive and that during the Term hereof Executive shall not,
            directly or indirectly, whether for compensation or otherwise,
            engage in any business that is competitive with the business of
            Image, or render any services of a business, commercial or
            professional nature to any other person or organization that is a
            competitor of Image or in a business similar to that of Image,
            without the prior written consent of Image.

3.    COMPENSATION.

      a.    BASE SALARY.  Image hereby agrees to pay Executive for Services to
            be rendered hereunder, including all services to be rendered as an
            Image director, a minimum annual base salary of $115,000 for each
            year of the Term, payable in equal biweekly installments or as
            otherwise provided in accordance with Image's regular Executive
            Officer compensation procedures in effect from time to time ("Base
            Salary") .                                                    ----
            ------

      b.    BONUS COMPENSATION.  Executive shall receive such bonus compensation
            equal to 5/8% of "Pre-Tax Profits" (as defined in Exhibit A), if
            any, as shall be payable to Executive in accordance with the terms
            and conditions of that certain Bonus Plan for Executive Officers,
            attached hereto and incorporated herein by this reference as Exhibit
            A. Image may modify the Bonus Plan from time-to-time and, so long as
            such modifications are of general applicability to all participants
            in such program, all such modifications shall be applicable to
            Executive hereunder ("Bonus Compensation") .
                                  ------------------

4.    STOCK OPTIONS.

      In addition to Base Salary and Bonus Compensation, Image may grant stock
      options to Executive in such form and amounts, and at such time or times,
      as Image's Board of Directors (or, if applicable, Image's stock option
      plan administrators) shall determine. If this Agreement is terminated
      early "Without "Cause" under Subparagraph 12(b) or due to a "Change In
      Control" under Paragraph 13, all unvested options granted to Executive
      will immediately vest. Further, unless this Agreement is terminated early
      for Cause under Subparagraph 12(a), all vested options granted to
      Executive shall be exercisable for the longest period permissible under
      the grant after employment ceases.

5.    FRINGE BENEFITS.

      a.    Image agrees to provide Executive with fringe benefits including but
            not limited to the medical, dental and life insurance, expense
            allowance and vacation time described below:

            i.    MEDICAL, DENTAL, LIFE & LONG-TERM DISABILITY INSURANCE. Image
                  shall purchase (or, if applicable, maintain) during the Term
                  medical, dental and life insurance for Executive,

<PAGE>

                  and provide coverage under the medical and dental policies for
                  Executive's direct dependent beneficiaries (e.g., spouse and
                  minor children), on terms no less favorable than the terms and
                  conditions in effect as of the date hereof and at all times at
                  least equal to that received by any other Executive Officer
                  (collectively "Insurance").
                                 ---------

            ii.   BUSINESS/TRAVEL EXPENSES.  Executive shall be reimbursed in
                  full for all reasonable and actual out-of-pocket business and
                  travel expenses incurred in the performance of Executive's
                  Services, on terms and at all times at least equal to that
                  received by any other Executive Officer, provided Executive
                  shall first present an itemized account of such expenditures
                  together with supporting vouchers.

            iii.  VACATION TIME.  Executive is entitled to 4 weeks of paid
                  vacation time per year of the Term. Any unused vacation time
                  will continue to accrue throughout the Term and will not be
                  subject to any offset, reduction, deduction or maximum accrual
                  limitation of any kind.

6.    SEVERANCE.

      Upon expiration of the Term, Executive shall be entitled to receive:

      a.    Base Salary continuation for a period of 6 months; and

      b.    a prorated portion of Bonus Compensation, if any, otherwise payable
            pursuant to Subparagraph 3(b) for 6 months or any partial fiscal
            year that has occurred prior to the expiration of the Term,
            whichever is greater; and

      c.    Insurance continuation for a period of 6 months.

7.    WITHHOLDING.

      There shall be deducted from all compensation payable to Executive
      hereunder (except Paragraph 5(b)(ii) compensation), such sums, including
      without limitation, social security, income tax withholding and
      unemployment insurance, as Image is by law obligated to deduct.

8.    CONFIDENTIALITY.

      In consideration of the payments to be received hereunder, Executive
agrees as follows:

      a.    That during the Term of this Agreement he will have access to and
            become acquainted with various "Trade Secrets" (as defined below)
            and proprietary information of Image. Except as Executive's duties
            may require or as Image may otherwise consent to in writing,
            Executive will not at any time disclose or use to the detriment of
            Image or the sole benefit of Executive, either directly or
            indirectly, and either during or subsequent to the Term hereof, any
            information, knowledge or data he receives in

<PAGE>

            confidence or acquires from Image or which relates to the Trade
            Secrets of Image. For purposes of this Agreement "Trade Secrets"
                                                              -------------

            shall include, but not be limited to:

            i.    Financial information, such as Image's earnings, assets,
                  debts, prices, pricing structure, volumes of purchases or
                  sales or other financial data, whether relating to Image
                  generally, or to particular products, services, geographic
                  areas, or time periods;

            ii.   Supply and service information, such as goods and services,
                  supplier's names or addresses, terms of supply or service
                  contracts, or of particular transactions, or related
                  information about potential suppliers, to the extent that such
                  information is not generally known to the public, and to the
                  extent that the combination of suppliers or use of a
                  particular supplier, though generally known or available,
                  yields advantages to Image, the details of which are not
                  generally known;

            iii.  Marketing information, such as details about ongoing or
                  proposed marketing programs or agreements by or on behalf of
                  Image, sales forecasts or results of marketing efforts or
                  information about impending transactions;

            iv.   Licensing or Distribution information, such as details about
                  ongoing or proposed negotiations or agreements by or on behalf
                  of Image, terms and details of such negotiations or agreements
                  or results of licensing or distribution efforts or information
                  about impending transactions; or,

            v.    Customer information, such as any compilation of past,
                  existing or prospective customers, customers' proposals or
                  agreements between customers and status of customers accounts
                  or credit, or related information about actual or prospective
                  customers.

      b.    That all files, records, documents, data information and customer
            lists are special, valuable and unique assets of Image and are
            essential to its continued business success, and that under no
            circumstance during the Term hereof or subsequent thereto will he
            influence or attempt to influence any employee of Image to terminate
            his or her employment with Image to work for any competitor of
            Image, nor shall the Executive solicit, directly or indirectly, any
            customers of Image or disclose or use for the purpose of such
            solicitation, without the prior written consent of Image, any files,
            records, documents, data, information, customer lists or any other
            proprietary information of Image.

      c.    Executive acknowledges that any violation of the terms of this
            Paragraph 8 will constitute a material breach of this Agreement and
            will cause Image immediate and irreparable harm and that the damages
            which Image will suffer may be difficult or impossible to measure.
            Therefore, upon any actual or impending violation of this Paragraph
            8, Image shall be entitled to the issuance of a

<PAGE>

            restraining order, preliminary and permanent injunction, without
            bond, restraining or enjoining such violation by Executive or any
            entity or person acting in concert with Executive. Such remedy shall
            be additional to and not in limitation of any other remedy which may
            otherwise be available to Image.

9.    INDEMNIFICATION OF EXECUTIVE.

      Image will, to the maximum extent permitted by law, indemnify and hold
      Executive harmless against expenses, including reasonable attorney's fees,
      judgments, fines, settlements and other amounts actually and reasonably
      incurred in connection with any proceeding arising by reason of
      Executive's employment by Image. Image shall advance to Executive any
      expenses incurred in defending any proceeding to the maximum extent
      permitted by law. Image will at all times maintain directors' and
      officers' liability insurance ("D&O Insurance"), or have sufficient funds
                                      -------------

      to self-insure, in amounts and on terms at least as favorable as the D&O
      Insurance policy in effect on the date hereof.

10.   DEATH.

      In the event of Executive's death, this Agreement will terminate on the
      last day of the calendar month of Executive's death. In such event,
      Executive's personal representative, heirs or beneficiaries shall be
      entitled to receive:

      a.    Base Salary continuation for a period of 6 months or the expiration
            of the Term, whichever occurs first; and

      b.    a prorated portion of Bonus Compensation, if any, otherwise payable
            pursuant to Subparagraph 3(b) for 6 months or any partial fiscal
            year that has occurred prior to the effective date of termination,
            whichever is greater; and

      c.    dependent Insurance continuation for a period of 6 months or the
            expiration of the Term, whichever occurs first.

11.   PERMANENT DISABILITY/SUSPENSION.

      If, for any reason including physical, mental illness, failure, refusal or
      other inability, Executive does not perform a majority of Executive's
      usual duties for a period of longer than 120 consecutive days, Image's
      obligation to pay Base Salary will be suspended. If the suspension is
      reasonably anticipated to exceed 180 consecutive days, Image may terminate
      this Agreement effective upon 30 days prior written notice to Executive.
      In such event, Executive shall be entitled to receive:

      a.    Base Salary continuation for a period of 6 months or the expiration
            of the Term, whichever occurs first; and

      b.    a prorated portion of Bonus Compensation, if any, otherwise payable
            pursuant to Subparagraph 3(b) for 6 months or any partial fiscal
            year that has occurred prior to the effective date of termination,
            whichever is greater; and
<PAGE>

      c.    Insurance continuation for a period of 6 months or the expiration of
            the Term, whichever occurs first.

      Disagreement as to the anticipation of a permanent disability/suspension
      and/or the date such permanent disability/suspension commenced shall be
      settled by the majority decision of 3 neutral arbitrators (or, if
      applicable, licensed physicians) one to be selected by each party to the
      dispute, the two thus appointed shall choose the third, and the three thus
      appointed shall constitute the board of arbitration. Such board, acting by
      majority vote within 30 days after choosing the third arbitrator, shall
      resolve such disagreement and their decision shall be final and binding on
      Executive, Image and any other person with an interest in the matter.

12.   TERMINATION.

      a.    "CAUSE." In the event of "Cause" (as defined below), Image may
            terminate this Agreement at any time effective upon delivery of
            written notice to Executive. In such event, all of Image's
            obligations hereunder will immediately terminate without further
            liability. Moreover, Executive shall not be entitled to receive any
            severance, fringe benefits, compensation or other such rights, nor
            shall Executive be entitled to receive a pro-rata portion of Bonus
            Compensation otherwise payable pursuant to Subparagraph 3(b). For
            purposes of this Agreement "Cause" shall include, but is not limited
                                        -----

            to:

            i.    Executive's (i) fraud, felonious conduct or dishonesty or (ii)
                  willful misconduct or gross negligence in the performance of
                  Executive's duties hereunder; provided, however, that bona
                                                --------  -------

                  fide disagreements or disputes as to expense reimbursement
                  shall not be deemed fraud or felonious conduct or Executive's
                  breach of any material provision of this Agreement; or

            ii.   Executive's breach of any material provision of this Agreement
                  or any other material agreement between Image and Executive.

      b.    "WITHOUT CAUSE." Notwithstanding anything contained herein to the
            contrary, in the event this Agreement is terminated prior to
            expiration of the Term for any reason other than pursuant to
            Paragraphs 10 or 11 or for Cause, this Agreement shall be deemed to
            have been terminated "Without Cause" and Executive shall be entitled
            to receive all of the compensation, rights and benefits described in
            Paragraphs 3, 4 and 5 through the expiration of the Term and the
            severance described in Paragraph 6, as if this Agreement were in
            full force.

13.   CHANGE IN CONTROL.

      Notwithstanding anything contained herein to the contrary, the terms and
      conditions of this Paragraph 13 shall control following a "Change In
      Control" (as defined below).
<PAGE>

      a.    TERMINATION.  In the event this Agreement is terminated prior to
            expiration of the Term for any reason other than pursuant to
            Paragraphs 10 or 11 or for Cause following a Change In Control,
            Executive shall be entitled to receive all of the compensation,
            rights and benefits described in Paragraphs 3, 4 and 5 for a period
            of 1 year following the effective date of termination or through the
            expiration of the Term, whichever is longer, and the severance
            described in Paragraph 6, as if this Agreement were in full force.
            If any other Executive Officer's options are acquired pursuant to a
            Change In Control, Executive's options will be acquired on terms and
            at all times at least equal to any other Officer. Executive must
            receive 30 days prior written notice of termination regardless of
            the reason for termination.

      b.    "CHANGE IN CONTROL."  For purposes of this Agreement "Change In
                                                                  ---------
            Control" shall mean and be deemed to have occurred on the earliest
            -------
            of the following dates:

            i.    the date, pursuant to Section 13(d) of the Act and the rules
                  promulgated thereunder, a person shall have acquired
                  beneficial ownership of more than 45% of the Voting Stock;

            ii.   the date the persons who were members of the Board at the
                  beginning of any 24-month period shall cease to constitute a
                  majority of the Board, unless the election, or the nomination
                  for election by Image's shareholders, of each new director was
                  approved by two-thirds of the members of the Board then in
                  office who were in office at the beginning of the 24-month
                  period; or

            iii.  the date Image's shareholders shall approve a definitive
                  agreement (a) to merge or consolidate Image with or into
                  another corporation, unless the holders of Image's capital
                  stock immediately before such merger or consolidation will,
                  immediately following such merger or consolidation, hold as a
                  group on a fully-diluted basis the ability to elect at least a
                  majority of the directors of the surviving corporation
                  (assuming cumulative voting, if applicable), or (b) to sell or
                  otherwise dispose of all or substantially all the assets of
                  Image.

      c.    EXECUTIVE'S RIGHT TO TERMINATE FOR GOOD REASON.  During the Term,
            Executive shall be entitled to terminate Executive's employment with
            Image for "Good Reason" (as defined below) following a Change In
            Control. For purposes of this Agreement "Good Reason" shall mean any
            of the following events which occurs without Executive's express
            written consent:

            i.    the assignment of any duties inconsistent with Executive's
                  status as an Executive Officer or a substantial alteration in
                  the nature or status of Executive's responsibilities from
                  those in effect immediately prior to a Change In Control other
                  than any such alteration primarily attributable to the fact
                  that Image may no longer be a public company;
<PAGE>

            ii.   a reduction by Image in Base Salary, except for across-the-
                  board salary reductions similarly affecting all Executive
                  Officers and any subsidiaries and all executives of any
                  person, firm or entity in control of Image;

            iii.  the relocation of Image's principal executive offices to a
                  location more than 35 miles from the current locale or Image's
                  requiring Executive to be based anywhere other than Image's
                  principal executive offices except for required travel on
                  Image's business to an extent substantially consistent with
                  Executive's present travel obligations;

            iv.   the failure by Image to continue in effect without material
                  change any compensation or benefit plan in which Executive is
                  entitled to participate, or the failure by Image to continue
                  Executive's participation therein, or the taking of any action
                  by Image which would directly or indirectly materially reduce
                  any of the benefits of such plans enjoyed by Executive at the
                  time of the Change In Control, or the failure by Image to
                  provide Executive with the number of paid vacation days to
                  which Executive is entitled hereunder, or the taking of any
                  other action by Image which materially adversely changes the
                  conditions or perquisites of Executive's employment;

            v.    the failure of Image to obtain a satisfactory agreement from
                  any successor to assume and agree to perform the Services
                  contemplated by this Agreement;

            vi.   any purported termination of employment which is not effected
                  pursuant to Subparagraph 13(a), any such purported termination
                  shall not be effective for purposes of this Agreement;

            vii.  the failure of Image to maintain adequate D&O insurance
                  coverage pursuant to the terms of this Agreement; or

            viii. the breach by Image of any material term of this Agreement.

      d.    LEGAL FEES AND EXPENSES.  If Executive is terminated following a
            Change In Control and Executive shall incur any legal fees or
            expenses as a result of (i) seeking to obtain or enforce any right
            or benefit provided by this Agreement or (ii) a claim of wrongful
            discharge or breach of this Agreement, Image agrees to pay or
            reimburse Executive for such fees and expenses; provided, however,
                                                            --------  -------

            that any claims giving rise to such fees or expenses must be made in
            good faith and for good cause. In the event there is a dispute
            regarding Executive's good faith or the merits of Executive's claim,
            and it is determined by the court that the claim lacked merit or was
            made in bad faith, Executive shall not be entitled to recover any
            fees and expenses including, reasonable attorneys' fees under the
            terms of this Agreement and Executive shall be limited to recover
            such fees and expenses, if any, as the court shall determine.
<PAGE>

14.   GENERAL PROVISIONS.

      a.    SUCCESSORS AND ASSIGNS.  This Agreement is binding upon and shall
            inure to the benefit of the parties hereto, and any of their heirs,
            legatees, devisees, personal representatives, assigns and successors
            in interest of every kind and nature whatsoever. The parties hereto
            agree that Executive's services are personal and that this Agreement
            is executed with respect thereto. Executive shall have no right to
            sell, transfer or assign this Agreement in any manner whatsoever.

      b.    ENTIRE UNDERSTANDING.  This Agreement, and the Exhibits hereto,
            constitute the entire understanding and agreement between the
            parties with respect to the subject matter hereof; supersedes (I)
            any and all prior and preliminary discussions, and (ii) any and all
            prior written or oral and any and all contemporaneous written or
            oral agreements, understandings and negotiations between the
            parties; including but not limited to prior written or oral
            employment agreements and severance agreements, and, there are no
            warranties, representations or other agreements between the parties
            in connection with the subject matter hereof except as set forth or
            referred to herein. This Agreement shall not be modified, amended or
            altered except by an instrument in writing executed by the parties
            hereto.

      c.    SEVERABILITY.  In case one or more of the provisions contained in
            this Agreement (or any portion of any such provision) shall for any
            reason be held invalid, illegal or unenforceable in any respect,
            such invalidity, illegality or unenforceability shall not affect any
            other provision of this Agreement (or any portion of any such
            provision), but this Agreement shall be construed as if such
            invalid, illegal or unenforceable provision (or portion thereof) had
            never been contained herein.

      d.    WAIVER.  The failure by Image, at any time, to require performance
            by Executive of any of the provisions hereof, shall not be deemed a
            waiver of any kind nor shall it in any way affect Image's rights
            thereafter to enforce the same.

      e.    NOTICES.  All notices, requests, demands and other communications
            provided for by this Agreement shall be in writing and shall be
            deemed to have been given 24 hours after deposit there of for
            mailing at any general or branch United States Post Office, enclosed
            in a registered or certified postpaid envelope and addressed as
            follows:

            To Image:         IMAGE ENTERTAINMENT, INC.
                              9333 Oso Avenue
                              Chatsworth, CA  91311
                              Attn:  General Counsel

            To Executive:     JEFF FRAMER
                              [Address]
<PAGE>

                              

            The parties hereto may designate a different place at which notice
            shall be given; provided, however, that any such notice of change of
            address shall be effective only upon receipt.

      f.    GOOD FAITH.  The parties hereto shall perform, fulfill and discharge
            their duties and obligations hereunder in a reasonable manner in
            good faith.

      g.    GOVERNING LAW.  This Agreement and all rights, obligations and
            liabilities arising hereunder shall be construed and enforced in
            accordance with the laws of the State of California.

      h.    ATTORNEYS' FEES.  In the event it becomes necessary to commence any
            proceeding or action to enforce the provisions of this Agreement,
            the court before whom the same shall be tried may award the
            prevailing party all costs and expenses thereof, including without
            limitation, reasonable attorney's fees, the usual, customary and
            lawfully recoverable court costs, and all other expenses in
            connection therewith.

      i.    ADVICE OF COUNSEL.  The parties represent and warrant that in
            executing this Agreement, they have each had the opportunity to
            obtain independent financial, legal, tax and other appropriate
            advice, and are not relying upon any other party (or the attorneys
            or other agents of such other party) for any such advice

      j.    SUBJECT HEADINGS AND DEFINED TERMS.  Subject headings and choice of
            defined terms are included for convenience only and shall not be
            deemed part of this Agreement.

      k.    CUMULATIVE RIGHTS AND REMEDIES.  The rights and remedies provided
            for in this Agreement shall be cumulative; resort to one right or
            remedy shall not preclude resort to another or to any other right or
            remedy provided for by law or in equity.

      IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the date first above written.
                              "Image":
                               -----

                              IMAGE ENTERTAINMENT, INC.,
                              a California corporation

                              By:/s/ MARTIN W. GREENWALD
                                 ----------------------------------------
                                    MARTIN W. GREENWALD, President

                              "Executive":
                               ---------

                              /s/ JEFF FRAMER
                              -------------------------------------------
<PAGE>

                                 JEFF FRAMER, an individual
<PAGE>

                                 EXHIBIT A to Jeff Framer's Employment Agreement

--------------------------------------------------------------------------------
                               EXECUTIVE OFFICER

                            BONUS COMPENSATION PLAN
--------------------------------------------------------------------------------

 .     OBJECTIVES OF THE PLAN.  In addition to Base Salary and stock options, to
      provide Executive Officer incentive compensation based upon Image's
      operating profits.

 .     "PRE-TAX PROFIT" PERCENTAGE.  The incentive compensation plan is designed
      to provide Executive Officers with a bonus based on Image's "Pre-Tax
      Profits," as defined on the attached. The actual amount earned pursuant to
      the Plan shall be based upon audited fiscal year end numbers and
      determined using the calculation method attached. Concurrent with the
      payment of Bonus Compensation, Image shall deliver to Executive a detailed
      statement setting forth the numbers and method of calculation.

 .     PAYMENT.  Bonus Compensation, if any, for the applicable fiscal year will
      be paid, using best efforts, at the earliest practicable date following
      completion of Image's annual audit, as conducted by Image's independent
      certified public accountants, and the filing of Image's Annual Report on
      Form 10-K for that fiscal year.

 .     AUDIT RIGHTS.  Executive shall be entitled to audit, at Executive's own
      expense, Image's records in order to verify any Bonus Compensation
      statement rendered hereunder. Any such audit shall be conducted by a
      certified public accountant upon reasonable notice to Image and during
      Image's normal business hours. Any statement not questioned by Executive
      in writing within 3 years from the date of such statement shall be deemed
      final and conclusive. In the event an audit reveals a discrepancy of 5% or
      more, Image shall bear the full cost of the audit and pay Executive
      interest on any underage at the highest rate permitted by law.

 .     DISPUTES.  Disagreement as to the computation of Bonus Compensation and/or
      any numbers used in such computation shall be settled by the majority
      decision of 3 certified public accountants, one to be selected by each
      party to the dispute, the two thus appointed shall choose the third, and
      the three thus appointed shall constitute the board of arbitration. Such
      board, acting by majority vote within 30 days after choosing the third
      arbitrator, shall resolve such disagreement and their decision shall be
      final and binding on Executive, Image and any other person with an
      interest in the matter.

 .     PRORATION OF BONUS COMPENSATION.  For any partial fiscal year for which
      Executive is entitled to receive Bonus Compensation, the proration shall
      be determined by multiplying total Net Profits for the fiscal year within
      which such partial fiscal year occurs by (a) the decimal equivalent of the
      applicable percentage bonus and by (b) a number equal to the number of
      months during any such partial fiscal year in which Executive was employed
      by Image (or, if applicable, such longer period as is set forth in the
      Employment Agreement), divided by 12.


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