Movie Gallery subsidiary enters new employment agreement with CFO

By Caroline Salls

Pittsburgh, Oct. 17 - Movie Gallery, Inc. wholly owned subsidiary Movie Gallery US, LLC entered into an executive employment agreement with executive vice president and chief financial officer Thomas D. Johnson Jr., effective Sept. 22, according to an 8-K filed Wednesday with the Securities and Exchange Commission.

Under the employment agreement, Johnson will continue to receive a $325,000 annual base salary. He is also eligible to participate in the executive officer bonus program and other company incentive, bonus, cash and equity compensation plans.

The employment agreement carries an initial term of 12 months, subject to automatic renewal after that for additional one-year terms unless either party gives notice of its intent not to renew at least 30 days before the expiration of the then-current term.

Either the company or Johnson can terminate the employment agreement, but if the company terminates Johnson without cause, he will be entitled to severance of 1½ times his annual base salary. All stock options held by Johnson would also become fully vested.

In addition, Johnson has agreed not to disclose any company trade secrets as long as the information is protected by law, not to disclose other confidential company information for five years after termination and, for one year after termination, not to compete with the company, to be employed by or perform services for a company competitor, to solicit any employee of the company, or to otherwise invest in or assist any competitor of the company.

Movie Gallery, a Dothan, Ala.-based video rental company, filed for bankruptcy on Oct. 16 in the U.S. Bankruptcy Court for the Eastern District of Virginia. Its Chapter 11 case number is 07-33849.

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