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525 N.W.2d 1 (1994) In re the MARRIAGE OF Carrie RYKHOEK and Irvin Rykhoek, Upon the Petition of Carrie Genest f/k/a Carrie Rykhoek, Appellant, And Concerning Irvin Ryhoek, Appellee. No. 93-949. Court of Appeals of Iowa. September 16, 1994. *2 Eric Borseth of Borseth & Genest, Pleasant Hill, for appellant. Chris Shepperd of Kreykes & Shepperd Law Office, Pella, for appellee. Considered by DONIELSON, C.J., and SACKETT and HUITINK, JJ. HUITINK, Judge. Carrie and Irvin Rykhoek were previously married and were divorced in February 1990. They were awarded joint legal custody of the minor children: Mitchell, born December 20, 1984; Carissa, born October 28, 1986; and Tyler, born September 4, 1987. Carrie was awarded primary physical care, and Irvin was given visitation rights. After the dissolution, Carrie lived in a trailer home on her parents' land near Pella. Carrie's mother took care of the children while Carrie was at work. Eventually, Carrie and her mother had a falling out and quit communicating with each other. In June 1991 Carrie moved with the children to Des Moines, where she had a job as a word processor. Carrie remarried in June 1992 and is now known as Carrie Genest. After Carrie moved to Des Moines, she and the children had little contact with her parents. Irvin still lives in the Pella area and would have the children there during visitation. Carrie's parents contacted Irvin and sought to see the children during Irvin's visitation time. Irvin allowed the maternal grandparents to visit the children. When she became aware of her parents' contact with the children, Carrie asked Irvin to stop this practice, or to at least notify her in advance. In an affidavit she stated she was concerned about the children's contact with her parents because of the negative statements her mother made about her, which she felt would undermine her authority with the children. Irvin refused to comply with her wishes on this matter. Carrie filed a petition for modification of the dissolution decree. She sought to modify the decree to provide that Irvin may not give the children to any member of her family, any person picking up the children for her family, or any other person unless the person seeking visitation had contacted her and received her permission in writing to have the children for visitation. She also requested that Irvin not be allowed to visit any member of her family while the children are in his custody, have any member of her family at his home while the children are in his custody, or allow her family to have unauthorized contact with the children. Carrie filed a motion for summary judgment in which she alleged she should be allowed to determine who could visit the children. Irvin also filed a motion for summary judgment, claiming Carrie has not shown a sufficient change in circumstances to modify the decree. The district court granted Irvin's motion for summary judgment and denied Carrie's motion. The court found there were no undisputed material facts in this case. The court determined there was a legal question as to whether Carrie, as the primary physical caretaker, could dictate to Irvin, as a joint custodian, who he can allow the children to visit. The court found Carrie's position was not supported by legal authority. The court also determined Carrie had not sufficiently shown a modification of the visitation provision of the decree would be in the children's best interests. The court dismissed Carrie's application for modification. Carrie appealed. *3 We review the district court's ruling granting summary judgment for errors at law. Iowa R.App. P. 4. Summary judgment is proper only when there is no genuine issue of fact and the moving party is entitled to judgment as a matter of law. Iowa R.Civ.P. 237(c); Brown v. Monticello State Bank, 360 N.W.2d 81, 83-84 (Iowa 1984). On review we determine whether a genuine issue of fact exists and whether the law was applied correctly. Id. at 84. To justify a change in visitation, a party must show there has been a change of circumstances since the dissolution decree. In re Marriage of Fortelka, 425 N.W.2d 671, 672 (Iowa App.1988). The burden in a modification of visitation rights is different than the burden in a child custody case. Id. Generally, a much less extensive change in circumstances need be shown in visitation rights cases. Id. We first consider the parties' rights as joint legal custodians and Carrie's rights as the children's primary physical caretaker. In pertinent part, Iowa Code section 598.41(5) provides: If one joint custodial parent is awarded physical care, the court shall hold that parent responsible for providing for the best interest of the child. However, physical care given to one parent does not affect the other parent's rights and responsibilities as a legal custodian of the child. Rights and responsibilities as legal custodian of the child include, but are not limited to, equal participation in decisions affecting the child's legal status, medical care, education, extracurricular activities, and religious instruction. Iowa Code § 598.41(5) (1993). Thus, joint custody gives both parents rights and responsibilities. In re Marriage of Westcott, 471 N.W.2d 73, 75 (Iowa App. 1991). Even though a parent does not receive primary physical care of his or her child, that parent continues to be the child's parent and retain all of those parental rights not granted exclusively to others in the decree or otherwise surrendered by the parent. Leaf v. Iowa Methodist Medical Ctr., 460 N.W.2d 892, 894 (Iowa App.1990). The parent who is granted primary physical care has the right and responsibility to maintain the principal home of the minor child and provide for the routine care of the child. In re Marriage of Will, 489 N.W.2d 394, 397 (Iowa 1992). The parent having physical care must, as between the parties, have the final say concerning where the children's home will be. In re Marriage of Frederici, 338 N.W.2d 156, 159 (Iowa 1983). Additionally, in the recent cases of In re Petition of Ash, 507 N.W.2d 400, 402 (Iowa 1993) and Lihs v. Lihs, 504 N.W.2d 890, 892 (Iowa 1993), the supreme court upheld the right of a custodial parent to exercise a common-law veto power over visitation between the child and all other third parties, except the parent who is granted visitation rights. We note that in Lihs the mother is described as the custodial parent, but the facts of the case show the mother was the primary physical caretaker.[1] 504 N.W.2d at 891. Lihs involved a request by half-siblings for court-ordered visitation rights. Id. Ash involved a request by the mother's former boyfriend, who was not the biological father, for court-ordered visitation rights. 507 N.W.2d at 401. Both of these supreme court cases rely upon Olds v. Olds, 356 N.W.2d 571 (Iowa 1984). Olds involved a request by grandparents for court-ordered visitation. 356 N.W.2d at 572. Section 598.35, the Iowa grandparent visitation statute, provides for such court-ordered visitation. Iowa Code § 598.35 (1993). However, this statute does not apply when the grandparents seeking court-ordered visitation are the parents of the custodial parent. Olds, 356 N.W.2d at 574; In re Marriage of Woodley, 474 N.W.2d 815, 816 (Iowa App.1991). Section 598.35 applies only to those situations specified in the statute. Lihs, 504 N.W.2d at 892. Thus, where section 598.35 does not apply, the common-law rule applies. In re Marriage of Freel, 448 N.W.2d 26, 27-28 (Iowa 1989). *4 In Olds, the court stated a custodial parent's veto power over visitation with people other than the noncustodial parent, and as provided for in section 598.35, is granted on the ground that judicial enforcement of visitation would divide and thereby hamper proper parental authority, force the child into the midst of a conflict of authority and ill feelings between parent and grandparent, and coerce what should remain a moral rather than a legal obligation. 356 N.W.2d at 573. The common-law rule against coercing grandparent visitation over parental objections demonstrates a respect for family privacy and parental autonomy. Id. at 574. We determine Olds dealt with a slightly different issue than the one presented to us. In Olds, the grandparents sought court-ordered visitation rights. Id. at 572. In the present case, Carrie's parents are not a party to the suit, and they are not seeking specific visitation rights of their own. Under the cases discussed above, Carrie's parents would not be entitled to court-ordered visitation under section 598.35 because their child is the physical caretaker of the children. Thus, legally Carrie could veto a request by her parents for visitation with the children. However, Carrie's veto power does not extend to Irvin, who is a joint custodial parent and who was granted visitation privileges under the dissolution decree. The question then in this case is whether Carrie's common-law veto can be used to dictate to Irvin who the children might see while they are in his care during visitation. Generally, we have considered liberal visitation rights to be in a child's best interest. In re Marriage of Stepp, 485 N.W.2d 846, 850 (Iowa App.1992). Section 598.41(1) provides: The court, insofar as is reasonable and in the best interest of the child, shall order the custody award, including liberal visitation rights where appropriate, which will assure the child the opportunity for the maximum continuing physical and emotional contact with both parents after the parents have separated or dissolved the marriage, unless direct physical harm or significant emotional harm to the child, other children, or a parent is likely to result from such contact with one parent.... Iowa Code § 598.41(1) (1993). Thus, we will not restrict a parent's visitation unless direct physical harm or significant emotional harm to the child, other children, or a parent is likely to result from such contact. In re Marriage of Gillilland, 487 N.W.2d 363, 366 (Iowa App.1992). Here, Carrie does not seek to restrict the amount of Irvin's visitation, but seeks to place conditions upon Irvin's activities with the children when he has visitation. Generally, we have not imposed conditions on a parent's visitation. In the case of In re Marriage of Fite, 485 N.W.2d 662, 664 (Iowa 1992), the supreme court deleted conditions which the district court had placed on the father's visitation, which included abstinence from use of alcohol and use of profane, obscene, or abusive language during visitation. In the case of In re Marriage of Walsh, 451 N.W.2d 492, 493 (Iowa 1990), the supreme court deleted a condition that the father could only have visitation when no unrelated adult was present. Similarly, in In re Marriage of Ullerich, 367 N.W.2d 297, 299-300 (Iowa App.1985), we eliminated a condition which restricted the mother from having any adult males present in her living quarters to whom she was not married or related within the third degree of affinity or consanguinity. We conclude these cases show the custodial parent can not generally exercise his or her common-law veto to dictate which persons the noncustodial parent can come in contact with during visitation. As the supreme court has pointed out, conditions on visitation may be considered demeaning. Fite, 485 N.W.2d at 664. Furthermore, the imposition of conditions may be used as a means to improperly restrict visitation. Id. Even without formal conditions in the decree, if a parent behaves irresponsibly during visitation, his or her conduct may be grounds for reduction or elimination of visitation. Id. However, in some situations conditions are justified. Where a father had once failed to return the children after visitation, we approved a condition which prohibited him from removing the children from the state of their *5 residence during visitation. In re Marriage of Smith, 471 N.W.2d 70, 73 (Iowa App.1991). Also, where a father admitted he had previously engaged in acts of exhibitionism, the supreme court agreed conditions could be placed on his visitation rights. Lamansky v. Lamansky, 207 N.W.2d 768, 772 (Iowa 1973). Additionally, a parent may agree to a condition on his or her visitation, such as paying all travel expenses. See In re Marriage of Hatzievgenakis, 434 N.W.2d 914, 916 (Iowa App.1988). From these cases, we conclude a court should place conditions on a parent's visitation rights only when visitation without the placement of conditions is likely to result in direct physical harm or significant emotional harm to the child, other children, or a parent. See Iowa Code § 598.41(1) (1993). Any conditions which are so imposed must be in the best interests of the child. In the present case, the district court found Carrie had no legal grounds for requesting the placement of conditions on Irvin's visitation rights. Based on this view, the court granted Irvin's motion for summary judgment. We conclude summary judgment was not appropriate in this case. We reverse the decision of the district court and remand for further proceedings using the standard for conditions on visitation rights which we have set forth. Irvin seeks attorney fees for this appeal. An award of attorney fees is not a matter of right, but rests within the court's discretion and the parties' financial positions. In re Marriage of Hunt, 476 N.W.2d 99, 103 (Iowa App.1991). We determine each party should pay his or her own attorney fees for this appeal. Costs of this appeal are assessed to Irvin. REVERSED AND REMANDED. DONIELSON, C.J., concurs. SACKETT, J., concurs in part and dissents in part. SACKETT, Judge (concurring in part; dissenting in part). I concur in part and dissent in part. I would affirm the trial court. Carrie and Irvin were divorced and the dissolution decree made the parties joint custodians of their children and awarded Carrie physical care. Carrie filed for modification of the decree to restrict Irvin's visitations and requested the following relief: [That the trial court] modify the Decree to prohibit the Respondent [Irvin] from allowing any of the Petitioner's [Carrie's] family to visit with the children or place them in their care for any period of time and further requesting that the Respondent [Irvin] be prohibited from allowing any contact whatsoever between the Petitioner's [Carrie's] family and the minor children. The issue is whether Carrie has shown facts which, if believed, would show a change of circumstances and grounds to justify modification of the dissolution decree. To justify a modification, Carrie must show changed circumstances. In re Marriage Frederici, 338 N.W.2d 156, 158 (Iowa 1983). The circumstances to show a change of visitation are not as great as those to modify custody. See In re Marriage of Jerome, 378 N.W.2d 302, 305 (Iowa App.1985). The trial court found the record showed Carrie's position was that: Her relationship with her own family has deteriorated so that her family refuses contact with her; That her family has sought to circumvent her by obtaining visitation from Irvin; That Carrie is in a position of not knowing where her children are during their visitations with Irvin and that places Irvin in the center of a conflict between Carrie and her family; and Irvin has assisted Carrie's family in the matter even though he knows Carrie disapproves. Carrie claims she should control not only her time with the children but, also, the time Irvin spends with the children. There are two questions: *6 The first is, can a custodial parent restrict the visitation of a noncustodial joint custodian? And, did Carrie show that there was a factual issue concerning the interest of the children? The evolution of our statutory law on joint custody has evidenced the legislature's strong voice that children deserve the attention and support of both parents even when a marriage is dissolved. Apparently, the majority has determined Carrie does not have veto power over Irvin's visitation; a position with which I agree. I depart, though, from the majority's conclusion Lihs v. Lihs, 504 N.W.2d 890 (Iowa 1993), and Olds v. Olds, 356 N.W.2d 571 (Iowa 1984), may be applicable, in whole or in part, to the issue before us. In Lihs, the natural father was deceased. In Olds, the grandparents were seeking visitation. Neither case is instructive. Irvin is a natural parent and a joint custodian. His status in regard to visitation is clearly defined by Iowa Code section 598.1(3) which provides: "Joint custody" or "joint legal custody" means an award of custody of a minor child to both parents under which both parents have rights and responsibilities toward the child and under which neither parent has rights superior to those of the other parent. The court may award physical care to one parent only. (Emphasis supplied). The second issue is whether there is evidence from which a fact finder could find there is a change of circumstances and the interest of the children require modification. The only evidence of changed circumstances is Carrie at the time of the dissolution decree had a relationship with her parents and her brothers and today she does not. I do not find this to be evidence such as would support a finding for a modification. Particularly where, as here, there is no evidence the relief Carrie seeks is in the children's best interests. There is no evidence visitation between Carrie's children and Carrie's parents and brothers poses any threat to the children. In fact, the following portions of Carrie's affidavit illustrate that point: While my mother has done nothing to this point to harm my relationship with my children that I know of, I think there is the very real potential for her to do so. She has a history of causing poor family relations. My mother has been involved in long-standing disputes with my father's family, specifically his two brothers for separate reasons, and is not welcome in their home. My father's family wants nothing to do with her. I think it is completely possible that at some point in the future my mother may attempt to alienate the children from me or otherwise undermine my authority with my children. (Emphasis supplied). The trial court made the observation Carrie is attempting to keep her children from her mother to force her mother to reestablish communications. The court went on to reason, "In this way, Carrie is using the children as a lever to force her mother to mend their broken relationship." The observation is clearly evident from Carrie's affidavit where she states, in part, "I fail to see why he [Irvin] should be drawn into it. I fail to see why he [Irvin] does not understand that if it were not for his allowing visitation with my family they would have to go through me and he would not be in this situation at all." There is nothing in this record from which a fact finder could determine Irvin's recognition of a need for the children to be in contact with their mother's extended family with whom they have had substantial bonding is harmful to the children. Absent such a showing, there is no basis to put restrictions on Irvin's visitation. The trial court should be affirmed. While I feel summary judgment in a modification case is unusual, the trial court should be affirmed in this case. Additionally, I would order Carrie pay $1000 toward Irvin's attorney fees. NOTES [1] We note that both appellate courts have often referred to the primary physical caretaker as the custodial parent and the other parent as the noncustodial parent, even though both parents have joint legal custody.
10-30-2013
[ "525 N.W.2d 1 (1994) In re the MARRIAGE OF Carrie RYKHOEK and Irvin Rykhoek, Upon the Petition of Carrie Genest f/k/a Carrie Rykhoek, Appellant, And Concerning Irvin Ryhoek, Appellee. No. 93-949. Court of Appeals of Iowa. September 16, 1994. *2 Eric Borseth of Borseth & Genest, Pleasant Hill, for appellant. Chris Shepperd of Kreykes & Shepperd Law Office, Pella, for appellee. Considered by DONIELSON, C.J., and SACKETT and HUITINK, JJ. HUITINK, Judge. Carrie and Irvin Rykhoek were previously married and were divorced in February 1990.", "They were awarded joint legal custody of the minor children: Mitchell, born December 20, 1984; Carissa, born October 28, 1986; and Tyler, born September 4, 1987. Carrie was awarded primary physical care, and Irvin was given visitation rights. After the dissolution, Carrie lived in a trailer home on her parents' land near Pella. Carrie's mother took care of the children while Carrie was at work. Eventually, Carrie and her mother had a falling out and quit communicating with each other. In June 1991 Carrie moved with the children to Des Moines, where she had a job as a word processor.", "Carrie remarried in June 1992 and is now known as Carrie Genest. After Carrie moved to Des Moines, she and the children had little contact with her parents. Irvin still lives in the Pella area and would have the children there during visitation. Carrie's parents contacted Irvin and sought to see the children during Irvin's visitation time. Irvin allowed the maternal grandparents to visit the children. When she became aware of her parents' contact with the children, Carrie asked Irvin to stop this practice, or to at least notify her in advance. In an affidavit she stated she was concerned about the children's contact with her parents because of the negative statements her mother made about her, which she felt would undermine her authority with the children. Irvin refused to comply with her wishes on this matter.", "Carrie filed a petition for modification of the dissolution decree. She sought to modify the decree to provide that Irvin may not give the children to any member of her family, any person picking up the children for her family, or any other person unless the person seeking visitation had contacted her and received her permission in writing to have the children for visitation. She also requested that Irvin not be allowed to visit any member of her family while the children are in his custody, have any member of her family at his home while the children are in his custody, or allow her family to have unauthorized contact with the children.", "Carrie filed a motion for summary judgment in which she alleged she should be allowed to determine who could visit the children. Irvin also filed a motion for summary judgment, claiming Carrie has not shown a sufficient change in circumstances to modify the decree. The district court granted Irvin's motion for summary judgment and denied Carrie's motion. The court found there were no undisputed material facts in this case. The court determined there was a legal question as to whether Carrie, as the primary physical caretaker, could dictate to Irvin, as a joint custodian, who he can allow the children to visit.", "The court found Carrie's position was not supported by legal authority. The court also determined Carrie had not sufficiently shown a modification of the visitation provision of the decree would be in the children's best interests. The court dismissed Carrie's application for modification. Carrie appealed. *3 We review the district court's ruling granting summary judgment for errors at law. Iowa R.App. P. 4. Summary judgment is proper only when there is no genuine issue of fact and the moving party is entitled to judgment as a matter of law. Iowa R.Civ.P. 237(c); Brown v. Monticello State Bank, 360 N.W.2d 81, 83-84 (Iowa 1984). On review we determine whether a genuine issue of fact exists and whether the law was applied correctly. Id. at 84. To justify a change in visitation, a party must show there has been a change of circumstances since the dissolution decree.", "In re Marriage of Fortelka, 425 N.W.2d 671, 672 (Iowa App.1988). The burden in a modification of visitation rights is different than the burden in a child custody case. Id. Generally, a much less extensive change in circumstances need be shown in visitation rights cases. Id. We first consider the parties' rights as joint legal custodians and Carrie's rights as the children's primary physical caretaker.", "In pertinent part, Iowa Code section 598.41(5) provides: If one joint custodial parent is awarded physical care, the court shall hold that parent responsible for providing for the best interest of the child. However, physical care given to one parent does not affect the other parent's rights and responsibilities as a legal custodian of the child. Rights and responsibilities as legal custodian of the child include, but are not limited to, equal participation in decisions affecting the child's legal status, medical care, education, extracurricular activities, and religious instruction. Iowa Code § 598.41(5) (1993). Thus, joint custody gives both parents rights and responsibilities. In re Marriage of Westcott, 471 N.W.2d 73, 75 (Iowa App. 1991). Even though a parent does not receive primary physical care of his or her child, that parent continues to be the child's parent and retain all of those parental rights not granted exclusively to others in the decree or otherwise surrendered by the parent. Leaf v. Iowa Methodist Medical Ctr., 460 N.W.2d 892, 894 (Iowa App.1990). The parent who is granted primary physical care has the right and responsibility to maintain the principal home of the minor child and provide for the routine care of the child.", "In re Marriage of Will, 489 N.W.2d 394, 397 (Iowa 1992). The parent having physical care must, as between the parties, have the final say concerning where the children's home will be. In re Marriage of Frederici, 338 N.W.2d 156, 159 (Iowa 1983). Additionally, in the recent cases of In re Petition of Ash, 507 N.W.2d 400, 402 (Iowa 1993) and Lihs v. Lihs, 504 N.W.2d 890, 892 (Iowa 1993), the supreme court upheld the right of a custodial parent to exercise a common-law veto power over visitation between the child and all other third parties, except the parent who is granted visitation rights. We note that in Lihs the mother is described as the custodial parent, but the facts of the case show the mother was the primary physical caretaker.", "[1] 504 N.W.2d at 891. Lihs involved a request by half-siblings for court-ordered visitation rights. Id. Ash involved a request by the mother's former boyfriend, who was not the biological father, for court-ordered visitation rights. 507 N.W.2d at 401. Both of these supreme court cases rely upon Olds v. Olds, 356 N.W.2d 571 (Iowa 1984). Olds involved a request by grandparents for court-ordered visitation. 356 N.W.2d at 572.", "Section 598.35, the Iowa grandparent visitation statute, provides for such court-ordered visitation. Iowa Code § 598.35 (1993). However, this statute does not apply when the grandparents seeking court-ordered visitation are the parents of the custodial parent. Olds, 356 N.W.2d at 574; In re Marriage of Woodley, 474 N.W.2d 815, 816 (Iowa App.1991). Section 598.35 applies only to those situations specified in the statute. Lihs, 504 N.W.2d at 892. Thus, where section 598.35 does not apply, the common-law rule applies.", "In re Marriage of Freel, 448 N.W.2d 26, 27-28 (Iowa 1989). *4 In Olds, the court stated a custodial parent's veto power over visitation with people other than the noncustodial parent, and as provided for in section 598.35, is granted on the ground that judicial enforcement of visitation would divide and thereby hamper proper parental authority, force the child into the midst of a conflict of authority and ill feelings between parent and grandparent, and coerce what should remain a moral rather than a legal obligation. 356 N.W.2d at 573. The common-law rule against coercing grandparent visitation over parental objections demonstrates a respect for family privacy and parental autonomy.", "Id. at 574. We determine Olds dealt with a slightly different issue than the one presented to us. In Olds, the grandparents sought court-ordered visitation rights. Id. at 572. In the present case, Carrie's parents are not a party to the suit, and they are not seeking specific visitation rights of their own. Under the cases discussed above, Carrie's parents would not be entitled to court-ordered visitation under section 598.35 because their child is the physical caretaker of the children. Thus, legally Carrie could veto a request by her parents for visitation with the children.", "However, Carrie's veto power does not extend to Irvin, who is a joint custodial parent and who was granted visitation privileges under the dissolution decree. The question then in this case is whether Carrie's common-law veto can be used to dictate to Irvin who the children might see while they are in his care during visitation. Generally, we have considered liberal visitation rights to be in a child's best interest. In re Marriage of Stepp, 485 N.W.2d 846, 850 (Iowa App.1992). Section 598.41(1) provides: The court, insofar as is reasonable and in the best interest of the child, shall order the custody award, including liberal visitation rights where appropriate, which will assure the child the opportunity for the maximum continuing physical and emotional contact with both parents after the parents have separated or dissolved the marriage, unless direct physical harm or significant emotional harm to the child, other children, or a parent is likely to result from such contact with one parent.... Iowa Code § 598.41(1) (1993).", "Thus, we will not restrict a parent's visitation unless direct physical harm or significant emotional harm to the child, other children, or a parent is likely to result from such contact. In re Marriage of Gillilland, 487 N.W.2d 363, 366 (Iowa App.1992). Here, Carrie does not seek to restrict the amount of Irvin's visitation, but seeks to place conditions upon Irvin's activities with the children when he has visitation. Generally, we have not imposed conditions on a parent's visitation. In the case of In re Marriage of Fite, 485 N.W.2d 662, 664 (Iowa 1992), the supreme court deleted conditions which the district court had placed on the father's visitation, which included abstinence from use of alcohol and use of profane, obscene, or abusive language during visitation. In the case of In re Marriage of Walsh, 451 N.W.2d 492, 493 (Iowa 1990), the supreme court deleted a condition that the father could only have visitation when no unrelated adult was present.", "Similarly, in In re Marriage of Ullerich, 367 N.W.2d 297, 299-300 (Iowa App.1985), we eliminated a condition which restricted the mother from having any adult males present in her living quarters to whom she was not married or related within the third degree of affinity or consanguinity. We conclude these cases show the custodial parent can not generally exercise his or her common-law veto to dictate which persons the noncustodial parent can come in contact with during visitation. As the supreme court has pointed out, conditions on visitation may be considered demeaning. Fite, 485 N.W.2d at 664. Furthermore, the imposition of conditions may be used as a means to improperly restrict visitation. Id. Even without formal conditions in the decree, if a parent behaves irresponsibly during visitation, his or her conduct may be grounds for reduction or elimination of visitation.", "Id. However, in some situations conditions are justified. Where a father had once failed to return the children after visitation, we approved a condition which prohibited him from removing the children from the state of their *5 residence during visitation. In re Marriage of Smith, 471 N.W.2d 70, 73 (Iowa App.1991). Also, where a father admitted he had previously engaged in acts of exhibitionism, the supreme court agreed conditions could be placed on his visitation rights. Lamansky v. Lamansky, 207 N.W.2d 768, 772 (Iowa 1973). Additionally, a parent may agree to a condition on his or her visitation, such as paying all travel expenses.", "See In re Marriage of Hatzievgenakis, 434 N.W.2d 914, 916 (Iowa App.1988). From these cases, we conclude a court should place conditions on a parent's visitation rights only when visitation without the placement of conditions is likely to result in direct physical harm or significant emotional harm to the child, other children, or a parent. See Iowa Code § 598.41(1) (1993). Any conditions which are so imposed must be in the best interests of the child. In the present case, the district court found Carrie had no legal grounds for requesting the placement of conditions on Irvin's visitation rights. Based on this view, the court granted Irvin's motion for summary judgment.", "We conclude summary judgment was not appropriate in this case. We reverse the decision of the district court and remand for further proceedings using the standard for conditions on visitation rights which we have set forth. Irvin seeks attorney fees for this appeal. An award of attorney fees is not a matter of right, but rests within the court's discretion and the parties' financial positions. In re Marriage of Hunt, 476 N.W.2d 99, 103 (Iowa App.1991). We determine each party should pay his or her own attorney fees for this appeal. Costs of this appeal are assessed to Irvin. REVERSED AND REMANDED. DONIELSON, C.J., concurs. SACKETT, J., concurs in part and dissents in part.", "SACKETT, Judge (concurring in part; dissenting in part). I concur in part and dissent in part. I would affirm the trial court. Carrie and Irvin were divorced and the dissolution decree made the parties joint custodians of their children and awarded Carrie physical care. Carrie filed for modification of the decree to restrict Irvin's visitations and requested the following relief: [That the trial court] modify the Decree to prohibit the Respondent [Irvin] from allowing any of the Petitioner's [Carrie's] family to visit with the children or place them in their care for any period of time and further requesting that the Respondent [Irvin] be prohibited from allowing any contact whatsoever between the Petitioner's [Carrie's] family and the minor children. The issue is whether Carrie has shown facts which, if believed, would show a change of circumstances and grounds to justify modification of the dissolution decree. To justify a modification, Carrie must show changed circumstances.", "In re Marriage Frederici, 338 N.W.2d 156, 158 (Iowa 1983). The circumstances to show a change of visitation are not as great as those to modify custody. See In re Marriage of Jerome, 378 N.W.2d 302, 305 (Iowa App.1985). The trial court found the record showed Carrie's position was that: Her relationship with her own family has deteriorated so that her family refuses contact with her; That her family has sought to circumvent her by obtaining visitation from Irvin; That Carrie is in a position of not knowing where her children are during their visitations with Irvin and that places Irvin in the center of a conflict between Carrie and her family; and Irvin has assisted Carrie's family in the matter even though he knows Carrie disapproves. Carrie claims she should control not only her time with the children but, also, the time Irvin spends with the children.", "There are two questions: *6 The first is, can a custodial parent restrict the visitation of a noncustodial joint custodian? And, did Carrie show that there was a factual issue concerning the interest of the children? The evolution of our statutory law on joint custody has evidenced the legislature's strong voice that children deserve the attention and support of both parents even when a marriage is dissolved. Apparently, the majority has determined Carrie does not have veto power over Irvin's visitation; a position with which I agree.", "I depart, though, from the majority's conclusion Lihs v. Lihs, 504 N.W.2d 890 (Iowa 1993), and Olds v. Olds, 356 N.W.2d 571 (Iowa 1984), may be applicable, in whole or in part, to the issue before us. In Lihs, the natural father was deceased. In Olds, the grandparents were seeking visitation. Neither case is instructive. Irvin is a natural parent and a joint custodian.", "His status in regard to visitation is clearly defined by Iowa Code section 598.1(3) which provides: \"Joint custody\" or \"joint legal custody\" means an award of custody of a minor child to both parents under which both parents have rights and responsibilities toward the child and under which neither parent has rights superior to those of the other parent. The court may award physical care to one parent only. (Emphasis supplied). The second issue is whether there is evidence from which a fact finder could find there is a change of circumstances and the interest of the children require modification. The only evidence of changed circumstances is Carrie at the time of the dissolution decree had a relationship with her parents and her brothers and today she does not. I do not find this to be evidence such as would support a finding for a modification.", "Particularly where, as here, there is no evidence the relief Carrie seeks is in the children's best interests. There is no evidence visitation between Carrie's children and Carrie's parents and brothers poses any threat to the children. In fact, the following portions of Carrie's affidavit illustrate that point: While my mother has done nothing to this point to harm my relationship with my children that I know of, I think there is the very real potential for her to do so. She has a history of causing poor family relations. My mother has been involved in long-standing disputes with my father's family, specifically his two brothers for separate reasons, and is not welcome in their home.", "My father's family wants nothing to do with her. I think it is completely possible that at some point in the future my mother may attempt to alienate the children from me or otherwise undermine my authority with my children. (Emphasis supplied). The trial court made the observation Carrie is attempting to keep her children from her mother to force her mother to reestablish communications. The court went on to reason, \"In this way, Carrie is using the children as a lever to force her mother to mend their broken relationship.\" The observation is clearly evident from Carrie's affidavit where she states, in part, \"I fail to see why he [Irvin] should be drawn into it.", "I fail to see why he [Irvin] does not understand that if it were not for his allowing visitation with my family they would have to go through me and he would not be in this situation at all.\" There is nothing in this record from which a fact finder could determine Irvin's recognition of a need for the children to be in contact with their mother's extended family with whom they have had substantial bonding is harmful to the children. Absent such a showing, there is no basis to put restrictions on Irvin's visitation. The trial court should be affirmed.", "While I feel summary judgment in a modification case is unusual, the trial court should be affirmed in this case. Additionally, I would order Carrie pay $1000 toward Irvin's attorney fees. NOTES [1] We note that both appellate courts have often referred to the primary physical caretaker as the custodial parent and the other parent as the noncustodial parent, even though both parents have joint legal custody." ]
https://www.courtlistener.com/api/rest/v3/opinions/1998837/
Legal & Government
https://huggingface.co/datasets/pile-of-law/pile-of-law
Pecora, J. This is an application for an order directing the fire commissioner to restore the petitioner to his former position of lieutenant in the fire department. The petition was dismissed at Special Term, upon motion of respondents, on the ground that it failed to state a good cause of action. This decision was affirmed by the Appellate Division (257 App. Div. 808), but the Court *841of Appeals reversed (282 N. Y. 182), pointing out that in view of the failure of the respondents to answer, the allegations of the petition were to be deemed admitted, including the allegation that the report of the board of medical officers to the fire commissioner was not founded on fact and was arbitrary and capricious Since that time respondents have served an answer denying various material allegations of the petition, and setting up an affirmative defense, to the effect that the findings of the medical board and the determination of the fire commissioner were based on evidence which amply supported the conclusions reached by them. Petitioner asks for a jury trial of the issues raised, while respondents contend that the answer and the documents made part thereof require the denial of the application without any trial on the ground that they establish that there is at most an honest difference of medical opinion as to the nature and cause of petitioner’s disability. It is well settled that “ a mere difference in medical opinion of physicians produced by petitioner on the one hand and physicians of the medical board on the other, as to the nature and cause of petitioner’s disability, does not justify a conclusion ” that the decision of the fire commissioner, acting on the advice of the medical board of the fire department, was arbitrary, capricious or unreasonable. (See Matter of Nilsson v. LaGuardia, 259 App. Div. 145, 148.) On the other hand, it is equally well established that petitioner is not “ necessarily bound by the findings of the medical board,” and that he may obtain relief on a showing “ that its findings were not amply sustained by competent evidence or that they were, or must have been, due to fraud, bad faith, accident or mistake.” (See Matter of Nilsson v. LaGuardia, supra, p. 148.) It is well nigh impossible; on the papers now before the court, to determine whether the conclusions reached by those members of the medical board who found adversely to the petitioner were amply supported by competent evidence, as respondents maintain, or were merely arbitrary, whimsical and capricious, without adequate factual basis. The very documents incorporated by reference in the answer reveal that a number of members of the medical board of the fire department believed that some or all of the petitioner's injuries and disabilities were, or might have been, caused or induced by the active performance of his duties; and this appears to be a fair inference from the record submitted to the court. It does not clearly and satisfactorily appear that the contrary conclusion reached by other members of the board rests upon a reasonable basis. In any event, petitioner should be given an opportunity, by means of cross-examination, to probe *842into the reasoning which led to the opinions arrived at by the majority of the members of the medical board; only thus may he adequately show, if it be the fact, that said opinions were without sufficient factual or medical foundation. The court’s attention has been directed to a number of cases in which our appellate courts have dismissed similar petitions, on the ground that petitioner had failed to establish that the opinion of the medical board was arbitrary, capricious or unreasonable, but had merely shown that there was a difference in medical opinion. All these determinations, however, were made subsequent to trial, and after petitioner had been afforded an opportunity to establish by cross-examination or otherwise that there was insufficient factual basis for the adverse findings of the medical board. (Matter of Nilsson v. LaGuardia, supra; Matter of Eichler v McElligott, 259 App. Div. 151: affd , 283 N. Y. 716; Strauss v. Hannig, 281 id 612. See, also, Maxwell v McElligott, [Hofstadter, J.j IN Y L. J March 26, 1940, p. 1359, Siefring v. McElligott, [Schmuck, J.| Id. April 19, 1940, p. 1781: Matter of Phillips v. McElligott, 279 N. Y. 792.) The motion is accordingly granted to the extent of directing a trial of the issues as to the nature of petitioner’s disability, and as to whether the same was caused or induced by the active performance of his duties. The cross-motion to strike out various paragraphs of the reply and of an affidavit submitted in support thereof is denied. Settle order.
01-08-2022
[ "Pecora, J. This is an application for an order directing the fire commissioner to restore the petitioner to his former position of lieutenant in the fire department. The petition was dismissed at Special Term, upon motion of respondents, on the ground that it failed to state a good cause of action. This decision was affirmed by the Appellate Division (257 App. Div. 808), but the Court *841of Appeals reversed (282 N. Y. 182), pointing out that in view of the failure of the respondents to answer, the allegations of the petition were to be deemed admitted, including the allegation that the report of the board of medical officers to the fire commissioner was not founded on fact and was arbitrary and capricious Since that time respondents have served an answer denying various material allegations of the petition, and setting up an affirmative defense, to the effect that the findings of the medical board and the determination of the fire commissioner were based on evidence which amply supported the conclusions reached by them. Petitioner asks for a jury trial of the issues raised, while respondents contend that the answer and the documents made part thereof require the denial of the application without any trial on the ground that they establish that there is at most an honest difference of medical opinion as to the nature and cause of petitioner’s disability.", "It is well settled that “ a mere difference in medical opinion of physicians produced by petitioner on the one hand and physicians of the medical board on the other, as to the nature and cause of petitioner’s disability, does not justify a conclusion ” that the decision of the fire commissioner, acting on the advice of the medical board of the fire department, was arbitrary, capricious or unreasonable.", "(See Matter of Nilsson v. LaGuardia, 259 App. Div. 145, 148.) On the other hand, it is equally well established that petitioner is not “ necessarily bound by the findings of the medical board,” and that he may obtain relief on a showing “ that its findings were not amply sustained by competent evidence or that they were, or must have been, due to fraud, bad faith, accident or mistake.” (See Matter of Nilsson v. LaGuardia, supra, p. 148.) It is well nigh impossible; on the papers now before the court, to determine whether the conclusions reached by those members of the medical board who found adversely to the petitioner were amply supported by competent evidence, as respondents maintain, or were merely arbitrary, whimsical and capricious, without adequate factual basis. The very documents incorporated by reference in the answer reveal that a number of members of the medical board of the fire department believed that some or all of the petitioner's injuries and disabilities were, or might have been, caused or induced by the active performance of his duties; and this appears to be a fair inference from the record submitted to the court.", "It does not clearly and satisfactorily appear that the contrary conclusion reached by other members of the board rests upon a reasonable basis. In any event, petitioner should be given an opportunity, by means of cross-examination, to probe *842into the reasoning which led to the opinions arrived at by the majority of the members of the medical board; only thus may he adequately show, if it be the fact, that said opinions were without sufficient factual or medical foundation. The court’s attention has been directed to a number of cases in which our appellate courts have dismissed similar petitions, on the ground that petitioner had failed to establish that the opinion of the medical board was arbitrary, capricious or unreasonable, but had merely shown that there was a difference in medical opinion. All these determinations, however, were made subsequent to trial, and after petitioner had been afforded an opportunity to establish by cross-examination or otherwise that there was insufficient factual basis for the adverse findings of the medical board.", "(Matter of Nilsson v. LaGuardia, supra; Matter of Eichler v McElligott, 259 App. Div. 151: affd , 283 N. Y. 716; Strauss v. Hannig, 281 id 612. See, also, Maxwell v McElligott, [Hofstadter, J.j IN Y L. J March 26, 1940, p. 1359, Siefring v. McElligott, [Schmuck, J.| Id. April 19, 1940, p. 1781: Matter of Phillips v. McElligott, 279 N. Y.", "792.) The motion is accordingly granted to the extent of directing a trial of the issues as to the nature of petitioner’s disability, and as to whether the same was caused or induced by the active performance of his duties. The cross-motion to strike out various paragraphs of the reply and of an affidavit submitted in support thereof is denied. Settle order." ]
https://www.courtlistener.com/api/rest/v3/opinions/5426094/
Legal & Government
https://huggingface.co/datasets/pile-of-law/pile-of-law
RESPONSE TO AMENDMENT Notice of Pre-AIA or AIA Status The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA . Request for Continued Examination A request for continued examination under 37 CFR 1.114, including the fee set forth in 37 CFR 1.17(e), was filed in this application after final rejection. Since this application is eligible for continued examination under 37 CFR 1.114, and the fee set forth in 37 CFR 1.17(e) has been timely paid, the finality of the previous Office action has been withdrawn pursuant to 37 CFR 1.114. Applicant's submission filed on 07 February 2022 has been entered. Amendments to claims 1, 2, 3, and 7, filed on 07 February 2022, have been entered in the above-identified application. Claims 11-18 have been added and claims 4 and 8 have been cancelled by applicant. Claims 1-3, 5-7, and 9-18 are pending. NEW AND REPEATED REJECTIONS The text of those sections of Title 35, U.S. Code not included in this action can be found in a prior Office action. Claim Rejections - 35 USC § 112 The following is a quotation of 35 U.S.C. 112(b): (b) CONCLUSION.—The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the inventor or a joint inventor regards as the invention. Claims 1-3, 5-7, and 9-18 are rejected under 35 U.S.C. 112(b) as being indefinite for failing to particularly point out and distinctly claim the subject matter which the inventor or a joint inventor regards as the invention. Regarding claims 1 and 2, line 5 of the claims refers to “the unstretched layer”, and this layer has a mass occupancy of 0.55 to 0.95 as determined by dividing a basis weight of the uniaxially stretched layer by a basis weight of all film layers. Later in the claim, options (i) notes that the film includes two uniaxially stretched layers. It is impossible for each uniaxially stretched layer to have a mass occupancy within the claimed range, as this would result in a total mass occupancy of more than 1. That is, if the first laminated layer has the lowest mass occupancy of 0.55, the core layer is thin to have a minimal mass occupancy, and the second laminate layer also has the lost mass occupancy of 0.55, the total mass occupancy of the laminate would be at least 1.10 which is not possible. The Examiner suggests amending the claims to note “a film comprising at least one uniaxially stretched layer”, and that a total mass occupancy of the uniaxially stretched layer(s) is 0.55 to 0.95. This allows for multiple uniaxially stretched layers as in option (i) while maintaining the intent of the mass occupancy limitation. Regarding claims 1 and 2, line 7 of the claims recites the basis weight of “all film layers”, however no other layers have been recited in the film up to this point in the claim. Thus the reference to “all film layers” lacks sufficient antecedent basis. See MPEP § 2173.05(e). The Examiner suggests reciting “all layers of the film”, and moving the mass occupancy clause to the end of the claims, to ensure proper antecedent basis for this limitation. Regarding claims 3, 5, 6, 7, and 9-18, these claims depend on one or more of the above claims and thus incorporate the above-described indefinite subject matter. Claim Rejections - 35 USC § 102 Claims 1-3, 5-7, 9 and 10 are rejected under 35 U.S.C. 102(a)(1) and (2) as being anticipated by Iwase (WO 2016/133012 A1) as evidenced by EP 3,778,032 A1 and by Breton (U.S. Pat. 6,649,682). U.S. Pat. 10,717,223 was relied upon as the translation of Iwase. The applied reference has a common inventor and assignee with the instant application. Based upon the earlier effectively filed date of the reference, it constitutes prior art under 35 U.S.C. 102(a)(2). This rejection under 35 U.S.C. 102(a)(2) might be overcome by: (1) a showing under 37 CFR 1.130(a) that the subject matter disclosed in the reference was obtained directly or indirectly from the inventor or a joint inventor of this application and is thus not prior art in accordance with 35 U.S.C. 102(b)(2)(A); (2) a showing under 37 CFR 1.130(b) of a prior public disclosure under 35 U.S.C. 102(b)(2)(B); or (3) a statement pursuant to 35 U.S.C. 102(b)(2)(C) establishing that, not later than the effective filing date of the claimed invention, the subject matter disclosed and the claimed invention were either owned by the same person or subject to an obligation of assignment to the same person or subject to a joint research agreement. Regarding claims 1-3 and 7, Iwase describes a film laminate including at least a base layer and a heat seal layer each containing a thermoplastic resin, see col. 6, lines 26-32. Table 1 teaches “PP1” which is homopolypropylene with trade name NOVATEC PP MA4, and “CA1” which is calcium carbonate with trade name SOFTON #1800 and “TIO” which is rutile titanium dioxide with trade name TIPAQUE CR-60, see col. 34-35. These materials are used in the examples shown in Table 2 in col. 35-36. This is the same polypropylene and calcium carbonate and titanium dioxide used in the examples of the present specification, see Tables 1-2 on pp. 54-55 of the instant specification. Accordingly, films made from these same materials will necessarily have a tensile strength in one direction and tensile strength in an orthogonal direction within the range specified in Claim 1, and have a tensile strain at strength in one direction and a tensile strain at strength in an orthogonal direction within the range specified in claim 2. The Examiner notes that the claimed tensile strength and tensile strain at strength properties are a property of the film structure and composition. Where the claimed and prior art products are identical or substantially identical in structure or composition, a prima facie case of either anticipation or obviousness has been established. “Products of identical chemical composition can not have mutually exclusive properties." A chemical composition and its properties are inseparable. Therefore, if the prior art teaches the identical chemical structure, the properties applicant discloses and/or claims are necessarily present. In re Spada, 911 F.2d 705, 709, 15 USPQ2d 1655, 1658 (Fed. Cir. 1990). See MPEP § 2112.01. Iwase teaches that the laminate includes a base layer, intermediate layer, and heat seal layer, see col. 18, lines 7-18. These layers may be uniaxially stretched or biaxially stretched resulting in examples of base layer / intermediate layer / heat seal layer being biaxial / uniaxial / uniaxial oriented or uniaxial / biaxial / biaxial oriented. The disclosure of layers being biaxially oriented / uniaxially oriented / uniaxially oriented reads on the structure of option (ii) as recited in claims 1 and 2 in which the core layer is uniaxially oriented and the first laminated layer is biaxially stretched. Iwase also teaches including a fine filler in the base or intermediate layers, see description at col. 19, lines 53-62, col. 11 line 35 through col. 12 line 29, and examples in Table 2. In particular, Examples 12 and 15 each use a base layer of 73 wt. % PP1, 22 wt. % of CA1, and 5 wt. % of TIO (shown as “TIC” in the table heading). The density of the thermoplastic resin film is disclosed to be most preferably in the range of 0.7 to 0.85 g/cm3, see col. 29, lines 20-39. Examples 12 and 15 have densities of 0.86 and 0.85 g/cm3, respectively, see Table 2 at col. 37-38. EP ‘032 provides evidence that the density of SOFTON 1800 calcium carbonate (used as CA1 in Iwase) is 2.7 g/cm3, see p. 17, [0143]. Breton provides evidence that the density of titanium dioxide is 4.3 g/cm3, see col. 6, lines 30-37. Thus, a film containing 73 wt. % PP1, 22 wt. % CA1, and 5 wt. % TIO will have a density of about 1.05 g/cm3.1 Assuming equally thick layers, the mass of the base layer in Examples 12 and 15 will be higher than that of the intermediate layer due to the presence of the 22% calcium carbonate and 5% titanium dioxide additives which are minimally present (only 1% calcium carbonate) in the intermediate layer. A filled base layer with a density of 1.05 g/cm3 is heavier than an equally thick relatively unfilled intermediate layer with a density of about 0.85 g/cm3 resulting in a mass occupancy of the base layer being about 0.553.2 Thus the mass occupancy of the base layer is within the claimed range of 0.55 to 0.95 based on the weight of all film layers as claimed. If the base layer is thicker than the intermediate layer, then the mass occupancy of the base layer is correspondingly larger. Regarding claims 5 and 9, Iwase teaches that the laminate is taken up by a winder, see Example 1 at col. 39, lines 10-15. Thus the film is wound into a roll. The direction of tensile strength and tensile strain at strength property measurements is necessarily a longitudinal direction. Regarding claims 6 and 10, Iwase also teaches that the heat seal layer is an adhesive layer, see col. 14, lines 25-30. The adhesive layer may be adhered to a plastic container, see col. 15, lines 52-62. This reads on a pressure-sensitive adhesive layer as claimed. Claim Rejections - 35 USC § 103 The following is a quotation of 35 U.S.C. 103 which forms the basis for all obviousness rejections set forth in this Office action: A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth in section 102, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains. Patentability shall not be negated by the manner in which the invention was made. The factual inquiries for establishing a background for determining obviousness under 35 U.S.C. 103 are summarized as follows: 1. Determining the scope and contents of the prior art. 2. Ascertaining the differences between the prior art and the claims at issue. 3. Resolving the level of ordinary skill in the pertinent art. 4. Considering objective evidence present in the application indicating obviousness or nonobviousness. Claims 13, 14, 17, and 18 are rejected under 35 U.S.C. 103(a) as being unpatentable over Iwase (WO 2016/133012 A1) as evidenced by EP 3,778,032 A1 and by Breton (U.S. Pat. 6,649,682). U.S. Pat. 10,717,223 was relied upon as the translation of Iwase. Regarding claims 13, 14, 17, and 18, Iwase and EP ‘032 and Breton are relied upon as described above to teach a film laminate having the configuration of option (ii) as in claims 1 and 2. Iwase does not specify the thickness of the individual layers of the laminate. However, the examples shown in Table 2 at col. 37-38 have total laminate thicknesses of from 75 microns to 200 microns. It would have been obvious to have formulated the core layer and first and second laminated layers with thicknesses within the claimed range of 15-40 microns for the core layer and 5-30 microns for the first and second laminated layers to result in an overall laminate thickness of from 75 to 200 microns as taught in the examples of Iwase to arrive at the claimed invention. A laminate with first and second laminated layers of from 5-30 microns and a core layer of from 15-40 microns has an overall thickness of from (5+15+5) to (30+40+30) microns, or from 25 to 100 microns. This overlaps the example layer thicknesses taught in Iwase. As set forth in MPEP § 2144.05, in the case where the claimed ranges "overlap or lie inside ranges disclosed by the prior art", a prima facie case of obviousness exists. See In re Wertheim, 541 F.2d 257, 191 USPQ 90 (CCPA 1976); In re Woodruff, 919 F.2d 1575, 16 USPQ2d 1934 (Fed. Cir. 1990). RESPONSE TO APPLICANT’S ARGUMENTS Applicant’s arguments in the response filed 07 February 2022 regarding the 35 U.S.C. § 102 rejection of claims 1-10 of record over Iwase (WO 2016/133012 A1) as evidenced by EP 3,778,032 A1 and by Breton (U.S. Pat. 6,649,682) have been carefully considered but are deemed unpersuasive. Applicant argues that the Examiner assumed the thicknesses of the base layer and intermediate layers of Iwase to be 10 microns, and that such an assumption is unfounded and the calculation of the purported density is not supported by the disclosure of Iwase. Furthermore, applicant argues that the Examiner’s calculations are incorrect as the presence of calcium carbonate in the layers will result in pores during the stretching process which will affect the density of the porous layer. The Examiner disagrees. The Examiner notes that claims 1 and 2 do not specify the thickness of the individual layers. The Examiner’s assumption was merely for a basis of calculating the mass occupancy of the layers of Iwase. As for the presence of calcium carbonate, the Examiner agrees that stretching the layer will affect various properties but this will not affect the mass of the resulting stretched layer. Thus comparing the mass of a stretched layer or unstretched layer does not affect the resulting mass occupancy value. Applicant also argues that the claimed invention has advantages such as improved linear cutability and preventing of breakage due to a tensile force applied in one direction. See p. 12 of the remarks. In response to applicant's argument that the references fail to show certain features of applicant’s invention, it is noted that the features upon which applicant relies (i.e., easier cuttability, improved linear cuttability) are not recited in the rejected claims. Although the claims are interpreted in light of the specification, limitations from the specification are not read into the claims. See In re Van Geuns, 988 F.2d 1181, 26 USPQ2d 1057 (Fed. Cir. 1993). Accordingly, this 35 U.S.C. § 102 rejection is maintained. Conclusion All claims are rejected. Any inquiry concerning this communication or earlier communications from the examiner should be directed to SCOTT R WALSHON whose telephone number is (571)270-5592. The examiner can normally be reached on Monday to Friday from 9am - 6pm. Examiner interviews are available via telephone, in-person, and video conferencing using a USPTO supplied web-based collaboration tool. To schedule an interview, applicant is encouraged to use the USPTO Automated Interview Request (AIR) at http://www.uspto.gov/interviewpractice. If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, D Lawrence Tarazano can be reached on (571) 272-1515. The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300. Information regarding the status of an application may be obtained from the Patent Application Information Retrieval (PAIR) system. Status information for published applications may be obtained from either Private PAIR or Public PAIR. Status information for unpublished applications is available through Private PAIR only. For more information about the PAIR system, see http://pair-direct.uspto.gov. Should you have questions on access to the Private PAIR system, contact the Electronic Business Center (EBC) at 866-217-9197 (toll-free). If you would like assistance from a USPTO Customer Service Representative or access to the automated information system, call 800-786-9199 (IN USA OR CANADA) or 571-272-1000. /Scott R. Walshon/ Primary Examiner, Art Unit 1759 1 Sample calculation: 100 grams of film contains 73 g of PP1 with a density of about 0.85 g/cm3 and thus the resin takes up 73 g / 0.85 g/cm3 = 85.9 cm3 of volume. 22 g of calcium carbonate with a density of 2.7 g/cm3 takes up 22g / 2.7 g/cm3 = 8.1 cm3 of volume. 5 g of titanium dioxide with a density of 4.3 g/cm3 takes up 5 g / 4.3 g/cm3 = 1.2 cm3 of volume. The total volume is about 85.9 + 8.1 + 1.2 = 95.2 cm3 for an average density of 100g / 95.2 cm3 = 1.05 g/cm3. 2 Sample calculation: A 10 micron thick film with a density of 1.05 g/cm3 has a basis weight of 1.05 mg/cm2. A 10 micron thick film with a density of 0.85 g/cm3 has a basis weight of 0.85 mg/cm2. The total weight is thus 1.90 mg per square centimeter of film, and the base layer comprises 1.05 / 1.90 = .553 weight fraction of the laminate.
2022-05-15T20:33:00
[ "RESPONSE TO AMENDMENT Notice of Pre-AIA or AIA Status The present application, filed on or after March 16, 2013, is being examined under the first inventor to file provisions of the AIA . Request for Continued Examination A request for continued examination under 37 CFR 1.114, including the fee set forth in 37 CFR 1.17(e), was filed in this application after final rejection. Since this application is eligible for continued examination under 37 CFR 1.114, and the fee set forth in 37 CFR 1.17(e) has been timely paid, the finality of the previous Office action has been withdrawn pursuant to 37 CFR 1.114. Applicant's submission filed on 07 February 2022 has been entered. Amendments to claims 1, 2, 3, and 7, filed on 07 February 2022, have been entered in the above-identified application.", "Claims 11-18 have been added and claims 4 and 8 have been cancelled by applicant. Claims 1-3, 5-7, and 9-18 are pending. NEW AND REPEATED REJECTIONS The text of those sections of Title 35, U.S. Code not included in this action can be found in a prior Office action. Claim Rejections - 35 USC § 112 The following is a quotation of 35 U.S.C. 112(b): (b) CONCLUSION.—The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the inventor or a joint inventor regards as the invention. Claims 1-3, 5-7, and 9-18 are rejected under 35 U.S.C. 112(b) as being indefinite for failing to particularly point out and distinctly claim the subject matter which the inventor or a joint inventor regards as the invention. Regarding claims 1 and 2, line 5 of the claims refers to “the unstretched layer”, and this layer has a mass occupancy of 0.55 to 0.95 as determined by dividing a basis weight of the uniaxially stretched layer by a basis weight of all film layers.", "Later in the claim, options (i) notes that the film includes two uniaxially stretched layers. It is impossible for each uniaxially stretched layer to have a mass occupancy within the claimed range, as this would result in a total mass occupancy of more than 1. That is, if the first laminated layer has the lowest mass occupancy of 0.55, the core layer is thin to have a minimal mass occupancy, and the second laminate layer also has the lost mass occupancy of 0.55, the total mass occupancy of the laminate would be at least 1.10 which is not possible. The Examiner suggests amending the claims to note “a film comprising at least one uniaxially stretched layer”, and that a total mass occupancy of the uniaxially stretched layer(s) is 0.55 to 0.95. This allows for multiple uniaxially stretched layers as in option (i) while maintaining the intent of the mass occupancy limitation.", "Regarding claims 1 and 2, line 7 of the claims recites the basis weight of “all film layers”, however no other layers have been recited in the film up to this point in the claim. Thus the reference to “all film layers” lacks sufficient antecedent basis. See MPEP § 2173.05(e). The Examiner suggests reciting “all layers of the film”, and moving the mass occupancy clause to the end of the claims, to ensure proper antecedent basis for this limitation.", "Regarding claims 3, 5, 6, 7, and 9-18, these claims depend on one or more of the above claims and thus incorporate the above-described indefinite subject matter. Claim Rejections - 35 USC § 102 Claims 1-3, 5-7, 9 and 10 are rejected under 35 U.S.C. 102(a)(1) and (2) as being anticipated by Iwase (WO 2016/133012 A1) as evidenced by EP 3,778,032 A1 and by Breton (U.S. Pat. 6,649,682). U.S. Pat. 10,717,223 was relied upon as the translation of Iwase. The applied reference has a common inventor and assignee with the instant application. Based upon the earlier effectively filed date of the reference, it constitutes prior art under 35 U.S.C. 102(a)(2). This rejection under 35 U.S.C. 102(a)(2) might be overcome by: (1) a showing under 37 CFR 1.130(a) that the subject matter disclosed in the reference was obtained directly or indirectly from the inventor or a joint inventor of this application and is thus not prior art in accordance with 35 U.S.C. 102(b)(2)(A); (2) a showing under 37 CFR 1.130(b) of a prior public disclosure under 35 U.S.C. 102(b)(2)(B); or (3) a statement pursuant to 35 U.S.C. 102(b)(2)(C) establishing that, not later than the effective filing date of the claimed invention, the subject matter disclosed and the claimed invention were either owned by the same person or subject to an obligation of assignment to the same person or subject to a joint research agreement.", "Regarding claims 1-3 and 7, Iwase describes a film laminate including at least a base layer and a heat seal layer each containing a thermoplastic resin, see col. 6, lines 26-32. Table 1 teaches “PP1” which is homopolypropylene with trade name NOVATEC PP MA4, and “CA1” which is calcium carbonate with trade name SOFTON #1800 and “TIO” which is rutile titanium dioxide with trade name TIPAQUE CR-60, see col. 34-35. These materials are used in the examples shown in Table 2 in col. 35-36. This is the same polypropylene and calcium carbonate and titanium dioxide used in the examples of the present specification, see Tables 1-2 on pp. 54-55 of the instant specification. Accordingly, films made from these same materials will necessarily have a tensile strength in one direction and tensile strength in an orthogonal direction within the range specified in Claim 1, and have a tensile strain at strength in one direction and a tensile strain at strength in an orthogonal direction within the range specified in claim 2. The Examiner notes that the claimed tensile strength and tensile strain at strength properties are a property of the film structure and composition. Where the claimed and prior art products are identical or substantially identical in structure or composition, a prima facie case of either anticipation or obviousness has been established.", "“Products of identical chemical composition can not have mutually exclusive properties.\" A chemical composition and its properties are inseparable. Therefore, if the prior art teaches the identical chemical structure, the properties applicant discloses and/or claims are necessarily present. In re Spada, 911 F.2d 705, 709, 15 USPQ2d 1655, 1658 (Fed. Cir. 1990). See MPEP § 2112.01. Iwase teaches that the laminate includes a base layer, intermediate layer, and heat seal layer, see col. 18, lines 7-18. These layers may be uniaxially stretched or biaxially stretched resulting in examples of base layer / intermediate layer / heat seal layer being biaxial / uniaxial / uniaxial oriented or uniaxial / biaxial / biaxial oriented. The disclosure of layers being biaxially oriented / uniaxially oriented / uniaxially oriented reads on the structure of option (ii) as recited in claims 1 and 2 in which the core layer is uniaxially oriented and the first laminated layer is biaxially stretched. Iwase also teaches including a fine filler in the base or intermediate layers, see description at col. 19, lines 53-62, col. 11 line 35 through col. 12 line 29, and examples in Table 2. In particular, Examples 12 and 15 each use a base layer of 73 wt.", "% PP1, 22 wt. % of CA1, and 5 wt. % of TIO (shown as “TIC” in the table heading). The density of the thermoplastic resin film is disclosed to be most preferably in the range of 0.7 to 0.85 g/cm3, see col. 29, lines 20-39. Examples 12 and 15 have densities of 0.86 and 0.85 g/cm3, respectively, see Table 2 at col. 37-38. EP ‘032 provides evidence that the density of SOFTON 1800 calcium carbonate (used as CA1 in Iwase) is 2.7 g/cm3, see p. 17, [0143].", "Breton provides evidence that the density of titanium dioxide is 4.3 g/cm3, see col. 6, lines 30-37. Thus, a film containing 73 wt. % PP1, 22 wt. % CA1, and 5 wt. % TIO will have a density of about 1.05 g/cm3.1 Assuming equally thick layers, the mass of the base layer in Examples 12 and 15 will be higher than that of the intermediate layer due to the presence of the 22% calcium carbonate and 5% titanium dioxide additives which are minimally present (only 1% calcium carbonate) in the intermediate layer. A filled base layer with a density of 1.05 g/cm3 is heavier than an equally thick relatively unfilled intermediate layer with a density of about 0.85 g/cm3 resulting in a mass occupancy of the base layer being about 0.553.2 Thus the mass occupancy of the base layer is within the claimed range of 0.55 to 0.95 based on the weight of all film layers as claimed. If the base layer is thicker than the intermediate layer, then the mass occupancy of the base layer is correspondingly larger. Regarding claims 5 and 9, Iwase teaches that the laminate is taken up by a winder, see Example 1 at col. 39, lines 10-15. Thus the film is wound into a roll.", "The direction of tensile strength and tensile strain at strength property measurements is necessarily a longitudinal direction. Regarding claims 6 and 10, Iwase also teaches that the heat seal layer is an adhesive layer, see col. 14, lines 25-30. The adhesive layer may be adhered to a plastic container, see col. 15, lines 52-62. This reads on a pressure-sensitive adhesive layer as claimed. Claim Rejections - 35 USC § 103 The following is a quotation of 35 U.S.C. 103 which forms the basis for all obviousness rejections set forth in this Office action: A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth in section 102, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains.", "Patentability shall not be negated by the manner in which the invention was made. The factual inquiries for establishing a background for determining obviousness under 35 U.S.C. 103 are summarized as follows: 1. Determining the scope and contents of the prior art. 2. Ascertaining the differences between the prior art and the claims at issue. 3. Resolving the level of ordinary skill in the pertinent art. 4. Considering objective evidence present in the application indicating obviousness or nonobviousness. Claims 13, 14, 17, and 18 are rejected under 35 U.S.C. 103(a) as being unpatentable over Iwase (WO 2016/133012 A1) as evidenced by EP 3,778,032 A1 and by Breton (U.S. Pat.", "6,649,682). U.S. Pat. 10,717,223 was relied upon as the translation of Iwase. Regarding claims 13, 14, 17, and 18, Iwase and EP ‘032 and Breton are relied upon as described above to teach a film laminate having the configuration of option (ii) as in claims 1 and 2. Iwase does not specify the thickness of the individual layers of the laminate. However, the examples shown in Table 2 at col. 37-38 have total laminate thicknesses of from 75 microns to 200 microns. It would have been obvious to have formulated the core layer and first and second laminated layers with thicknesses within the claimed range of 15-40 microns for the core layer and 5-30 microns for the first and second laminated layers to result in an overall laminate thickness of from 75 to 200 microns as taught in the examples of Iwase to arrive at the claimed invention.", "A laminate with first and second laminated layers of from 5-30 microns and a core layer of from 15-40 microns has an overall thickness of from (5+15+5) to (30+40+30) microns, or from 25 to 100 microns. This overlaps the example layer thicknesses taught in Iwase. As set forth in MPEP § 2144.05, in the case where the claimed ranges \"overlap or lie inside ranges disclosed by the prior art\", a prima facie case of obviousness exists.", "See In re Wertheim, 541 F.2d 257, 191 USPQ 90 (CCPA 1976); In re Woodruff, 919 F.2d 1575, 16 USPQ2d 1934 (Fed. Cir. 1990). RESPONSE TO APPLICANT’S ARGUMENTS Applicant’s arguments in the response filed 07 February 2022 regarding the 35 U.S.C. § 102 rejection of claims 1-10 of record over Iwase (WO 2016/133012 A1) as evidenced by EP 3,778,032 A1 and by Breton (U.S. Pat. 6,649,682) have been carefully considered but are deemed unpersuasive. Applicant argues that the Examiner assumed the thicknesses of the base layer and intermediate layers of Iwase to be 10 microns, and that such an assumption is unfounded and the calculation of the purported density is not supported by the disclosure of Iwase. Furthermore, applicant argues that the Examiner’s calculations are incorrect as the presence of calcium carbonate in the layers will result in pores during the stretching process which will affect the density of the porous layer. The Examiner disagrees. The Examiner notes that claims 1 and 2 do not specify the thickness of the individual layers. The Examiner’s assumption was merely for a basis of calculating the mass occupancy of the layers of Iwase.", "As for the presence of calcium carbonate, the Examiner agrees that stretching the layer will affect various properties but this will not affect the mass of the resulting stretched layer. Thus comparing the mass of a stretched layer or unstretched layer does not affect the resulting mass occupancy value. Applicant also argues that the claimed invention has advantages such as improved linear cutability and preventing of breakage due to a tensile force applied in one direction. See p. 12 of the remarks. In response to applicant's argument that the references fail to show certain features of applicant’s invention, it is noted that the features upon which applicant relies (i.e., easier cuttability, improved linear cuttability) are not recited in the rejected claims. Although the claims are interpreted in light of the specification, limitations from the specification are not read into the claims. See In re Van Geuns, 988 F.2d 1181, 26 USPQ2d 1057 (Fed.", "Cir. 1993). Accordingly, this 35 U.S.C. § 102 rejection is maintained. Conclusion All claims are rejected. Any inquiry concerning this communication or earlier communications from the examiner should be directed to SCOTT R WALSHON whose telephone number is (571)270-5592. The examiner can normally be reached on Monday to Friday from 9am - 6pm. Examiner interviews are available via telephone, in-person, and video conferencing using a USPTO supplied web-based collaboration tool. To schedule an interview, applicant is encouraged to use the USPTO Automated Interview Request (AIR) at http://www.uspto.gov/interviewpractice. If attempts to reach the examiner by telephone are unsuccessful, the examiner’s supervisor, D Lawrence Tarazano can be reached on (571) 272-1515. The fax phone number for the organization where this application or proceeding is assigned is 571-273-8300. Information regarding the status of an application may be obtained from the Patent Application Information Retrieval (PAIR) system. Status information for published applications may be obtained from either Private PAIR or Public PAIR.", "Status information for unpublished applications is available through Private PAIR only. For more information about the PAIR system, see http://pair-direct.uspto.gov. Should you have questions on access to the Private PAIR system, contact the Electronic Business Center (EBC) at 866-217-9197 (toll-free). If you would like assistance from a USPTO Customer Service Representative or access to the automated information system, call 800-786-9199 (IN USA OR CANADA) or 571-272-1000.", "/Scott R. Walshon/ Primary Examiner, Art Unit 1759 1 Sample calculation: 100 grams of film contains 73 g of PP1 with a density of about 0.85 g/cm3 and thus the resin takes up 73 g / 0.85 g/cm3 = 85.9 cm3 of volume. 22 g of calcium carbonate with a density of 2.7 g/cm3 takes up 22g / 2.7 g/cm3 = 8.1 cm3 of volume. 5 g of titanium dioxide with a density of 4.3 g/cm3 takes up 5 g / 4.3 g/cm3 = 1.2 cm3 of volume. The total volume is about 85.9 + 8.1 + 1.2 = 95.2 cm3 for an average density of 100g / 95.2 cm3 = 1.05 g/cm3. 2 Sample calculation: A 10 micron thick film with a density of 1.05 g/cm3 has a basis weight of 1.05 mg/cm2. A 10 micron thick film with a density of 0.85 g/cm3 has a basis weight of 0.85 mg/cm2. The total weight is thus 1.90 mg per square centimeter of film, and the base layer comprises 1.05 / 1.90 = .553 weight fraction of the laminate." ]
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Legal & Government
https://huggingface.co/datasets/pile-of-law/pile-of-law
"Walker, J. Tbis case was before us at a former term, under tbe title of Stone Co. v. McLamb & Co., A. D. Rich, and others, 153 N. C., 378. "We tben beld tbat Mrs. M. M. Yann, a feme covert, was liable for tbe debts of tbe firm of McLamb & Go., under tbe statute, Eevisal, sec. 2118, and tbat tbe order appointing a receiver of tbe partnership effects was erroneous and should be vacated, and tbe property, which was under mortgagee to A. D. Eicb, should be restored to him. Tbe ease was remanded for tbe settlement of tbe other matters involved. Tbe parties thereupon agreed tbat an issue be submitted to a jury to ascertain if a paymnet of $333, made by McLamb & Go. to Eicb, should be applied to tbe debt' of tbe firm, amounting to $1,650, which is secured by bis mortgage, or to an unsecured debt of $300 beld by him against McLamb & Go. Tbe jury returned tbe following verdict: “Should tbe $333-credited to A. D. Eicb on page 453 of tbe ledger be appliéd to the mortgage debt of McLamb & Co. to A. D. Eicb? Answer: Yes.” Tbe court adjudged, upon tbe verdict, tbat tbe payment be so applied. Tbe defendant’s exception raises tbe question whether there was any evidence to show tbat be bad been instructed by tbe" firm to so apply tbe payment, be having requested tbe court to charge substantially tbat there was none. We have examined tbe testimony carefully, and have failed to find any evidence to sustain tbe charge of tbe court or tbe verdict of tbe jury. Tbe most tbat can be made of it, when considered favorably to McLamb & Go. and tbe other interested.parties, is tbat tbe firm made some payments, at different times, aggregating $333 and entered them upon its books as credits on the mortgage notes, but did not direct Eicb bow to apply them, and Eicb did not know of tbe entries until some time after they were made, when be promptly objected to them. It was tben agreed tbat they should be applied to tbe unsecured debt. It is admitted tbat Eicb did not apply tbe payments to either of tbe debts. There is no rule in tbe law better settled than tbe one in regard to tbe application of payments: 1. A debtor owing two or more debts to tbe same creditor, and making a payment, may, at tbe time, direct its application *164to any one o£ the debts. The right is lost if the particular application is not directed- at the time of the payment. 2. If the debtor fails to make the application at the time of the payment, the right to apply it belongs to the creditor. 3. If neither debtor nor creditor makes it, the law will apply it to the unsecured debt or the one for which the creditor’s security is most precarious, or, as sometimes expressed, according to its own view of the intrinsic justice and equity of the case. Sprinkle v. Martin, 72 N. C., 92, and cases cited; Vick v. Smith, 83 N. C., 80; Moss v. Adams, 39 N. C., 42 (Anno. Ed.); Jenkins v. Beal, 70 N. C., 440; Ramsour v. Thomas, 32 N. C., 165; Wittkowski v. Reid, 84 N. C., 21; Long v. Miller, 93 N. C., 233; Lester v. Houston, 101 N. C., 605; Pearce v. Walker, 103 Ala., 250. The weight of authority is that the debtor must direct the application at or before the time of his payment, and that he cannot do so afterwards. 30 Oye., p. 1230, and cases in note. A direction by the debtor as to the application of payments may be shown by an express agreement with the creditor, by the declaration of the debtor, or it may be implied from circumstances showing the debtor’s intention at the time of payment. 30 Cyc., p. 1230. Again: The communication need not be expressed in writing, nor in any technical‘or formal words, nor the instruction delivered in any particular manner., It will be sufficient if the intention is manifest, and that it comes to the knowledge of the other party at the proper time. 2 Am. and Eng. Ene. of Law (2d Ed.), 448. “It is certainly too late for either party to claim a right to make an appropriation after the controversy has arisen, and a fortiori at the time of the trial.” U. S. v. Kirkpatrick, 9 Wheaton (U. S.), 721, 737. When a party, indebted to another on more than one account, makes a partial payment, the burden of proving that at or before the time of such payment he directed its application to a particular debt, as pleaded by him, and that this direction was made known to his creditor, is upon the debtor. Pearce v. Walker, supra. Coming to the special facts of this case, it is said in Parsons on Contracts (6 Ed.), sec. 630: “It is not necessary that the *165appropriation of the payment should be.made by an express declaration of the debtor; for if his intention and purpose can be clearly gathered from the circumstances of the case, the. creditor is bound by it. If the debtor, at the time of making a payment, makes also an entry in his own book, stating the payment to be on a particular account, and shows the entry to the creditor, this is sufficient appropriation by the debtor. But the right of election of appropriation is not conclusively exercised by entries in the books of either party until those entries are communicated to the other party.” But the cases nearest to the present in matters of fact are the following: Manning v. Westerne, 2 Vernon, Ch., 606 (23 Eng. Reprint, 996), where it appeared that defendant, being indebted to plaintiff on specialty and also by simple contract, or a running account, made several payments of sums in gross, and entered them in his own book as paid upon the specialty. It was be.tter for the debtor that the payment should go to the simple contract, which did not bear interest. The Lord Chancellor said: “Although the rule of law is that quicquid1 solvitur, solvitur secundum, modum solventis; yet that is to be understood, when at the time of payment he that pays the money declares upon what account he pays it; but if the payment is general, the application is in the party who receives the money, and the entries in the defendant’s books are not sufficient to make the application.” So in Frazer v. Bunn, 8 Carr, and P., 704 (34 E. C. L., 592), where a performer at a theater had arrears of salary due to him, and a payment was made to him without any direction at the time as to its application, it was held that an entry by the debtor in his books was not a sufficient direction unless brought to the creditor’s knowledge at the time; otherwise, if he had stated for what specific portion of the indebtedness it was intended, or had the entry been made known to the creditor, in which case it would have been evidence of such an appropriation as would be binding on the creditor. Lord Abinger said: “If Mr. Jones had expressly paid this for what was due to the plaintiff between February and June, the plaintiff would have been out of court; but so far from that, he states that he did not tell the plaintiff on what account he paid it, neither did he show him *166tbe book. If be bad. shown tbe plaintiff tbe book in wbicb be bad entered it as for a particular period, that would be evidence of appropriation; but tbat was not so, and I tbink tbat tbe plaintiff is at liberty to apply those payments to tbe other parts of what bad been due to him, and tbat, therefore, be may recover for tbe rest of bis claim, wbicb is within tbe dates stated in tbe particulars.” In a case with substantially tbe same facts, Terhune v. Colton, 12 N. J. Eq. (1 Beasley), 232, tbe Court, after stating tbe general rule as to tbe appropriation of payments, held tbat while tbe intention of tbe debtor to apply tbe payment to a particular debt or part of a debt may be shown by circumstances attending tbe act of payment, they must be known to the creditor, or tbe intention to do so must be signified to him in some way, and tbat an entry in bis own books of account by tbe debtor is insufficient to determine tbe application in bis favor, as be bad not, by showing tbe entry to tbe creditor, or otherwise, indicated bis intention as to bow tbe money should be applied. Tbe result of tbe cases ■ is tbat an undisclosed intention to apply tbe payment will not do. Tbe right of tbe creditor to apply tbe payment, when tbe debtor by bis silence has lost control of it, is stated more in detail by Justice Rodman in Jenkins v. Beal, supra: “Tbe rule is tbat where a debtor owes several debts to a creditor and makes payments, be may appropriate the payments to any of the debts be may please; but if be fails to do so at tbe time, tbe creditor may appropriate them as be pleases (subject to some exceptions not material here) at any time before be brings suit for tbe balance.” And in another case tbe Court held: “Although as between tbe immediate parties tbe creditor has a right to appropriate when the debtor has failed to do so, yet this right must be exercised within, at tbe furthest, a reasonable time after the payment, and by tbe performance of some act wbicb indicates an intention to appropriate. It is too late to attempt it at tbe trial.” Harker v. Conrad, 12 S. and R. (Pa.), 301; Reiss v. Scherner, 87 Ill. App., 84. Where neither party has exercised bis right of appropriation, and a dispute subsequently arises, tbe court will make tbe appli*167cation, as we have seen, and in doing so will, as a general rule, apply the payment to the debt which is unsecured or the least secured, upon the assumption that the debtor would desire to pay all his debts, and this disposition of the credit most nearly accomplishes that result, or, in other words, the law pursues this course, as it intends that all men shall be honest and fully perform their just obligations, and adopts this method as the one which an honest man would unselfishly choose, if left to himself to act in the premises. It simply does what the debtor should have done if prompted by just motives. Leeds v. Gifford, 41 N. Y. Eq., 464; Turner v. Hill, 56 N. J. Eq., 293; Terhune v. Cotton, 1 Beasley (12 N. J.), 238, in which cases the law upon this subject is clearly stated with peculiar reference to the same state of facts as are presented in this case. As the burden was upon McLamb & Co. to show that they had directed how the "payment should be applied at the time it was made, and as the mere entries, without the knowledge of A. D. Eieh, were, in law, insufficient to show such an appropriation of the money, the court should have instructed the jury that there was no evidence of an ’appropriation by the debtor, McLamb & Co., and to answer the issue “No,” as the law applied the payment to the unsecured debt or open account. For this error, the verdict and judgment thereon are set aside. It appears that while the issue was found against the defendant A. D. Rich, and judgment entered thereon that the .payment, $333, be applied to the mortgage debt, the Court has given á final judgment in favor of A. D. Rich, by dismissing the action as to him and taxing the plaintiff with the costs of said defendant. As our decision disposes of the principal question in the case and is given upon facts virtually admitted, or at least uncontroverted — that is, the book of McLamb & Co., and the oral testimony, which the parties agreed should be decisive of their rights, so far as the application of the payment is concerned — the defendant A. D. Rich would seem to be entitled to the final judgment. It will, therefore, be allowed to stand, and the action is dismissed as to him. The plaintiffs have called our attention to the anomaly presented in this case, of a verdict against Rich and judgment on *168tbe same, and tben a, final judgment in bis favor. Witb tbis before bim, be expresses a doubt as to Bicb’s right of appeal and some wonder at tbe course of tbe proceeding. We bave decided tbe question, as to tbe payment, to prevent any prejudice to the defendant A. D. Rich likely to grow out of the verdict and judgment thereon, which be should bave tbe right to review by appeal, and by bolding that our decision disposes of tbe merits of tbe case in so far as Rich is affected. We thus sustain tbe final judgment, as consistent witb our decision upon tbe payment, and thus reconcile what was done witb orderly procedure. Appellees will pay tbe costs of tbis Court. Action dismissed.
07-20-2022
[ "\"Walker, J. Tbis case was before us at a former term, under tbe title of Stone Co. v. McLamb & Co., A. D. Rich, and others, 153 N. C., 378. \"We tben beld tbat Mrs. M. M. Yann, a feme covert, was liable for tbe debts of tbe firm of McLamb & Go., under tbe statute, Eevisal, sec. 2118, and tbat tbe order appointing a receiver of tbe partnership effects was erroneous and should be vacated, and tbe property, which was under mortgagee to A. D. Eicb, should be restored to him. Tbe ease was remanded for tbe settlement of tbe other matters involved. Tbe parties thereupon agreed tbat an issue be submitted to a jury to ascertain if a paymnet of $333, made by McLamb & Go. to Eicb, should be applied to tbe debt' of tbe firm, amounting to $1,650, which is secured by bis mortgage, or to an unsecured debt of $300 beld by him against McLamb & Go.", "Tbe jury returned tbe following verdict: “Should tbe $333-credited to A. D. Eicb on page 453 of tbe ledger be appliéd to the mortgage debt of McLamb & Co. to A. D. Eicb? Answer: Yes.” Tbe court adjudged, upon tbe verdict, tbat tbe payment be so applied. Tbe defendant’s exception raises tbe question whether there was any evidence to show tbat be bad been instructed by tbe\" firm to so apply tbe payment, be having requested tbe court to charge substantially tbat there was none. We have examined tbe testimony carefully, and have failed to find any evidence to sustain tbe charge of tbe court or tbe verdict of tbe jury.", "Tbe most tbat can be made of it, when considered favorably to McLamb & Go. and tbe other interested.parties, is tbat tbe firm made some payments, at different times, aggregating $333 and entered them upon its books as credits on the mortgage notes, but did not direct Eicb bow to apply them, and Eicb did not know of tbe entries until some time after they were made, when be promptly objected to them. It was tben agreed tbat they should be applied to tbe unsecured debt. It is admitted tbat Eicb did not apply tbe payments to either of tbe debts. There is no rule in tbe law better settled than tbe one in regard to tbe application of payments: 1. A debtor owing two or more debts to tbe same creditor, and making a payment, may, at tbe time, direct its application *164to any one o£ the debts. The right is lost if the particular application is not directed- at the time of the payment. 2. If the debtor fails to make the application at the time of the payment, the right to apply it belongs to the creditor. 3. If neither debtor nor creditor makes it, the law will apply it to the unsecured debt or the one for which the creditor’s security is most precarious, or, as sometimes expressed, according to its own view of the intrinsic justice and equity of the case.", "Sprinkle v. Martin, 72 N. C., 92, and cases cited; Vick v. Smith, 83 N. C., 80; Moss v. Adams, 39 N. C., 42 (Anno. Ed. ); Jenkins v. Beal, 70 N. C., 440; Ramsour v. Thomas, 32 N. C., 165; Wittkowski v. Reid, 84 N. C., 21; Long v. Miller, 93 N. C., 233; Lester v. Houston, 101 N. C., 605; Pearce v. Walker, 103 Ala., 250. The weight of authority is that the debtor must direct the application at or before the time of his payment, and that he cannot do so afterwards. 30 Oye., p. 1230, and cases in note. A direction by the debtor as to the application of payments may be shown by an express agreement with the creditor, by the declaration of the debtor, or it may be implied from circumstances showing the debtor’s intention at the time of payment.", "30 Cyc., p. 1230. Again: The communication need not be expressed in writing, nor in any technical‘or formal words, nor the instruction delivered in any particular manner., It will be sufficient if the intention is manifest, and that it comes to the knowledge of the other party at the proper time. 2 Am. and Eng. Ene. of Law (2d Ed. ), 448. “It is certainly too late for either party to claim a right to make an appropriation after the controversy has arisen, and a fortiori at the time of the trial.” U. S. v. Kirkpatrick, 9 Wheaton (U. S.), 721, 737. When a party, indebted to another on more than one account, makes a partial payment, the burden of proving that at or before the time of such payment he directed its application to a particular debt, as pleaded by him, and that this direction was made known to his creditor, is upon the debtor.", "Pearce v. Walker, supra. Coming to the special facts of this case, it is said in Parsons on Contracts (6 Ed. ), sec. 630: “It is not necessary that the *165appropriation of the payment should be.made by an express declaration of the debtor; for if his intention and purpose can be clearly gathered from the circumstances of the case, the. creditor is bound by it. If the debtor, at the time of making a payment, makes also an entry in his own book, stating the payment to be on a particular account, and shows the entry to the creditor, this is sufficient appropriation by the debtor.", "But the right of election of appropriation is not conclusively exercised by entries in the books of either party until those entries are communicated to the other party.” But the cases nearest to the present in matters of fact are the following: Manning v. Westerne, 2 Vernon, Ch., 606 (23 Eng. Reprint, 996), where it appeared that defendant, being indebted to plaintiff on specialty and also by simple contract, or a running account, made several payments of sums in gross, and entered them in his own book as paid upon the specialty. It was be.tter for the debtor that the payment should go to the simple contract, which did not bear interest. The Lord Chancellor said: “Although the rule of law is that quicquid1 solvitur, solvitur secundum, modum solventis; yet that is to be understood, when at the time of payment he that pays the money declares upon what account he pays it; but if the payment is general, the application is in the party who receives the money, and the entries in the defendant’s books are not sufficient to make the application.” So in Frazer v. Bunn, 8 Carr, and P., 704 (34 E. C. L., 592), where a performer at a theater had arrears of salary due to him, and a payment was made to him without any direction at the time as to its application, it was held that an entry by the debtor in his books was not a sufficient direction unless brought to the creditor’s knowledge at the time; otherwise, if he had stated for what specific portion of the indebtedness it was intended, or had the entry been made known to the creditor, in which case it would have been evidence of such an appropriation as would be binding on the creditor.", "Lord Abinger said: “If Mr. Jones had expressly paid this for what was due to the plaintiff between February and June, the plaintiff would have been out of court; but so far from that, he states that he did not tell the plaintiff on what account he paid it, neither did he show him *166tbe book. If be bad. shown tbe plaintiff tbe book in wbicb be bad entered it as for a particular period, that would be evidence of appropriation; but tbat was not so, and I tbink tbat tbe plaintiff is at liberty to apply those payments to tbe other parts of what bad been due to him, and tbat, therefore, be may recover for tbe rest of bis claim, wbicb is within tbe dates stated in tbe particulars.” In a case with substantially tbe same facts, Terhune v. Colton, 12 N. J. Eq. (1 Beasley), 232, tbe Court, after stating tbe general rule as to tbe appropriation of payments, held tbat while tbe intention of tbe debtor to apply tbe payment to a particular debt or part of a debt may be shown by circumstances attending tbe act of payment, they must be known to the creditor, or tbe intention to do so must be signified to him in some way, and tbat an entry in bis own books of account by tbe debtor is insufficient to determine tbe application in bis favor, as be bad not, by showing tbe entry to tbe creditor, or otherwise, indicated bis intention as to bow tbe money should be applied.", "Tbe result of tbe cases ■ is tbat an undisclosed intention to apply tbe payment will not do. Tbe right of tbe creditor to apply tbe payment, when tbe debtor by bis silence has lost control of it, is stated more in detail by Justice Rodman in Jenkins v. Beal, supra: “Tbe rule is tbat where a debtor owes several debts to a creditor and makes payments, be may appropriate the payments to any of the debts be may please; but if be fails to do so at tbe time, tbe creditor may appropriate them as be pleases (subject to some exceptions not material here) at any time before be brings suit for tbe balance.” And in another case tbe Court held: “Although as between tbe immediate parties tbe creditor has a right to appropriate when the debtor has failed to do so, yet this right must be exercised within, at tbe furthest, a reasonable time after the payment, and by tbe performance of some act wbicb indicates an intention to appropriate.", "It is too late to attempt it at tbe trial.” Harker v. Conrad, 12 S. and R. (Pa.), 301; Reiss v. Scherner, 87 Ill. App., 84. Where neither party has exercised bis right of appropriation, and a dispute subsequently arises, tbe court will make tbe appli*167cation, as we have seen, and in doing so will, as a general rule, apply the payment to the debt which is unsecured or the least secured, upon the assumption that the debtor would desire to pay all his debts, and this disposition of the credit most nearly accomplishes that result, or, in other words, the law pursues this course, as it intends that all men shall be honest and fully perform their just obligations, and adopts this method as the one which an honest man would unselfishly choose, if left to himself to act in the premises.", "It simply does what the debtor should have done if prompted by just motives. Leeds v. Gifford, 41 N. Y. Eq., 464; Turner v. Hill, 56 N. J. Eq., 293; Terhune v. Cotton, 1 Beasley (12 N. J. ), 238, in which cases the law upon this subject is clearly stated with peculiar reference to the same state of facts as are presented in this case. As the burden was upon McLamb & Co. to show that they had directed how the \"payment should be applied at the time it was made, and as the mere entries, without the knowledge of A. D. Eieh, were, in law, insufficient to show such an appropriation of the money, the court should have instructed the jury that there was no evidence of an ’appropriation by the debtor, McLamb & Co., and to answer the issue “No,” as the law applied the payment to the unsecured debt or open account. For this error, the verdict and judgment thereon are set aside. It appears that while the issue was found against the defendant A. D. Rich, and judgment entered thereon that the .payment, $333, be applied to the mortgage debt, the Court has given á final judgment in favor of A. D. Rich, by dismissing the action as to him and taxing the plaintiff with the costs of said defendant.", "As our decision disposes of the principal question in the case and is given upon facts virtually admitted, or at least uncontroverted — that is, the book of McLamb & Co., and the oral testimony, which the parties agreed should be decisive of their rights, so far as the application of the payment is concerned — the defendant A. D. Rich would seem to be entitled to the final judgment. It will, therefore, be allowed to stand, and the action is dismissed as to him. The plaintiffs have called our attention to the anomaly presented in this case, of a verdict against Rich and judgment on *168tbe same, and tben a, final judgment in bis favor.", "Witb tbis before bim, be expresses a doubt as to Bicb’s right of appeal and some wonder at tbe course of tbe proceeding. We bave decided tbe question, as to tbe payment, to prevent any prejudice to the defendant A. D. Rich likely to grow out of the verdict and judgment thereon, which be should bave tbe right to review by appeal, and by bolding that our decision disposes of tbe merits of tbe case in so far as Rich is affected. We thus sustain tbe final judgment, as consistent witb our decision upon tbe payment, and thus reconcile what was done witb orderly procedure.", "Appellees will pay tbe costs of tbis Court. Action dismissed." ]
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Legal & Government
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Exhibit 10.18 IMAX CORPORATION EMPLOYMENT AGREEMENT This Employment Agreement dated and effective as of March 1, 2006 (the “Agreement”), is made between IMAX CORPORATION a corporation organized under the laws of Canada (hereinafter referred to the “Company”; the Company and its subsidiaries and affiliates collectively referred to as “Imax”)     OF THE FIRST PART And   GREG FOSTER of the City of Los Angeles in the State of California (hereinafter referred to as the “Employee”)     OF THE SECOND PART WHEREAS, the Company wishes to enter into this Agreement to engage the Employee to provide services to the Company, and the Employee wishes to be so engaged, pursuant to the terms and conditions hereinafter set forth; AND WHEREAS the Employee is engaged to provide services to the Company as Chairman and President, Filmed Entertainment, NOW, THEREFORE, in consideration of the covenants and agreements hereinafter set forth, the parties hereto agree as follows:   1. EMPLOYMENT AND DUTIES 1.1 Employment. The Company hereby agrees to employ the Employee, and the Employee hereby agrees to serve, as Chairman and President, Filmed Entertainment of the Company, upon the terms and conditions herein contained. The Employee agrees to serve the Company faithfully and to the best of his ability under the direction of the co-CEO’s of the Company. The Executive’s responsibilities shall include film distribution, in addition to film development, film production, film marketing and sponsorship. The Employee shall be a spokesperson for film announcements that are made by the Company. There shall be no more senior executive in the Filmed Entertainment department and the Executive shall report only to the co-CEOs of the Company on all of his activities. No executive shall be engage between the Employee the co-CEOs. 1.2 Exclusive Services. Except as may otherwise be approved in advance by the co-CEO’s, the Employee shall devote his full working time throughout the Employment Term (as defined in Section 1.3) to the services required of him hereunder. The Employee’s primary responsibilities shall be the development, production and acquisition of films, film operations (e.g. administrative and business affairs) and such other duties commensurate with his position with the Company as are reasonably designated by the Co-CEO’s of the Company. The Employee’s main duties are expected to include, but shall not be limited to: (i) running and administering IMAX Filmed Entertainment in a manner consistent with the direction of the Co-CEO’s (ii) helping to make available to IMAX certain Hollywood films for re-purposing into IMAX’s format; and (iii) responsibility for film development and film production with such responsibilities discharged in a fashion -------------------------------------------------------------------------------- (A) consistent with annual departmental and per film budgets, (B) in which all films receive a G or PG or PG-13rating by the MPAA, (C) in which all films have running times of 60 minutes or less, and made specifically for IMAX and (D) in which all films are consistent with the IMAX Brand which stands for high quality entertainment. The Employee shall be entitled to a discretionary fund (the “Fund”) of US$ 100,000 for use in the Employee’s discretion for reasonable administrative, marketing or development matters. All expenditures from the Fund will be reported in advance to the co-CEOs and the CFO and all expenditures will be appropriate and necessary for the optimal functioning of the Filmed Entertainment division as the Employee determines and will be consistent with the Company’s internal control and audit functions. The Employee shall render his services exclusively to the Company and its subsidiaries and affiliates during the Employment Term, and shall use his best efforts, judgment and energy to improve and advance the business and interests of the Company in a manner consistent with the duties of his position. 1.3 Term of Employment. The Employee’s employment commenced on March 19, 2001 (the “Commencement Date”) and shall terminate on the earlier of (i) June 30, 2008, or (ii) termination of the Employee’s employment pursuant to this Agreement. The period commencing as of the Commencement Date and ending on June 30, 2008 or such later date to which the term of the Employee’s employment under this Agreement shall have been extended is hereinafter referred to as the “Employment Term”. 1.4 Place of Employment. During the Employment Term the Employee will, subject to work-related travel but no permanent or semi-permanent relocation from Los Angeles without mutual agreement, principally work at the Company’s offices in Los Angeles and, as requested or as required by circumstance, at the offices of the Company in Mississauga, Canada and New York. The Employee shall spend the balance of his working time in such location or locations as are necessary and appropriate for the performance of the duties of the Employee, subject to the direction of the Co-CEO’s of the Company. 1.5 Reimbursement of Expenses. The Company shall reimburse the Employee for reasonable travel and other business expenses incurred by him in the fulfilment of his duties hereunder in accordance with Company practices consistently applied.   2. COMPENSATION 2.1 Base Salary. Effective March 1, 2006, the Employee shall be paid an annual base salary (“Base Salary”) of no less than US$ 700,000 subject to annual review. The Employee shall be paid no less frequently than monthly in accordance with the Company’s payroll practices. 2.2 Bonus. In addition to the Base Salary, effective commencing the 2006 fiscal year, the Employee shall continue to be entitled to participate in the management bonus plan of the Company which applies to senior executives of the Company. The Employee will be eligible, subject to the terms of the plan, to receive a bonus (the “Management Bonus”) of up to 100% of the Base Salary for the applicable year, which is normally paid in March of each year. Notwithstanding the foregoing, the Employee shall receive a minimum bonus (the “Minimum Bonus”) of 50% of his Base Salary for the 2006 and 2007 fiscal years and a pro-rated amount for fiscal 2008. 2.3.1 Incentive Compensation. As soon as practicable after the signing of this Agreement the Employee shall be granted non-qualified options (the “Options”) to purchase 225,000 shares of common stock of IMAX Corporation (the “Common Shares”), subject to approval by the Company’s Board of Directors and vested according to the following schedule: 112,500 Options shall vest on the first anniversary date of the grant date and 112,500 Options shall vest on the second anniversary date of the grant date. The Options granted hereunder shall be subject to the terms and conditions of the Option Plan and the stock option agreement (the “Option Agreement”) to be entered into between the Company and the Employee as of the Commencement Date pursuant to, and in accordance with, the terms of the Option Plan. In addition, if there is a Change of Control of the Company (as defined below) on or before March 10, 2008, the Employee shall be paid an incentive bonus equal to the difference between the price of the Common Shares upon such Change of Control and the price of the   -2- -------------------------------------------------------------------------------- Common Shares on March 10, 2006, multiplied by 75,000. Such incentive bonus shall be paid: (i) in a lump sum in the event Employee is terminated Without Cause following such Change of Control, or (ii) in three equal instalments on the third, fourth and fifth anniversaries of the grant date of the Options. 2.3.2 Notwithstanding anything provided herein (or in the Option Plan) to the contrary, all of the Employee’s Options, together with any additional options granted to the Employee under the Option Plan, including those which are not yet exercisable, shall become immediately exercisable in the event of both (a) a change of control of the Company (a “Change of Control”) (i.e. any person, or group of persons acting in concert, other than Bradley J. Wechsler and Richard L. Gelfond, acquiring greater than fifty percent (50%) of the outstanding common shares of Imax Corporation, whether by direct or indirect acquisition or as a result of a merger, reorganization or sale of substantially all of the assets of Imax Corporation) and (b) the occurrence of one or more of the following: (i) Bradley J. Wechsler and Richard L. Gelfond cease to be Co-Chief Executive Officers of the Company; (ii) the Employee’s termination from the Company Without Cause; (iii) the diminution of the Employee’s title and/or responsibilities; (iv) the Employee is asked to relocate more than twenty-five (25) miles from his existing Los Angeles offices; or (v) any other material breach of this Agreement. The Options shall in all other respects be governed pursuant to, and in accordance with, the term of the Option Plan. 2.3.3 Life Insurance. As soon as practicable, and for the duration of the Employment Term, the Company shall take out a term life insurance policy in the amount of $5,000,000 for the benefit of a beneficiary designated by the Executive.   3. EMPLOYEE BENEFITS 3.1 General. The Employee shall, during the Employment Term, receive Employee benefits including vacation time, medical benefits, disability and life insurance, all at least consistent with those established by the Company for its other key Employees at a level commensurate with that of the Employee. Without limitation, however, the Employee shall be entitled to the following benefits:     (i) four (4) weeks’ paid vacation in each year of the Employment Term;     (ii) car allowance of $850 per month; and     (iii) standard medical benefits available to US employees of the Company.   4. TERMINATION OF EMPLOYMENT Definitions. As used in this Article 4, the following terms have the following meanings: (a) “Termination Payment” means each of the following amounts to the extent that such amounts are due to be paid to and including the date upon which the Employee’s employment is terminated (i) Base Salary, (ii) unreimbursed business expenses as outlined in Section 1.5, (iii) any amounts to be paid pursuant to the terms of any benefit plans of the Company in which the Employee participates or pursuant to any policies of the Company applicable to the Employee; (iv) a pro-rated portion of the Minimum Bonus and (v) any outstanding vacation pay calculated up to and including such date. (b) “Without Cause” means termination of the Employee’s employment by the Company other than for Cause (as defined in Section 4.3), death or disability (as set forth in Section 5).   4.1 Termination Without Cause 4.1.1 General. Subject to the provisions of Sections 4.1.2, 4.1.3 and 6, if, after the Commencement Date and prior to the expiration of the Employment Term, the Employee’s employment is terminated by the Company Without Cause, the Company shall pay the Termination Payment then due to be paid within 30 days of the date of termination and shall continue to pay the Employee the Base Salary and Minimum Bonus for the remainder of   -3- -------------------------------------------------------------------------------- the Employment Term (such period being referred to hereinafter as the “Severance Period”), and in no event for less than six (6) months, either at such intervals as the same would have been paid had the Employee remained in the active service of the Company, or, at the option of the Company, by immediate payment to the Employee of the remaining Base Salary and Minimum Bonus which would be payable during the Severance Period. Upon such termination (if after the Commencement Date and prior to the expiration of the Employment Term), the Employee shall also be entitled to continue to receive his employment benefits referred to in Section 3.1 at the Company’s expense (to the extent paid for by the Company as at the date of termination) and subject to the consent of the applicable insurers. The Employee agrees that the Company may deduct from any payment of Base Salary and Minimum Bonus to be made during the Severance Period the benefit plan contributions which are to be made by the Employee during the Severance Period in accordance with the terms of all benefit plans for the minimum period prescribed by law. The Employee shall have no further right to receive any other compensation or benefits after such termination of employment except as are necessary under the terms of the employee benefit plans or programs of the Company or as required by applicable law. Payment of Base Salary and Minimum Bonus and the continuation of the aforementioned Employee benefits during the Severance Period as outlined above shall be deemed to include all termination and severance pay to which the Employee is entitled pursuant to applicable statute law and common law. The date of termination of employment Without Cause shall be the date specified in a written notice of termination to the Employee and does not include the Severance Period. 4.1.2 Fair and Reasonable The parties confirm that notice and pay in lieu of notice provisions contained in Subsection 4.1.1 are fair and reasonable and the parties agree that upon any termination of this Agreement Without Cause, the Employee shall have no action, cause of action, claim or demand against the Company or Imax or any other person as a consequence of such termination other than to enforce Section 4.1.1. 4.1.3 Conditions Applicable to the Severance Period. If, during the Severance Period, the Employee breaches his obligations under Article 7 of this Agreement, the Company may, upon written notice to the Employee, terminate the Severance Period and cease to make any further payments or provide further benefits as described in Section 4.1.1. 4.2 Termination for Cause; Resignation. At any time prior to the expiration of the Employment Term the Employee’s employment may be terminated by the Company immediately upon notice for Cause. If, prior to the expiration of the Employment Term, the Employee’s employment is terminated by the Company for Cause, or the Employee resigns from his employment hereunder, the Employee shall only be paid, within 15 days of the date of such termination or resignation, the Termination Payment then due to be paid. The Employee shall have no further right to receive any other compensation or benefits after such termination or resignation of employment, except as determined in accordance with the terms of the Employee benefit plans or programs of the Company. The date of termination for Cause shall be the date specified in a written notice of termination to the Employee, which notice shall set forth the basis for the termination. The date of resignation shall be thirty (30) days following the date or receipt of notice of resignation from the Employee to the Company. 4.3 Cause. Termination for “Cause” shall mean termination of the Employee’s employment because of:     (i) the cessation of the Employee’s ability to work legally in the United States other than for reasons not within the Employee’s reasonable control;     (ii) any act or omission that constitutes a material breach by the Employee of any of his obligations under this Agreement; provided, however, that if such act or omission is related to the Employee’s performance of his duties within the scope of his employment, then he shall have thirty (30) days after written notice is provided to Employee of such material breach, to cure such breach;     (iii) the continued failure or refusal of the Employee to perform the duties reasonably required of him as Chairman and President, Filmed Entertainment which is not cured within thirty (30) days after written notice is provided to Employee of such failure or refusal;   -4- --------------------------------------------------------------------------------   (iv) any material violation by the Employee of any United States federal, state or local law or regulation applicable to the business of the Company or Imax, which violation is injurious to the financial condition or business reputation of the Company or Imax, or the Employee’s conviction of a felony or commission of an indictable offense for which he is not pardoned, or any perpetration by the Employee of a common law fraud;     (v) any other action by the Employee which is materially injurious to the financial condition or business reputation of, or is otherwise materially injurious to, the Company or Imax, or which results in a violation by the Company or Imax of any United States federal, state or local law or regulation applicable to the business of the Company or Imax, which violation is injurious to the financial condition or business reputation of the Company or Imax.   5. DEATH OR DISABILITY In the event of termination of employment by reason of death or Permanent Disability (as hereinafter defined), the Employee (or his estate, as applicable) shall be paid the Termination Payment then due to be paid within 30 days of the date of such termination of employment. Both the employment of the Employee and the entitlement of the Employee to be paid amounts under Section 4.1.1, in respect of the Severance Period, shall terminate immediately and without notice upon his death or upon his Permanent Disability (as hereinafter defined). Any benefits thereafter shall be determined in accordance with the benefit plans maintained by the Company, and the Company shall have no further obligation hereunder. For purposes of this Agreement, “Permanent Disability” means a physical or mental disability or infirmity of the Employee that prevents the normal performance of substantially all his duties under this Agreement as an Employee of the Company, which disability or infirmity shall exist for any continuous period of 180 days. The parties agree that such Permanent Disability cannot be accommodated short of undue hardship.   6. MITIGATION Subject to Section 7.2, the Employee shall not be required to mitigate the amount of any payment provided for in Section 4.1.1 (other than the Termination Payment) by seeking other employment or remunerative activity reasonably comparable to his duties hereunder and if and when the Employee does obtain other employment or remunerative activity (subject to Section 7.2), then any Base Pay and Minimum Bonus payable under Section 4.1.1 upon the date he begins such other employment or remunerative activity will be reduced by fifty percent (50%) for the remainder of the Severance Period. The Employee shall be required as a condition of any paymen tunder Section 4.1.1 (other than the Termination Payment) promptly to disclose to the Company any such mitigation compensation.   7. NON-SOLICITATION, CONFIDENTIALITY, NON-COMPETITION 7.1 Non-solicitation. For so long as the Employee is employed by the Company or receiving payment hereunder and continuing for two years thereafter, notwithstanding whether the Employee’s employment is terminated with or Without Cause or whether the Employee resigns, the Employee shall not, without the prior written consent of the Company and Imax, directly or indirectly, for the Employee’s own benefit or the benefit of any other person, whether as a sole proprietor, member of a partnership, stockholder or investor (other than a stockholder or investor owning not more than a 5% interest), officer or director of a corporation, or as a trustee, employee, associate, consultant, principal or agent of any person, partnership, corporation or other business organization or entity other than the Company or Imax: (x) solicit or endeavour to entice away from Imax, any person or entity who is, or, during the then most recent 12-month period, was employed by, or had served as an agent or consultant of, the Company and/or Imax; or (y) solicit, endeavour to entice away or gain the custom of, canvass or interfere in the Company’s and/or Imax’s relationship with any person or entity who is, or was within the then most recent 12-month period, a supplier, customer or client (or reasonably anticipated to become a supplier, customer or client) of the Company and/or Imax and with whom the Employee had dealings during his   -5- -------------------------------------------------------------------------------- employment with the Company. The Employee confirms that all restrictions in this Section are reasonable and valid and waives all defences to the strict enforcement thereof. 7.2 Non-Competition For so long as the Employee is employed by the Company or receiving payment hereunder and continuing for a period of two years after the date of the termination of the employment of the Employee with the Company, notwithstanding whether the Employee’s employment is terminated with or without Cause or whether the Employee resigns, the Employee shall not, without the prior written consent of the Company and Imax, directly or indirectly anywhere within Canada, the United States, Europe or Asia, as a sole proprietor, member of a partnership, stockholder or investor (other than a stockholder or investor owning not more than a 5% interest), officer or director of a corporation, or as a trustee, employee, associate, consultant, principal or agent of any person, partnership, corporation or other business organization or entity other than Imax: (x) solicit, endeavour to entice away or gain the custom of, canvass or interfere in the Company’s and/or Imax’s relationship with any person or entity who is, or was within the then most recent 12-month period, a supplier, customer or client (or, at the time of termination of Employee’s employment, reasonably anticipated to become a supplier, customer or client) of the Company and/or Imax and with whom the Employee had dealings during his employment with the Company; or (y) render any service to or in any way be affiliated with a Competitor of Imax. A “Competitor” of Imax shall be defined for these purposes as any person or entity which is either: (i) primarily engaged or reasonably anticipated to become primarily engaged in the Business, or (ii) engaged in, or reasonably anticipated to become engaged in the Business, though not primarily,—but then only if the Employee would be directly and materially involved in the Business. “Business” shall be defined for these purposes as designing or supplying large format theatres, designing or distributing projection or sound systems for large format theatres, designing or supplying motion simulation attractions, producing, developing, making, formatting, re-formatting or distributing films for large format theatres or motion simulation attractions or designing, supplying, marketing, manufacturing or otherwise offering for sale or purchase image capture, post capture image processing or projection display systems, including but not limited to, in connection with the “electronic cinema” projector or “digital cinema” projector business or films for such systems. The Employee confirms that all restrictions in this Section are reasonable and valid and waives all defences to the strict enforcement thereof. 7.3 Confidentiality. The Employee covenants and agrees with Imax that he will not at any time during employment hereunder or thereafter, except in performance of his obligations to the Company hereunder or with the prior written consent of the senior operation officer of the Company, directly or indirectly, disclose or use any secret or confidential information that he may learn or has learned by reason of his association with IMAX. The term “confidential information” includes information not previously disclosed to the public or to the trade by IMAX’s management, or otherwise in the public domain, with respect to IMAX’s products, facilities, applications and methods, trade secrets and other intellectual property, systems, procedures, manuals, confidential reports, product price lists, customer lists, technical information, financial information, business plans, prospects or opportunities, but shall exclude any information which (i) is or becomes available to the public or is generally known in the industry or industries in which IMAX operates other than as a result of disclosure by the Employee in violation of his agreements under this Section 7.3, or (ii) the Employee is required to disclose under any applicable laws, regulations or directives of any government agency, tribunal or authority having jurisdiction in the matter or under subpoena or other process of law. The Employee confirms that all restrictions in this Section are reasonable and valid and waives all defences to the strict enforcement thereof. 7.4 Grant of Rights. The Employee hereby: (i) grants to the Company all copyrights, patent rights and other rights in all work furnished or created by the Employee pursuant to this Agreement; (ii) agrees to sign all documents which may be required to confirm the Company’s absolute ownership of such work; and (iii) waives the moral rights associated with such work. Without limiting the generality of the foregoing, all rights of whatsoever nature and kind (nor or hereafter known) in any and all film projects developed or contributed by the Employee pursuant to this Agreement shall be, from the inception of the creation thereof, the exclusive property of the Company and for the purposes of the United States Copyright Act shall be deemed to constitute “works made for hire.”   -6- -------------------------------------------------------------------------------- 7.5 Exclusive Property. The Employee confirms that all confidential information is and shall remain the exclusive property of Imax. All business records, papers and documents, other than the Employee’s personal files and a copy of his Rolodex, regardless of the form of their records kept or made by Employee relating to the business of Imax shall be and remain the property of Imax, and shall be promptly returned by the Employee to Imax upon any termination of employment. 7.6 Injunctive Relief. Without intending to limit the remedies available to Imax, the Employee acknowledges that a material breach of any of the covenants contained in Article 7 will result in material and irreparable injury to Imax for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event of such a breach or threat thereof, Imax shall be entitled to seek a temporary restraining order and/or a preliminary, interim or permanent injunction restraining the Employee from engaging in activities prohibited by Article 7 or such other relief as may be required specifically to enforce any of the covenants in Article 7. If for any reason it is held that the restrictions under Article 7 are not reasonable or that consideration therefor is inadequate, such restrictions shall be interpreted or modified to include as much of the duration and scope identified in Article 7 as will render such restrictions valid and enforceable. 7.7 Representation. The Employee represents and warrants that he is not subject to any non-competition covenant or any other agreement with any party which would in any manner restrict or limit his ability to render the services required of him hereunder.   8. MISCELLANEOUS   8.1 Notices. All notices or communications hereunder shall be in writing, addressed as follows:   To the Company:    Imax Corporation 2525 Speakman Drive Mississauga, Ontario L5K 1B1    Telecopier No:        (905) 403-6468    Attention:                 Legal Department To the Employee:    Mr. Greg Foster 228 North Layton Drive Los Angeles, California 00049 With a copy to:    Mr. Tom Hansen 450 North Roxbury Eighth Floor Beverly Hills, California 90210 All such notices shall be conclusively deemed to be received and shall be effective, (i) if sent by hand delivery, upon receipt or (ii) if sent by registered or certified mail, on the fifth day after the day on which such notice is mailed. 8.2 Severability. Each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. The parties agree that Sections 4, 5, 6 and 7 shall survive the termination of this Agreement.   -7- -------------------------------------------------------------------------------- 8.3 Assignment. This Agreement shall be binding upon and inure to the benefit of the heirs and representatives of the Employee and the assigns and successors of the Company and Imax, if any are permitted by law and provided that the Company and Imax and its assignee shall each remain liable to the Employee in the event of any assignment, but neither this Agreement nor any rights hereunder shall be assignable or otherwise subject to hypothecation by the Employee. The Employee expressly agrees that each of Imax and the Company my assign any of its rights, interest or obligations hereunder to any affiliate of either of them without the consent of the Employee; provided, however, that no such assignment shall relieve the assignor of any of its obligations hereunder. 8.4 Entire Agreement: Amendment. This Agreement represents the entire agreement of the parties and shall supersede any and all previous contracts, arrangements or understandings between the Company and the Employee. This Agreement may only be amended at any time by mutual written agreement of the parties hereto. 8.5 Withholding. The payment of any amount pursuant to this Agreement shall be subject to any applicable withholding and payroll taxes, and such other deductions as may be required under applicable law or the Company’s Employee benefit plans, if any. 8.6 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein without regard to principles of conflicts of laws.   -8- -------------------------------------------------------------------------------- IN WITNESS WHEREOF, the Company and the Employee have duly executed and delivered this Agreement as of the 9th day of March, 2006.   IMAX CORPORATION: By:   /s/ Mary Sullivan   Name:   Mary Sullivan   Title:   Senior Vice President,   Human Resources & Administration By:   /s/ G. Mary Ruby   Name:   G. Mary Ruby   Title:   Senior Vice President,     Legal Affairs   SIGNED, SEALED AND DELIVERED in the presence of:     EMPLOYEE: /s/ Jill Ferguson     /s/ Greg Foster Witness     Greg Foster   -9-
[ "Exhibit 10.18 IMAX CORPORATION EMPLOYMENT AGREEMENT This Employment Agreement dated and effective as of March 1, 2006 (the “Agreement”), is made between IMAX CORPORATION a corporation organized under the laws of Canada (hereinafter referred to the “Company”; the Company and its subsidiaries and affiliates collectively referred to as “Imax”) OF THE FIRST PART And GREG FOSTER of the City of Los Angeles in the State of California (hereinafter referred to as the “Employee”) OF THE SECOND PART WHEREAS, the Company wishes to enter into this Agreement to engage the Employee to provide services to the Company, and the Employee wishes to be so engaged, pursuant to the terms and conditions hereinafter set forth; AND WHEREAS the Employee is engaged to provide services to the Company as Chairman and President, Filmed Entertainment, NOW, THEREFORE, in consideration of the covenants and agreements hereinafter set forth, the parties hereto agree as follows: 1. EMPLOYMENT AND DUTIES 1.1 Employment. The Company hereby agrees to employ the Employee, and the Employee hereby agrees to serve, as Chairman and President, Filmed Entertainment of the Company, upon the terms and conditions herein contained. The Employee agrees to serve the Company faithfully and to the best of his ability under the direction of the co-CEO’s of the Company. The Executive’s responsibilities shall include film distribution, in addition to film development, film production, film marketing and sponsorship.", "The Employee shall be a spokesperson for film announcements that are made by the Company. There shall be no more senior executive in the Filmed Entertainment department and the Executive shall report only to the co-CEOs of the Company on all of his activities. No executive shall be engage between the Employee the co-CEOs. 1.2 Exclusive Services. Except as may otherwise be approved in advance by the co-CEO’s, the Employee shall devote his full working time throughout the Employment Term (as defined in Section 1.3) to the services required of him hereunder. The Employee’s primary responsibilities shall be the development, production and acquisition of films, film operations (e.g. administrative and business affairs) and such other duties commensurate with his position with the Company as are reasonably designated by the Co-CEO’s of the Company. The Employee’s main duties are expected to include, but shall not be limited to: (i) running and administering IMAX Filmed Entertainment in a manner consistent with the direction of the Co-CEO’s (ii) helping to make available to IMAX certain Hollywood films for re-purposing into IMAX’s format; and (iii) responsibility for film development and film production with such responsibilities discharged in a fashion -------------------------------------------------------------------------------- (A) consistent with annual departmental and per film budgets, (B) in which all films receive a G or PG or PG-13rating by the MPAA, (C) in which all films have running times of 60 minutes or less, and made specifically for IMAX and (D) in which all films are consistent with the IMAX Brand which stands for high quality entertainment.", "The Employee shall be entitled to a discretionary fund (the “Fund”) of US$ 100,000 for use in the Employee’s discretion for reasonable administrative, marketing or development matters. All expenditures from the Fund will be reported in advance to the co-CEOs and the CFO and all expenditures will be appropriate and necessary for the optimal functioning of the Filmed Entertainment division as the Employee determines and will be consistent with the Company’s internal control and audit functions. The Employee shall render his services exclusively to the Company and its subsidiaries and affiliates during the Employment Term, and shall use his best efforts, judgment and energy to improve and advance the business and interests of the Company in a manner consistent with the duties of his position.", "1.3 Term of Employment. The Employee’s employment commenced on March 19, 2001 (the “Commencement Date”) and shall terminate on the earlier of (i) June 30, 2008, or (ii) termination of the Employee’s employment pursuant to this Agreement. The period commencing as of the Commencement Date and ending on June 30, 2008 or such later date to which the term of the Employee’s employment under this Agreement shall have been extended is hereinafter referred to as the “Employment Term”. 1.4 Place of Employment. During the Employment Term the Employee will, subject to work-related travel but no permanent or semi-permanent relocation from Los Angeles without mutual agreement, principally work at the Company’s offices in Los Angeles and, as requested or as required by circumstance, at the offices of the Company in Mississauga, Canada and New York.", "The Employee shall spend the balance of his working time in such location or locations as are necessary and appropriate for the performance of the duties of the Employee, subject to the direction of the Co-CEO’s of the Company. 1.5 Reimbursement of Expenses. The Company shall reimburse the Employee for reasonable travel and other business expenses incurred by him in the fulfilment of his duties hereunder in accordance with Company practices consistently applied. 2. COMPENSATION 2.1 Base Salary. Effective March 1, 2006, the Employee shall be paid an annual base salary (“Base Salary”) of no less than US$ 700,000 subject to annual review.", "The Employee shall be paid no less frequently than monthly in accordance with the Company’s payroll practices. 2.2 Bonus. In addition to the Base Salary, effective commencing the 2006 fiscal year, the Employee shall continue to be entitled to participate in the management bonus plan of the Company which applies to senior executives of the Company. The Employee will be eligible, subject to the terms of the plan, to receive a bonus (the “Management Bonus”) of up to 100% of the Base Salary for the applicable year, which is normally paid in March of each year. Notwithstanding the foregoing, the Employee shall receive a minimum bonus (the “Minimum Bonus”) of 50% of his Base Salary for the 2006 and 2007 fiscal years and a pro-rated amount for fiscal 2008. 2.3.1 Incentive Compensation.", "As soon as practicable after the signing of this Agreement the Employee shall be granted non-qualified options (the “Options”) to purchase 225,000 shares of common stock of IMAX Corporation (the “Common Shares”), subject to approval by the Company’s Board of Directors and vested according to the following schedule: 112,500 Options shall vest on the first anniversary date of the grant date and 112,500 Options shall vest on the second anniversary date of the grant date. The Options granted hereunder shall be subject to the terms and conditions of the Option Plan and the stock option agreement (the “Option Agreement”) to be entered into between the Company and the Employee as of the Commencement Date pursuant to, and in accordance with, the terms of the Option Plan. In addition, if there is a Change of Control of the Company (as defined below) on or before March 10, 2008, the Employee shall be paid an incentive bonus equal to the difference between the price of the Common Shares upon such Change of Control and the price of the -2- -------------------------------------------------------------------------------- Common Shares on March 10, 2006, multiplied by 75,000.", "Such incentive bonus shall be paid: (i) in a lump sum in the event Employee is terminated Without Cause following such Change of Control, or (ii) in three equal instalments on the third, fourth and fifth anniversaries of the grant date of the Options. 2.3.2 Notwithstanding anything provided herein (or in the Option Plan) to the contrary, all of the Employee’s Options, together with any additional options granted to the Employee under the Option Plan, including those which are not yet exercisable, shall become immediately exercisable in the event of both (a) a change of control of the Company (a “Change of Control”) (i.e. any person, or group of persons acting in concert, other than Bradley J. Wechsler and Richard L. Gelfond, acquiring greater than fifty percent (50%) of the outstanding common shares of Imax Corporation, whether by direct or indirect acquisition or as a result of a merger, reorganization or sale of substantially all of the assets of Imax Corporation) and (b) the occurrence of one or more of the following: (i) Bradley J. Wechsler and Richard L. Gelfond cease to be Co-Chief Executive Officers of the Company; (ii) the Employee’s termination from the Company Without Cause; (iii) the diminution of the Employee’s title and/or responsibilities; (iv) the Employee is asked to relocate more than twenty-five (25) miles from his existing Los Angeles offices; or (v) any other material breach of this Agreement.", "The Options shall in all other respects be governed pursuant to, and in accordance with, the term of the Option Plan. 2.3.3 Life Insurance. As soon as practicable, and for the duration of the Employment Term, the Company shall take out a term life insurance policy in the amount of $5,000,000 for the benefit of a beneficiary designated by the Executive. 3. EMPLOYEE BENEFITS 3.1 General. The Employee shall, during the Employment Term, receive Employee benefits including vacation time, medical benefits, disability and life insurance, all at least consistent with those established by the Company for its other key Employees at a level commensurate with that of the Employee.", "Without limitation, however, the Employee shall be entitled to the following benefits: (i) four (4) weeks’ paid vacation in each year of the Employment Term; (ii) car allowance of $850 per month; and (iii) standard medical benefits available to US employees of the Company. 4. TERMINATION OF EMPLOYMENT Definitions. As used in this Article 4, the following terms have the following meanings: (a) “Termination Payment” means each of the following amounts to the extent that such amounts are due to be paid to and including the date upon which the Employee’s employment is terminated (i) Base Salary, (ii) unreimbursed business expenses as outlined in Section 1.5, (iii) any amounts to be paid pursuant to the terms of any benefit plans of the Company in which the Employee participates or pursuant to any policies of the Company applicable to the Employee; (iv) a pro-rated portion of the Minimum Bonus and (v) any outstanding vacation pay calculated up to and including such date. (b) “Without Cause” means termination of the Employee’s employment by the Company other than for Cause (as defined in Section 4.3), death or disability (as set forth in Section 5).", "4.1 Termination Without Cause 4.1.1 General. Subject to the provisions of Sections 4.1.2, 4.1.3 and 6, if, after the Commencement Date and prior to the expiration of the Employment Term, the Employee’s employment is terminated by the Company Without Cause, the Company shall pay the Termination Payment then due to be paid within 30 days of the date of termination and shall continue to pay the Employee the Base Salary and Minimum Bonus for the remainder of -3- -------------------------------------------------------------------------------- the Employment Term (such period being referred to hereinafter as the “Severance Period”), and in no event for less than six (6) months, either at such intervals as the same would have been paid had the Employee remained in the active service of the Company, or, at the option of the Company, by immediate payment to the Employee of the remaining Base Salary and Minimum Bonus which would be payable during the Severance Period.", "Upon such termination (if after the Commencement Date and prior to the expiration of the Employment Term), the Employee shall also be entitled to continue to receive his employment benefits referred to in Section 3.1 at the Company’s expense (to the extent paid for by the Company as at the date of termination) and subject to the consent of the applicable insurers. The Employee agrees that the Company may deduct from any payment of Base Salary and Minimum Bonus to be made during the Severance Period the benefit plan contributions which are to be made by the Employee during the Severance Period in accordance with the terms of all benefit plans for the minimum period prescribed by law.", "The Employee shall have no further right to receive any other compensation or benefits after such termination of employment except as are necessary under the terms of the employee benefit plans or programs of the Company or as required by applicable law. Payment of Base Salary and Minimum Bonus and the continuation of the aforementioned Employee benefits during the Severance Period as outlined above shall be deemed to include all termination and severance pay to which the Employee is entitled pursuant to applicable statute law and common law.", "The date of termination of employment Without Cause shall be the date specified in a written notice of termination to the Employee and does not include the Severance Period. 4.1.2 Fair and Reasonable The parties confirm that notice and pay in lieu of notice provisions contained in Subsection 4.1.1 are fair and reasonable and the parties agree that upon any termination of this Agreement Without Cause, the Employee shall have no action, cause of action, claim or demand against the Company or Imax or any other person as a consequence of such termination other than to enforce Section 4.1.1.", "4.1.3 Conditions Applicable to the Severance Period. If, during the Severance Period, the Employee breaches his obligations under Article 7 of this Agreement, the Company may, upon written notice to the Employee, terminate the Severance Period and cease to make any further payments or provide further benefits as described in Section 4.1.1. 4.2 Termination for Cause; Resignation. At any time prior to the expiration of the Employment Term the Employee’s employment may be terminated by the Company immediately upon notice for Cause. If, prior to the expiration of the Employment Term, the Employee’s employment is terminated by the Company for Cause, or the Employee resigns from his employment hereunder, the Employee shall only be paid, within 15 days of the date of such termination or resignation, the Termination Payment then due to be paid. The Employee shall have no further right to receive any other compensation or benefits after such termination or resignation of employment, except as determined in accordance with the terms of the Employee benefit plans or programs of the Company.", "The date of termination for Cause shall be the date specified in a written notice of termination to the Employee, which notice shall set forth the basis for the termination. The date of resignation shall be thirty (30) days following the date or receipt of notice of resignation from the Employee to the Company. 4.3 Cause. Termination for “Cause” shall mean termination of the Employee’s employment because of: (i) the cessation of the Employee’s ability to work legally in the United States other than for reasons not within the Employee’s reasonable control; (ii) any act or omission that constitutes a material breach by the Employee of any of his obligations under this Agreement; provided, however, that if such act or omission is related to the Employee’s performance of his duties within the scope of his employment, then he shall have thirty (30) days after written notice is provided to Employee of such material breach, to cure such breach; (iii) the continued failure or refusal of the Employee to perform the duties reasonably required of him as Chairman and President, Filmed Entertainment which is not cured within thirty (30) days after written notice is provided to Employee of such failure or refusal; -4- -------------------------------------------------------------------------------- (iv) any material violation by the Employee of any United States federal, state or local law or regulation applicable to the business of the Company or Imax, which violation is injurious to the financial condition or business reputation of the Company or Imax, or the Employee’s conviction of a felony or commission of an indictable offense for which he is not pardoned, or any perpetration by the Employee of a common law fraud; (v) any other action by the Employee which is materially injurious to the financial condition or business reputation of, or is otherwise materially injurious to, the Company or Imax, or which results in a violation by the Company or Imax of any United States federal, state or local law or regulation applicable to the business of the Company or Imax, which violation is injurious to the financial condition or business reputation of the Company or Imax.", "5. DEATH OR DISABILITY In the event of termination of employment by reason of death or Permanent Disability (as hereinafter defined), the Employee (or his estate, as applicable) shall be paid the Termination Payment then due to be paid within 30 days of the date of such termination of employment. Both the employment of the Employee and the entitlement of the Employee to be paid amounts under Section 4.1.1, in respect of the Severance Period, shall terminate immediately and without notice upon his death or upon his Permanent Disability (as hereinafter defined). Any benefits thereafter shall be determined in accordance with the benefit plans maintained by the Company, and the Company shall have no further obligation hereunder. For purposes of this Agreement, “Permanent Disability” means a physical or mental disability or infirmity of the Employee that prevents the normal performance of substantially all his duties under this Agreement as an Employee of the Company, which disability or infirmity shall exist for any continuous period of 180 days.", "The parties agree that such Permanent Disability cannot be accommodated short of undue hardship. 6. MITIGATION Subject to Section 7.2, the Employee shall not be required to mitigate the amount of any payment provided for in Section 4.1.1 (other than the Termination Payment) by seeking other employment or remunerative activity reasonably comparable to his duties hereunder and if and when the Employee does obtain other employment or remunerative activity (subject to Section 7.2), then any Base Pay and Minimum Bonus payable under Section 4.1.1 upon the date he begins such other employment or remunerative activity will be reduced by fifty percent (50%) for the remainder of the Severance Period. The Employee shall be required as a condition of any paymen tunder Section 4.1.1 (other than the Termination Payment) promptly to disclose to the Company any such mitigation compensation.", "7. NON-SOLICITATION, CONFIDENTIALITY, NON-COMPETITION 7.1 Non-solicitation. For so long as the Employee is employed by the Company or receiving payment hereunder and continuing for two years thereafter, notwithstanding whether the Employee’s employment is terminated with or Without Cause or whether the Employee resigns, the Employee shall not, without the prior written consent of the Company and Imax, directly or indirectly, for the Employee’s own benefit or the benefit of any other person, whether as a sole proprietor, member of a partnership, stockholder or investor (other than a stockholder or investor owning not more than a 5% interest), officer or director of a corporation, or as a trustee, employee, associate, consultant, principal or agent of any person, partnership, corporation or other business organization or entity other than the Company or Imax: (x) solicit or endeavour to entice away from Imax, any person or entity who is, or, during the then most recent 12-month period, was employed by, or had served as an agent or consultant of, the Company and/or Imax; or (y) solicit, endeavour to entice away or gain the custom of, canvass or interfere in the Company’s and/or Imax’s relationship with any person or entity who is, or was within the then most recent 12-month period, a supplier, customer or client (or reasonably anticipated to become a supplier, customer or client) of the Company and/or Imax and with whom the Employee had dealings during his -5- -------------------------------------------------------------------------------- employment with the Company.", "The Employee confirms that all restrictions in this Section are reasonable and valid and waives all defences to the strict enforcement thereof. 7.2 Non-Competition For so long as the Employee is employed by the Company or receiving payment hereunder and continuing for a period of two years after the date of the termination of the employment of the Employee with the Company, notwithstanding whether the Employee’s employment is terminated with or without Cause or whether the Employee resigns, the Employee shall not, without the prior written consent of the Company and Imax, directly or indirectly anywhere within Canada, the United States, Europe or Asia, as a sole proprietor, member of a partnership, stockholder or investor (other than a stockholder or investor owning not more than a 5% interest), officer or director of a corporation, or as a trustee, employee, associate, consultant, principal or agent of any person, partnership, corporation or other business organization or entity other than Imax: (x) solicit, endeavour to entice away or gain the custom of, canvass or interfere in the Company’s and/or Imax’s relationship with any person or entity who is, or was within the then most recent 12-month period, a supplier, customer or client (or, at the time of termination of Employee’s employment, reasonably anticipated to become a supplier, customer or client) of the Company and/or Imax and with whom the Employee had dealings during his employment with the Company; or (y) render any service to or in any way be affiliated with a Competitor of Imax.", "A “Competitor” of Imax shall be defined for these purposes as any person or entity which is either: (i) primarily engaged or reasonably anticipated to become primarily engaged in the Business, or (ii) engaged in, or reasonably anticipated to become engaged in the Business, though not primarily,—but then only if the Employee would be directly and materially involved in the Business. “Business” shall be defined for these purposes as designing or supplying large format theatres, designing or distributing projection or sound systems for large format theatres, designing or supplying motion simulation attractions, producing, developing, making, formatting, re-formatting or distributing films for large format theatres or motion simulation attractions or designing, supplying, marketing, manufacturing or otherwise offering for sale or purchase image capture, post capture image processing or projection display systems, including but not limited to, in connection with the “electronic cinema” projector or “digital cinema” projector business or films for such systems.", "The Employee confirms that all restrictions in this Section are reasonable and valid and waives all defences to the strict enforcement thereof. 7.3 Confidentiality. The Employee covenants and agrees with Imax that he will not at any time during employment hereunder or thereafter, except in performance of his obligations to the Company hereunder or with the prior written consent of the senior operation officer of the Company, directly or indirectly, disclose or use any secret or confidential information that he may learn or has learned by reason of his association with IMAX. The term “confidential information” includes information not previously disclosed to the public or to the trade by IMAX’s management, or otherwise in the public domain, with respect to IMAX’s products, facilities, applications and methods, trade secrets and other intellectual property, systems, procedures, manuals, confidential reports, product price lists, customer lists, technical information, financial information, business plans, prospects or opportunities, but shall exclude any information which (i) is or becomes available to the public or is generally known in the industry or industries in which IMAX operates other than as a result of disclosure by the Employee in violation of his agreements under this Section 7.3, or (ii) the Employee is required to disclose under any applicable laws, regulations or directives of any government agency, tribunal or authority having jurisdiction in the matter or under subpoena or other process of law.", "The Employee confirms that all restrictions in this Section are reasonable and valid and waives all defences to the strict enforcement thereof. 7.4 Grant of Rights. The Employee hereby: (i) grants to the Company all copyrights, patent rights and other rights in all work furnished or created by the Employee pursuant to this Agreement; (ii) agrees to sign all documents which may be required to confirm the Company’s absolute ownership of such work; and (iii) waives the moral rights associated with such work. Without limiting the generality of the foregoing, all rights of whatsoever nature and kind (nor or hereafter known) in any and all film projects developed or contributed by the Employee pursuant to this Agreement shall be, from the inception of the creation thereof, the exclusive property of the Company and for the purposes of the United States Copyright Act shall be deemed to constitute “works made for hire.” -6- -------------------------------------------------------------------------------- 7.5 Exclusive Property.", "The Employee confirms that all confidential information is and shall remain the exclusive property of Imax. All business records, papers and documents, other than the Employee’s personal files and a copy of his Rolodex, regardless of the form of their records kept or made by Employee relating to the business of Imax shall be and remain the property of Imax, and shall be promptly returned by the Employee to Imax upon any termination of employment. 7.6 Injunctive Relief. Without intending to limit the remedies available to Imax, the Employee acknowledges that a material breach of any of the covenants contained in Article 7 will result in material and irreparable injury to Imax for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event of such a breach or threat thereof, Imax shall be entitled to seek a temporary restraining order and/or a preliminary, interim or permanent injunction restraining the Employee from engaging in activities prohibited by Article 7 or such other relief as may be required specifically to enforce any of the covenants in Article 7.", "If for any reason it is held that the restrictions under Article 7 are not reasonable or that consideration therefor is inadequate, such restrictions shall be interpreted or modified to include as much of the duration and scope identified in Article 7 as will render such restrictions valid and enforceable. 7.7 Representation. The Employee represents and warrants that he is not subject to any non-competition covenant or any other agreement with any party which would in any manner restrict or limit his ability to render the services required of him hereunder. 8. MISCELLANEOUS 8.1 Notices. All notices or communications hereunder shall be in writing, addressed as follows: To the Company: Imax Corporation 2525 Speakman Drive Mississauga, Ontario L5K 1B1 Telecopier No: (905) 403-6468 Attention: Legal Department To the Employee: Mr. Greg Foster 228 North Layton Drive Los Angeles, California 00049 With a copy to: Mr. Tom Hansen 450 North Roxbury Eighth Floor Beverly Hills, California 90210 All such notices shall be conclusively deemed to be received and shall be effective, (i) if sent by hand delivery, upon receipt or (ii) if sent by registered or certified mail, on the fifth day after the day on which such notice is mailed.", "8.2 Severability. Each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. The parties agree that Sections 4, 5, 6 and 7 shall survive the termination of this Agreement. -7- -------------------------------------------------------------------------------- 8.3 Assignment. This Agreement shall be binding upon and inure to the benefit of the heirs and representatives of the Employee and the assigns and successors of the Company and Imax, if any are permitted by law and provided that the Company and Imax and its assignee shall each remain liable to the Employee in the event of any assignment, but neither this Agreement nor any rights hereunder shall be assignable or otherwise subject to hypothecation by the Employee. The Employee expressly agrees that each of Imax and the Company my assign any of its rights, interest or obligations hereunder to any affiliate of either of them without the consent of the Employee; provided, however, that no such assignment shall relieve the assignor of any of its obligations hereunder. 8.4 Entire Agreement: Amendment.", "This Agreement represents the entire agreement of the parties and shall supersede any and all previous contracts, arrangements or understandings between the Company and the Employee. This Agreement may only be amended at any time by mutual written agreement of the parties hereto. 8.5 Withholding. The payment of any amount pursuant to this Agreement shall be subject to any applicable withholding and payroll taxes, and such other deductions as may be required under applicable law or the Company’s Employee benefit plans, if any. 8.6 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein without regard to principles of conflicts of laws. -8- -------------------------------------------------------------------------------- IN WITNESS WHEREOF, the Company and the Employee have duly executed and delivered this Agreement as of the 9th day of March, 2006. IMAX CORPORATION: By: /s/ Mary Sullivan Name: Mary Sullivan Title: Senior Vice President, Human Resources & Administration By: /s/ G. Mary Ruby Name: G. Mary Ruby Title: Senior Vice President, Legal Affairs SIGNED, SEALED AND DELIVERED in the presence of: EMPLOYEE: /s/ Jill Ferguson /s/ Greg Foster Witness Greg Foster -9-" ]
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