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Disney Says Katzenberg Knew He Would Not Get Bonus

May 17, 1996

BURBANK, Calif. (AP) _ The legal feud between the Walt Disney Co. and Jeffrey Katzenberg grew more bitter Friday, when the studio claimed the former studio chief is not entitled to a $250 million bonus.

Katzenberg, one of the founders of the fledgling DreamWorks studios, sued Disney last month for breach of contract. The executive said Disney owed him an ``incentive bonus″ worth 2 percent of the studio’s profits from movies or TV shows produced or acquired for distribution during his tenure.

In an answer to the lawsuit filed in Superior Court, Disney’s attorneys said Katzenberg knew he would not get the bonus when he renegotiated his contract in 1988. Under that deal, Disney said, the bonus would be canceled if Katzenberg left the company before the deal expired in 1996.

Katzenberg left Disney in 1994.

Disney’s legal filing says that when Katzenberg told Disney in 1993 he would leave the next year, he was ``expressly reminded″ that a bonus based on the performance of future films and TV shows would be revoked. After he left the company, Disney released ``Pocahontas″ and earned substantial income from movies such as ``The Lion King,″ made under Katzenberg’s tenure.

When Katzenberg left the next year, Disney said, he sacrificed ``any bonus based on the future performance of Disney motion pictures and television programs produced during his employment.″

He gave up that money, Disney said, ``in favor of what Katzenberg contemplated would be even more profitable and prestigious entrepreneurial opportunities″ _ i.e., DreamWorks.

Disney said that when Katzenberg left Disney he was paid the full amount of any bonuses he was owed and that the company even accelerated the payment of deferred bonuses.

``Katzenberg is simply not entitled to the enormous sums of money he now demands,″ the filing says. It asked that his lawsuit be dismissed and that Disney’s legal costs be paid by Katzenberg.

Bert Fields, the attorney representing Katzenberg in the lawsuit, termed the filing ``vintage Disney″ and dismissed its argument as not credible.

``That claim is nonsense and I don’t believe any judge or jury will buy it,″ Fields said.

Under Katzenberg’s leadership, Disney produced several blockbuster animated musicals, including ``Aladdin″ and ``Beauty and the Beast.″ Live-action films were far less successful.

In his original lawsuit, Katzenberg said he helped boost studio revenue from $245 million when he arrived in 1984 to $4.8 billion in 1994.

Katzenberg is joined by the record executive David Geffen and director Steven Spielberg in the DreamWorks enterprise.

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