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THE PARTIES

• Production Company. Most independent producers do not have much money; therefore the most important thing a low-budget producer can offer a professional actor is a great role, in a great script, in a great movie that will receive distribution. Other ways that you can entice an actor to be in your film without breaking your bank include:

• Offering him a higher salary, but making most of it deferred compensation.

• Offering him an "associate producer" credit.

• Offering those perks and amenities you may be able to acquire through your contacts. For instance, if your family owns a car rental business, offer him the free rental car during the duration of the shoot.

Make sure to get the proper spelling of the performer's professional and legal names, his or her contact information, as well the both the performer's Social Security number and his or her company's federal tax ID number, if he or she has a loan-out company. (See Loan-Out Companies, p. 31.) Get contact information for the performer's attorney or agent, if the actor has one.

• Actor. Because independent producers are often untried in the film industry, actors get very wary of committing to a role if they see any signs that the film is not fully financed. In addition, because their image is so important to actors, they will:

• Seek to limit the ways in which their likeness can be merchandised without their consent.

• Seek approval over publicity shots and nonphotographic likenesses, such as poster art.

ENGAGEMENT

• Services. These should be described as "all services as are customarily rendered by actors on a feature-length theatrical motion picture, including appearing in any vmaking-of' or vbehind-the-scenes' documentaries, plus additional services as specified in any rider attached hereto." If this is a nonunion shoot requiring everybody, even actors, to perform more than just the customary duties of their job, these additional services should be spelled out in a detailed rider attached to the contract. For actors on a nonunion shoot, this might include transporting themselves and other actors to the set, selecting and purchasing their own wardrobe, and so forth.

• If this is a union agreement, this paragraph should specify under which union contract the services are being rendered to the production company (e.g., SAG's Ultra-Low Budget Agreement).

• Location. The location of all principal photography is usually specified. This is important, especially for SAG agreements, which have different rules regarding consecutive employment, travel, and other accommodations, based upon the particular geographic zone in which the shoot occurs.

• Unique Services. The production company may want to say that "the performer's services are of a unique nature, the loss of which cannot be fully compensated by monetary damages." If the performer breaches the contract with the production company, then starts work for a third party, the producer can use the "unique services" language and try to get an injunction preventing the performer from working for the third party. Unfortunately, an injunction can't compel a performer or other employee to work with your production company. It can only prevent them from working with another party during the term of your Performer's Services Agreement with that actor.

AVAILABILITY DATES

• This section details all of the dates for which an actor must be available to the production company; this includes pre-production, production, post-production, and publicity and promotional activities.

• Define the Start Date—this is the first day for which the actor will be getting paid.

• Pre-Production. This is the number of days or dates for which the actor must be available for wardrobe fitting, rehearsal, makeup, etc. These dates are typically nonconsecutive, and often nonexclusive to the production company. If the pre-production dates are to be nonexclusive, the production company should require that they have first priority on the actor's time for those dates.

• Production. These are the dates for which the actor must be available to the production for shooting. It is typical to list all consecutive days and weeks of employment and to make an actor's services exclusive to the production company on those days/weeks on which the actor is performing in the movie.

• Post-Production. Number of days or dates for which the actor must be available for looping, reshoots, etc.

• Reshoot Tip. Oftentimes dates for post-production activities have not yet been scheduled when the actor's agreement is being negotiated and signed. In those instances, it is common practice to put the number of days, rather than date, for which an actor must be available for these activities. Keep in mind, however, that when a specific date is not negotiated, performers usually condition their availability to the production company upon whether they have prior contractual commitments that keep them from performing for the production company on a particular date. If this is the case, contract language should specify that it is the actor's obligation to provide services at the earliest possible date thereafter.

• Publicity. Number of days or dates for which the actor must be available for photo sessions, interviews, and other publicity or promotional activities.

• Free Days. Days beyond the production dates for which the performer will be available for reshoots and the like. Compensation should be negotiated for these days as well.

COMPENSATION

• Fixed compensation. This is the rate the actor will be paid regardless of whether the movie makes money. It is typically coupled with the pay or play provision, which requires the production company to pay the actor even if the actor's services are not used. If you are a SAG signatory company working with SAG actors the particular SAG contract under which your production is being shot will dictate the minimum amount you can pay your performers.

• Contingent compensation.

• Deferred compensation. SAG agreements impact whether or not an actor can defer his or her salary.

• Profit participation. An actor might get a portion of the producer's adjusted gross. The net proceeds, or net profits, are usually defined in terms of the production company's definition. In other words, the actor will receive his or her percentage only from the production company's share, rather than the aggregate of all the monies made by the film. For longer contracts, the net profit definition is usually included in the contracts of all contingent compensation participants.

• Reuse/Residuals. These are fees payable to a performer when the motion picture is televised, broadcast, etc. Union contracts will set the minimum rate for these as well. On a nonunion production, companies often have the actors waive these fees.

• Favored Nations. Most principal cast members will insist upon favored-nations treatment for their compensation and any definition affecting compensation. (See Appendix C: Favored Nations, p. 293.)

• Merchandising. Although the right to manufacture merchandise from an actor's likeness is typically granted to the production company, the performer will want to receive a portion of the proceeds from the merchandise. One formula is to grant the performer 5% of whatever the producer receives from the license of merchandising rights.This fee should be reduced if other actors share the same merchandise property. For example, for a t-shirt deal that features a picture of several cast members, the percentage each actor receives should be reduced according to the number of actors featured on the shirt, so that they all share in the 5%.

• Agent Fee. Actors and agents will often try to negotiate to have the production company, rather than the actor, pay for the agent's 10% commission. If this is agreed to, producers need to understand that this effectively means a 10% increase in compensation to be paid to the actor, as well as a 10% increase in compensation for any other actors who have a favored-nations provision regarding compensation perks.

• Agents usually require that their actor clients have their salaries paid directly to the agency. The agency then takes its commission and passes the remainder on to the actor. If this is the arrangement for your performer the Performer's Services Agreement must contain a clause giving the production company the right to pay the salary to the agency as opposed to the actor.

PERQUISITES

Perks are fringe benefits not counted as part of the salary.

• Per Diem. This is a daily allowance which is supposed to compensate the actor for meals, incidental transportation, and other expenses the performer incurs as a result of being away from home. Be wary of agents here—especially when an actor has agreed to work below his quote, an agent may attempt to recapture money for the actor by increasing the actor's per diem.

CREDIT

• It should come as no surprise that this is one of the more hotly negotiated provisions of the contract. In addition to the position that the credit occupies with respect to the other actors' credits, other negotiable credit terms are whether the credit must appear in all paid advertising, posters, publicity, and so forth.

• It is common for lead actors to negotiate a favored-nations clause with respect to the size and placement of their credit.

• As with all credit provisions, the producer should contract for as much discretion as possible in creating the look of the credits, and any other matter with respect to the credits for which the performer has not been given approval rights.

• As is true for all credit provisions, the production company should insert a clause in the contract that says that "inadvertent failure to accord the contracting party credit shall not be actionable."This clause should also require the injured party to waive the right to injunctive relief, leaving an obligation on the production company's part to correct the problem on all future prints as the only remedy for the production company's credit mistakes.The clause should further state that a mistake of this nature is not a breach of the Performer's Services Agreement.

RIGHTS GRANTED; RESULTS AND PROCEEDS

This section lays out the specific rights granted ("Assigned") to the producer.This should always be structured as a work-made-for-hire provision. That way, initial ownership by the production company in the performer's work on the film is automatic. (See Appendix A:Work Made for Hire, p. 263.)

• Make sure to define the film as including behind-the-scenes footage.

• The producer needs the broadest grant of rights possible:

• The copyright in the performer's work on the film

• A waiver of moral rights and droit moral (See Appendix A: Moral Rights, p. 282.)

• A grant of the right of publicity to exploit the actor's likeness for merchandising and other tie-ups. (See Appendix A: Right of Publicity, p. 271.)

• The right to use doubles for the performer and to dub the performer's voice.

• The production company needs the perpetual right to be able to use the actor's name and likeness in connection with the publicity and promotion of the film.

APPROVAL

Principal performers often require certain approval rights over elements of the film's promotion, merchandise, and publicity, such as poster images or publicity stills, used to promote the film.

• The production company should never give absolute approval rights to the performer; instead the performer should be obligated to approve no less than 50% of all of the images submitted to him for approval (and perhaps 75% if the performer is in the picture with somebody else).

• This should be coupled with a time limit within which the performer must approve or reject the stills/likenesses. If the performer does not reject the likenesses within such time period, the clause should state that the production company may assume that the performer's approval has been granted.

RIGHT TO WITHHOLD

The production company needs the right to withhold monies for tax purposes, as well as to pay a performer's agents and managers directly.

NO OBLIGATION TO PRODUCE

Although the production company has the right to produce the film, it needs to be sure that it is not obligated to produce the film.

SUSPENSION AND TERMINATION RIGHTS

It's no secret that sometimes actors can go off the deep end during a production. This clause allows the production company to terminate its relationship with the performer, subject only to payment of monies earned to date, if certain triggering events occur.

Reasons to suspend/terminate often include:

• A performer who is either unable or unwilling to show up for production.

• A drastic change in that performer's appearance.

• Unprofessional or illegal behavior.

This paragraph typically gives the producer the right to suspend or terminate the performer's contract, at the discretion of the producer. If the contract is terminated, it means that neither the producer nor the performer have further obligations with respect to the other. If the contract is suspended, the performer is put on hold until the performer corrects the problem. During the suspension period, the performer may not work for other people.

REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION

The performer typically promises the production company that:

• He or she is free to enter into this contract with the production company, and that he or she has no prior commitments or legal obligations that would prevent him or her from performing his or her duties under the contract.

• Any material that he or she contributes is original with him or her (e.g., lines of dialogue that he or she improvises in the film are original with him or her).

• He or she has no health conditions that would undermine his or her ability to perform his or her services. The performer should also grant the production company the right to take out insurance on the performer, naming the production company as a beneficiary.

• The performer should indemnify the production company for breach of these warranties.

REMEDIES

The performer should waive any claim to injunctive relief arising out of the production company's breach of the contract. Additionally, in all events the performer should be prohibited from rescinding the contract and recapturing any of the Granted Rights.

PUBLICITY

• The producer needs to be able to exploit the performer's name, likeness, biography, and so forth, in connection with the marketing of the film.

• Conversely, the producer will want to prohibit the performer from releasing any publicity about the motion picture without the producer's approval.

ACCOUNTING

If the performer is a net-profit participant or will receive any form of deferred or contingent compensation, this paragraph will delineate how often the performer may expect to receive accounting statements. This is coupled with the right to audit the production company, usually no more frequently than once a year.

ASSIGNMENT

The production company needs the right to assign this contract and all the rights under it.At the same time, the production company needs to prohibit the performer from being able to assign the contract.

INDUCEMENT

If the actor is providing services on behalf of a loan-out company, the performer services agreement must have an inducement at the end.

Like all services contracts, the actor/production company's relationship is also controlled by federal and state employment and labor laws.

When working with any children for any length of time, child labor laws must be complied with. (See Appendix D: Child Labor Laws, p. 313;Working with Minors, p. 119.)

SAG Compliance

Delegate to a member of the producer's team the task of making sure the production company is complying with all of SAG's rules and regulations.This "SAG compliance producer" should pay special attention to rules regarding:

• Working conditions for the performers

• Work Schedule and Overtime

• Transportation

• Exhibition restrictions

• Any other item required under the contract with SAG

NUDITY: If you are a SAG signatory you must let actors know when the role requires nudity. Additionally, you must let them know before they audition for the role. All performers who appear in nude scenes must agree to it in writing, usually as part of the Actor's Services Agreement.The right to use a double in place of the actor must also be agreed to in writing beforehand. When shooting nude scenes, it is critical that the set be closed to all nonessential personnel.

• PRODUCER'S TIP: When shooting a nude scene, the key is to make the performers feel as comfortable as possible. Make sure the temperature is warm enough for the actors to feel comfortable in the buff. This may mean space heaters and a sweaty crew, but the actor's performances will be the better for it. See that blankets and robes are always handy. Talk to the crew beforehand to make sure that there are absolutely no off-color or bawdy remarks. Not only should the crew be on its best behavior, it should be as silent as possible.The more they blend into the background, keeping chatter to a minimum, the less vulnerable and exposed the actors will feel. And above all, the only people who should be on the set are those necessary for taking the shot.There should be nobody standing around who does not have a job to do—absolutely no gawkers and no still photographs without the prior written permission of the actors. Unless you want to lose an actor's trust and have S^G come down on you hard, avoid turning your set into a peep show.

Business Issues PERKS

Perks are fringe benefits not counted as part of salary. What you gain in keeping down an actor's compensation you may lose when it comes to negotiating the perquisites. It is not uncommon for an actor to agree to defer a good portion of his or her salary while steadfastly insisting upon first-class airfare and five-star hotel accommodations.

Frequently requested perks include the following:

• First-class airfare

• Five-star hotel accommodations

• Flying in the actor's family and providing them with accommodations

• An on-set nanny for the actor's child

• Invitations, airfare, and accommodations to film festivals

• The right to keep wardrobe

• Video copies of the finished film

Although you may be tempted to give these to your lead actor, keep in mind that you may be obligated to provide the same perks to any other actor with a favored-nations clause regarding perks. (See Appendix C: Favored Nations, p. 293.)

OPTION ON FUTURE SERVICES

If the production company is making a television series or a movie with sequel potential, it may want to obtain an option on the performer's future services. (See The Screenplay Option/Purchase, p. 74.) Performers, on the other hand, may not want an option on their future acting services; they want the greatest freedom possible, especially the right to renegotiate their quotes with the production company.

NET PROFITS

If the actor is a profit participant, the Performer's Services Agreement should contain a rider defining how the production company computes its net profits.

THE MORALS CLAUSE

In the days of the Hollywood studio system, performer's contracts often included a paragraph called the "morals clause." This clause attempted to regulate the actors' behavior on and off set. It prohibited the performer from:

• Engaging in acts of moral turpitude.

• Committing illegal acts.

• Performing acts that would bring them into disrespect, disrepute, scorn, contempt, or ridicule with the public.

Failure to abide by the morals clause in their contracts would cost performers their jobs, and during the anti-Communist scare of the early 1950s, their careers. Because Hollywood is now largely driven by stars, rather than studios, the morals clause tends to be the first thing an actor's representative will strike from a contract.Today, a filmmaker's best bet is to include in the suspension and termination rights clause the right for the production company to suspend the actor's services on a particular film for specific acts, such as breaking the law or being intoxicated.

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