The Exhibitor (Nov 1938-May 1939)

SPECIAL FEATURES 2>e intent and effect of depriving the complaining exhibitor of sufficient features to operate his theatre or theatres, shall be subject to arbitration. In considering such complaint, the arbitrators shall, among other things, make due allowance for a sufficient number of features reasonably to protect the responding exhibitor against nondelivery of features and failure to make features available and give due regard to the type and operating policy of the theatre or theatres operated by the responding exhibitor. In no event shall an exhibitor be deemed to be “over-bought” if his minimum commitments do not exceed by more than fifteen (15%) per cent his maximum requirements. If the arbitrators shall find that over-buying exists as herein provided, they shall specifically find by what number, if any, the responding exhibitor shall have over-bought and the responding exhibitor shall then be permitted a period of 14 days from the date of the arbitrators’ decision to obtain the release of such excess number, if any, from his license agreement (s); if the exhibitor does not obtain such release, in whole or in part, then the arbitrators shall make an award apportioning among the distributors, with which responding exhibitor has entered into license agreements, the number of features to be released by them, respectively (being in the aggregate the number of features "over-bought” less such number, if any, the release of which the responding exhibitor shall have obtained) to the complaining exhibitor10, provided that no such award shall be made unless adequate assurance shall be given to each distributor that it will receive from the complaining exhibitor, in respect of its features to be so released, no less in license fees and no less favorable other terms than were provided for in its license agreement with the responding exhibitor. (4) License Fees, Other Terms and Conditions. Neither license fees, nor (except in the respects and to the extent specifically provided in this code) other terms or conditions upon which motion pictures may be licensed by a distributor to an exhibitor, shall be the subject of arbitration for any purpose under any Article hereof, each of the parties hereto recognizing that such matters are to be determined only by mutual agreement between distributor and exhibitor. XV. Effective Date The provisions of this code shall apply to all contracts made after January 1, 1939, for 19391940 product and the product of subsequent years so long as this agreement shall be in effect. “The rights of exclusion, if any, under Article I, Section ( 1 ) hereof, of a responding exhibitor found by the arbitrators to have over-bought, shall be determined and computed on the basis of his license agreement (s) as modified in consequence of such finding. XVI. Term The term of this code shall be for two exhibition seasons11 commencing with the season 193 91940, and thereafter indefinitely. Any signatory hereto may withdraw herefrom at the end of the second exhibition season or at the end of any subsequent exhibition season by giving written notice of such withdrawal to the other signatories at least six months prior to the end of such exhibition season. (Provision should be made giving the signatories the right of withdrawal in the event of substantial withdrawals by other signatories and in the event of legislation or judicial decisions declaring any part of the code invalid or illegal, requiring a material change in the method under which distributors or exhibitors do business or making the code impracticable because of added burdens. While this has been discussed with representatives of exhibitors no definitive language has yet been worked out but will be supplied shortly.) (Provision should also be made enabling other distributors and exhibitors to become parties to the code.) Arbitration Machinery 1. Location of Board. An Arbitration Board shall be established in each exchange territory. 2. Method of selection of arbitrators. There shall be created in each exchange territory a general panel and a neutral panel. The general panel shall consist of about 20 members of whom the distributors will appoint 10 and the exhibitor association functioning in that particular exchange territory the other 10. Where there are 2 or more exhibitor associations, each association may appoint a panel of 10 of their own. The members of the general panel may be affiliated with exhibitor or distributor interests. Each party to a dispute may designate as his arbitrator any member of this general panel or any one else he desires outside of the panel. The neutral panel shall consist of 10 members to be mutually agreed upon by the exhibitor and distributor interests in each exchange territory. These members shall not be members of the general panel and shall not be associated with exhibitor or distributor interests but shall have an understanding and knowledge of the motion picture industry. The two arbitrators chosen by the above method shall designate the third arbitrator from the neutral panel and if they are unable to agree the third arbitrator shall be drawn from the neutral panel by lot. uAn exhibition season for the purpose of this Article shall be deemed to commence September 1, and end August 31, next following. No compensation shall be paid to any arbitrator from the general panel, but compensation wherever necessary may be paid to the neutral arbitrator. 3. The cost of arbitration machinery. Upon the filing of a claim the complaining party shall pay a filing fee of $5. These fees are to cover the cost of: (a) compensation to the neutral, wherever necessary, (b) expenses incurred upon the initative of the arbitration board, (c) administration. In disputes involving principles, affecting the entire industry the arbitration board may assess the cost incurred upon the initiative of the arbitration board upon all distributors and exhibitors associations. The arbitration board shall have no power to award counsel fees. Except as here provided each party shall stand its own costs and expenses. The board shall be empowered in its discretion to engage a secretary for its own sessions. 4. Qualification of arbitrators. No person shall be nominated or elected to act as an arbitrator in any dispute in which he has a personal or financial interest, directly or indirectly. The parties, may, however, waive their right in any objections which may exist on the above grounds. 5. Vacancies. Vacancies occurring by reason of illness, resignation, disqualification, disability or death shall be filled in the same manner as the original appointment. 6. Hearings. Hearings shall take place in the exchange territory in the city in which is located the exchange out of which the complaining exhibitor is served. Parties may represent themselves or be represented by another. Each party shall have the right to question the witnesses of the other party or parties. Witnesses shall testify under oath. The arbitrator may require any party to produce whatever records and documents they may deem necessary. Stenographic records of testimony will not be taken unless either or both parties so request and provide funds for the same in which case the stenographer shall be selected by the board, or if designated by either or both parties, approved by the board. 7. Waiving oral hearings. If the parties to a controversy agree in writing to waive oral hearings they shall submit to the arbitrators a statement of claim under oath including statements from books of account or other evidence together with written argument. Immediately upon receipt of the statement of facts and written arguments a copy thereof shall be submitted to the respective parties and each shall have the right to reply thereto. But if either party should fail to make such reply in days from receipt thereof he shall be deemed to have waived the right to reply. The files shall then be submitted to the arbitrators. 8. Preferential cases. Certain disputes require prompt and immediate decisions while others do not. There shall therefore be established a list of disputes to which the arbitrators must give preference in time of hearing. 9. Miscellaneous. All questions affecting procedure such as the time when the submissions are to be made; the time within which the arbitrators must make their awards; the forms to be used; the notices to be sent and similar problems should be referred to counsel for the distributors and exhibitor groups. (Disputes where more than 2 parties are involved, or involving third parites who refuse to submit to arbitration, or where a greater number of exhibitors are involved than distributors or vice versa, or where a distributor and its affiliated theatre company are parties, present problems which have been discussed but have not yet been resolved.) April 5, 1939