The film daily year book of motion pictures (1934)

period preceding the Exhibitor's notice of exclusion, and apply to such average the percentage terms specified in the license agreement for the picture excluded. (2) If no feature motion pictures of the Distributor were exhibited at the Exhibitor's theater during said ninety (90) day period, average the daily gross receipts of the Exhibitor's theater for the period of thirty (30) operating days preceding the Exhibitor's notice of exclusion and apply to such average the percentage terms specified in the license agreement for the picture excluded. (f) In computing the number of feature motion pictures which may be excluded hereunder, fractions of more than one half (lA) shall be regarded as one (1). (g) Upon the exclusion of each feature motion picture, the license therefor and all rights thereunder shall terminate and shall revert to the Distributor. (h) The Optional Standard License Agreement referred to in Part 1 hereof shall be deemed amended by substituting in place of Article F fteenth of such contract the provisions of this Part. Article VI Part 1. Clearance and Zoning Boards. — Section 1. To provide against clearance of unreasonable length and /or area in any exchange territory, fair, just, reasonable, and equitable schedules of clearance and zoning may be prescribed by a Local Clearance and Zoning Board created for such territory. Sec. 2. Each such Board shall be appointed by the Code Authority and shall consist of two representatives of Distributors, one of whom shall be a National Distributor with theater affiliations and one of whom shall be a Distributor without circuit theater affiliations ; two representatives of first-run theaters located in such territory, one of whom shall be an affiliated Exhibitor, if there be one, and one of whom shall be an unaffiliated Exhibitor ; and two representatives of subsequentrun unaffiliated theaters operating within such territory ; and one person approved by the Administrator who shall have no direct or indirect affiliation with any branch of the motion-picture, industry who shall be regarded as the impartial representative of the Code Authority and who shall vote on any question before the Board only in th^ case where the Board is deadlocked. There shall be a Chairman of each Board, selected by a majority vote of the members of the Board. Any vacancy in the Board shall be filled from the class of members in which the vacancy occurred. Sec. 3. Each Local Clearance and Zoning Board shall, promptly after its creation, and prior to January 1, 1934, and prior to Jnnuary 1st of each year thereafter, formulate, prescribe and publish for its territory, schedules of clearance as in Section 1 above described, for the season next ensuing. Such schedules may classify theaters by zones or other classifications suited to local conditions, but for the sole purpose of fixing the maximum clearance in length of time and area after the conclusion of the prior runs of such theaters. Each Board may, after fair and reasonable notice and hearing to interested parties, change, modify, or vary any part of the schedule set up by it, provided that any such change or modification shall not in any wise apply to, affect, or modify any exhibition contract made subject to, or in reliance upon, or pursuant to any such schedules, without the prior written consent of the parties to such contract. Sec. 4. Each Board when making any classification of theaters, or when fixing the maximum period or area of clearance in respect of any theater shall, among other things, consider and give due regard to the following factors : (a) that clearance to a very considerable extent determines the rental value of motion pictures ; (b) that exhibitions of the same motion picture within the same competitive area at too short an interval after the conclusion of a preceding run or runs thereof by unduly restricting the competitive area in which clearance is limited, depreciates the rental value of motion pictures; ami (c) that all such depreciations of the rental values of motion pictures tend to reduce the num ber of motion pictures produced, discourages the production of motion pictures of quality involving large investments of capital, labor, skill, and enterprise and thereby tend to reduce employment. (d) that unreasonable clearance to a considerable extent affects the value of motion pictures for subsequent-run theaters. (e) that unreasonable clearance depreciates the potential return from motion pictures to subsequent-run theaters. (f) that unreasonable clearance as to time and area diminishes the potential revenue to the Distributor from the subsequent-run Exhibitor. Sec. 5. The decision of each Board upon any question shall be determined by a majority vote, but in case the Board is evenly divided, such question shall be submitted for determination to the impartial representative of the Code Authority, who is provided for in Section 2 of this PART. The decision of the Board and/or the impartial representative, as the case may be, shall be in writing. Sec. 6. It shall be the duty of each such Board to promptly publish the schedules formulated by it, and file a copy thereof immediately with the Code Authority. Sec. 7. (a) Any party aggrieved by the schedules shall promptly and not later than thirty (30) days after publication thereof file a protest in writing with the Board issuing them. Thereupon such Board shall promptly convene and give rea sonable notice of hearing to all parties concernee1 or having an interest in the proceeding and heat them and accept from them all papers and evidence. The Board shall have power to make reasonable rules respecting notice of the time, place, and manner of hearing. The Board shall make its decision within fifteen (15) days from the filing of the protest, or within three (3) days after the parties shall have been fully heard, whichever date is sooner. Any party aggrieved by the decision shall have the absolute right to appeal therefrom to the Code Authority, provided such appeal be filed or mailed by registered mail or delivered in writing not later than five (5) days after the decision of the Local Boaid is rendered, in which case the protest, with all evidence taken before the Local Clearance and Zoning Board, shall be referred to the Code Authority. (b) All persons interested in the decision shall have the right to appear before the Code Authority and present additional evidence. The Code Authority, after invest:gating such protest and reviewing the evidence theretofore taken and considering the additional evidence, if any, shall promptly render its decision, and not later than fifteen (15) days from and after the date of the hearing upon the appeal. The requirement as to the various steps herein prescribed shall be mandatory in order to give full relief before the buying season commences. Sec. 8. (a) The schedules presented and/or decisions made by any Local Clearance and Zoning Board and/or decisions of the Code Authority upon any appeal to it, shall be binding upon all Distributors and Exhibitors in the territory affected. (b) Pending the final determination of any dispute or controversy all existing contracts between the disputants shall continue to be performed in every respect. Sec. 9. The jurisdiction of the Local Clearance and Zoning Board shall be limited as herein specifically provided and such Board shall hear no quest ons other than those pertaining strictly to clearance and zoning matters. Part 2. Grievance Boards. — Section 1. The complaint of any Exhibitor that a competing Exhibitor has committed any of the acts set forth in the following paragraphs (a), (b), (c). and (d) w:th the intention and effect of depriving, without just cause, the complaining Exhibitor of a sufficient number of motion pictures to operate Mich Exhibitor's theater, shall lie referred for determination to a Local Crievancc Board constituted as hereinafter provided: (a) The licensing of more motion pictures than are reasonably required. (b) The adoption of an unfairly competing operating policy of unnecessary and too frequent changes of motion pictures. (c) The exaction without just cause of an 612