EXHIBIT 10.4
XXXXXXX X. XXXXXX
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") dated as of July 7, 1997 is
between PRODUCTION RESOURCE GROUP, L.L.C., a Delaware limited liability company
with its principal place of business at 0000 Xxxx Xxxxxx Xxxxxx, Xxx Xxxxx,
Xxxxxx (the "Company"), and Xxxxxxx X. Xxxxxx, an individual residing at 000
Xxxxxxxx Xxxxxx, Xxx. 0X, Xxx Xxxx, X.X. 00000 (the "Employee").
RECITALS
The Company is engaged in business as an integrated provider of
goods and services in a variety of related markets, including production
management, theatrical rental, scenery, rigging, supply of physical production
elements (including lighting, scenery, sound and costumes), promotion, themed
attractions, Broadway and touring shows, special events and exhibits and film
and television production.
The Employee has special knowledge and expertise in corporate finance,
mergers and acquisitions and related fields and is being employed as Executive
Vice President, Chief Operating Officer and Chief Financial Officer of the
Company. Employee will be expected to work closely on a "project team" basis
with the other managers of the Company and its divisions.
NOW, THEREFORE in consideration of the mutual and dependent promises
hereinafter set forth, the parties, intending to be legally bound, do hereby
agree as follows:
ARTICLE I
Employment and Term
1.1 Employment/Duties. The Company hereby agrees to employ the Employee and the
Employee hereby accepts employment as the Company's Chief Operating Officer and
Chief Financial Officer under the terms and conditions set forth in this
Agreement. Employee shall be responsible to the Chairman of the Company or his
designee for the performance of his duties. Employee shall have responsibility
for all Company mergers and acquisitions, all Company financial relationships
(banks, Wall Street, investors, etc.), creating and monitoring budgets and
profitability and cash flow analyses, and assisting in making capital
expenditure decisions and such other duties and responsibilities as may be
assigned by the Company's Chairman. Employee understands that although he will
have the title of Chief Operating Officer he will function as a chief strategic
officer unless otherwise notified by the Chairman of the Company. During the
Term (as hereinafter defined), Employee shall devote substantially all of his
working time, attention and skill to the business affairs of the Company.
Employee's primary office will be in the Company's Xxx Xxxx,
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Xxx Xxxx location or such other office of the Company as is mutually determined
between the parties.
1.2. Effective Date. This Agreement commenced on July 7, 1997, the date Employee
commenced full-time work for the Company, such date being referred to as the
"Effective Date".
1.3. Term. This Agreement is effective from the Effective Date and shall run for
an initial period of five (5) years, subject to early termination as provided in
Section 6.1. Thereafter, the Agreement will be automatically renewed for
successive one-year terms unless the Company provides Employee a minimum of six
months notice of non-renewal prior to expiration of the Term. The initial term
and any renewal terms are collectively referred to as the "Term".
ARTICLE II
Compensation
2.1. Base Salary. For each twelve (12) month period during the Term of this
Agreement, the Employee shall be paid an annual base salary of no less than One
Hundred Seventy-Five Thousand Dollars ($175,000) ("Base Salary") in a manner
consistent with the usual pay practices of the Company. Base Salary will be
reviewed annually but may not be reduced during the Term.
2.2. Bonuses.
(a) Employee will be eligible for a bonus in accordance with the customary
practice of the Company. The payment of bonuses will be based on the performance
of the Company and or the performance of Employee, and shall be solely within
the discretion of the Chairman or the Compensation Committee of the Company, but
will generally be representative of bonuses paid to other senior executives
except for non-performance by Employee or extraordinary performance by other
senior executives.
(a) In the event the Company effects a "leveraged recapitalization,"
Employee shall receive a fee, as agreed by the parties, for services provided in
connection therewith.
(c) Unless otherwise agreed, Employee will not be entitled to receive any
fee with respect to any public offering of the Company's securities.
(d) All fees payable to Employee pursuant to subsections (c), (d) and (e)
of this Section 2.2 will be paid within 30 days of the date on which the fee is
earned hereunder.
2.4 Equity Provisions
(a) The Company currently has 10,000,000 limited liability company ("LLC")
units authorized and 5,199,413 issued and outstanding on a fully diluted basis.
Employee will receive 452,000 Company LLC Capital Appreciation Units ("Units")
which will entitle Employee
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to receive annual distributions of $0.05 per year per Unit and which will
entitle Employee to share in the realized appreciation of the Company upon a
sale of the Company, an initial public offering or a similar event as follows:
(i) for 113,000 Units, Employee will share in appreciation above $55
million;
(ii) for 113,000 Units, Employee will share in appreciation above $70
million;
(iii) for 113,000 Units, Employee will share in appreciation above $85
million; and
(iv) for 113,000 Units, Employee will share in appreciation above $95
million.
The $55 million, $70 million, $85 million and $95 million figures referred
to in subsections (i) through (iv) above are referred to herein as "Thresholds."
The Company agrees to negotiate in good faith with Employee regarding the
mechanics for realization of value upon a change of control, death, disability
or termination without "Cause" or with "Good Reason" (as defined in Sections 2.6
and 6.1(b) hereof respectively).
(b) Eighteen thousand eight hundred thirty-four (18,834) of each Threshold
of Employee's Units will be fully vested at the time of grant, an additional
eighteen thousand eight hundred thirty-four (18,834) of each Threshold of
Employee?s Units will vest on the first anniversary of the Effective Date and an
additional eighteen thousand eight hundred thirty-three (18,833) of each
Threshold of Employee's Units will vest on the second, third, fourth and fifth
anniversaries of the Effective Date provided, that Employee has not been
terminated for "Cause" and has not voluntarily departed his employment without
Good Reason.
(c) The Thresholds will be reduced on a dollar for dollar basis for
extraordinary distributions of funds to the Founders if Employee does not
receive his pro rata share of such distributions. For purposes of this
Agreement, the term "Founders" means Xxxxxxxx X. Xxxxxx, Xxx Xxxxx, Xxxx Xxxx,
Xxxx Xxxxx and Xxxxx Xxxxxx.
(d) Calculations illustrating the operation of subsections (c) and (d)
above are attached as Exhibit A hereto.
2.4 Reclassification, Etc.
(a) In case of: (i) any reclassification or change of outstanding
securities by the Company; (ii) any consolidation or merger of the Company with
or into another limited liability company or corporation (other than a merger
with another limited liability company or limited partnership in which the
Company is a continuing limited liability company and which does not result in
any reclassification, change or exchange of its outstanding securities); or
(iii) any sale or transfer to another entity of all, or substantially all, of
the property of the Company, then, and in each such event, the Company or such
successor or purchasing entity, as the case may be, shall adjust the rights and
privileges of the Units in a manner designed to make Employee as nearly as may
be practicable economically indifferent to such change vis a vis the Founders.
The provisions of this subparagraph shall similarly apply to successive
reclassifications, changes, consolidations, mergers, sales and transfers.
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(b) If the Company shall at any time while Employee?s Units remain
outstanding in whole or in part: (i) divide its LLC units, the Thresholds shall
be proportionately reduced; or (ii) combine its LLC units, the Thresholds shall
be proportionately increased.
2.5 Founders' Interests. The grant of units pursuant to this Agreement
shall not affect in any way the right or power of the Company (i) to make
adjustments, reclassifications, spin offs, reorganizations or changes of its
capital or business structure, to merge or consolidate or to dissolve,
liquidate, sell or transfer all or any part of its business or assets; (ii) to
issue, redeem or repurchase units or securities convertible into or exchangeable
for units, including units preferred in rights of liquidation, dividends, etc.,
to the Employee's units; (iii) otherwise to deal in interests in its equity or
profits, provided that the Employee's units shall be appropriately adjusted in
case equity securities of any nature (including interests in profits) are issued
to the Founders, or any of them, in such a way as to dilute the Employee's
interest vis a vis such Founder or Founders by more than ten percent.
2.6 Owners' and Operating Agreements. Employee will be required to become a
party to, and agree to be bound by the terms of the operating agreement of the
Company and the "Owners' Agreement" among the direct and indirect owners of PRG;
provided that notwithstanding anything to the contrary in section 4.3 of the
Owners' Agreement: (i) upon a termination for "Cause", Employee's unvested Units
will be repurchased by the Company at a price of $1.00 per Unit and PRG will
have the option to purchase his vested Units for their fair market value as of
the date of termination, (ii) if Employee voluntarily leaves his employment with
PRG, Employee's unvested Units will be repurchased by the Company at a price of
$1.00 per Unit and PRG will have the option to purchase all of his Units for
their fair market value as of the date of termination and (iii) if Employee is
terminated other than for "Cause" PRG will have the option to acquire Employee's
Units for their fair market value as of the first anniversary of such
termination. Fair market value will be determined as set forth in the Owners'
Agreement. It is further anticipated that, for these purposes, "Cause" will be
defined to include only:
(a) Falsification of the accounts of PRG, embezzlement of funds of PRG
or other material dishonesty with respect to PRG or any of its affiliates;
(b) Conduct engaged in or action taken or omitted to be taken by an
employee which is in material breach of any employment agreement to which
such employee is bound, which breach continues for more than thirty (30)
days after written notice of such breach to employee;
(c) Gross or willful misconduct with respect to PRG or any subsidiary
or affiliate thereof which breach continues for more than ten (10) days
after written notice of such breach to employee; or
(d) Conviction of a crime involving moral turpitude or the violation
of any law which could reasonably be believed to materially adversely
affect the Company.
2.7 Leveraged Recapitalization. If PRG effects a "leveraged
recapitalization" transaction, Employee will be entitled to buy stock of the
"Newco" formed to effect the transaction at the price paid by other investors on
terms designed to preserve the economic arrangements set
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forth in paragraph 2.3(a) adjusted for any reduction in the aggregate ownership
interest of the Founders; provided, that up to one-half of the shares or options
acquired by Employee may be subject to a vesting or similar schedule over a
three-year period commencing on the date the stock is first acquired. The
parties agree to negotiate the terms of such buy-in in good faith consistent
with the foregoing principles.
2.8 Conversion to C Corporation. If PRG is converted to a C corporation,
Employee will receive options to the extent necessary to preserve his
proportionate interest in PRG adjusted for any reduction in the aggregate
ownership interest of the Founders or will receive other securities designed to
maintain (but not to improve or reduce) such economic terms on a tax-efficient
basis.
2.9 Benefits. The Company shall during the Term provide the Employee with
such standard benefits as are generally provided by the Company to other
full-time senior executives of the Company, including but not limited to
pension, health, dental, life and disability insurance. Participation shall be
subject to the terms of the applicable plan documents. To the extent, if any,
that there is a waiting period before Employee is entitled to participate in the
Company's medical plan, the Company shall reimburse COBRA payments made by
Employee to Xxxxxxxx Xxxxxxxx & Company. The Company may alter, modify, add to
or delete its employee benefit plans as they apply to the Company's management
at such times and in such manner as the Company determines appropriate, without
recourse by Employee.
2.10 Automobile. The Company shall reimburse the Employee for the lease of
a new automobile mutually acceptable to Employee and the Company and all
expenses related to the use thereof for the Employee's use during the Term of
this Agreement, including but not limited to, insurance, maintenance, repairs,
mobile telephone and gasoline. Reimbursable lease costs will not exceed five
hundred dollars per month.
2.11 Business Expenses. The Company will pay or reimburse Employee for all
reasonable business expenses incurred or paid by him in the performance of his
duties and responsibilities hereunder subject to and in accordance with a
pre-approved budget, subject further to any restrictions on such expenses set by
the Managers or Chairman with respect to reasonable substantiation requirements
as may be specified by the Company from time to time.
2.12 Insurance. In addition to any life insurance provided by the Company
to the Employee, the Company may, at its discretion and at any time after the
execution of this Agreement, apply for and procure, as owner and for its own
benefit, insurance on the life of the Employee, in such amounts and in such form
or forms as the Company may choose. Unless otherwise agreed, the Employee shall
have no interest whatsoever in any such policy or policies, but shall, at the
request of the Company, subject himself to such medical examinations, supply
such information and execute such documents as may be required by the insurance
company or companies to which it has applied for such insurance.
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ARTICLE III
Proprietary Information
3.1 Confidential and Proprietary Information. Employee acknowledges that
the Company possesses or will come into possession of information that has been
created, discovered, developed, acquired or otherwise become known to the
Company (including, without limitation, information that is created, discovered,
developed, acquired or made known by Employee in the course of his employment)
and in which the Company has rights of indeterminable commercial value (all of
the aforementioned information is hereinafter collectively referred to as
"Proprietary Information"). By way of illustration, Proprietary Information
includes, but is not limited to, trade secrets, processes, formulas, data and
know-how, marketing plans, strategies, forecasts, market information, contacts,
customer lists, business plans, financial information, and all information
collected from the Company's clients and customers. Employee acknowledges that
such Proprietary Information is critical to the success of the Company and
constitutes the trade secrets of the Company. Employee further acknowledges that
Proprietary Information is in part set forth in the Company's manuals,
memoranda, drawings and designs, specifications, accounting and sales records,
and other documents and records of the Company whether or not otherwise
identified as "Proprietary," some of which documents may be actually prepared in
full or in part by Employee. Proprietary Information shall exclude information
that has become public, except (i) when and to the extent that such public
information, when applied to or combined with other information, is non-public
and proprietary or (ii) where such information became public through disclosure
by Employee.
3.2 Non-Disclosure. Employee acknowledges that all Proprietary Information
shall be the sole property of the Company and its successors and assigns. At all
times, both during the Term of employment by the Company and for the two year
period after Employee ceases to be employed by the Company, whether such
cessation of employment shall be for any reason or for no reason, with or
without cause, voluntary or involuntary, or by termination, resignation,
disability, retirement or otherwise, Employee agrees to keep in confidence and
trust all Proprietary Information, and not to use, disclose, disseminate,
publish, copy, or otherwise make available, directly or indirectly, any
Proprietary Information except as expressly authorized in writing by the
Company, provided Employee shall be relieved of his obligation of nondisclosure
hereunder if Proprietary Information is required to be disclosed by any
applicable judgment, order or decree of any court or governmental body or agency
having jurisdiction or by any law, rule or regulation, provided that, in
connection with any such disclosure, Employee shall give the Company reasonable
prior written notice of the disclosure of such information pursuant to this
exception and shall obtain, to the maximum extent possible, confidential
treatment for such information by any authority requiring delivery of such
information.
3.3 Return of Proprietary Information. Employee agrees that when he ceases
to be employed by the Company, whether such cessation of employment shall be for
any reason or for no reason, with or without cause, voluntary or involuntary, or
by termination, resignation, disability, retirement or otherwise, Employee shall
(i) deliver to the Company all documents and data of any nature owned by the
Company pertaining either to the Proprietary Information or to Employee's
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work with the Company and (ii) abstain from taking or removing any documents,
data or information, or any reproduction thereof, containing or pertaining to
the Proprietary Information or to Employee's work for the Company.
3.4 Disclosure and Assignment of Information. Employee agrees promptly to
disclose to the Company all information pertaining to the Company's business and
collected or learned by Employee, either alone or jointly with others, in the
course of his employment with the Company. In addition, Employee hereby assigns
to the Company any rights he may have or acquire in the Proprietary Information
referred to in Section 3.1, and promises that during the duration of his
employment with the Company and thereafter, he will assist the Company in the
enforcement and protection of the Proprietary Information. The Company shall
promptly reimburse Employee for any reasonable expenses incurred in complying
with the provisions of this Section 3.4.
3.5 Innovations and Improvements. Employee agrees that all inventions,
innovations or improvements in the Company's method of conducting its business
conceived by him during his employment with the Company belong to the Company.
Employee will promptly disclose such inventions, innovations or improvements to
the Company, and perform all actions reasonably requested by the Company to
establish and confirm such ownership. Any such actions required to be performed
by Employee shall be at the expense of the Company. Without limiting the
foregoing, Employee agrees that:
(a) It is the intention of the parties hereto that all rights, including
without limitation copyright, in any product, software (including source code,
object code, models and algorithms) reports, surveys, marketing, promotional and
collateral materials prepared by Employee pursuant to the terms of this
Agreement, or otherwise for Company (hereinafter the "Work") vest in Company.
The parties expressly acknowledge that the Work was specially ordered or
commissioned by Company, and further agree that it shall be considered a "Work
Made for Hire" within the meaning of the patent and copyright laws of the United
States and that Company is entitled, as author, to the copyright and all other
rights therein, throughout the world, including, but not limited to, the right
to make such changes therein and such uses thereof, as it may determine in its
sole and absolute discretion.
(b) If for any reason the Work is not considered a Work Made for Hire under
the copyright law, then Employee grants and assigns to Company, its successors
and assigns, all of his rights, title, and interest in and to the Work,
including, but not limited to, the patent or copyright therein throughout the
world (and any renewal, extension or reversion copyright now or hereafter
provided), and all other rights therein of any nature whatsoever, whether now
known or hereafter devised, including, but not limited to the right to make such
changes therein, and such uses thereof, as Company may determine in its sole and
absolute discretion.
ARTICLE IV
Competition
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4.1 Noncompetition Covenant. Employee covenants and agrees with the Company
that during the "Noncompete Term"( as hereinafter defined) he will not in any
geographic area in which the Company does business or makes sales during the
Term engage in any of the following activities: (i) either directly or
indirectly, solely or jointly with any person or persons, as an employee,
consultant, or advisor (whether or not engaged in business for profit) or as an
individual proprietor, owner, partner, shareholder, director, officer, joint
venturer, investor, lender or in any other capacity, compete with the Company
in, or engage in, the scenery or exhibit business including, without limitation,
the business of theatrical rental, lighting, scenery, rigging, supply of
physical product elements, or any other business which directly competes with
any other business conducted by the Company or any of its affiliates or any
other business if the Company or such affiliate took substantial steps in
anticipation of commencing such business prior to the termination of the
Employee and the Employee was aware of such steps; provided, Employee may own up
to one percent (1%) of the stock of any publicly traded company which may be
engaged in such business; (ii) request or advise any past or present customer or
customer prospect of the Company to withdraw, curtail or cancel its business
with the Company; (iii) sell any products or services which compete with any
Company products or services to any customer who has purchased products or
services from the Company in the two year period prior to the commencement of
the Noncompete Term; or (iv) directly or indirectly recruit or hire or attempt
to recruit or hire any employee of the Company or assist any person or persons
in recruiting or hiring or soliciting any employee of the Company or any person
who was an employee of the Company in the two year period prior to the
commencement of the Noncompete Term.
4.2 Noncompete Term. The "Noncompete Term" shall commence on the Effective
Date and end two years following expiration or termination of the Employee's
employment; provided, however, if termination of the Employee is by the Company,
subsection (i) of Section 4.1 shall apply only for such portion of the
Noncompete Term, if any, during which the Company pays Employee on a monthly
basis the Employee?s base salary as of the effective date of termination. The
Company shall notify the Employee in writing of its election to extend the
Noncompete Term as provided in Section 4.1(i) above, and monthly payments shall
be made on the first day of each month in arrears (partial months will be paid
on a per diem basis).
4.3 Blue Pencil Rule. The Employee and the Company desire that the
provisions of this Article IV be enforced to the fullest extent permissible
under the laws and public policies applied in each jurisdiction in which
enforcement is sought. The parties agree that Employee is a key executive of the
Company. If a court of competent jurisdiction, however, determines that any
restrictions imposed on the Employee in this Article IV are unreasonable or
unenforceable because of duration, geographic area or otherwise, the Employee
and Company agree and intend that the court shall enforce this Article IV to the
maximum extent the court deems reasonable and that the court shall have the
right to strike or change any provisions of this Article IV and substitute
therefor different provisions to effect the intent of this Article IV to the
maximum extent possible.
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ARTICLE V
Indemnification
5.1 Indemnification of Employee. The Company agrees to indemnify Employee
in connection with the performance of his duties and obligations hereunder to
the maximum extent permitted by applicable law. In addition, expenses of defense
which may be indemnifiable under applicable law shall be paid by the Company in
advance of the final disposition of a proceeding, provided Employee agrees to
repay such amount if he is later found not entitled to be indemnified as
authorized by applicable law. A condition to the Company's obligation of
indemnification hereunder is that Employee provide the Company immediate written
notice of any claim for which indemnification will be sought, stating the
identity of the claimant, the nature and basis of the claim and the amount
thereof, and copies of all notices and documents received by Employee in
connection with the claim. Thereafter Employee, as a condition of the Company's
obligation of indemnification, shall cooperate in the defense of the claim by
the Company, and shall provide the Company with all additional information and
copies of documents received by him, or otherwise in his possession, related to
the claim. The Company will notify Employee of its election to assume the
defense of a claim against Employee, in which event the Company will defend
utilizing counsel of the Company's choice, reasonably acceptable to Employee,
and at the Company's sole expense, and in the event the Company makes such
election, Employee may also participate in the defense utilizing his own counsel
at Employee's sole expense. In the event the Company does not elect to defend,
the Company will advance Employee's reasonable expenses of counsel, subject to
Employee's contingent obligation to repay such expenses as provided above.
Employee will not independently consent to the settlement of any claim without
the prior written consent of the Company, which consent will not be unreasonably
withheld.
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ARTICLE VI
Termination of Employment and Severance Benefits
6.1 Events of Termination by the Company.
(a) Death or Disability. In the event Employee dies or becomes permanently
disabled during the term of this Agreement, his employment hereunder shall
automatically terminate. In such case, the Company shall pay to Employee or his
beneficiary, as the case may be, any earned but unpaid base salary as of the
date of his death or disability. For the purpose of this Agreement, "permanent
disability" or "permanently disabled" shall mean the inability of the Employee,
due to physical or mental illness or disease, to perform the functions then
performed by such Employee for one hundred eighty (180) substantially
consecutive days, accompanied by the likelihood, in the opinion of a physician
chosen by the Company, that the disabled Employee will be unable to perform such
functions within the reasonably foreseeable future; provided, however, that the
foregoing definition shall not include a disability for which the Company is
required to provide reasonable accommodation pursuant to the Americans with
Disabilities Act or other similar statute or regulation. If any question shall
arise as to whether during any period Employee has suffered disability, Employee
may, and at the request of the Company will, submit to the Company a
certification in reasonable detail by a physician selected by Employee or his
guardian to whom the Company has no reasonable objection as to whether Employee
was so disabled and such certification shall for the purposes of this Agreement
be conclusive of the issue. If such question shall arise and Employee shall fail
to submit such certification, the Company's determination of such issue shall be
binding on Employee.
(b) By the Company. The Company may terminate Employee's employment
hereunder for "Cause" at any time upon notice to Employee setting forth in
reasonable detail the nature of such cause. For purposes of this Agreement,
"Cause" shall have the meaning given in Section 2.6 hereof.
(c) By Employee for Good Reason. Employee may terminate his employment by
the Company for "Good Reason" at any time upon notice to the Company setting
forth in reasonable detail the nature of such good reason. "Good Reason" for
Employee to terminate his employment shall mean any act or omission by the
Company which constitutes a material breach of any term or provision of this
Agreement or which results in the assignment to Employee of any duties
inconsistent with, or in diminution of, the positions, duties, responsibilities
and status of Employee hereunder or any change in Employee's titles or duties
with the same intent or effect which breach continues for more than ten days
after written notice of such breach to Company.
(d) In the event of termination or cessation by the Company of Employee's
employment with the Company other than for "Cause" as defined above or the
termination of the Employee's employment with the Company by Employee for "Good
Reason" as defined above, Employee shall be entitled to receive from the Company
payment of all salary and bonus and
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continuation of all benefits which Employee would have been entitled to receive
through the end of the Term had his employment not terminated, at the same times
as such payments would otherwise have been made. Upon the giving of notice of
termination of Employee's employment hereunder for Cause, and the passing of any
applicable notice period, except as specifically provided herein, the Company
shall have no further obligation or liability to Employee, other than the
payment of base salary earned but unpaid at the date of termination and the
contribution by the Company to the cost of Employee's participation (subject to
any required employee contribution by Employee under the terms of the applicable
plans) in the Company's group medical and dental insurance plans as the same are
in effect from time to time for so long as Employee is entitled to continue such
participation under applicable law and plan terms.
6.2 Survival. Notwithstanding termination of this Agreement as provided in
this Article VI, the obligations of Employee and the Company under Article III,
Article IV and Article V shall survive termination.
ARTICLE VII
Concluding Provisions
7.1 Entire Agreement. This Agreement contains the entire understanding of
the parties with respect to the matters contained herein. There are no oral
understandings, terms, or conditions, and no party has relied upon any
representation, express or implied, not contained in this Agreement.
7.2 Amendments. This Agreement may not be amended in any respect
whatsoever, nor may any provision hereof be waived by any party, except by a
further agreement, in writing, fully executed by each of the parties.
7.3 Successors. This Agreement shall be binding upon and inure to the
benefit of the parties and to their respective heirs, personal representatives,
successors and assigns, executors and/or administrators, provided that Employee
may not assign his rights hereunder (except by will or the laws of descent)
without the prior written consent of the Company.
7.4 Captions. The captions of this Agreement are for convenience and
reference only and in no way define, describe, extend or limit the scope or
intent of this Agreement or the intent of any provision contained in this
Agreement.
7.5 Notice. Any notice, demand, offer or other written instrument
("Notice") required or permitted to be given shall be in writing signed by the
party giving such Notice and shall be hand delivered or sent, postage prepaid,
by Certified or Registered Mail, Return Receipt Requested, to the parties at the
addresses as set forth in this Agreement. Any Notice to be given to the estate
of any deceased person shall be addressed to the personal representative of such
deceased person at his address as set forth in this Agreement. Any party shall
have the right to change the place to which such Notice shall be sent or
delivered by similar notice sent in like manner to all other parties hereto.
7.6 Effective Date of Notice. The effective date of any offer, demand,
notice or instrument shall be the date of delivery to the addressee.
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7.7 Counterparts. This Agreement may be executed in one or more copies,
each of which shall be deemed an original. This Agreement may be executed by
facsimile signature and each party may fully rely upon facsimile execution; this
agreement shall be fully enforceable against a party which has executed the
agreement by facsimile.
7.8 Partial Invalidity. The invalidity of one or more of the phrases,
sentences, clauses, sections or Articles contained in this Agreement shall not
affect the validity of the remaining portions so long as the material purposes
of this Agreement can be determined and effectuated.
7.9 Applicable Law. This Agreement shall be governed by, construed and
enforced in accordance with the laws of the State of New York.
7.10 Resolution of Disputes.
(a) Subject to the provisions of Section 7.11(b), any dispute, difference
or controversy arising under this Agreement regarding the payment of money shall
be settled by arbitration. Any arbitration pursuant to this Section 7.11 shall
be held before a panel of three arbitrators, one of which shall be selected by
each of the Employee and the Company and the third of which shall be selected by
the mutual election of such two arbitrators. Except as otherwise set forth
herein, each party shall bear its own expenses for counsel and other
out-of-pocket costs in connection with any resolution of a dispute, difference
or controversy. Any arbitration shall take place in New York, New York or at
such other location as the parties may agree upon, according to the American
Arbitration Association's Commercial Arbitration Rules now in force and
hereafter adopted. The parties agree that, in any arbitration the parties shall,
to the maximum extent possible, have such rights as to the scope and manner of
discovery as are permitted in the Federal Rules of Civil Procedure and consent
to the entry of any order of any court of competent jurisdiction necessary to
enforce such discovery. The arbitrators shall make their award in accordance
with and based upon all the provisions of this Agreement and judgment upon any
award rendered by the arbitrators shall be entered in any court having
jurisdiction thereof. The fees and disbursements of such arbitrators shall be
borne equally by the parties, with each party bearing its own expenses for
counsel and other out-of-pocket costs. The arbitrators are specifically
authorized to award costs and attorney's fees to the party substantially
prevailing in the arbitration and shall do so in any case in which they believe
the arbitration was not commenced in good faith.
(b) The parties acknowledge that in the case of disputes regarding matters
other than the payment of money, damages may be insufficient to remedy a breach
of this Agreement and that irreparable harm will result from a breach of this
Agreement. Accordingly, the parties consent to the award of preliminary and
permanent injunctive relief and specific performance to remedy any breach of
this Agreement, regarding disputes other than the payment of money, without
limiting any other rights or remedies to which the parties may be entitled under
law or equity. Either party may pursue injunctive relief or specific performance
in any court of competent jurisdiction.
7.11 Genders. Any reference to the masculine gender shall be deemed to
include feminine and neuter genders, and vice versa, and any reference to the
singular shall include the plural, and vice versa, unless the context otherwise
requires.
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7.12 Initialing. Each page which contains handwritten or typewritten
changes and each exhibit which is not attached to this Agreement shall be
initialed or signed by each party.
7.13 No Conflicts. The parties represent and warrant that the terms of this
Agreement do not violate any existing agreements with other parties.
7.14 Withholding. All payments made by Company to Employee hereunder shall
be subject to applicable withholding.
7.15 Conversion of Form; Public Offering. In the event Company converts its
structure from a limited liability company to a stock corporation, and/or in the
event the Company subsequently registers its securities pursuant to the
Securities Act of 1933, as amended (the "Securities Act") (other than in
connection with a transaction contemplated by Rule 145(a) promulgated under the
Securities Act or pursuant to Form S-8 or successor forms), Employee shall (i)
be entitled to convert a proportionate number of Units as are converted by other
employee owners of the Company and (ii) be entitled to register a proportionate
number of shares of stock as the other employee owners of the Company with
respect to their interest, if any, in the Company, subject to the provisions of
the Company's Operating Agreement and the Owners' Agreement referred to in
Section 2.6 hereof. The Company will use reasonable best efforts to structure
the conversion of capital appreciation units in the event of a conversion of the
Company to a C corporation in a manner which will maximize Employee's ability to
obtain capital gains treatment.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first set forth above.
THE COMPANY:
PRODUCTION RESOURCE GROUP, L.L.C.
By: _____________________________________
Xxxxxxxx X. Xxxxxx
Chairman
THE EMPLOYEE:
__________________________________________
Xxxxxxx X. Xxxxxx
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