EXHIBIT 10.2
EMPLOYMENT AGREEMENT
THIS AGREEMENT 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 (hereinafter referred to as the "Company") and
Xxxxxxxx X. Xxxxxx, residing at 0000 Xxxxxxxx Xxxx Xxxxxx, Xxx Xxxxx, Xxxxxx
00000 (hereinafter referred to as the "Employee").
RECITALS
1. The Company has been formed to engage 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 (such activities are hereinafter collectively referred to
as the ("PRG Business").
2. The Employee has special knowledge and expertise and unique and
extraordinary skills which will be of benefit to the Company's
business and the Employee is a direct or indirect owner of the
Company.
3. The Company wishes to employ the Employee.
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. The Company hereby agrees to employ the Employee and the
Employee hereby accepts employment under the terms and conditions set forth in
this Agreement. Employee shall have such title or titles as the Managers of the
Company may provide.
1.2 Effective Date. This Agreement shall take effect as of January 1, 1996
(such date is referred to as the "Effective Date").
1.3 Term. This Agreement is effective from the Effective Date and shall run
for a period of 3 years therefrom (the "Initial Term"). Subject to Section 7.1
hereof, the term of this Agreement shall automatically thereafter be extended
for successive one (1) year terms on the same terms and conditions unless either
party gives at least thirty (30) days prior written notice that the Agreement
will not be renewed (the Initial Term and any and all such extended terms are
hereinafter collectively referred to as the "Term").
ARTICLE II
Compensation
2.1 Base Salary. For each 12 month period during the Term of this
Agreement, the Employee shall be paid an annual base salary of Three Hundred
Fifty Thousand ($350,000) Dollars in a manner consistent with the usual pay
practices of the Company.
2.2 Bonus. The Employee shall 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 the Employee or the
division(s) of the Company for which the Employee performs services, and shall
be solely within the discretion of the Company.
2.3 Incentive Compensation Arrangements. Employee shall be eligible to
participate in such incentive compensation and similar arrangements as may be
established by the Company from time to time.
2.4 Automobile. The Company shall reimburse the Employee for the lease of
an automobile for the Employee's use during the Term of this Agreement
comparable to that currently driven by Employee. The Company shall reimburse the
Employee for all reasonable automobile expenses including, but not limited to,
gasoline, insurance and repairs.
2.5 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.
ARTICLE III
Duties
3.1 General Duties. During the Term, the Company shall employ Employee, and
Employee agrees to serve as a key Employee of the Company in such capacity as
may be determined by the Managers of the Company. Employee shall have
responsibility for such duties as are assigned by the Company's Managers,
officers or their delegatees. During the Term, Employee shall devote
substantially all of his working time, attention and skill to the business
affairs of the Company. Employee shall report to the Company's Managers or such
person as the Managers may designate.
3.2 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
of 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.
ARTICLE IV
Confidential Information
4.1 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 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 its
disclosure by Employee. Employer acknowledges that the definition of Proprietary
Information is not intended to prevent Employee from practicing the skill of his
calling provided that such exercise does not utilize any trade secrets of
Employer.
4.2 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 course of employment by the Company and 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.
4.3 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 work
with the Company (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.
4.4 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 that he may have or acquire in the information
referred to in this subsection, 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 4.4.
4.5 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 V
Competition
5.1 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 themed entertainment business including, without
limitation, the business of production management, theatrical rental, scenery,
rigging, supply of physical product elements, theatrical equipment business or
design and build business, the theatrical equipment software business, 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 which compete with any Company products to any customer who has
purchased goods from the Company in the one 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 any employee of the Company or any
person who was an employee of the Company in the one year period prior to the
commencement of the Noncompete Term.
5.2 Noncompete Term. The "Noncompete Term" shall commence on the Effective
date and end on the later of (a) the time period following expiration or
termination of the Employee's employment for which the Employee is entitled to
any compensation or payments under this Agreement or (b) one year following
expiration or termination of Employee's employment with the Company. Upon the
termination of this Agreement pursuant to Section 7.1 or 7.2 hereof, the Company
shall have the option of paying or continuing to pay severance at 50% of
Employee's base salary as of the effective date of termination as consideration
for any portion of the one year following termination in which the Employee is
not otherwise entitled to compensation or payments under this Agreement as
further consideration for the noncompetition agreement contained herein. If not
earlier terminated, the Noncompete Term will terminate, after ten days written
notice and an opportunity to cure upon a material breach of the Employer's
obligations, if any, pursuant to any purchase note given in accordance with
Section 4.3 of the Owners' Agreement; provided, however, that Employer shall not
be deemed in material breach of its obligatations if it has a good faith belief
that Employee is in violation of Article IV or V hereof. Employee further agrees
that, in addition to any other remedies, Employer may offset any amounts
otherwise payable to Employee pursuant to this agreement or any other agreement
between the parties on account of such breach.
5.3 Blue Pencil Rule. The Employee and the Company desire that the
provisions of this Article V 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 an owner of the Company and that the non-competition covenant is
given in connection with the organization of a business granting the Employee
substantial rights pursuant to a certain Owners Agreement being executed
contemporaneously with this Agreement. The parties further agree that the
non-competition agreement is accordingly given in connection with the sale of a
business and should be enforced as such. If a court of competent jurisdiction,
however, determines that any restrictions imposed on the Employee in this
Article V 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 V 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 V and substitute therefore different provisions to effect the intent of
this Article V to the maximum extent possible.
ARTICLE VI
Indemnification
6.1 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 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 will not be unreasonably withheld.
ARTICLE VII
Termination
7.1 Events of Termination by Company.
(a) Notwithstanding anything to the contrary set forth in Section 1.3,
prior to the disability, retirement or death of the Employee, this Agreement may
be terminated by the Company for cause, immediately after written notice has
been given or sent (as defined in Section 8.7) to the Employee. A termination
shall be deemed to be "for cause" if, in the sole and conclusive determination
of the Company's Managers, the Employee either (i) materially breaches this
agreement (and fails to cure within fifteen (15) days after notice) or (ii) the
Employee has committed acts which, in the sole discretion of two-thirds of the
Managers of the Company are seriously detrimental to the best interests of the
Company. In the event of such termination, the Employee shall receive no
benefits under any severance plan of the Company and his benefits under any
other plans and programs of the Company shall be as provided for under the terms
of such plans and programs.
(b) Notwithstanding anything to the contrary set forth in Section 1.3, the
Company, acting only with the approval of its Managers, may terminate this
Agreement at any time without cause, by giving or sending (pursuant to section
8.6) the Employee written notice at least forty-five (45) days prior to the
termination date. In the event of termination without cause by the Company, the
Company shall pay the Employee his regular salary and benefits for a period
equal to the longer of (i) the period through the remainder of the Term or (ii)
the sum of (x) six (6) months from the termination date and (y) one additional
month for each year of service with the Company or a predecessor in entity up to
a maximum of six additional months. This post employment severance shall be paid
on a regular salary schedule for the termination benefit period.
7.2 Termination by Employee. This Agreement may be terminated by the
Employee by the Employee's giving or sending the Company ninety (90) days
advance written notice. In such event, the Employee shall be paid his regular
compensation through and including such termination date. If the Employee
terminates his employment, he shall not be entitled to severance or similar
payments.
7.3 Termination of this Agreement. Notwithstanding anything to the contrary
set forth elsewhere in this Agreement, including but not limited to Sections
1.3, 7.1 and 7.2, this Agreement and any payments being made or to be made in
accordance with this Agreement shall terminate, with the exception of severance
payments, upon the occurrence of any of the following events:
(a) Cessation of active Company business unless the Company business
is continued by a successor in interest to the Company;
(b) The death of Employee, in which event the Employee shall receive
his regular salary and benefits through and including the date of death;
(c) A disabling event which, as determined in the judgment of the
Managers of the Company, is likely to adversely affect the Employee's
ability to carry out his responsibilities for a period of more than six
months, in which case the Employee will receive no severance or similar
payments but shall receive his regular salary and benefits during the
lesser period of (a) six months or (b) the remainder of the Term;
(d) The voluntary agreement of the parties who are bound by the terms
of this Agreement at that time.
ARTICLE VIII
Concluding Provisions
8.1 Entire Agreement. This Agreement contains the entire understanding of
the parties. There are no oral understandings, terms, or conditions, and no
party has relied upon any
representation, express or implied, not contained in this Agreement.
8.2 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.
8.3 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 its rights hereunder (except by will or the laws of descent)
without the prior written consent of the Company.
8.4 Joint Effort. Preparation of this Agreement has been a joint effort of
the parties, and the resulting document shall not be construed more severely
against one of the parties than the other.
8.5 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.
8.6 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 all 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.
8.7 Effective Date of Notice. The effective date of any offer, demand,
notice or instrument shall be the date of delivery to the addressee.
8.8 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.
8.9 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.
8.10 Applicable Law. This Agreement shall be governed by, construed and
enforced in accordance with the laws of the State of Nevada.
8.11 Resolution of Disputes
(a) Subject to the provisions of Section 8.11(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 8.11 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. 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 in Las
Vegas, Nevada at the election of the Company, 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 Members 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 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.
8.12 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.
8.13 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.
8.14 No Conflicts. The parties represent and warrant that the terms of this
agreement will not at the Closing violate any existing agreements with other
parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the first day of January, 1996.
PRODUCTION RESOURCE GROUP, L.L.C.
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By:
Name:
Title
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Xxxxxxxx X. Xxxxxx
