EXHIBIT 10.3
XXXXXXX X. XXXXXXX
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") dated as of June 6, 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. Xxxxxxx, an individual residing at 0000
Xxxx Xxxxx Xxxx, Xxxxxxxxx, Xxxxxxxx 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 Company has recently expressed its intent to acquire the assets of
Design Dynamics, Inc. (the "Target") and several of its affiliates by letter
dated March 27, 1997 (the "Acquisition"). A condition precedent to the parties'
obligations to consummate the Acquisition is the Company's employment of the
Employee effective upon the closing of the Acquisition.
The Employee has special knowledge and expertise in the exhibit business is
being employed as President of the Company's exhibit division (the "Division")
because of his special experience as President and Chief Operating Officer of
the Target, and to provide a smooth transition with minimal interruptions in
integrating the acquired assets into the Division. 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 President of the Division under the
terms and conditions set forth in this Agreement. Employee initially shall be
responsible to the Chairman of the Company for the performance of his duties.
Employee shall have responsibility for such duties as are customarily associated
with the position of President and such other duties and responsibilities as
- 1 -
may be assigned by the Company's Chairman. During the Term, Employee shall
devote substantially all of his working time, attention and skill to the
business affairs of the Division and the Company. Employee's office will be in
the Company's or Division's Denver, Colorado location or such other office of
the Company or Division as is mutually determined between the parties.
1.2 Effective Date. Employee will commence work immediately upon the
closing of the Acquisition (the "Closing"), such date being referred to as the
"Effective Date". Notwithstanding any other provision of this Agreement to the
contrary, this Agreement is conditioned upon the Closing and shall have no force
and effect until such event occurs.
1.3 Term. This Agreement is effective from the Effective Date and shall run
for a period of three (3) years or until terminated as provided in Article VI
(the "Term").
ARTICLE II
Compensation
1.4 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) in a manner consistent with the
usual pay practices of the Company. Base salary will be reviewed annually.
1.5 Incentive Compensation
(1) Subject to the approval of the Company's senior lender, the Company
will make Employee a loan in the principal amount of $456,250 which, together
with $293,750 in cash from the Employee's share of the proceeds of the
Acquisition, will be invested in Preferred Units of the Company. The number of
Preferred Units will be based on a value to be determined when the current Bank
of New York financing is closed and there has been a determination of which of
the currently-anticipated acquisitions will occur but will represent a minimum
of one percent (1%) of the issued and outstanding Units of the Company at the
time of issuance. Preferred Units entitle their holder to receive distributions
equal to those received with respect to Regular Units and to share in the
appreciation in the value of the Company above the aggregate capital account
balances on the date such Units are issued. Preferred Units will have a
liquidation preference equal to the amount paid therefor. The loan will be
substantially in the form of Exhibit A, and will have a term of 5 years, be
secured by a pledge of Employee's interest in PRG and will bear interest at the
minimum rate necessary to avoid the imputation of interest for federal income
tax purposes. Except for mandatory prepayments as described below, the note will
require payments of interest only prior to maturity. Units issued to Employee
will also be pledged to the Company's senior lender if requested by such lender.
(2) The loan will be repaid out of the after-tax proceeds of any bonuses
paid to Employee pursuant to sections 2.2(c) and (d) hereof. Employee will also
be required to make
- 2 -
mandatory prepayments equal to 50% of the after-tax proceeds of any
distributions made with respect to the Units held by Employee or other
securities exchanged therefor.
(3) In addition to any discretionary bonuses based on the performance of
Employee, the Division, and the Company, Employee will be entitled to receive a
bonus of $18,250 no later than December 31st of each of 1997, 1998 and 1999.
(4) In addition to the units acquired as described above, Employee will be
entitled to receive Capital Appreciation Units entitling him to share in the
appreciation in the value of the Company subsequent to the issuance of such
Units based on the extent to which he is able to exceed mutually agreed-upon
annual budgets for the Division as set forth in Exhibit B. This paragraph 2.2(d)
will, notwithstanding the Term hereof, have a term of three (3) years and will
not be affected by the conversion of the Company to a corporation or by an
initial public offering of the Company.
(5) As a condition of the grant of any Units to Employee, Employee will be
required to enter into an Owners' Agreement among the direct and indirect owners
of the Company containing restrictions on the transfer of his Units and granting
the Company an option to acquire the Units under circumstances specified therein
and to become a party to the Company's Operating Agreement. It is anticipated
that section 4.3 of the Owners' Agreement will be amended (or PRG will otherwise
provide that) (i) upon a termination for "Cause," Employee's Units will be
purchased for their fair market value, (ii) if Employee voluntarily leaves his
employment with the Company, the Company will have the option to purchase all of
his Units for their then fair market value and (iii) if Employee is terminated
other than for "Cause" the Company will have the option to acquire Employee's
Units for their fair market value determined as of the first anniversary of
Employee's termination, in each case with fair market value, determined as set
forth in such agreement. It is further anticipated that, for these purposes,
"Cause" will be defined to include only:
(1) Falsification of the accounts of the Company, embezzlement of
funds of the Company or other material dishonesty with respect to the
Company or any of its affiliates;
(2) 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 seven (7) days
after written notice of such breach to employee; or (1)
(3) Gross or willful misconduct with respect to the Company or any
subsidiary or affiliate thereof which breach continues for more than ten
(10) days after
- 3 -
written notice of such breach to employee.
1.6 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. 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.
1.7 Vacation. Employee shall be entitled to receive annual vacation in
accordance with the Company's policies applicable to its senior managers.
1.8 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 to any restrictions on such expenses set by the
Managers or Chairman to such reasonable substantiation requirements as may be
specified by the Company from time to time.
1.9 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.
ARTICLE III
Proprietary Information
1.10 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
- 4 -
critical to the success of the Company, was acquired in part by the Company upon
the acquisition of the assets of Design Dynamics, Inc., (the "Acquisition") 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.
1.11 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 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.
1.12 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 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.
1.13 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 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.
- 5 -
1.14 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:
(1) 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.
(2) 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
1.15 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 exhibit or scenery 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;
- 6 -
(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.
1.16 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).
1.17 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
therefore different provisions to effect the intent of this Article IV to the
maximum extent possible.
ARTICLE V
Indemnification
- 7 -
1.18 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 will not be unreasonably
withheld.
ARTICLE VI
Termination of Employment and Severance Benefits
1.19 Events of Termination by the Company.
(1) 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, in addition to such amounts as may be payable
to Employee pursuant to Article II of this Agreement, any earned but unpaid
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
- 8 -
Employee shall fail to submit such certification, the Company's determination of
such issue shall be binding on Employee.
(2) 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. The following shall constitute
"Cause" for termination.
(1) Employee's falsification of the accounts of the Company,
embezzlement of funds of the Company or other material dishonesty with
respect to the Company or any of its affiliates; or
(2) Conviction of, or plea of nolo contendere to, a felony or other
crime involving moral turpitude (it being understood that violation of a
motor vehicle code does not constitute such a crime); or
(3) Conduct engaged in or action taken or omitted to be taken by
Employee which is in material breach of this Agreement, which breach
continues for more than seven (7) days after written notice of such breach
is given to Employee; or
(4) Material failure satisfactorily to perform a substantial portion
of Employee's duties and responsibilities hereunder which failure continues
for more than thirty (30) days after written notice of such failure is
given to Employee; or
(5) Gross or willful misconduct of Employee with respect to the
Company or any subsidiary or affiliate thereof which misconduct continues
for more than ten (10) days after written notice of such misconduct is
given to Employee.
Upon the giving of notice of termination of Employee's employment hereunder
for cause, the Company shall have no further obligation or liability to
Employee, other than the payment of salary earned and bonus earned (pursuant to
Section 2.2(c)) 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. Provided further, if Employee
is terminated pursuant to Section 6.1(b)(iv), Employee shall be entitled to
receive severance in the amount of six (6) months base salary in addition to the
amounts, if any, payable pursuant to Section 4.2 hereof.
1.20 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.
- 9 -
ARTICLE VII
Concluding Provisions
1.21 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.
1.22 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.
1.23 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.
1.24 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.
1.25 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.
1.26 Effective Date of Notice. The effective date of any offer, demand,
notice or instrument shall be the date of delivery to the addressee.
1.27 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.
1.28 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.
1.29 Applicable Law. This Agreement shall be governed by, construed and
enforced in accordance with the laws of the State of Colorado.
- 10 -
1.30 Resolution of Disputes.
(1) 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 Denver, Colorado 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.
(2) 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.
1.31 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.
1.32 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.
1.33 No Conflicts. The parties represent and warrant that the terms of this
Agreement do not violate any existing agreements with other parties.
1.34 Withholding. All payments made by Company to Employee hereunder shall
be subject to applicable withholding.
- 11 -
1.35 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
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 2.2(e) hereof.
[Remainder of page intentionally left blank.]
- 12 -
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:___________________________________________
Name:
Title:
THE EMPLOYEE:
______________________________________________
Xxxxxxx X. Xxxxxxx
- 13 -
EXHIBIT A
To be provided.
- 14 -
EXHIBIT B
--------------------------------------------------------------------------------
If EBITDA is: Employee shall receive:
--------------------------------------------------------------------------------
1997 $1.1 to $1.6M 10.0% of up to $500K
---- $1.6 to $3.0M 17.5% of up to $1.4M
EBITDA $3.0M and above 25% of excess
--------------------------------------------------------------------------------
1998 $2.0 to $3.0M 10.0% of up to $1M
---- $3.0 to $4.0M 15.0% of up to $1M
EBITDA $4.0 to $5.0M 20.0% of up to $1M
$5.0M and above 25% of excess
--------------------------------------------------------------------------------
1999 $3.2 to $4.0M 10.0% of up to $800K
---- $4.0 to $6.0M 15.0% of up to $2.0M
EBITDA $6.0 to $8.0M 20.0% of up to $2.0M
$8.0M and above 25% of excess
--------------------------------------------------------------------------------
EBITDA shall be calculated without any deduction for compensation to Jan
Speiczny and is adjusted for capital charges at 20%.
- 15 -
