EXHIBIT 10.15
LOAN OUT SERVICE AGREEMENT
This Loan Out Service Agreement is made effective March 26, 2003,
between Panavision, Inc., a Delaware Corporation ("Panavision" or the
"Company"), and Ziffren, Brittenham, Branca, Fischer, Xxxxxxx-Xxxxx & Xxxxxxxxxx
LLP ("ZBBFG-L&S"), with reference to the following:
A. Panavision wishes to utilize the services of Xxxxxxx Xxxxxxx,
Esq. ("Executive") on the terms and conditions set forth herein.
B. ZBBFG-L&S wishes to provide the services of Executive to
Panavision on the terms and conditions set forth herein.
1. Term of this Agreement: The term of this Agreement shall be
for a period of three years ("Term") (unless terminated sooner as provided
herein) commencing on the date both parties have signed this Agreement. Each
year of the Term of this Agreement ("Term Year") will commence on March 26th of
the current calendar year and end on March 25th of the following calendar year.
2. Executive's Services: Executive will serve as Co-Chairman of
the Company, or such other title as may be mutually agreed by Panavision and the
Executive, and shall report to the Executive Committee of Panavision. Executive
will devote his time and attention to Panavision's business affairs as
reasonably necessary during the Term of this Agreement on matters reasonably
requested by the Company's senior executive officers and the Executive Committee
of Panavision, including (but not limited to) long-term strategy and customer
relationships. In addition, Panavision's Board of Directors may from time to
time give Executive certain specific tasks to perform on Panavision's behalf.
Panavision agrees and acknowledges that Executive will not render legal advice
or legal services to the Company during the Term and that neither Executive nor
ZBBFG-L&S is being retained by the Company to render legal services. The parties
agree that Executive shall not be an employee of the Company and that nothing in
this Agreement shall be construed to establish an employment relationship
between Executive and the Company.
3. Compensation: ZBBFG-L&S accepts as full compensation for
Executive's non-exclusive services under this Agreement:
3.1. An annual sum of $250,000.00 ("Base Compensation") to
be paid in twelve equal installments, with the initial payment to be made on the
Effective Date of this Agreement and each succeeding payment to be made on a
monthly basis thereafter.
3.2 An annual bonus for each calendar year or portion
thereof during the Term, payable at the same time as bonuses for senior
executives of the Company or by March 15, whichever is earlier, the amount of
which will be calculated as follows:
a. If the targets for the calendar year set forth in
the Executive Incentive Compensation Plan are met or exceeded, the amount of the
bonus will be not less than 100% of Base Compensation as set forth in
sub-Paragraph 3.1;
b. Otherwise, the amount of the bonus will be not less
than the percentage of salary for bonus purposes assigned to the Chief Executive
Officer of Panavision for the year in question (but not more than 100%)
multiplied by Base Compensation.
c. For any period of less than a full calendar year
during the Term, the Executive shall be paid a bonus in accordance with
paragraphs 3.2(a) and (b), except that the amount of the bonus shall be prorated
to reflect the number of full calendar months of service rendered during that
calendar year pursuant to this Agreement.
3.3 In addition to the amounts to be paid to ZBBFG-L&S
pursuant to Section 3.1 and Section 3.2, ZBBFG-L&S shall be entitled to receive
a payment (the "Equity Participation Payment") at the time and in an amount
determined pursuant to this Section 3.3. The Equity Participation Payment shall
be made within fifteen (15) days following issuance of audited financial
statements of the Company for the fiscal year in which occurred the last day of
the Term pursuant to Section 1 or the last day on account of which the Company
made a payment of Base Salary pursuant to Section 3.1, as applicable (such
fiscal year, the "Final Fiscal Year"). The Equity Participation Payment shall be
in an amount equal to one percent (1%) of (i) EBITDA for the Final Fiscal Year
multiplied by 8.0, (ii) less the sum of (A) $600 million and (B) any
contributions to the capital of the Company since September 30, 2002 and
(iii)(A) less if an increase or (B) plus if a decrease, the change in debt
(reduced by any unrestricted cash) of the Company and its consolidated
subsidiaries outstanding between September 30, 2002 and the last day of the
Final Fiscal Year. The Equity Participation Payment may be subject to approval
by the stockholders of the Company at the Annual Meeting of Stockholders of the
Company next following the execution and delivery of this Agreement.
3.4 Business Expense Reimbursement: If Executive incurs
expenses arising out of the provision of services under the terms of this
Agreement, Executive will be reimbursed pursuant to Panavision's then current
business expenses reimbursement policies and procedures.
4. Termination:
4.1 Cause: In the event of:
x. xxxxx neglect by the Executive regarding the
provision of his services hereunder;
b. conviction of the Executive of any felony;
c. conviction of the Executive of any lesser crime
or offense involving the property of Panavision or any of its subsidiaries or
affiliates;
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d. willful misconduct by the Executive in
connection with the performance of any material portion of the Executive's
duties hereunder;
e. breach by the Executive of any material
provision of this Agreement;
f. breach by the Executive of Panavision's
official written Code of Conduct as in effect from time to time; or
g. any other conduct on the part of the Executive
which would make the provision of Executive's services to Panavision materially
prejudicial to the best interests of Panavision,
then Panavision may at any time by written notice to the Executive terminate the
Term, provided, however, that in the case of any matter covered by clauses (a),
(d), (e) or (g), Panavision shall first have given the Executive written notice
of the conduct (or lack thereof) at issue and 30 days within which to cure. Upon
such termination, this Agreement shall terminate and ZBBFG-L&S and/or the
Executive shall be entitled to receive no further amounts or benefits hereunder,
except Base Compensation as shall have been earned to the date of such
termination.
4.2 Termination Without Cause:Panavision may terminate
this Agreement without cause upon the giving of ten (10) days written notice
without any further liability than that set forth herein.
a. If this Agreement is terminated pursuant to
this sub-Paragraph 4.2 Panavision will pay to ZBBFG-L &S: (i) the amount of the
Base Compensation not yet paid for the remainder of the Term Year as of the date
on which this Agreement is terminated or the sum of $125,000.00, whichever is
greater; (ii) a sum equal to a percentage of the bonus set forth in
sub-Paragraph 3.2 which percentage will be equivalent to the number of days
which have elapsed in the Term Year as of the date on which this Agreement is
terminated divided by 365; and (iii) the Equity Participation Payment pursuant
to Section 3.3.
5. Assignment: The rights of Panavision under this Agreement may,
without the consent of Executive, be assigned by Panavision, in its sole and
unfettered discretion, to any person, firm, corporation or other business entity
which at any time, whether by purchase, merger or otherwise, directly or
indirectly, acquires all or substantially all of the assets or business of
Panavision, provided such person, firm, corporation or other business entity is
controlled, directly or indirectly, by Xxxxxx X. Xxxxxxxx.
6. Confidential Information: During the provision of Executive's
services hereunder, Executive may come into possession of Panavision's
proprietary information, confidential information and/or trade secrets
("Confidential Information"). In order to insure that such Confidential
Information is not misappropriated, Executive will execute and abide by
Panavision's Confidential Information Agreement at the time this Agreement is
executed by the parties.
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7. Insurance. Throughout the Term, and thereafter for so long as
any claim may be interposed against Executive related to his services under this
Agreement, Panavision shall maintain, without cost to Executive, Directors and
Officers Liability insurance covering Executive, with limits of liability of
amounts not less than those in effect as of the date of this Agreement.
8. Notices: Any notice required under this Agreement shall be in
writing and shall be delivered by messenger and facsimile:
a. If to Panavision, at
PANAVISION, INC.
0000 Xx Xxxx Xxxxxx
Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxx
000-000-0000
b. If to ZBBFG-L&S, at
Ziffren, Brittenham, Branca, Fischer, Xxxxxxx-Xxxxx
& Stiffelman LLP
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx
310-553-7068
and:
c. Xxxxxxx Xxxxxxx, Esq.
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
000-000-0000
9. Arbitration: Any claim, dispute or controversy between or
among the Company, Executive or ZBBFG-L&S arising out of or relating to the
provisions of this Agreement (including, without limitation, any claim relating
to the purported meaning, validity, interpretation, effect, enforceability,
performance, enforcement or breach of any provision of this Agreement), whether
in contract or tort (collectively, "Dispute") shall be resolved by final and
binding arbitration conducted by J.A.M.S. in accordance with its Comprehensive
Arbitration Rules in Los Angeles, California, except that the parties may
conduct discovery in accordance with the California Arbitration Act (Code of
Civil Procedure Section 1280 et. seq.). The arbitrability of any such Dispute
shall likewise be determined in such arbitration. The parties hereby acknowledge
that by agreeing to arbitrate Disputes pursuant to this Section 7, they have
hereby waived their respective rights to trial by jury. Panavision shall advance
the costs of the arbitration, including arbitrator's fees and expenses but not
including the attorney's fees of
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Executive or any other party. Notwithstanding the foregoing sentence, the
arbitrator shall, in the award, allocate all of the costs of the arbitration,
including the fees of the arbitrator and the reasonable attorneys' fees of the
prevailing party, against the party who did not prevail. The determinations,
findings, judgments, damages and/or awards rendered through any such arbitration
shall be final and binding on the parties hereto and judgment thereon may be
entered in any court of competent jurisdiction.
10. This Agreement will be governed by and construed in
accordance with the laws of the State of California applicable to contracts made
and to be performed wholly in such state, and without regard to the conflicts of
laws principles thereof. The parties shall mutually prepare and approve a press
release concerning this Agreement.
PANAVISION, INC.
Dated: April 10, 2003 By /S/ XXXXXX XXXXXX
---------------------------- ----------------------------
Its Vice Chairman
-------------------------
ZIFFREN, BRITTENHAM, BRANCA, FISCHER,
XXXXXXX-XXXXX & STIFFELMAN LLP
Dated: April 10, 2003 By /S/ XXXXXXX XXXXXXX
---------------------------- ----------------------------
Its Partner
-------------------------
Dated: April 10, 2003 By /S/ XXXXXXX XXXXXXX
---------------------------- ----------------------------
Xxxxxxx Xxxxxxx
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