XXXXXX X. MANNERS
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") dated as of August
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 Xxxxxx X. Manners,
an individual residing at 00 Xxxxx Xxxxx, XXxxx Xxxxxxxxxxx, XX 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 is being employed as Senior Vice President,
Business Affairs and General Counsel of the Company (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.l Employment/Duties. The Company hereby agrees to employ the
Employee and the Employee hereby accepts employment as the Senior Vice
President, Business Affairs and General Counsel of the Company 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 such
duties as are customarily associated with the position of Senior Vice
President, Business Affairs and General Counsel including providing
general legal advice, supervising outside lawyers, providing general
business and strategic advice and planning and such other duties and
responsibilities as my be assigned by the Company's Chairman. Employee
will be invited to attend all meetings of the Company's board of
advisors. During the Term, Employee shall devote substantially all of his
working time, attention and skill to the business affairs of the Company.
Employee's office will be in the Company's New Windsor, New York location
or such other office within the New York Metropolitan area of the Company
as is mutually determined between the parties; provided, however, that
Employee may work part time from home or at an office at Pepe & Hazard
prior to his relocating to the New York metropolitan area.
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1.2 Effective Date. This Agreement will commence on the date
Employee commences full-time work for the Company, anticipated to be on
or about August 11, 1997, 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 four (4) years or until terminated
as provided in Article VI. Thereafter, the Agreement will be
automatically renewed for successive one-year terms unless the Company
gives Employee a minimum of six month notice of non-renewal 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) 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. 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.
2.3 Equity Provisions
(a) The Company currently has 10,000,000 units
authorized and 5,199,213 issued and outstanding LLC units on a
fully diluted basis. Employee will receive 113,000 Company LLC
Capital Appreciation Units which will entitle Employee to
receive annual distributions of $0.05 per year per Unit when
payable pursuant to the terms of the Company's limited liability
company agreement and which will entitle Employee to share in
the appreciation of the Company upon a sale of the Company, an
initial public offering or a similar event above an equity value
of $55 million, such $55 million figure referred to as the
"Threshold." 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 2.9 and
Section 6.1 hereof respectively).
(b) Twenty-two thousand six hundred (22,600) of
Employee's Units will be fully vested at the time of grant, and
an additional twenty-two thousand six hundred (22,600) Units
will vest on each of the first, second and third anniversaries
of the Effective Date provided that Employee has not been
terminated for Cause and has not voluntarily departed his
employment without Good Reason. The final twenty-two thousand
six
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hundred (22,600) Units will vest on the fourth anniversary
of the Effective Date provided (i) that Employee has not been
terminated for Cause and has not voluntarily departed his
employment without Good Reason and (ii) the Company has
completed an initial public offering and has had a market
capitalization of its outstanding equity securities (whether or
not registered under the securities laws of the United States)
of at least two hundred fifty million dollars for a ten
consecutive trading day period.
(c) The Threshold 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.
2.4 Relocation Expenses
(a) The Company shall pay reasonable temporary living
expenses pending sale of Employee's house including the rental of
suitable temporary quarters if necessary. During the period, if any, that
Employee is responsible for carrying costs on the both a new house and
Employee's South Glastonbury house, the Company will pay the carrying
costs on the less expensive of the two houses. The Company shall pay all
direct moving expenses incurred by Employee, sales costs incident to
selling Employee's South Glastonbury house including brokerage fees,
attorney's fees, if any, and transfer taxes and shall pay closing costs
on new house purchased by Employee including title insurance, mortgage
recording tax and up to 2 points on mortgage provided that the amount
payable pursuant to this sentence shall not exceed seventy thousand
dollars ($70,000). All taxable benefits will be grossed up. Employee
agrees that if his employment is terminated with Cause or he voluntarily
terminates his employment without Good Reason prior to the third
anniversary of the Effective Date he shall repay the relocation costs
paid by the Company pursuant to this Section 2.4(a) as follows:
If termination occurs: Employee will repay
the following percent of
costs paid by the Company:
Prior to the first anniversary of the Effective Date 100%
Prior to the second anniversary of the Effective Date 66-2/3%
Prior to the third anniversary of the Effective Date 33-1/3%
Thereafter 0%
(b) The Company will make Employee a four-year term
loan in an amount equal to the difference between the cash sales proceeds
from the sale of Employee's South Glastonbury house and a twenty percent
(20%) down payment on new house. This loan will bear interest at the
minimum rate necessary to avoid the imputation of interest, shall have a
term of four years, and be payable solely from 50% of after-tax bonus
proceeds over the four year initial Term hereof. The loan is anticipated
to have a principal amount of forty to sixty thousand dollars plus the
loss realized by Employee on the sale of his South Glastonbury house and
will in no event exceed one
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hundred twenty thousand dollars ($120,000). Employee agrees that if his
employment is terminated with Cause or he voluntarily terminates his
employment without Good Reason prior to the fourth anniversary of the
Effective Date he shall repay the outstanding portion of the loan made
pursuant to this Section 2.4(b).
2.5 Automobile Expenses The Company shall reimburse Employee for
all costs including without limitation, insurance, gasoline and
maintenance associated with the lease of and operation of a mutually
agreeable automobile. Reimbursable lease costs will not exceed five
hundred dollar per month.
2.6 Adjustment if Bash Transaction Does Not Occur. The Threshold
will be adjusted as agreed by the parties if the Company's acquisition of
the assets of Bash Theatrical Lighting Inc. and its affiliated entities
has not occurred on or before September 30, 1997 or such later date as
the parties may agree.
2.7 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, 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 Capital Appreciation Units in a manner designed to make
Employee as nearly as may be practicable economically indifferent to such
change. The provisions of this subparagraph shall similarly apply to
successive reclassifications, changes, consolidations, mergers, sales and
transfers.
(b) If the Company shall at any time while Employee's
Capital Appreciation Units remain outstanding in whole or in part: (i)
divide its limited liability company Units, the Thresholds shall be
proportionately reduced; or (ii) combine its limited liability company
Units, the Thresholds shall be proportionately increased
2.8 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 five percent.
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2.9 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; or
(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.
2.10 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
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.
2.11 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.
2.12 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.
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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 Pepe & Hazard.
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.
2.13 Vacation. Employee shall be entitled to receive four weeks
of annual vacation in accordance with the Company's policies applicable
to its senior managers.
2.14 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
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.
2.15 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
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
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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 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
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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
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
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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.
ARTICLE II
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
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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.
ARTICLE III
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
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reasonable detail the nature of such good reason. The following shall
constitute "Good Reason" for Employee to terminate his employment:
(i) 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; or
(ii) the transfer of Employee's office outside
of the New Windsor, New York or metropolitan New York
area without Employee's consent.
(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
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 IV
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.
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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.
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
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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.
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.
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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: Xxxxxxxx X. Xxxxxx
Title: Chairman
THE EMPLOYEE:
________________________________________
Xxxxxx X. Manners
