EXHIBIT 10.15
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement"), dated as of October 3,
2002, between XXXX Industries, Inc., a Delaware corporation ("the Company"), and
Xxxxx X. Xxxxxxxxx (the "Consultant").
WHEREAS, the Consultant has been serving the Company as its President
and Chief Executive Officer pursuant to the terms of an Employment Agreement
entered into on November 11, 1999 (the "Prior Agreement"), under which the
Employment Term (as defined therein) will expire on November 11, 2002, and
WHEREAS, the Company desires that the Consultant provide certain
consulting services to its Board of Directors (the "Board") and Chief Executive
Officer following the expiration of the Employment Term and the Consultant is
willing to provide such services on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and intending to be legally bound hereby, the parties hereto agree as
follows:
1. RESIGNATION. The Consultant hereby resigns as President and Chief
Executive Officer of the Company effective as of November 11, 2002 (the
"Effective Date").
2. RETENTION AS CONSULTANT. The Company shall retain the Consultant
and the Consultant shall serve the Company as consultant to the Board and Chief
Executive Officer of the Company in connection with strategic reviews and
general sales advice, shall assist the Company in connection with its pursuit
and maintenance of a contract with the U.S. Coast Guard and shall provide such
other services as reasonably requested by the Board on the terms and conditions
set forth herein.
3. TERM. The Consultant shall be so retained for the period (the
"Consulting Term") commencing as of the Effective Date and ending December 31,
2003 unless terminated sooner upon (i) the death of the Consultant, (ii) the
material breach of this Agreement by the Consultant or (iii) conduct by the
Consultant that is inimical to the best interests of the Company.
4. COMPENSATION AND RELATED MATTERS. As full and complete
compensation for the services to be rendered by the Consultant hereunder the
Company shall make the following payments to the Consultant:
(a) CONSULTING FEES. Subject to Section 2 hereof, in
consideration for the Consultant's services hereunder, during the Consulting
Term the Company shall pay the Consultant at a rate of $31,667 per month for the
first 3 months of the Consulting Term and at a rate of $1,500 per month for each
month thereafter (the "Fees"). The Fees set forth
in this paragraph 4(a) shall be paid to the Consultant no less frequently than
monthly and shall be pro-rated for the final portion of a month at the end of
the Consulting Term.
(b) COMMISSIONS. In addition to the Fees, during the Consulting
Term, the Consultant shall be eligible to earn commissions on revenues generated
by sales made to any customer obtained by the Consultant provided that the
Consultant has obtained pre-approval from the then current Chief Executive
Officer to solicit such customer. The amount of any such commissions shall be
equal to 0.007 multiplied by the revenues generated by sales to such customer
for a period of five years beginning on the date of the first contract between
the customer and the Company. Commissions shall be paid within 30 days following
the end of each calendar year quarter with respect to revenues received during
such quarter. Unless otherwise agreed between the Company and the Consultant, no
commissions shall be paid pursuant to this Section 4(b) following a Change in
Control (as defined in Exhibit A hereto) except for commissions payable in
respect of customer orders that had been received prior to the date of the
Change in Control.
(c) REIMBURSEMENT OF EXPENSES. The Company shall reimburse the
Consultant for reasonable business expenses incurred in the performance of the
Consultant's duties hereunder upon submission of reasonably satisfactory
documentation in accordance with the general policies of the Company; provided,
however, that no expenses in excess of $500 will be reimbursed unless the
Consultant obtained prior approval to incur such expenses in writing by the
Board or the then Chief Executive Officer.
(d) WITHHOLDING. The Consultant acknowledges that as of the
Effective Date he will no longer be an "employee" (or person of similar status)
of the Company or any of its affiliates for purposes of the Internal Revenue
Code of 1986, as amended (the "Code"), or for purposes of eligibility for
employee benefits provided by the Company or any of its affiliates. The
Consultant waives any rights he may have to participate in any employee, fringe
benefit or other similar plan of the Company or any of its affiliates. The
Consultant acknowledges that he will not be paid any "wages" (as defined in the
Code) hereunder and that the Consultant shall be solely responsible for all
taxes imposed on him by reason of any compensation, benefits or other amounts
payable hereunder.
5. CONSULTANT COVENANTS. The Consultant hereby acknowledges that the
covenants and other provisions set forth in Section 6 of the Prior Agreement
survive the expiration of the Prior Agreement and the termination of this
Agreement and the Consultant hereby affirms his agreement to comply with such
provisions. In the event the Consultant violates any of the covenants set forth
in Section 6 of the Prior Agreement, in addition to any other remedies the
Company may have, all of the Company's obligations under this Agreement shall
immediately cease.
6. BINDING EFFECT/ASSIGNMENT. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective heirs,
executors, personal representatives, estates, successors (including, without
limitation, by way of merger) and
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assigns. Notwithstanding the provisions of the immediately preceding sentence,
the Consultant shall not assign all or any portion of this Agreement without the
prior written consent of the Company.
7. NOTICE. For the purposes of this Agreement, notices, demands and
all other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered or (unless otherwise
specified) mailed by United States certified or registered mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Company: XXXX Industries, Inc.
0000 Xxxx Xxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxx
If to the Employee: Xxxxx X. Xxxxxxxxx
0000 Xxxxxxx Xxxxx Xxxx
Xxx Xxxxxx, Xxxxxxxxxx 00000
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
8. MODIFICATION OF AGREEMENT. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by the parties hereto. No waiver by either party
hereto at any time of any breach by the other party hereto, or compliance with,
any condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time
9. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of Illinois, without reference
to the principles of conflict of laws.
10. ENTIRE AGREEMENT. This Agreement and Section 6 of the Prior
Agreement set forth the entire understanding of the parties hereto with respect
to the subject matter hereof and supersede all prior agreements, written or
oral, between them as to such subject matter.
11. SEVERABILITY. If any provision of this Agreement, or any
application thereof to any circumstances, is invalid, in whole or in part, such
provision or application shall to that extent be severable and shall not affect
other provisions or applications of this Agreement.
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12. HEADINGS. The headings contained herein are solely for the
purposes of reference, are not part of this Agreement and shall not in any way
affect the meaning or interpretation of this Agreement.
13. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by authority of its Board of Directors, and the Consultant has hereinto
set his hand, on the date and year first above written.
COMPANY:
XXXX INDUSTRIES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: Chairman of the Board
CONSULTANT:
/s/ Xxxxx X. Xxxxxxxxx
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XXXXX X. XXXXXXXXX
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Exhibit A
"Change in Control" shall mean the occurrence of any one of the
following events:
(a) An acquisition (other than directly from the Company) of any
common stock, par value $.01 per share, of the Company ("Common Stock") or other
voting securities of the Company by any "Person" (as the term person is used for
purposes of Section 13(d) or 14(d) of the Exchange Act), immediately after which
such Person has "Beneficial Ownership" (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of fifty percent (50%) or more of either (i)
the then outstanding Common Stock or (ii) the combined voting power of the
Company's then outstanding voting securities entitled to vote for the election
of directors (the "Voting Securities"); PROVIDED, HOWEVER, in determining
whether a Change in Control has occurred, Common Stock or Voting Securities
which are acquired in a "Non-Control Acquisition" (as hereinafter defined) shall
not constitute an acquisition which would cause a Change in Control. A
"Non-Control Acquisition" shall mean an acquisition by (i) an employee benefit
plan (or a trust forming a part thereof) maintained by (A) the Company or (B)
any corporation or other Person the majority of the voting power, voting equity
securities or equity interest of which is owned, directly or indirectly, by the
Company (for purposes of this definition, a "Related Entity"), (ii) the Company
or any Related Entity, (iii) any Person in connection with a "Non-Control
Transaction" (as hereinafter defined), or (iv) the UNR Asbestos-Disease Claims
Trust;
(b) The individuals who, as of the date of this Agreement are
members of the Board (the "Incumbent Board"), cease for any reason to constitute
at least a majority of the members of the Board; PROVIDED, HOWEVER, that if the
election, or nomination for election by the Company's common stockholders, of
any new director was approved by a vote of at least two-thirds of the Incumbent
Board, such new director shall, for purposes of this Agreement, be considered a
member of the Incumbent Board; PROVIDED, FURTHER, HOWEVER, that no individual
shall be considered a member of the Incumbent Board if such individual initially
assumed office as a result of either an actual or threatened Election Contest
(as described in Rule 14a-11 promulgated under the Exchange Act) or other actual
or threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board (a "Proxy Contest"), including by reason of any agreement
intended to avoid or settle any Election Contest or Proxy Contest; or
(c) The consummation of:
(i) A merger, consolidation or reorganization with or into
the Company or in which securities of the Company are issued (a "Merger"),
unless the
Merger is a Non-Control Transaction. A "Non-Control Transaction" shall mean a
Merger if:
(A) the stockholders of the Company immediately
before such Merger own directly or indirectly immediately following the Merger
at least fifty percent (50%) of the outstanding common stock and the combined
voting power of the outstanding voting securities of (x) the corporation
resulting from such Merger (the "Surviving Corporation"), if fifty percent (50%)
or more of the combined voting power of the then outstanding voting securities
of the Surviving Corporation is not Beneficially Owned, directly or indirectly
by another corporation (a "Parent Corporation"), or (y) the Parent Corporation,
if fifty percent (50%) or more of the combined voting power of the Surviving
Corporation's then outstanding voting securities is Beneficially Owned, directly
or indirectly, by a Parent Corporation;
(B) the individuals who were members of the
Incumbent Board immediately prior to the execution of the agreement providing
for the Merger constitute at least a majority of the members of the board of
directors of (x) the Surviving Corporation, if fifty percent (50%) or more of
the combined voting power of the then outstanding voting securities of the
Surviving Corporation is not Beneficially Owned, directly or indirectly by a
Parent Corporation, or (y) the Parent Corporation, if fifty percent (50%) or
more of the combined voting power of the Surviving Corporation's then
outstanding voting securities is Beneficially Owned, directly or indirectly, by
a Parent Corporation; and
(C) no Person other than (1) the Company or another
corporation that is a party to the agreement of Merger, (2) any Related Entity,
or (3) any employee benefit plan (or any trust forming a part thereof) that,
immediately prior to the Merger, was maintained by the Company or any Related
Entity, or (4) any Person who, immediately prior to the Merger had Beneficial
Ownership of fifty percent (50%) or more of the then outstanding Common Stock or
Voting Securities, has Beneficial Ownership immediately following the Merger,
directly or indirectly, of fifty percent (50%) or more of the combined voting
power of the outstanding voting securities or common stock of (x) the Surviving
Corporation, if fifty percent (50%) or more of the combined voting power of the
then outstanding voting securities of the Surviving Corporation is not
Beneficially Owned, directly or indirectly by a Parent Corporation, or (y) the
Parent Corporation, if fifty percent (50%) or more of the combined voting power
of the Surviving Corporation's then outstanding voting securities is
Beneficially Owned, directly or indirectly, by a Parent Corporation;
(ii) A complete liquidation or dissolution of the Company;
or
(iii) The sale or other disposition of all or substantially
all of the assets of the Company to any Person (other than a transfer to a
Related Entity or
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under conditions that would constitute a Non-Control Transaction with the
disposition of assets being regarded as a Merger for this purpose or the
distribution to the Company's stockholders of the stock of a Related Entity or
any other assets).
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
solely because any Person (the "Subject Person") acquired Beneficial Ownership
of more than the permitted amount of the then outstanding Common Stock or Voting
Securities as a result of the acquisition of Common Stock or Voting Securities
by the Company which, by reducing the number of Common Stock or Voting
Securities then outstanding, increases the proportional number of shares
Beneficially Owned by the Subject Persons, provided that if a Change in Control
would occur (but for the operation of this sentence) as a result of the
acquisition of Common Stock or Voting Securities by the Company, and after such
share acquisition by the Company, the Subject Person becomes the Beneficial
Owner of any additional Common Stock or Voting Securities which increases the
percentage of the then outstanding Common Stock or Voting Securities
Beneficially Owned by the Subject Person, then a Change in Control shall occur.
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