CONSULTING AGREEMENT
AGREEMENT, dated as of January 1, 1999, by and between Acorn Holding Corp.,
a Delaware corporation (the "Corporation"), and Xxxxx Xxxxxxxx (the
"Consultant").
R E C I T A L S :
A. WHEREAS, the Corporation and Consultant entered into an employment
agreement, dated as of January 17, 1996, as amended (the "Employment
Agreement"), pursuant to which Consultant was employed as an executive of the
Corporation to the Corporation;
B. WHEREAS, the Corporation and the Consultant are desirous of converting
their relationship to that of a consultative nature; and
C. WHEREAS, the Corporation and Executive desire to supersede the
Employment Agreement and to enter into a this consulting agreement, on the terms
and conditions set forth herein.
In consideration of the mutual promises herein contained, the parties
hereto hereby agree as follows:
1. Engagement.
1.1. General. The Corporation hereby engages Consultant and the Corporation
hereby accepts such engagement, subject to the terms and conditions herein
contained.
1.2. Availability. Throughout the Engagement Period (as defined In Section
3.1 hereof), the Consultant will make himself reasonably available as a
consultant to Chief Executive Officer of the Corporation and to such other
persons as designated by the Chief Executive Officer. The Consultant will from
time to time render such advice and consultation to the Corporation and at such
time and place and in such manner (whether by in-person conference, telephone,
correspondence or otherwise) as the Corporation may reasonably request, upon
reasonable notice.
2. Compensation.
2.1. Compensation. For all services to be rendered by the Consultant under
this Agreement, the Corporation agrees to pay the Consultant $22,500 per year
(the "Compensation") during the Engagement Period, payable monthly at the rate
of $1,875 per month on the first day of each month commencing January 1, 1999.
The Corporation recognizes that the Consultant will be rendering more services
during certain periods of time than others, so that the payment schedule is
based on convenience of payment rather than reflecting the scope of work done
during any particular time period.
2.1.1 Adjustments in Compensation. Commencing on January 1, 1999 and on
each January 1 thereafter during the Engagement Period (or any extension
thereof), the Compensation shall be increased by that percentage, if any, by
which the Consumer Price Index published by the United States Bureau of Labor
Statistics as the same is in effect on the date of this Agreement.
2.2. Expenses. The Corporation will promptly reimburse Consultant for
expenses she reasonably incurs in connection with the performance of her duties
(including business travel and entertainment expenses) hereunder, all in
accordance with the Corporation's policy with respect thereto as in effect from
time to time.
3. Engagement Period; Termination.
3.1. Engagement Period. Consultant's engagement by the Corporation
hereunder shall commence on the date hereof and shall continue until December
31, 2001 (the "Initial Period"); provided, however, that the term of this
engagement shall be automatically extended by an additional period of one year
commencing as of December 31, 1999 and each December 31, thereafter, unless
Consultant or the Corporation shall elect by written notice to the other given
no later than September 30 of such calendar year that she or it does not wish
the term of this Agreement to be so extended (the Initial Period together with
any subsequent consulting period being referred to herein as the "Engagement
Period"). The Engagement Period may be terminated, prior to its scheduled
expiration date, as provided in Section 3.2 hereof. Upon termination of the
Engagement Period pursuant to Sections 3.2.1 through 3.2.6 hereof, inclusive,
Consultant will be released from any duties hereunder (except as set forth in
Section 4 hereof) and the obligations of the Corporation to Consultant will be
as set forth in Section 3.3 hereof.
3.2. Events of Termination. The Engagement Period will terminate upon the
occurrence of any one or more of the following events:
3.2.1. Death. In the event of Consultant's death, the Engagement Period
will terminate on the date of her death.
3.2.2. Voluntary Resignation. In the event of Consultant's voluntary
resignation during the Engagement Period, the Engagement Period will terminate
on the effective date of such resignation.
3.2.3. Disability. In the event of Consultant's Disability (as hereinafter
defined), the Corporation will have the option to terminate the Engagement
Period by giving a Notice of Termination (as defined in Section 3.4.3 hereof) to
Consultant. The Notice of Termination shall specify the date of termination,
which date shall not be earlier than thirty (30) days after the Notice of
Termination is given. For purposes of this Agreement, "Disability" means the
inability of Consultant for 180 consecutive days to substantially perform her
duties hereunder as a result of a physical or mental illness, all as determined
in good faith by the Board of the Corporation.
3.2.4. Cause. The Corporation may, at its option, terminate the Engagement
Period for "Cause" based on objective factors determined in good faith by a
majority of the Board of the Corporation, as set forth in a Notice of
Termination to Consultant specifying the reasons for termination and the failure
of the Consultant to cure the same within ten (10) days of her receiving the
Notice of Termination; provided, that in the event the Board of the Corporation
in good faith determines that the underlying reasons giving rise to such
determination cannot be cured, then said cure period shall not apply and the
Engagement Period shall terminate on the date of Consultant's receipt of the
Notice of Termination. For purposes of this Agreement, "Cause" means willful
misconduct or gross negligence by Consultant which results in material harm to
the Corporation and/or a material violation by Consultant of the provisions of
Section 4 hereof.
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3.2.5. Without Cause By the Corporation. The Corporation may, at its
option, terminate the Engagement Period for any reason whatsoever (other than
for the reasons set forth elsewhere in this Section 3.2) by giving a Notice of
Termination to Consultant. The Notice of Termination shall specify the date of
termination, which date shall not be later than thirty (30) days after the
Notice of Termination is given.
3.2.6. The Corporation's Material Breach. Consultant may, at her option,
terminate the Engagement Period upon the Corporation's material breach of this
Agreement and the continuation of such breach for more than ten (10) days after
written demand for cure of said breach is given to the Corporation by Consultant
(which demand will identify the manner in which the Corporation has materially
breached this Agreement); provided, that no such demand will be required if
Consultant determines in good faith that such material breach is not capable of
being cured by the Corporation within said ten (10) day period. The
Corporation's material breach of this Agreement shall include, but not be
limited to, (i) the failure of the Corporation to make any payment which it is
required to make hereunder to Consultant when such payment is due; (ii) the
assignment to Consultant without Consultant's express written consent of any
duties inconsistent with her position, duties, responsibilities and status with
the Corporation, or a change in Consultant's reporting responsibilities; and
(iii) a reduction by the Corporation in Consultant's Compensation.
3.3. Certain Obligations of the Corporation Following Termination of the
Engagement Period. Following termination of the Engagement Period under the
circumstances described below, the Corporation will pay to Consultant in
accordance with its regular payroll practices (except as set forth in Section
3.3.2 hereof), the following compensation and provide the following benefits in
full satisfaction and final settlement of any and all claims and demands that
Consultant now has or hereafter may have hereunder against the Corporation:
3.3.1. Death; Disability; For Cause. In the event that the Engagement
Period is terminated by reason of Consultant's death, Disability or For Cause,
the Corporation will pay to Consultant or her estate, as the case may be, the
Compensation through the effective date of termination.
3.3.2. Without Cause by the Corporation; Material Breach by the
Corporation. In the event that the Engagement Period is terminated by the
Corporation pursuant to Section 3.2.5 hereof or by Consultant pursuant to
Section 3.2.6 hereof, the Corporation will pay to Consultant, following the Date
of Termination, an amount equal to the aggregate Compensation which Consultant
would have been paid for the remainder of the Engagement Period. The foregoing
amount shall be paid as a lump sum payment and shall be delivered to Consultant
by the Corporation within 10 days following the Date of Termination.
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3.3.3. Without Cause By Consultant. In the event that the Engagement Period
is terminated by Consultant pursuant to Section 3.2.2 hereof, the Corporation
will pay to Consultant the Compensation and the benefits set forth in Sections
3.3.1 hereof through the Date of Termination.
3.3.4. "Notice of Termination" Defined. "Notice of Termination" means a
written notice which indicates the specific termination provision relied upon by
the Corporation or Consultant and, except in the case of termination pursuant to
Sections 3.2.2 or 3.2.5 hereof, which sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Engagement
Period under the termination provision so indicated.
3.3.5. "Date of Termination" Defined. "Date of Termination" means such date
as the Engagement Period is terminated in accordance with Section 3.2 hereof;
provided, however, that in the event that within thirty (30) days after any
Notice of Termination is given, the party receiving such Notice of Termination
notifies the other party that a dispute exists concerning the termination, the
Date of Termination will be the date on which the dispute is finally determined,
either by mutual written agreement of the parties or by a final judgment, order
or decree of a court of competent jurisdiction entered upon an arbitration award
rendered in an arbitration proceeding pursuant to Section 8.13 hereof.
4. Confidentiality and Nonsolicitation.
4.1. "Confidential Information" Defined. "Confidential Information" means
any and all information (oral or written) relating to the Corporation or any
person controlling, controlled by, or under common control with the Corporation
or any of its activities, including, but not limited to, information relating
to: technology, research, test procedures and results, machinery and equipment;
manufacturing processes; financial information; products; identity and
description of materials and services used; purchasing; costs; pricing;
customers and prospects; advertising, promotion and marketing; and selling,
servicing and information pertaining to any governmental investigation, except
such information which can be shown to be generally in the public domain (such
information not being deemed to be in the public domain merely because it is
embraced by more general information which is in the public domain), other than
as a result of a breach of the provisions of Section 4.2 hereof.
4.2. Nondisclosure of Confidential Information. Consultant will not at any
time (other than as may be required or appropriate in connection with the
performance by her of her duties hereunder), directly or indirectly, use,
communicate, disclose or disseminate any Confidential Information in any manner
whatsoever (except as may be required under legal process by subpoena or other
court order).
4.3. Injunctive Relief. The parties hereby acknowledge and agree that (a)
the Corporation will be irreparably injured in the event of a breach by
Consultant of any of her obligations under this Section 4; (b) monetary damages
will not be an adequate remedy for any such breach; (c) the Corporation will be
entitled to injunctive relief, in addition to any other remedy which it may
have, in the event of any such breach, including, but not limited to,
termination of the Engagement Period for Cause; and (d) the existence of any
claims which Consultant may have against the Corporation, whether under this
Agreement or otherwise, will not be a defense to the enforcement by the
Corporation of any of its rights under this Section 4.
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4.4. Nonexclusivity and Survival. The covenants of Consultant contained in
this Section 4 are in addition to, and not in lieu of, any obligations which
Consultant may have with respect to the subject matter hereof, whether by
contract, as a matter of law or otherwise, and such covenants and their
enforceability will survive any termination of the Engagement Period by either
party and any investigation made with respect to the breach thereof by the
Corporation at any time.
5. Miscellaneous Provisions.
5.1. Severability. If, in any jurisdiction, any term or provision hereof is
determined to be invalid or unenforceable, (a) the remaining terms and
provisions hereof shall be unimpaired, (b) any such invalidity or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction, and (c) the invalid or
unenforceable term or provision shall, for purposes of such jurisdiction, be
deemed replaced by a term or provision that is valid and enforceable and that
comes closest to expressing the intention of the invalid or unenforceable term
or provision.
5.2. Execution in Counterparts. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate counterparts,
each of which shall be deemed to be an original but all of which taken together
shall constitute one and the same agreement (and all signatures need not appear
on any one counterpart), and this Agreement shall become effective when one or
more counterparts has been signed by each of the parties hereto and delivered to
each of the other parties hereto.
5.3. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed duly given when delivered by
hand, or when delivered if mailed by registered or certified mail or private
courier service, postage prepaid, return receipt requested, via facsimile (with
confirmed answerback) as follows:
If to the Corporation, to:
Acorn Holding Corp.
1251 Avenue of the Americas
New York, New York
Attention: Xxxxxxx X. Xxxxxxxxxx
If to Consultant, to:
Xxxxx Xxxxxxxx
0000 Xxxxxx Xxxx. #000
Xxxxxxxx, Xxxxxxx 00000
or to such other address(es) as a party hereto shall have designated by like
notice to the other parties hereto.
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5.4. Amendment. No provision of this Agreement may be modified, amended,
waived or discharged in any manner except by a written instrument executed by
both the Corporation and Consultant.
5.5. Entire Agreement. This Agreement constitutes the entire agreement of
the parties hereto with respect to the subject matter hereof, and supersedes all
prior agreements and understandings of the parties hereto, oral or written,
including but not limited to the Employment Agreement, with respect to the
subject matter hereof. Consultant and the Corporation hereby agree that the
Employment Agreement is hereby superseded and of no further force and effect,
and that this Agreement shall be effective as of the date hereof.
5.6. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to contracts made
and to be wholly performed therein without regard to its conflicts or choice of
law provisions.
5.7 Joint and Several Liability. The obligations and duties of the
Corporation hereunder are the joint and several obligations of each of Par and
Resources.
5.8. Headings. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Agreement.
5.9. Binding Effect; Successors and Assigns. Consultant may not delegate
her duties or assign her rights hereunder. This Agreement will inure to the
benefit of, and be binding upon, the parties hereto and their respective heirs,
legal representatives, successors and permitted assigns. The Corporation shall
require any successor (whether direct or indirect and whether by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Corporation, by an agreement in form and substance
reasonably satisfactory to Consultant, to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the Corporation
would be required to perform if no such succession had taken place.
5.10. Waiver, etc. The failure of either of the parties hereto to at any
time enforce any of the provisions of this Agreement shall not be deemed or
construed to be a waiver of any such provision, nor to in any way affect the
validity of this Agreement or any provision hereof or the right of either of the
parties hereto thereafter to enforce each and every provision of this Agreement.
No waiver of any breach of any of the provisions of this Agreement shall be
effective unless set forth in a written instrument executed by the party against
whom or which enforcement of such waiver is sought, and no waiver of any such
breach shall be construed or deemed to be a waiver of any other or subsequent
breach.
5.11. Capacity, etc. Consultant and the Corporation hereby represent and
warrant to the other that: (a) she or it has full power, authority and capacity
to execute and deliver this Agreement, and to perform her or its obligations
hereunder; (b) such execution, delivery and performance will not (and with the
giving of notice or lapse of time or both would not) result in the breach of any
agreements or other obligations to which she or it is a party or she or it is
otherwise bound; and (c) this Agreement is her or its valid and binding
obligation in accordance with its terms.
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5.12. Enforcement. If any party institutes legal action to enforce or
interpret the terms and conditions of this Agreement, the prevailing party shall
be awarded reasonable attorneys' fees at all trial and appellate levels, and the
expenses and costs incurred by such prevailing party in connection therewith.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto as of the date first above written.
ACORN HOLDING CORP.
By: Xxxxxxx X. Xxxxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxxxx
Title: Chairman & Chief Executive Officer
Xxxxx Xxxxxxxx
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Xxxxx Xxxxxxxx
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