CONSULTING AGREEMENT
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This CONSULTING AGREEMENT, dated this 18th day of June, 2002, by and
between Xxxxxxx-Xxxxxx Corporation, a Delaware corporation (the "Company") and
Xxxxxx Xxxxxxx ("Xxxxxxx").
WITNESSETH:
WHEREAS, Xxxxxxx has been serving as an Executive Vice President of the
Company;
WHEREAS, Xxxxxxx desires to retire from his position with the Company,
and otherwise as an employee and officer of the Company and all of its
affiliates effective as of February 28, 2003 (the "Retirement Date");
WHEREAS, in contemplation of compensation and benefit arrangements for
Xxxxxxx such as are provided herein, the parties determined that no award will
be made to Xxxxxxx in November 2002 under the Long-Term Incentive Plan of the
Company or in 2002 under the Incentive Compensation Plan;
WHEREAS, the parties hereto desire that, commencing after the
Retirement Date, Xxxxxxx will serve as a consultant to the Company as set forth
herein; and
WHEREAS, the parties desire to set forth the exact nature and the
amount of compensation and benefits to be provided to Xxxxxxx for his consulting
services to the Company.
NOW THEREFORE, the parties hereto agree as follows:
I. Retirement
1.1 Retirement from Position as Executive Vice President.
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Xxxxxxx hereby confirms his retirement from his position as Executive
Vice President of the Company and hereby resigns, effective as of the Retirement
Date, from all of his other positions as an officer of the Company and as a
director and officer of each of its affiliates and, effective as of the
Retirement Date, Xxxxxxx shall cease to be an employee of the Company and each
of its affiliates for all purposes.
1.2. Compensation and Related Matters.
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(a) Lump Sum Bonus. In lieu of amounts that Xxxxxxx might have
otherwise received under the Incentive Compensation Plans of the Company 2003,
the Company agrees to pay to Xxxxxxx a lump sum bonus of two hundred thousand
dollars and no cents in February, 2003.
(b) Retirement Benefits. Xxxxxxx shall receive upon and as a
result of his retirement those payments and other benefits to which Xxxxxxx is
entitled under any of the following Plans of the Company in accordance with the
provisions of the Plans: Supplemental Retirement Benefit Agreement, Long-Term
Incentive Plan; Retirement Plan; Retirement Benefits Restoration Plan; Deferred
Compensation Plan and Savings and Investment Plan. During the "Consulting
Period," as defined in Section 2.1 of this Agreement, Xxxxxxx shall also be
entitled to that business travel accident and worker's compensation insurance
which the Company offers consultants to the Company in the ordinary course of
business, paid at Company expense.
(c) Automobile. The Company shall offer to sell to Xxxxxxx the
automobile currently provided to him by the Company at wholesale value, in
accordance with the terms of the Company's current automobile policy if the
automobile is owned by the Company and by the terms of the pertinent lease
agreement if the automobile is leased by the Company.
(d) Medical, Dental and Prescription Benefits; Certain
Insurance Benefits. During the period commencing on the Retirement Date and
ending on February 28, 2007, the Company shall continue on behalf of Xxxxxxx and
his spouse the medical, dental, and prescription drug benefits provided to
Xxxxxxx and his spouse immediately prior to the Retirement Date, as adjusted for
any changes in the plans affecting benefits provided to all plan participants.
(e) Withholding. The Company shall have the right to deduct
from any amounts payable under this Section 1.2, any taxes or other amounts
required by law to be withheld.
II. Consulting Period
2.1. Consulting Services.
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During the period commencing on the Retirement Date and ending
on February 28, 2007, (the "Consulting Period"), Xxxxxxx agrees to serve the
Company as a consultant and render such advisory and consulting services to the
Company and its affiliates in connection with the business of the Company and
its affiliates as may reasonably be requested by the Chief Executive Officer of
the Company, having due regard to Xxxxxxx'x residence at the time, in connection
with any matter with respect to which he has experience or special competence by
reason of his prior employment with the Company (the "Consulting Services"). The
Consulting Services shall be rendered at such locations as shall be mutually
convenient to the Company and Xxxxxxx. The Company agrees that the Consulting
Services shall be appropriate for a former Executive Vice President of the
Company.
2.2. Consulting Fees.
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Xxxxxxx shall provide the services described in paragraph 2.1
during the period from March 1, 2003 through February 29, 2004 in consideration
for amounts paid to him as salary and bonus from the date of this Agreement up
to the Retirement Date. In consideration for the Consulting Services to be
provided the Company and for the acceptance of the terms
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contained in this Agreement, provided Xxxxxxx is then available to perform
Consulting Services for the Company, except for such unavailability as results
from urgent personal matters, a failure by the Company to provide reasonable
advance notice of the assignment in light of the date and place of the
assignment or physical incapacity, and provided further, that Xxxxxxx is not in
breach of, or has not committed a material breach (which has not been cured), of
any of the covenants contained in Section 3.1 hereof, during the Consulting
Period, the Company shall pay Xxxxxxx monthly consulting fees of twelve thousand
five hundred dollars and no cents ($12,500.00) payable in the last pay period of
the month beginning in March , 2004 and ending in February , 2005, of eight
thousand three hundred and thirty three dollars and thirty four cents
($8,333.34) payable in the last pay period of the month beginning in March ,
2005 and ending in February , 2006 and of four thousand one hundred and sixty
six dollars and sixty seven cents ($4,166.67) payable in the last pay period of
the month beginning in March , 2006 and ending in February , 2007 (the
"Consulting Fees"). Xxxxxxx shall have the right to decline any request for
services by the Company due to urgent personal matters, a failure by the Company
to provide reasonable advance notice of the assignment in light of the date and
place of the assignment or physical incapacity.
2.3. Reimbursement of Expenses.
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During the Consulting Period, the Company shall pay Xxxxxxx
within thirty (30) days the reasonable expenses incurred by him in the
performance of the Consulting Services, including, without limitation, those
incurred in connection with business related travel or entertainment, provided
that Xxxxxxx properly accounts therefor in accordance with the Company's current
expense reimbursement policy.
2.4. Non-Employee Status.
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Xxxxxxx acknowledges that during the Consulting Period and
thereafter he will not be an "employee" (or person of similar status) of the
Company or any of its affiliates for any purpose. Xxxxxxx acknowledges that he
will not be paid any "wages" (as defined in any relevant law) in respect of the
Consulting Services under Section 2.2 of the Agreement, and that he shall be
solely responsible for all taxes imposed on him by reason of the payment of the
Consulting Fees and/or any other compensation, benefits or other amounts payable
in respect of the Consulting Services.
III. General Provisions
3.1. Covenants.
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(a) Unauthorized Disclosure. Xxxxxxx agrees and understands
that in his position with the Company, Xxxxxxx has been and will be exposed to
and has and will receive information relating to the confidential affairs the
Company and its affiliates, including but not limited to technical information,
intellectual property, business and marketing plans, strategies, customer
information, other information concerning the products, promotions, development,
financing, expansion plans, business policies and practices of the Company, its
affiliates, and other forms of information considered by the Company to be
confidential and in the nature of
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trade secrets ("Confidential Information"). Xxxxxxx agrees that during the
Consulting Period and thereafter, Xxxxxxx will not disclose such Confidential
Information, either directly or indirectly, to any third person or entity
without the prior written consent of the Company; provided, however, that (i)
Xxxxxxx shall have no such obligation to the extent such information is or
becomes publicly known other than as a result of Xxxxxxx'x breach of his
obligations hereunder and (ii) Xxxxxxx may, after giving prior notice to the
Company to the extent practicable under the circumstances, disclose such
information to the extent required by applicable law or governmental regulation
or judicial or regulatory process. This confidentiality covenant has no
temporal, geographical or territorial restriction. Upon the termination of the
Consulting Period, Xxxxxxx will, to the extent requested by the Company in
writing, promptly supply to the Company all property, keys, notes, memoranda,
writings, lists, files, reports, customer lists, correspondence, tapes, disks,
cards, surveys, maps, logs, machines, technical data or any other tangible
product or document which has been produced by, received by or otherwise
submitted to Xxxxxxx during or prior to the Consulting Period.
(b) Non-competition. Xxxxxxx agrees that, for a period
commencing on the date hereof and ending five years (5) years after the
termination or expiration of this Agreement for any reason (`the Non-competition
Term"), he shall not, without the Company's prior written consent, anywhere in
North America, and anywhere that the Company's Metal Improvement Company, Inc.
subsidiary has done business under Xxxxxxx'x supervision and control, directly
or indirectly:
(1) engage, directly or indirectly, as an employee, director,
shareholder, officer, partner, consultant, independent
contractor or otherwise in any activity for or on behalf of
any person or entity in a line of business competitive to that
carried on by the Company or it's Metal Improvement Company,
Inc. subsidiary, or engage in any manner in the design,
development, manufacturing, assembling, installing, and/or
marketing of any technology competitive with the business
carried on by the Company or it's Metal Improvement Company,
Inc. subsidiary during Xxxxxxx'x employment with the Company,
so long as the Company or it's Metal Improvement Company, Inc.
subsidiary is still carrying on said business;
(2) solicit or attempt to solicit business of any customers of
the Company or it's Metal Improvement Company, Inc. subsidiary
(including prospective customers solicited by the Company or
it's Metal Improvement Company, Inc. subsidiary) for products
or services the same as or similar to those offered, sold,
produced or under development by the Company or it's Metal
Improvement Company, Inc. subsidiary during Xxxxxxx'x
employment with the Company, so long as the Company or it's
Metal Improvement Company, Inc. subsidiary is still carrying
on said business;
(3) otherwise divert or attempt to divert from the Company or
it's Metal Improvement Company, Inc. subsidiary any business
whatsoever, so long as the Company or it's Metal Improvement
Company, Inc. subsidiary is still carrying on said business;
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(4) solicit or attempt to solicit for any business endeavor
any employee of the Company or it's Metal Improvement Company,
Inc. subsidiary, except for Xxxxxx Xxxxx;
(5) interfere with any employment relationship or other
business relationship between the Company or it's Metal
Improvement Company, Inc. subsidiary and any other individual,
person, or other entity;
(6) have any interest as a stockholder, partner, lender or
otherwise in, any person which is engaged in activities which,
if performed by Xxxxxxx would violate this Section 3.1 (b)
other than an interest in a publicly traded corporation not
exceeding one percent of such corporation's issued and
outstanding voting stock;
(7) disparage the Company or it's Metal Improvement Company,
Inc. subsidiary, or their officers, directors, employees,
affiliates, or advisors; or
(8) engage in any other activity of a professional or
consultative nature which (i) could reasonably be expected to
be detrimental to the business prospects of the Company or
it's Metal Improvement Company, Inc. subsidiary or (ii) which
is or may be directly or indirectly competitive with the
Company or it's Metal Improvement Company, Inc. subsidiary.
In the event that any provisions of this Section 3.1 (b) should be deemed to
exceed the time and geographical limitations permitted by applicable law, then
such provisions shall be reformed to the maximum time and geographic limitations
permitted by applicable law.
(c) Remedies. Xxxxxxx agrees that any breach of the terms of
this Section 3.1 would result in irreparable injury and damage to the Company
and/or its affiliates for which the Company and/or its affiliates would have no
adequate remedy at law; Xxxxxxx therefore also agrees that in the event of said
breach or any threat of breach, the Company and/or its affiliates, as
applicable, shall be entitled to an immediate injunction and restraining order
to prevent such breach and/or threatened intentional breach and/or continued
breach by Xxxxxxx and/or any and all persons or entities acting for or with
Xxxxxxx, without having to prove damages, in addition to any other remedies to
which the Company and its affiliates may be entitled at law or in equity. The
terms of this paragraph shall not prevent the Company and its affiliates from
pursuing any other available remedies for any breach and/or threatened
intentional breach hereof, including but not limited to the recovery of damages
from Xxxxxxx. The parties hereto further agree that the provisions of the
covenants contained in this Section 3.1 are reasonable and necessary to protect
the businesses of the Company and its affiliates because of Xxxxxxx'x access to
Confidential Information and his material participation in the operation of such
businesses. Xxxxxxx hereby acknowledges that due to the global aspects of the
Company's and its affiliates' businesses and competitors it would not be
appropriate to include any geographic limitation on this Section 3.1. Should a
court or arbitrator determine, however, that any provision of the covenants
contained in this Section 3.1 are not reasonable or valid, either in period of
time, geographical area, or otherwise, the parties hereto agree that such
covenants should be interpreted and enforced to the maximum extent which such
court or arbitrator deems reasonable or valid.
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The existence of any claim or cause of action by Xxxxxxx
against the Company or its affiliates under this Agreement shall not constitute
a defense to the enforcement by the Company of the covenants contained in
Section 3.1(a).
Anything contained herein to the contrary notwithstanding, the
Company shall be required to give Xxxxxxx prior written notice of any claimed
failure by him to comply with any provision of this Agreement. If Xxxxxxx shall,
within fifteen (15) days after such notice, be in all material respects in
compliance with the provisions of this Agreement that is involved, the Company
shall not, by virtue of the provisions of this Agreement, be entitled to an
immediate injunction and restraining order to prevent such breach, provided,
however, that nothing contained herein shall relieve Xxxxxxx from any liability
for actual damages occurring as a result of any breach by him of the provisions
of this Agreement.
3.2. Independence, Severability and Non-Exclusivity.
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Each of the rights enumerated in this Agreement hereof shall
be independent of the others and shall be in addition to and not in lieu of any
other rights and remedies available to the Company or Xxxxxxx at law or in
equity. If any provision of this Agreement is hereafter construed or adjudicated
to be invalid or unenforceable, the same shall not affect the remainder of the
Agreement or rights or remedies, which shall be given full effect without regard
to the invalid portions.
3.3 Non-Exclusivity of Rights
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Nothing in this Agreement shall limit or reduce such rights as
Xxxxxxx may have under any of the following Plans of the Company and any amounts
or benefits which Xxxxxxx is or shall become entitled to receive under any of
those Plans shall be paid or provided in accordance with the provisions of the
Plans: Long-Term Incentive Plan; Retirement Plan; Retirement Benefits
Restoration Plan; Deferred Compensation Plan and Savings and Investment Plan.
3.4 Successors.
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This Agreement shall be binding upon and shall inure to the benefit of the
Company and any and all of its successors and assigns, which, for purposes of
this Agreement, shall include a corporation or other entity acquiring all or
substantially all of the assets and business of the Company, as the case may be,
whether by operation of law or otherwise. The Company shall require its
successors and assigns to expressly assume and agree to perform this Agreement
in the same manner and to the same extent that the Company would be required to
perform it if no such succession or assignment had taken place. Neither this
Agreement nor any right or interest hereunder shall be assignable or
transferable by Xxxxxxx, his beneficiaries or legal representatives, except by
will or by the laws of descent and distribution. This Agreement shall inure to
the benefit of and be enforceable by Xxxxxxx'x legal personal representative.
The Company's obligation to pay Xxxxxxx for consulting services is personal to
Xxxxxxx and shall terminate upon his death, except that his estate or
beneficiaries shall be entitled to receive
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payment for the full month for all services Xxxxxxx provides prior to his death
for which he has not received payment as of his death.
3.5 Notices.
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All notices, consents or other communications required or
permitted to be given by any party hereunder shall be in writing and shall be
given by personal delivery, or certified or registered mail, postage prepaid, as
follows:
To the Company:
Xxxxxxx-Xxxxxx Corporation, Suite 501
0000 Xxxx Xxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attn: General Counsel and Corporate Secretary
To Xxxxxxx:
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxx Xxxxxx 00000
or at such other address as either party may from time to time specify to the
other. Any notice, consent or other communication required or permitted to be
given hereunder shall be deemed to have been given on the date of mailing or
personal delivery and shall be conclusively presumed to have been received on
the fourth business day following the date of mailing or, in the case of
personal delivery, the day of delivery thereof, except that a change of address
shall not be effective until actually received.
3.6 Modifications and Waivers.
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No term, provision or condition of this Agreement may be
modified or discharged unless such modification or discharge is agreed to in
writing by both Parties. No waiver by either party hereto of any breach by the
other party hereto of any term, provision or condition 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.
3.7 Entire Agreement.
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This Agreement constitutes the entire understanding between
the parties hereto relating to the subject matter hereof, superseding all
negotiations, prior discussions, preliminary agreements and agreements relating
to the subject matter hereof made prior to the date hereof.
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3.8 Governing Law.
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This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey, without giving effect to
conflicts of laws principles thereof. Notwithstanding the foregoing, and except
with respect to any proceeding for an injunction and restraining order under
Section 3.1(c), if a dispute hereunder shall exist either party shall have the
right (but not the obligation), in addition to all other rights and remedies
provided by law, to compel arbitration of the dispute in the County of Bergen,
State of New Jersey, under the rules of the American Arbitration Association, by
giving written notice of arbitration to the other party within thirty (30) days
after notice of such dispute has been received by the party to whom notice has
been given; any decision and award under the arbitration shall be final and
binding on the parties hereto, and judgment on the decision and award may be
entered in any court of competent jurisdiction, and
3.9. Headings.
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The headings contained in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year set forth above.
/s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
XXXXXXX-XXXXXX CORPORATION.
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: General Counsel & Secretary
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