EXHIBIT 10.5
CONSULTING AGREEMENT
This Consulting Agreement is made by and between YGCD Assets, Inc., a
Colorado Corporation ("YGCD" or "Company") and Xxxxx X. Xxxxxxx ("Consultant"
or "Xxxxxxx").
WITNESSETH:
Whereas, Xxxxxxx has demonstrated special skill, knowledge, ability and
experience serving as Chairman of public companies, and because of these
qualities, the Company is desirous of entering into a Consulting Agreement
whereby the Company will retain the services of Xxxxxxx for a future term of
service, subject to the terms and conditions herein set forth.
I. Term. The term of the Agreement shall be for a period of one (1) year
commencing on March 1, 2000 and terminating on February 28, 2001, or
upon the completion of any sale, merger or dissolution of the Company
occurring prior to February 28, 2001. This agreement shall only be
terminated in accordance with the provisions of Paragraph VI (six) of
this Agreement.
II. Position, Duties and Services. Through the term of the agreement:
(A) With approval of the Shareholders and the Board of Directors,
Xxxxxxx shall serve as Chairman of the Board of Directors of YGCD
Assets, Inc. Xxxxxxx agrees to devote the necessary time and attention
to his duties as a Director of the Company, which duties may be
augmented or restricted in accordance with the directives of the Board
of Directors of the Company. The initial services to be rendered by
Xxxxxxx shall include the negotiation and completion of the planned
transaction with Xxxxxxx-XxXxx Corporation.
(B) Additional consulting services to be rendered shall include the
early stage administration and development of financing and capital-
ization of the newly combined public entity, to include investment
banking, investment relations, and mergers and acquisitions activities
as authorized by the Chief Executive Officer of the Company.
(C) Xxxxxxx agrees to exercise his best efforts in good faith with
respect to his position and duties as provided hereunder.
III. Compensation. Consultant shall be paid stock compensation and
performance incentives payable as follows:
(A) Stock Grant. The Company agrees to award to Xxxxxxx a one time
stock grant of sufficient number of restricted common shares so as to
be convertible to 150,000 restricted common shares of Xxxxxxx-XxXxx
Corporation stock, post share exchange.
Page 1
(B) Stock Options and Performance Bonuses. During the term of this
Agreement, Consultant may be eligible to receive performance bonuses
and any qualified or non-qualified stock options of the Company,
and/or of its public parent, as established by the Compensation
Committee of the Board of Directors of the Company. Upon completion
of the Company's planned transaction with Xxxxxxx-XxXxx Corporation,
and the latter's related common stock reverse split, Consultant shall
receive a five year stock option from the renamed public entity for
the exercise of 50,000 common shares. The options shall be exer-
cisable upon demand and at the then fair market value of the stock
on the date of grant.
IV. EXPENSES. Subject to the Company's written expense reimbursement
policy, the Consultant shall be entitled to reimbursement for all
reasonable expenses necessarily incurred by him in the performance of
his duties upon presentation of a voucher indicating the amount and
business purpose and supported by appropriate documentation.
V. BENEFITS. The Consultant shall not be eligible to participate in
the Company's health and welfare benefit programs, except as otherwise
agreed upon between the Consultant and the Board of Directors of the
Company. Consultant shall be an independent contractor, and shall be
responsible for all taxes.
VI. TERMINATION. Notwithstanding any provision of the foregoing contract,
the Consultant may be discharged either for Cause or without Cause by
the Board of Directors of the Company at any time during the term
of this Agreement. "Cause" shall mean a material breach of the terms
of this Agreement, including: (a) conviction of a felony involving
moral turpitude; (b) theft from the Company or any of its customers;
(c) breach of any covenant of non-competition or non-disclosure as
hereafter executed; (d) willful failure or refusal to carry out the
policies of the Company or any order or directive of the Board of
Directors; or (e) the failure by the Consultant to perform all of the
material duties and to comply with the material terms and conditions
of him under this Agreement.
If the Consultant is discharged for Cause, or voluntarily terminates
this Agreement during the period specified herein, then and in any
such event, all subsequent compensation required to be paid by the
Company to the Consultant shall be forfeited, and this contract
and the rights of the parties shall terminate.
In the event the Company otherwise terminates this Agreement, the
Company shall be obligated to pay Consultant, as a lump sum severance
payment, an amount equal in value to the balance of the compensation,
payable in either shares at fair market value and/or cash at Company's
option within thirty (30) days of such termination.
VII. RENEWAL. At the Company's option, this Agreement may be renewed
annually for two (2) subsequent one-year periods. Compensation
adjustments, if any, shall be mutually agreed upon between the
parties.
Page 2
VIII. ARBITRATION. All disputes, differences, or questions arising between
the parties hereto relating to construction, prices, meaning, or
effect of any cause or thing contained herein, or the rights or
liabilities of the parties respectively, or their respective successors
and assigns, shall be referred to arbitration between the parties
hereto, one arbitrator to be appointed by each party, and the
arbitrators so chosen, if by themselves unable to agree within ten days
after their appointment, to choose an additional arbitrator, without
Page 2
delay, and the decision in writing signed by a majority of such
arbitrators, unless patently erroneous, shall be binding upon the
parties hereto. The general procedure followed for arbitrators shall
conform to the laws of the State of Colorado. The unsuccessful party in
the arbitration shall pay the expenses/costs related thereto.
IX. NOTICE. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and if sent by certified
or registered mail, return receipt requested.
X. RULES OF CONSTRUCTION.
(A) Entire Agreement. This Agreement constitutes the entire agreement
between the parties pertaining to the subject matter hereof and
supersedes all negotiations, prior agreements and contemporaneous
agreements, discussions and understandings of the parties in connection
with the subject matter hereof.
(B) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Colorado. Venue and
Jurisdiction shall be in Denver County, Colorado.
(C) Amendments. No change, modification or termination of any of the
terms, provisions or conditions of this Agreement shall be effective
unless made in writing and signed by all parties hereto, their
successors or assigns.
(D) Binding Effect on Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and
their respective successors, personal representatives, heirs and
assigns.
(E) Disclosure. Consultant agrees not to disclose the terms of this
Agreement to anyone during the term of this agreement, except as
required by law, without the express written consent of the Company.
(F) Severability. If any Article, or other provision of this
Agreement, or the application thereof, is held to be invalid, illegal,
or unenforceable in any respect or for any reason, the remainder of this
Agreement, and the application of the Article, Section or Provision to a
person or circumstance with respect to which it is valid, legal or
enforceable, shall not be affected thereby.
Page 3
IN WITNESS WHEREOF, the parties hereto have executed this Consulting
Agreement below, as of this 2nd day of March, 2000.
THE COMPANY:
YGCD ASSETS, INC.
By:/s/ Xxxx Xxxxxxxxx
Xxxx Xxxxxxxxx, President
THE CONSULTANT:
XXXXX X. XXXXXXX
By:/s/ Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx
Page 4
