Exhibit 99(d)(3)
CONSULTING, NONDISCLOSURE
AND NONCOMPETITION AGREEMENT
This Consulting, Nondisclosure and Noncompetition Agreement (this
"Agreement"), is made as of February 22, 2001, by and among Luxottica Group
S.p.A., an Italian corporation ("Parent"), Sunglass Hut International, Inc.,
a Florida corporation (the "Company") and Xxxxx X. Xxxxxxxx ("Consultant").
R E C I T A L S
WHEREAS, concurrently with the execution and delivery of this Agreement, the
Company is entering into that certain Agreement and Plan of Merger, dated as of
the date hereof (the "Merger Agreement"), by and among the Company, Parent and
Shade Acquisition Corp., a Florida corporation and a subsidiary of Parent (the
"Purchaser");
WHEREAS, upon the fulfillment of the terms and conditions of the Merger
Agreement, the Purchaser shall be merged with and into the Company, and the
Company shall continue as the surviving corporation (the "Merger");
WHEREAS, upon the consummation of the Merger, the Company desires to employ the
time and expertise of Consultant as a consultant and not as an employee; and
WHEREAS, Consultant agrees to provide certain consulting services for such
purpose.
NOW, THEREFORE, in consideration of the mutual promises herein contained, the
parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS. Capitalized terms not expressly defined in this
Agreement shall have the meanings ascribed to them in the Merger Agreement.
ARTICLE II
ENGAGEMENT AS CONSULTANT
Section 2.1 GENERAL. Parent and the Company hereby engage Consultant and
Consultant hereby accepts such engagement, subject to the terms and conditions
herein contained.
Section 2.2 TERM. This Agreement shall be effective as of the Effective
Time, and the term of this Agreement (the "Consulting Period") shall continue
for five (5) years, unless earlier terminated or extended under this Agreement
or changed in writing by the parties hereto. None of Parent, the Company and
Consultant shall have any rights, duties or obligations hereunder prior to the
Effective Time. In the event that the Merger Agreement is terminated, none of
Parent, the Company and Consultant shall have any rights, duties or obligations
hereunder from and after any such termination.
Section 2.3 DUTIES. Consultant hereby agrees to provide to Parent and/or
the Company the following services (the "Services") from time to time, as
reasonably requested by Parent and/or the Company:
(a) assistance in finding, analyzing, negotiating and consummating
the acquisition of other businesses or entities;
(b) strategic planning advice and assistance regarding the expansion
of the business of the Company;
(c) advice and assistance regarding potential new business
relationships and financial analysis of potential new projects;
(d) advice and assistance in finding, structuring, negotiating and
consummating financing and capital investment transactions; and
(e) other general investment, consulting, strategic planning and
management services.
Section 2.4 LOCATION. The Services shall be rendered from Consultant's
offices in the State of Florida or from such other locations Parent and the
Consultant may agree upon.
Section 2.5 AVAILABILITY. Consultant shall devote such number of hours per
week to performing the Services during the Consulting Period as Parent and/or
the Company shall reasonably request, it being understood and agreed that
Consultant shall not be required to devote all of his business time to his
services hereunder.
Section 2.6 COMPENSATION. As compensation for the Services rendered to the
Company by Consultant hereunder during the Consulting Period, Consultant shall
receive from the Company a fee of $250,000 per month during the Consulting
Period. The first such monthly fee shall be paid on the first day of the first
calendar month next succeeding the Effective Time and each subsequent monthly
fee shall be paid on the first calendar day of each succeeding month. If
Consultant breaches or violates, in any material respect, any of his covenants
set forth in this Article II, in Article IV or in Article V, and such breach or
violation continues for not less than thirty (30) days after Parent or the
Company gives him notice thereof, then, in addition to all other rights and
remedies to which Parent or the Company would be entitled in connection
therewith, the Company shall thereupon and thereafter have no obligation to pay
Consultant any compensation.
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Section 2.7 EXPENSES. Upon receipt of an itemized expense report (along
with receipts), the Company shall promptly reimburse Consultant for reasonable
expenses (including business travel, entertainment and professional publications
expenses) incurred in connection with the performance of Consultant's duties
hereunder.
Section 2.8 INDEPENDENT CONTRACTOR. Consultant shall perform the Services
as an independent contractor and not as an employee of the Company, and
Consultant shall be responsible for all taxes in respect of compensation paid to
Consultant hereunder, including without limitation, self-employment taxes.
Consultant shall provide to the Company a Form W-9 consistent with the
foregoing, and if he does not so provide a Form W-9, the Company shall be
entitled to withhold the required amounts under applicable laws from payments to
Consultant.
Section 2.9 TERMINATION.
(a) EVENTS OF TERMINATION. The Consulting Period will also terminate
earlier in the event of Consultant's death or disability. For purposes of this
Agreement, "disability" means the inability of Consultant to substantially
perform the Services for 90 days out of 180 consecutive days as a result of a
physical or mental illness.
(b) OBLIGATIONS FOLLOWING TERMINATION OF THE CONSULTING PERIOD.
Following termination of the Consulting Period under the circumstances described
in Section 2.9(a) hereof, the Company will pay to Consultant in accordance with
its regular payroll practices 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 Company. In the event the Consulting Period is terminated pursuant
to Section 2.9(a) hereof, Consultant or Consultant's estate, as the case may be,
shall be entitled to all accrued and unpaid compensation and expenses owed under
Sections 2.6 and 2.7 hereof through the date of death, or date of termination
for disability, pursuant to Section 2.9(a) hereof.
ARTICLE III
ACKNOWLEDGEMENTS
Section 3.1 ACKNOWLEDGMENTS BY CONSULTANT. Consultant acknowledges that:
(a) Consultant has served as Chairman of the Board of Directors and
Chief Executive Officer of the Company and, as such, has occupied a position of
trust and confidence with the Company and its direct and indirect subsidiaries
(collectively, the "Acquired Companies"), has become special, unique and
extraordinary with respect to the Acquired Companies, and has become familiar
with the following, any and all of which constitute confidential information of
the Acquired Companies (collectively, the "Confidential Information"):
(i) any and all trade secrets concerning the business and affairs of
the Acquired Companies, product specifications, data, know-how, formulae,
compositions, processes, designs, sketches, photographs, graphs, drawings,
samples, inventions and ideas, past, current and planned research and
development, customer and client lists, current and anticipated customer
requirements, price lists, market studies, business plans,
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computer software and programs (including object code and source code),
computer software and database technologies, systems, structures and
architectures and related processes, formulae, compositions, improvements,
devices, know-how, inventions, discoveries, concepts, ideas, designs,
methods and information of the Acquired Companies and any other
information, however documented, of the Acquired Companies that is a trade
secret under applicable law;
(ii) any and all information concerning the business and affairs of
the Acquired Companies (which includes historical financial statements,
financial projections and budgets, historical and projected sales, capital
spending budgets and plans, the names, backgrounds and remuneration and
other terms and conditions of employment of key personnel, strategic plans
and business relationships, marketing plans, potential acquisitions and
the identity of competitors) however documented; and
(iii) any and all notes, analysis, compilations, studies, summaries,
and other material prepared by or for the Acquired Companies containing or
based, in whole or in part, on any information included in the foregoing;
(b) the business of Parent and the Acquired Companies is
international in scope;
(c) Parent and the Acquired Companies compete with other businesses
that are or could be located in any part of the world;
(d) Parent has required that Consultant make the covenants set forth
in Articles IV and V of this Agreement as a condition to the consummation of the
transactions contemplated by the Merger Agreement;
(e) Consultant has agreed to make the covenants set forth in
Articles IV and V of this Agreement in order to induce Parent and Purchaser to
enter into the Merger Agreement and perform its obligations thereunder;
(f) the provisions of Articles IV and V of this Agreement are
reasonable and necessary to protect and preserve the legitimate business
interest of Parent and the Acquired Companies; and
(g) Parent and the Acquired Companies would be irreparably damaged
if Consultant were to breach the covenants set forth in Articles IV and V of
this Agreement.
ARTICLE IV
NONDISCLOSURE
Section 4.1 NONDISCLOSURE. Consultant acknowledges and agrees that all
Confidential Information (defined below) known or obtained by Consultant whether
before or after the date hereof, is the property of Parent and the Acquired
Companies. Therefore, Consultant agrees that Consultant will not, at any time
after the Effective Time, directly or indirectly, communicate, disclose or
disseminate any Confidential Information to any unauthorized natural person,
firm,
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individual, business trust, trust, association, corporation, partnership,
limited liability company, joint venture, company, unincorporated entity or
Governmental Entity (each, a "Person") or use for his own account or for the
benefit of any third party (other than Parent or the Company in connection with
his services hereunder) any Confidential Information, whether Consultant has
such information in Consultant's memory or embodied in writing or other physical
form, without Parent's written consent, unless the Confidential Information is
or becomes generally known to and available for use by the public other than as
a result of Consultant's fault, and other than to the extent otherwise required
by applicable law. Consultant agrees to deliver to Parent at the Effective Time,
and at any time or from time to time thereafter as Parent may request, until the
end of the Consulting Period, all Confidential Information that Consultant may
then possess or have under Consultant's control.
Section 4.2 CONFIDENTIAL INFORMATION DEFINED. Confidential Information
means any and all information (oral or written) relating to the Company or any
person controlling, controlled by, or under common control with the Company or
any of their respective activities, including but not limited to, information
relating to: discoveries, innovations, chemistry, patents, patent applications,
know how, secret processes, research, test procedures and results, machinery and
equipment; manufacturing processes; financial information; products; identify
and description of materials and services used; purchasing; costs; pricing;
customers and prospects; advertising, promotion and marketing; trademarks and
trademarks registrations; and copyrights and copyright registrations, except
such information which can be shown by Consultant 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 breach of the provisions of Section 4.1
hereof.
ARTICLE V
COVENANT NOT TO COMPETE
Section 5.1 COVENANT NOT TO COMPETE. As an inducement for Parent to enter
into the Merger Agreement, Consultant agrees that:
(a) commencing on the Effective Time and for a period of five (5)
years thereafter:
(i) Consultant will not, directly or indirectly, engage or invest
in, own, manage, operate, finance, control, or participate in the
ownership, management, operation, financing, or control of, be employed
by, associated with, or in any manner connected with, lend Consultant's
name or any similar name to, lend Consultant's credit to, or render
services or advice to, any Competitive Business (as defined below)
anywhere within the world; provided, however, that Consultant may purchase
or otherwise acquire up to (but not more than) one percent of any class of
securities of any Competitive Business (but without otherwise
participating in the activities of such Competitive Business) if such
securities are listed on any foreign, national, or regional securities
exchange or have been registered under Section 12(g) of the Securities
Exchange Act of 1934, as amended. Consultant agrees that this covenant is
reasonable with respect to its duration, geographical area, and scope;
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(ii) Consultant will not, directly or indirectly, either for himself
or any other Person:
(A) induce or attempt to induce any employee of Parent or any of the
Acquired Companies to leave the employ thereof,
(B) in any way interfere with the relationship between Parent or any
of the Acquired Companies and any employee thereof in a manner that
is materially adverse to such relationship,
(C) employ or otherwise engage, as an employee, independent
contractor, or otherwise, any employee of Parent or any of the
Acquired Companies or any person who shall have been an employee of
Parent or any of the Acquired Companies within the six months
immediately preceding; or
(D) induce or attempt to induce any customer, client, supplier,
licensee, or business relation of Parent or any of the Acquired
Companies to cease doing business therewith, or in any way interfere
with the relationship between any customer, client, supplier,
licensee, or business relation of Parent or any of the Acquired
Companies in a manner that is materially adverse to such
relationship;
(iii) Consultant will not, directly or indirectly, either for
himself or any other Person, solicit the business of any Person known to
Consultant to be a customer or client of Parent or any of the Acquired
Companies, whether or not Consultant had personal contact with such
Person, with the view to promoting any Competitive Business;
(b) In the event of a breach by Consultant of any covenant set forth
in Section 5.1(a) of this Agreement, the term of such covenant will be extended
by the period of the duration of such breach;
(c) Consultant will not, at any time during or after the foregoing
five year period, disparage Parent or any of the Acquired Companies, or any of
their shareholders, directors, officers, employees, or agents in a manner that
is not inadvertent and is reasonably likely to have material adverse
consequences for the person or entity so disparaged;
(d) Consultant will, for a period of five years after the Effective
Time, and within ten days after accepting any employment with any other Person,
advise Parent of the identity of any such Person. Parent may serve notice upon
any such Person that Consultant is bound by this Agreement and furnish any such
Person with a copy of this Agreement or relevant portions thereof;
(e) As used herein, the term "Competitive Business" means any
enterprise that engages in:
(i) the manufacture and wholesale and/or retail distribution of
eyeglass frames and/or sunglasses;
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(ii) the ownership or operation of retail stores or licensed
departments that offer for sale sunglasses, including but not limited to,
chain and individual sunglass specialty stores, department stores, optical
chains and sporting goods specialty stores;
(iii) the ownership or operation of retail stores or licensed
departments that offer for sale watches, including but not limited to,
chain and individual watch specialty stores, department stores, catalog
showrooms and jewelry stores;
(iv) the ownership or operation of mass merchandisers that offer for
sale sunglasses and/or watches, including but not limited to, catalog
showrooms, warehouse clubs, discount stores and drug stores;
(v) the ownership or operation of retail stores or licensed
departments that combines sunglasses and watches in a unified format;
(vi) the development of brands of sunglass and watch products; or
(vii) the ownership or operation of web sites that offer for sale
sunglasses and watches.
ARTICLE VI
INDEMNITY
Section 6.1 GENERAL. (a) Consultant agrees to defend, indemnify and hold
harmless Parent, the Company, their affiliates and their respective partners,
directors, principal, agents, employees, and officers (each, individually, a
"Company Party" and, collectively, the "Company Parties") from any loss, damage,
liability, cost or expense resulting or caused by (i) any negligent act or
omission or willful misconduct of Consultant; (ii) any breach or default by
Consultant in the performance of this Agreement; (iii) claims for personal
injury or property damage arising from Consultant's performance of the Services
under this Agreement; or (iv) any claim by an employee or subcontractor of
Consultant against Consultant and/or the Company Parties. Consultant will not
indemnify, defend or hold harmless the Company when the Company has committed a
negligent act, omission or misconduct which is a cause of the claimed liability
or damage.
(b) The Company agrees to defend, indemnify and hold harmless the
Consultant from any loss, damage, liability, cost or expense resulting or caused
by (i) any negligent act or omission or willful misconduct of any of the Company
Parties or (ii) any claim by an employee or subcontractor of a Company Party
against a Company Party and/or the Consultant. The Company will not indemnify,
defend or hold harmless the Consultant when the Consultant has committed a
negligent act, omission or misconduct which is a cause of the claimed liability
or damage.
Section 6.2 SURVIVAL. The covenants and agreements of Consultant contained
in Articles IV, V and VI of this Agreement and of the Company contained in
Article VI of this Agreement shall remain operative and in full force and
effect, regardless of the termination of this Agreement, and shall survive any
such termination.
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ARTICLE VII
GENERAL PROVISIONS
Section 7.1 REMEDIES. If Consultant breaches the covenants set forth in
Articles IV or V of this Agreement, neither Parent nor the Company will be
precluded from the recovery of any form of relief authorized by applicable law
to which Parent or the Company proves itself entitled, but in no event shall
Consultant be precluded from the presentation of any defenses, affirmative
defenses, or counterclaims or cross-claims available in response to any claim(s)
properly presented by Parent or the Company. Parent, the Company and Consultant
each additionally agree that in the event a party seeks equitable relief as
provided in Section 7.2 of this Agreement, no party will be obligated to post
any bond or other security in connection with such application.
Section 7.2 NOTICE AND OPPORTUNITY TO CURE: CLAIMS FOR INJUNCTIVE RELIEF.
(a) In the event that any party to this Agreement reasonably
believes that action is necessary to vindicate the party's right(s) in respect
of this Agreement, the aggrieved party agrees to give the other party(ies)
written notice of the party's concern(s) prior to the initiation of any
adversarial proceeding. Such written notice shall state in reasonable detail the
particular act(s) or failure(s) to act that constitute the basis for the party's
concern(s) and shall be delivered to all interested parties to this Agreement in
the manner provided in Section 7.9. Where reasonable under the circumstances,
the parties after delivery of the initial written notice agree to attempt the
non-adversarial resolution of the concern(s), in no event waiving any party's
alternative opportunity(ies) to seek redress as provided in the Agreement.
(b) Any action or proceeding initiated by any party to this
Agreement seeking any form of temporary or preliminary injunctive relief
connected with this Agreement may be brought against any of the parties in the
courts of the State of New York or, if the party has or can acquire
jurisdiction, in the United States District Court for the Southern District of
New York, and each of the parties consents to the jurisdiction of such courts
(and of the appropriate appellate courts) in any such action or proceeding and
waives any objection to venue laid therein. Process in any action or proceeding
referred to in the preceding sentence, may be served on any party anywhere in
the world.
Section 7.3 SUCCESSORS AND ASSIGNS. This Agreement will be binding upon
Parent, the Company and Consultant and will inure to the benefit of Parent, the
Company, their respective affiliates, successors and permitted assigns,
Consultant and Consultant's permitted assigns and legal representatives;
provided, however, that the Acquired Companies shall be deemed to be third-party
beneficiaries of the covenants set forth in Articles IV and V hereof, and shall
be entitled to enforce such covenants in accordance with the terms thereof.
Section 7.4 WAIVER. The rights and remedies of the parties to this
Agreement are cumulative and not alternative. Neither the failure nor any delay
by any party in exercising any right, power, or privilege under this Agreement
will operate as a waiver of such right, power, or privilege, and no single or
partial exercise of any such right, power, or privilege will preclude any other
or further exercise of such right, power, or privilege or the exercise of any
other right,
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power, or privilege. To the maximum extent permitted by applicable law:
(a) no claim or right arising out of this Agreement can be
discharged by one party, in whole or in part, by a waiver or renunciation of the
claim or right unless in writing signed by the other parties;
(b) no waiver that may be given by a party will be applicable except
in the specific instance for which it is given; and
(c) no notice to or demand on one party will be deemed to be a
waiver of any obligation of such party or of the right of the party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement.
Section 7.5 GOVERNING LAW. This Agreement will be governed by the laws of
the State of New York without regard to conflicts of laws principles.
Section 7.6 SEVERABILITY. Whenever possible each provision and term of
this Agreement will be interpreted in a manner to be effective and valid but if
any provision or term of this Agreement is held to be prohibited by or invalid,
then such provision or term will be ineffective only to the extent of such
prohibition or invalidity, without invalidating or affecting in any manner
whatsoever the remainder of such provision or term or the remaining provisions
or terms of this Agreement. If any of the covenants set forth in Articles IV or
V of this Agreement are held to be unreasonable, arbitrary, or against public
policy, such covenants will be considered divisible with respect to scope, time,
and geographic area, and in such lesser scope, time and geographic area, will be
effective, binding and enforceable against Consultant.
Section 7.7 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which will be deemed to be an original copy of this Agreement and all of
which, when taken together, will be deemed to constitute one and the same
agreement.
Section 7.8 SECTION HEADINGS, CONSTRUCTION. The headings of Sections in
this Agreement are provided for convenience only and will not affect its
construction or interpretation. All references to "Section" or "Sections" refer
to the corresponding Section or Sections of this Agreement unless otherwise
specified. All words used in this Agreement will be construed to be of such
gender or number as the circumstances require. Unless otherwise expressly
provided, the word "including" does not limit the preceding words or terms.
Section 7.9 NOTICES. All notices, requests, demands, consents, waivers,
and other communications under this Agreement must be in writing and will be
deemed to have been duly given when (a) delivered by hand (with written
confirmation of receipt), (b) sent by facsimile (with written confirmation of
receipt), provided that a copy is mailed by registered or certified mail, return
receipt requested, or (c) when received by the addressee, if sent by a
nationally recognized overnight delivery service (receipt requested), in each
case to the appropriate addresses and facsimile numbers set forth below (or to
such other addresses and facsimile numbers as a party may designate by notice to
the other parties):
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If to Parent or the Company, to:
Xxx Xxxxxxxxxx, 00
Xxxxxx (Xxxxxxx) 00000
Xxxxx
Attention: Chief Executive Officer
Facsimile No.: 00-0000-00000
with a copy to:
Winston & Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxxxxxxx
Xxxxxx X. Xxxxxxxxx
Facsimile No.: (000) 000-0000
If to Consultant, to:
Xxxxx X. Xxxxxxxx
000 Xxxxx Xxxxx Xxxx
Xxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxxxxx Xxxxxxx
Xxx Xxxx Xxxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxxx
Facsimile No.: (000) 000-0000
Section 7.10 ENTIRE AGREEMENT. This Agreement and the Merger Agreement
constitute the entire agreement between the parties with respect to the subject
matter of this Agreement and supersede all prior written and oral agreements and
understandings among Parent, the Company and Consultant with respect to the
subject matter of this Agreement. This Agreement may not be amended except by a
written agreement executed by the party or parties to be charged with the
amendment.
Section 7.11 ASSIGNMENT. This Agreement may not be assigned by either
party hereto without the prior written consent of the other party, except that
Parent and the Company shall be entitled to assign this Agreement and all of
their respective rights, duties and obligations hereunder to a subsidiary or
affiliate of Parent or the Company, or to another party in the event that any
such assignment shall be effected in connection with the acquisition of in
excess of a majority of the outstanding capital stock of Parent, the merger or
consolidation of Parent or the Company with another corporation or other
business enterprise, or the acquisition of all or
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substantially all of the assets of Parent or the Company.
Section 7.12 NON-EXCLUSIVITY. The covenants and agreements of Consultant
contained in this Agreement 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, provided, that during the
Consulting Period, Consultant shall not engage in any activity in violation of
Articles IV or V hereof.
Section 7.13 RIGHT TO ENTER INTO AGREEMENT. Consultant represents that he
is not restricted by any type of agreement with any other company from entering
into this Agreement.
[Signature page follows]
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IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto as of the date first written above.
LUXOTTICA GROUP S.p.A.
By: /s/ Xxxxxxxx Del Xxxxxxx
-------------------------------------
Name: Xxxxxxxx Del Vecchio
Title: Chairman
SUNGLASS HUT INTERNATIONAL, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Chairman of the Board
CONSULTANT
/s/ Xxxxx X. Xxxxxxxx
------------------------------
Xxxxx X. Xxxxxxxx
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