Consulting Agreement
with
Xxxxx Xxxxxxx
10.02
CONSULTING AGREEMENT
(and Agreement to serve as a Director)
THIS CONSULTING AGREEMENT, made as of this 7th day of November, 1995,
by and between:
FIDELITY HOLDINGS, INC., a newly organized Nevada corporation having
its executive office at 000-00 Xxxxx Xxxxxxxx Xxx Xxxxxxx Xxxxx, XX 00000
(hereinafter referred to as "COMPANY") AND
XXXXX XXXXXXX, an adult individual with offices at 00-00 Xxxxxxxx
Xxxx, Xxxx Xxxxxx Xxxx, X.X. I 1 101 (hereinafter referred to as
"CONSULTANT")WITNESSETH THAT:
WHEREAS, CONSULTANT has certain education, experience, background and
contacts which would be useful and helpful to COMPANY in its business and
COMPANY is desirous of retaining CONSULTANT in order to obtain the benefits of
such education, experience, background and contacts.
WHEREAS, CONSULTANT is agreeable to being retained by COMPANY as a
consultant and providing the benefits of his education, experience, background
and contacts to COMPANY;
WHEREAS, the parties have agreed upon the terms of such retention and
desire a written, formal contract to evidence their agreements;
NOW, THEREFORE, in consideration of the mutual promises, covenants
and forbearances contained herein, and intending to be legally bound, the
parties have agreed as follows:
1. RETENTION. For the term provided in Paragraph 2, COMPANY hereby
retains CONSULTANT, and CONSULTANT hereby accepts that retention, upon the terms
and conditions hereinafter set forth.
2. TERM.
(a) This Agreement shall become effective as of November 7, 1995.
(b) This Agreement, subject to the provisions of Paragraphs 14 and 15
below, shall continue and exist for an initial period from-n November 7, 1995 to
December 31, 1998.
(c) If, at September 30, 1998, neither party is then in default under
this Agreement, COMPANY shall have the option to extend the term of this
Agreement for an additional one (1) year period, i.e., to December 31, 1999.
Such option shall be exercised by COMPANY mailing notice to CONSULTANT on or
before October 31, 1998, of its intention to so extend the Agreement. If COMPANY
shall not exercise its extension option by October 31, 1998, this Agreement
shall terminate on December 31, 1998.
(d) This Agreement shall be subject to successive additional one (1)
year extensions under the procedure provided in subparagraph (c), provided that
at September 30 of the then existing extension year neither party is then in
default under this Agreement and notice of exercise of the extension option is
given on or before October 31 of such extension year.
(e) Notwithstanding the foregoing, the term of this Agreement is
otherwise subject to the termination provisions contained hereafter.
3. COMPENSATION-BASE.
(a) For all services rendered under this Agreement, CONSULTANT shall
be paid, as base compensation, such annual fee as shall be determined by the
Board of Directors of COMPANY, from time to time, but in no event shall such
compensation be at a rate of less than $150,000per year. In the event of any
extension of this Agreement, such compensation shall be at a rate of no less
than $150,000 per year during each extension year. All such compensation shall
be subject to a Cost-of-Living Adjustment (COLA) annually based upon the
percentage increase in the Cost-of-Living Index, All Commodities, for the New
York City area. Subject to subparagraph (b) below, such compensation is to be
payable in equal installments at intervals no longer than semi-monthly. Such
base compensation shall be in addition to such fringe benefits and bonuses as
provided elsewhere herein.
(b) The base compensation for each year of this Agreement, including
the first and second year, and any extensions to this Agreement, shall be
subject to a retroactive increase, based upon an earnings per share formula
(actual common shares issued and outstanding at December 31 of each year, and
not fully diluted) as follows:
Profits Per Increase as a
Common Share Percent of Base Compensation
$.00 - $.01 5%
$.11 - $.20 10%
$.21 - $.30 20%
$.31 - $.40 30%
$.41 - $.50 40%
$.51 - $.60 50%
$.61 - $.70 70%
$.71 - $.80 90%
$.81 - $.90 110%
$.91 - $1.00 130%
over $1.00 150%
This retroactive increase, if any should occur, is not a bonus but a merit
adjustment to the base salary.
(c) COMPANY may assign CONSULTANT to one or more of its subsidiaries
and/or affiliates, to perform services consistent with CONSULTANT'S duties
hereunder. In such event, CONSULTANT may be separately compensated by each such
subsidiary and/or affiliate. All such compensation shall be deducted from the
compensation payable under subparagraph (a) above and COMPANY shall pay
CONSULTANT only the difference between (i) the total of all such compensations
from subsidiaries and/or affiliates and (ii) the base compensation.
(d) At the end of each calendar year, the Board of Directors of COMPANY
shall review the performance of CONSULTANT for such year and, based upon such
evaluation, establish any increase in the base compensation payable to
CONSULTANT for the succeeding calendar year, as adjusted by subparagraph (c)
above. COMPANY shall not be obligated to provide any increase, in excess of the
increase in the Cost-of-Living Index, All Commodities, for the New York City
area during the prior calendar year.
4. COMPENSATION-FRINGE BENEFITS. CONSULTANT shall receive at least
the following additional benefits, which may be extended or increased, but not
reduced, by COMPANY:
(a) Vacation - During each year of this Agreement, CONSULTANT shall be entitled
to paid vacation of three (3) weeks.
(b) Personal Leave - During each year of this Agreement, CONSULTANT shall
receive five days paid personal leave, which shall not be accumulated from year
to year if unused. CONSULTANT shall not be compensated for any unused personal
leave. "Personal leave" shall include sick leave, bereavement leave, and all
other personal time off.
(c) Other CONSULTANT shall receive such other medical, surgical, hospital,
dental or legal insurance and fringe benefits as are available to any other
officers/employees/consultants, consistent with COMPANY'S past practices and
such life/disability insurance, incentive or deferred compensation or bonuses,
pension/profit sharing plan and qualified and non-qualified stock option plans
as the Board of Directors of COMPANY shall establish. Nothing contained in this
Agreement shall be in lieu of any rights, benefits and privileges to which
CONSULTANT may be entitled under any retirement, pension, profit-sharing,
insurance, hospital or other plans which may now be in effect or which may
hereafter be adopted. CONSULTANT shall have the same right ' s and privileges to
participate in such plans and benefits as any other employee during his period
of retention.
5. COMPENSATION-BONUS. After the end of each calendar year, the Board
of Directors of COMPANY shall determine the net profits before taxes of COMPANY
for such prior year and shall determine any bonus for such year payable to
CONSULTANT. COMPANY shall not be obligated to provide any bonus. Any bonus
awarded shall be paid at such time or times, in such amounts or installments, as
the Board of Directors may determine.
6. DUTIES. (a) CONSULTANT is engaged as a business, management and
financial consultant to COMPANY and shall provide advice to the officers,
directors and key management of the COMPANY. CONSULTANT'S performance shall be
subject to the supervision of COMPANY'S Board of Directors. In addition, at the
option of COMPANY management, and subject to the approval of the company's
shareholders, during the term of this Agreement CONSULTANT shall serve as a
director of the COMPANY if so elected. The precise consulting scope and the
specific services to be rendered by CONSULTANT may be defined, interpreted,
curtailed, or extended, from time to time, by determination of the Board of
Directors of COMPANY, provided, however, that any definition, interpretation,
curtainment, or extension is consistent with the status of, and/or educational
experience required for, the responsibilities for which CONSULTANT has been
initially engaged hereunder. It is the intent of this provision to provide
COMPANY with flexibility in assigning responsibilities to CONSULTANT and this
provision shall not be used to discipline, embarrass, humiliate or harass
CONSULTANT.
7. EXTENT AND PLACE OF SERVICES. CONSULTANT is a general businessman
engaged in various business activities, including consulting for other
companies. Nothing contained herein is intended to limit Consultant's
continuation of existing business activities nor the commencement of new
activities, provided only that such activities are not directly competitive with
the conduit pipe business of COMPANY, for which reasons Paragraphs 11, 12 and 13
relate to conduit pipe business only. COMPANY acknowledges
that the majority of Consultant's services will be rendered during the initial
months of this Agreement and the diminution of such services over time shall not
be a breach hereof nor a reason for reduction of compensation.
Furthermore, nothing contained herein shall be construed as
preventing CONSULTANT from investing his assets in such form or manner as
CONSULTANT may select, whether or not such investment will require any services
on CONSULTANT'S part in the operation of the affairs of the companies in which
such investments are made.
8. WORKING FACILITIES. CONSULTANT shall be furnished with all
necessary working facilities, including but not limited to an equipped office,
clerical help, and telephone/facsimile/copying services, suitable to his
position and adequate for the performance of his duties. CONSULTANT may utilize
his existing office space, in which event COMPANY shall reimburse CONSULTANT for
its pro rata share thereof
9. EXPENSES. CONSULTANT is not authorized to incur expenses on behalf
of, or chargeable to, COMPANY, with respect to his business travel, including
transportation, lodging, food, entertainment, etc. except within such guidelines
as may be established from time to time by the Board of Directors of COMPANY.
COMPANY shall reimburse CONSULTANT for authorized expenses within such
guidelines upon presentation by CONSULTANT, from time to time, of an itemized
account of such expenditures in such form as COMPANY may require, together with
receipts or other proofs of the expenditures as may be required.
10. DISCLOSURE OF INFORMATION REGARDING CONDUIT PIPE. CONSULTANT
recognizes and acknowledges that: (a) during the course of his retention, he
will have access to valuable proprietary information regarding the conduit pipe,
and that (b) such information about the conduit pipe constitutes unique assets
of the business of COMPANY. CONSULTANT will not, during or after his retention,
personally use or disclose all, or any part of, such proprietary information
regarding the conduit pipe to any person, firm, corporation, association,
agency, or other entity except as properly required in the conduct of the
business of COMPANY or one of its subsidiaries, or except as pre-authorized in
writing by COMPANY or one of its subsidiaries, publish, disclose or authorize
anyone else to publish or disclose, any secret or confidential matter relating
to any aspect of the business of COMPANY and its subsidiaries with which
CONSULTANT'S service may in any way acquaint CONSULTANT. In the event of a
breach, or threatened breach, by CONSULTANT, of the provisions of this
Paragraph, COMPANY shall be entitled to a preliminary, temporary and permanent
injunction restraining CONSULTANT from disclosing in whole or in part, any such
proprietary information and/or form rendering any services to any person, firm,
corporation, association, agency, or other entity to whom such information, in
whole or in part, has been disclosed or is threatened to be disclosed.
Furthermore, nothing herein shall be construed as prohibiting COMPANY from
pursuing any other equitable or legal remedies available to it for such breach
or threatened breach, including the recovery or damages from CONSULTANT, and
neither remedy (injunction or damages) shall be exclusive of the other or
constitute an election of remedies.
11. RESTRICTIVE COVENANT.
(a) During the term of this Agreement and for a period of one (1)
year after the termination of this Agreement and any extension thereof,
CONSULTANT shall not, within the eastern United States, as well as within such
other areas as COMPANY shall then be operating conduit pipe plants, be engaged
in the manufacture and/or sale of conduit pipe
or, directly or indirectly, own, anage, operate, control, be employed by,
consult for, participate in, or be connected in any manner with the ownership,
management, operation or control of any business relating to conduit pipe.
(b) CONSULTANT agrees that the "time,""geographic area," and "scope
of business" provisions of this restrictive covenant are reasonable and proper
and have been negotiated in connection with his participation in the proposed
business combination as well as in connection with his retention hereunder and
specifically the continued compensation provisions under Paragraphs 14 and 15.
(c) COMPANY and CONSULTANT agree, that if any court of competent
jurisdiction shall, for any reason, conclude that any portion of this covenant
shall be too restrictive, the court shall determine and apply lesser
restrictions, it being the intent of the parties that some such restrictions
shall be applicable for the protection of COMPANY and its shareholders.
12. NON SOLICITATION COVENANT.
(a) During the term of this Agreement and for a period of two (2)
years after the termination of this Agreement (including any extension thereof)
CONSULTANT shall not solicit, directly or indirectly, by any means, any of the
customers, accounts, employees or "leads" of COMPANY relating to the conduit
pipe business.
(b) COMPANY and CONSULTANT agree that, if any court of competent
jurisdiction shall, for any reason conclude that any portion of this covenant
shall be too restrictive, the court shall determine and apply lesser
restrictions, it being the intent of the parties that some such restrictions
shall be applicable for the protection of COMPANY and its shareholders.
(c) This covenant has been given to induce COMPANY to enter into this
Agreement and provide CONSULTANT'S job responsibilities and compensation, and
specifically the continued compensation provisions under Paragraph 14.
13. DISABILITY.
(a) CONSULTANT'S inability to perform his duties because of temporary
illness, disability, or incapacity, or for any other reasonable cause, shall not
constitute a failure to perform his obligations hereunder and shall not be
deemed a breach or default by him.
(b) If, at any time during the term of this Agreement and/or any
extension thereof, the CONSULTANT is unable to perform his services by reason of
illness or incapacity, COMPANY shall continue CONSULTANT'S compensation during
the period of such illness or incapacity, up to the balance of the initial term
of this Agreement or then current extension thereof.
(c) At any time, and from time to time, COMPANY may purchase
disability insurance to compensate CONSULTANT during periods of disability. In
the event that such insurance is purchased, during any period for which benefits
are being paid by such insurance subparagraph (a) above shall be inapplicable.
In lieu thereof, COMPANY shall compensate CONSULTANT at the agreed base
compensation rate less the benefits paid by such insurance.
14. TERMINATION.
(a) COMPANY can terminate consultant's retention at any time for good
cause. Without intending to limit the definition of good cause hereby, good
cause will include:
(1) the CONSULTANT'S death;
(2) the occurrence of one of the following events:
(i) CONSULTANT commits, is arrested, or is officially charged with a felony or
any crime involving moral turpitude or unethical conduct which in the good faith
opinion of the COMPANY could impair his ability to perform his duties;
(ii) CONSULTANT commits an act, or fails to take action in bad faith and to the
detriment of the COMPANY, and
(iii) in the good faith opinion of the Board of Directors, the CONSULTANT fails
to fully and faithfully perform his obligations under this Consulting Agreement.
(b) The termination of CONSULTANT'S services shall not constitute a
termination of the restrictive obligations and duties under Paragraphs 10, 11
and 12.
(c) In the event of the bankruptcy (Chapter 7), reorganization
(Chapter 11) or other termination of the business of the COMPANY or of any
subsidiary on which CONSULTANT'S continued retention and compensation is
dependent, the provisions of Paragraph 11 shall continue in full force and
effect only so long as full base compensation by COMPANY shall continue.
(d) In the event of the termination or non-renewal of this Agreement
as a result of, or in connection with, or as the outcome of, a change of control
of COMPANY, the provisions of Paragraph 11 and the provisions of Paragraph 12
shall not remain in effect following termination.
15. ARBITRATION. Any controversy or claim arising out of, or relating
to this Agreement, or the breach thereof, shall be settled by arbitration in New
York City, New York in accordance with the rules then pertaining of the American
Arbitration Association, but with all rights of discovery provided by the New
York Rules of Civil Procedure, and judgment upon the award rendered may be
entered in any court having jurisdiction thereof
16. WAIVER OF BREACH. The waiver by either party of a breach of any
provision of this Agreement by the other party shall not operate or be construed
as a waiver of any subsequent breach by such other party. The failure of a party
to exercise any rights or privileges under this Agreement shall not be deemed to
be a waiver or extinguishment of such rights or privileges, all of which shall
continue to be exercisable.
17. BENEFIT. The rights and obligations of COMPANY under this
Agreement shall inure to the benefit of, and shall be binding upon, its
successors and assigns. The protection of Paragraphs 10, I 1 and 12 shall inure
to the benefit of COMPANY and any successors and assigns. The rights and
obligations of CONSULTANT under this Agreement shall inure to the benefit of,
and shall be binding upon, his heirs, administrators, executors, successors and
assigns.
18. NOTICES. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing, and if sent by certified mail to
his residence in the case of CONSULTANT, or to its principal office in the case
of COMPANY.
19. LIFE INSURANCE.
(a) COMPANY and/or one or more of its subsidiaries may, in its
discretion at any time after the execution of this Agreement, apply for and
procure, as owner and for its own benefit, insurance on the life of CONSULTANT,
in such amounts and in such forms as COMPANY may choose. COMPANY shall not be
required to give CONSULTANT any interest whatsoever in any such policy or
policies, (although nothing contained herein shall be deemed to prohibit any
such arrangement) but CONSULTANT shall, at the request of COMPANY, subject
himself to such medical examination, supply such information, and
execute such information releases and documents as may be required by the
insurance company or companies to whom COMPANY has applied for such insurance.
(b) The provisions of subparagraph (a) above shall be in addition to
any insurance purchased to fund any shareholder buy-sell agreement.
20. ENTIRE AGREEMENT. This instrument contains the entire agreement
of the parties and may be modified only by agreement in writing signed by the
party against whom enforcement of any waiver, change, modification, extension or
discharge is sought.
21. APPLICABLE LAW. This Agreement shall be governed for all purposes
by the laws of the State of New York. If any provision of this Agreement is
declared void, such provision shall be deemed severed from this Agreement, which
shall otherwise remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto, intending to be legally
bound, have hereunto set their hands and seals as of the day and year herein
above written.
FIDELITY HOLDINGS, INC.
ATTEST: By: /s/
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President
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Secretary
WITNESS:
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