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EXHIBIT 10.44
CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement") is made and
entered into as of November 1, 1997, by and between BOYDS WHEELS, INC., a
California corporation (the "Company") and XXXX XXXXXXXXXX ("Consultant").
RECITALS
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A. Consultant has served as a key executive officer, director
and shareholder of the Company, is intimately aware of the operations of the
Company, its customers, manufacturing, operations and technology, and has the
ability to effectively compete with the Company absent the existence of and
compliance with this Agreement.
B. Consultant is in good health, intends to continue living in
geographic areas where the Company is doing business and/or manufacturing and,
absent the existence of this Agreement, would desire to actively compete with
the Company, and therefore would have substantial opportunity to compete with
the Company.
C. The Company believes that it would be substantially harmed
if Consultant were to engage in a business competitive with that of the Company,
and that the Company would lose amounts substantially greater than that being
paid under this Agreement if Consultant was to actively compete with the Company
during the term of this Agreement.
D. As a result of Consultant's experience and stature, the
consulting services which the Consultant is agreeing to perform pursuant hereto
are deemed vital to the success of the Company.
NOW, THEREFORE, in consideration of the premises and covenants
contained herein, the Company and Consultant agree as follows:
1. Term. Consultant hereby agrees to provide the services
hereinafter described on the terms and conditions set forth herein for a period
of five (5) years commencing on November 1, 1997. This Agreement shall
automatically renew for successive periods of five (5) years each, unless either
party gives notice of termination to the other party at least thirty (30) days
prior to the commencement of any such successive five (5) year renewal period.
2. Duties. Consultant, upon request of the executive officers
of the Company, shall assist appropriate Company personnel with the executive,
sales, marketing, operations, design and other functions previously performed by
Consultant for Company. Consultant shall provide such services, and such other
services as the Company may request which are similar to those heretofore
provided by Consultant to Company, via means acceptable to the Company, for an
amount of time not to exceed, on a monthly basis, fifty percent (50%) of the
time heretofore spent by Consultant on his employment duties. A list of specific
duties and limitations is attached hereto as Exhibit A. The Company shall give
reasonable advance notice to Consultant regarding the exact hours during which
such services are to be provided, whether Consultant's physical presence shall
be required and whether such services
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require travel. The consulting services to be rendered by Consultant shall be
rendered in good faith, on a reasonably timely basis, and shall be rendered with
such diligence, attention and skill as the Consultant devotes to his other
professional activities.
3. Non-Competition. Consultant agrees that, unless he has
received the express prior written consent of the Company, he, including any
affiliated entities, will not, in the counties or parishes in any state of the
United States of America or in any other jurisdiction in the world in which the
Company or it affiliates is now or then doing business, during the term hereof
(including any renewal periods or such other period during which termination
payments are being made), directly or indirectly, permit his name to be used by,
personally engage in, work for, advise, consult, render services to or directly
or indirectly invest in any individual, sole proprietorship, partnership,
corporation, trust or other person (in any capacity including without limitation
as an employee, consultant, advisor, officer, director, shareholder or partner)
which directly or indirectly, either itself or with an affiliated entity or
entities, engages in any business involving the design, promotion, distribution
or sale of wheels, car care products, custom cars, hot rods and related products
for the specialty automotive and motorcycle aftermarkets (the "Products").
Notwithstanding the foregoing, this Section 3 shall be void and no longer
binding upon Consultant in the event that the Company and its affiliates or
assignees cease their active business operations or in the event the Company and
its affiliates or assignees permanently cease the design, promotion,
distribution, or sale of the Products. Further, this Section 3 shall not
prohibit Consultant from engaging in a business (such as Consultant's hot rods
and collectibles store) which involves the retail resale of hot rods and custom
cars, provided that neither the Company's (or its affiliates) employees nor the
Company's (or its affiliates) independent contractors are utilized in the sale
of such hot rods and custom cars in violation of Section 3 hereof.
4. Permitted Stock Ownership. Notwithstanding Section 3,
Consultant, or any affiliate, collectively may acquire the ownership of less
than 1% of any class of equity securities of any company engaged in business
similar to that of the Company whose securities are publicly traded.
5. Non-Solicitation of Employees/Contractors. During the terms
of this Agreement and for a period of two (2) years thereafter, Consultant and
any of his affiliated entities, will not (i) solicit, directly or indirectly,
for himself or for any other person or entity, employees of the Company or its
affiliates, or any independent contractors of the Company or its affiliates,
(ii) solicit, directly or indirectly, for himself or for any other person or
entity, existing or potential customers for business that will compete with the
Company's business, or (iii) directly or indirectly encourage, or do any act
that would encourage, any employees or independent contractors of the Company to
terminate their working relationship with the Company. For purposes of this
Agreement, "employees" and "independent contractors" shall include cottage,
piece work, and similar laborers retained by the Company or its affiliates for
the benefit of the Company or its affiliates.
6. Confidential Information. Consultant and any of his
affiliated entities will maintain in confidence and will not disclose to any
third party any confidential or proprietary information of the business of the
Company, including, without limitation, personnel information, trade secrets,
know how, processes, business practices, finances, suppliers, customers or
potential customers of the Company.
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7. Injunctive Relief; Breach. Consultant acknowledges that his
compliance with the covenants and agreements contained herein is necessary to
protect the goodwill and other proprietary interests of the Company. The
Consultant acknowledges that any breach by him or by any affiliated entities of
any of the foregoing covenants and agreements will cause irreparable damage to
the Company, the exact amount of which will be difficult or impossible to
ascertain, and that the remedies at law for any such breach will be inadequate.
Accordingly, Consultant agrees that the Company shall be entitled to injunctive
relief ordering specific performance of the foregoing covenants and agreements,
in addition to such further relief as may be proper.
8. Termination. This Agreement and all rights and obligations
of the parties hereunder (except as set forth in Sections 4, 5, 6, 7 and 20)
shall terminate immediately upon occurrence of any of the following events:
A. Upon the death of Consultant.
B. Upon the "permanent disability" of Consultant. As used
herein, the term "permanent disability" shall mean the good faith
determination by the Company that Consultant has become so physically
or mentally disabled as to be incapable of satisfactorily performing
his responsibilities under this Agreement for a period of ninety (90)
consecutive days.
C. Upon notice from the Company for "good cause." As used
herein, the term "good cause" shall include, without limitation, a
material breach of this Agreement by Consultant, a material breach by
Consultant of any other agreement between the parties, a material
breach by Consultant of an agreement with a third party for the benefit
of the Company, future misconduct by Consultant which materially and
adversely impacts the Company or its reputation or a failure or refusal
by Consultant to perform his duties hereunder in the manner reasonably
specified.
D. Upon notice from the Company without "good cause,"
provided that the Company shall pay Consultant payments equal to (i)
$300,000, if such termination occurs during the first year of the term
of this Agreement, and (ii) one (1) year of base compensation, if such
termination occurs after the first year of this Agreement or during any
renewal period of this Agreement, if applicable. In the event of such a
termination without good cause, then Consultant will be relieved of any
obligations set forth in Section 3 hereof that would otherwise restrict
his ability to compete after the date of such termination.
Notwithstanding the foregoing, Consultant shall not be entitled to
receive any termination payments upon (i) any termination of this
Agreement pursuant to Sections A, B or C above, or (ii) any expiration
of this Agreement with notice as provided in Section 1.
9. Severability. If any of the provisions of this Agreement
shall contravene or be invalid under the laws of any state or other jurisdiction
where it is applicable but for such contravention or invalidity, such
contravention or invalidity shall not invalidate all of the provisions of this
Agreement, but, rather, it shall be construed, insofar as the laws of that state
or jurisdiction are concerned, as not containing the provision or provisions
contravening or invalid under the laws of that
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state or jurisdiction, and the rights and obligations created hereby shall be
construed and enforced accordingly. If, however, any such contravening provision
relates to the term of this Agreement or the geographic area or areas to which
it applies, then this Agreement shall be construed as providing for the maximum
time period and widest geographic area or areas which the laws of that state or
jurisdiction permit; provided that such time period and geographic area shall
never exceed the time period or geographic area provided for herein.
10. Payment for Services and Covenants. In consideration of
the agreements being made by Consultant hereunder, the Company hereby agrees to
pay to Consultant (i) base compensation equal to the sum of SIX THOUSAND DOLLARS
($6,000) for the first thirteen months and TWELVE THOUSAND FIVE HUNDRED DOLLARS
($12,500) per month for each month thereafter, plus (ii) annual incentive
compensation equal to one-half of one percent (1/2%) of the Company's sales in
excess of $24,000,000, with such incentive compensation not to exceed $60,000
annually. Further, the Company agrees to (i) reimburse Consultant for reasonable
expenses incurred in performance of his duties hereunder and (ii) provide
Consultant with a telephone and a facsimile line to be installed in Consultant's
home or other agreed upon place to be used by Consultant exclusively in
connection with the performance of Consultant's duties hereunder and to
reimburse Consultant for telephone and facsimile charges reasonably incurred.
Said amounts shall be payable at any such times that Consultant is not in
material breach of the terms and provisions hereof.
11. Relationship and Authority, Taxes, Insurance, Other. The
relationship between the Company and Consultant intended to be created by this
Agreement is that of an independent contractor, and nothing herein contained
shall be construed as creating a relationship of employer and employee or
principal and agent between the parties hereto. Consultant covenants and agrees
that he shall not act as if or make any representation that he is authorized to
act as an agent or officer of the Company and specifically covenants and agrees
that he will not attempt to contractually obligate or bind the Company.
Consultant, not the Company, shall pay all federal income taxes, FICA taxes,
medicare taxes, state income taxes, state disability insurance, and all other
federal, state, and local taxes, insurance, or other charges relating to
Consultant's performance of services hereunder. Consultant also shall carry for
himself any required worker's compensation insurance.
12. Surrender of Books and Records. Consultant agrees that, as
and when requested to do so by the Company, and in any event upon the
termination of this Agreement, Consultant shall immediately surrender to the
Company all lists, books and records (and any copies thereof) of, or in
connection with, the business of the Company, and all other properties belonging
to the Company then in his possession, it being distinctly understood that all
such lists, books and records, and other documents or property are that
confidential, proprietary property of the Company.
13. Amendment and Waiver. This Agreement may not be amended,
modified or waived in any way except in a writing signed by all of the parties
hereto. Failure of any party to insist upon strict observance of or compliance
with an aspect of this Agreement on one or more instances shall not be deemed a
waiver of that term in that instance or in the future, or as to any other term
at any time. Waivers, to be effective, must be express and in writing, and no
waiver shall operate as a waiver
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of any other default or of the same default on a future occasion. Failure to
enforce any similar agreement against any other person shall in no event
constitute a waiver under this Agreement.
14. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.
15. Advice of Counsel. Each party hereto acknowledges that he
has been advised to seek independent legal counsel for advice regarding the
effect of the terms and provisions hereof, and has either obtained such advice
of independent legal counsel, or has voluntarily and without compulsion elected
to enter into and be bound by the terms of this Agreement without such advice of
independent legal counsel.
16. Attorneys' Fees. In the event of any proceeding arising
out of or related to this Agreement, the prevailing party shall be entitled to
recover from the losing party all of its costs and expenses incurred in
connection with such proceeding, including court costs and reasonable attorneys'
fees, whether or not such proceeding is prosecuted to judgment.
17. Further Assurances. The parties shall at their own cost
and expense execute and deliver such further documents and instruments and shall
take such other actions as may be reasonably required or appropriate to carry
out the intent and purposes of this Agreement.
18. Gender and Number. The use of the masculine, feminine and
neuter genders and the singular and plural number shall include the others where
the context so requires.
19. Notices. All notices, requests, demands and other
communications under this Agreement shall be given in writing and shall be
served either personally, by facsimile or delivered by first class mail,
registered or certified, return receipt requested, postage prepaid, and properly
addressed as follows:
If to the Company: BOYDS WHEELS, INC.
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
If to Consultant: Xxxx Xxxxxxxxxx
0000 Xxxxxxxx Xxxx
Xx Xxxxx Xxxxxxx, Xxxxxxxxxx 00000
With a copy to: Xxxxx X. Xxxxxx, Esq.
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Notices shall be deemed received upon the earliest of actual
receipt, confirmed facsimile or three (3) days following mailing pursuant to
this Section.
20. Arbitration. Any dispute arising out of or related to this
Agreement shall be submitted to arbitration in Orange County, California, before
an arbitrator selected from Judicial Arbitration and Mediation Services, Inc.,
Orange County, California and shall be conducted in
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accordance with the provisions of California Code of Civil Procedure Section
1280 et seq. as the exclusive remedy of such dispute; provided, however, that
provisional injunctive relief may, but need not, be sought in a court of law
while arbitration proceedings are pending, and any provisional injunctive relief
granted by such court shall remain effective until the matter is finally
determined by the Arbitrator. Final resolution of any dispute through
arbitration may include any remedy or relief which the Arbitrator deems just and
equitable, including permanent injunctive relief or specific performance, or
both, and the Arbitrator is hereby empowered to award such relief. Any award or
relief granted by the Arbitrator hereunder shall be final and binding on the
parties hereto and may be enforced by any court of competent jurisdiction.
21. Assignment. This Agreement and the rights and obligations
created hereunder may not be assigned, transferred, pledged, or hypothecated in
any manner by either of the parties hereto, whether voluntarily or by operation
of law, without the prior written consent of the other party. Any attempted
assignment, transfer, pledge, hypothecation, or other disposition of this
Agreement in a manner contrary hereto, shall be null and void and without force
or effect. Notwithstanding the foregoing, this Agreement may be assigned by the
Company to one or more affiliates of the Company, or in connection with the sale
or transfer of all or substantially all of the assets of the Company; provided
that upon any such assignment hereunder, that each and all of the provisions
hereof shall be binding upon such successors and permitted assigns.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed effective as of the date first above written.
"CONSULTANT"
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Xxxx Xxxxxxxxxx
"COMPANY"
BOYDS WHEELS, INC.,
a California corporation
By:
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Its:
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