PUBLIC COMPANY MANAGEMENT CORPORATION CONSULTING AGREEMENT
PUBLIC
COMPANY MANAGEMENT CORPORATION
This
Consulting Agreement (the “Agreement”),
entered into this 12th day of April, 2007 and made effective January 2, 2007
(the “Effective
Date”),
BY
and BETWEEN Public Company Management Corporation (the “Company”),
a
Nevada corporation, and Xxxxxx X. Xxxxx, CFA, (the “Consultant”).
A.
The
Consultant will be one of the key executives of the Company and has experience
in several areas of business of which the Company is involved.
B. The
Company wishes to obtain the services of Consultant as Secretary and Chief
Operating Officer (hereinafter defined as “COO”)
and
Consultant wishes to provide these officer services to the Company in the
capacity of an independent contractor. In addition, the Company and the
Consultant agree that the Consultant will serve as a member of the Company’s
board of directors during the Term (defined below) of this Agreement and that
the Consultant will not receive additional consideration for serving on the
Company’s board of directors.
THEREFORE,
in consideration of the recitals, the following representations and covenants
and the payment of one dollar made by each party to the other, the receipt
and
sufficiency of which is acknowledged by each party, the parties agree on the
following terms:
1.0 ENGAGEMENT
AND DURATION
1.1 The
Company hereby engages the services of the Consultant for the positions of
Secretary, COO and Director of the Company, and the Consultant hereby accepts
such engagement and agrees to perform the services to the best of his ability
and in accordance with terms and conditions of this Agreement.
1.2 The
Company shall engage the Consultant for a term of one calendar year commencing
on the Effective Date and expiring on December 31, 2007 (the “Term”).
Mutually agreeable extensions by both parties will be accepted per agreement
of
both parties and compensation milestones set forth in subsection 3.2.1 will
extend into any extension or ongoing future consulting agreement if they have
yet to be fulfilled.
2.0 DUTIES
2.1 The
Consultant shall, pursuant to this Agreement, perform all duties customarily
performed by a person with like titles and positions of a small, publicly-held
corporation engaged in a business similar to the Company’s business, which
includes, but is not limited to the following:
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·
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New
client sales - participation in open line consultations and advising
potential clients on the process, merits, risks and appropriateness
of the
Company’s services to generate new
clients;
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·
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PCMC
Bulletin Board 30 Index® (the “PCMC30”)
- maintain the index in accordance with Company standards and
policies;
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·
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Marketing
- participation and advising the Company regarding advertisements
through
various media such as print, email, white papers product offerings,
Google, the PCMC30, radio and newspaper, magazine or other
articles;
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·
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Investor
Relations - serving as the contact person for investors, assisting
in
drafting, selecting appropriate content and issuing press releases,
conducting road shows and
presentations;
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·
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Strategic
Development - conducting pre-client business qualification screening,
financial forecasting, providing financial related input for forecasting,
budgeting and other strategic management initiatives, negotiating
and
developing client and consulting contracts, keeping abreast of industry
and Company-specific developments, participating in daily and
issue-specific conference calls relating to the duties provided for
in
this subsection 2.1, and maintaining close interaction on developing
systems and controls with internal accountant and other managerial
functions, and exploring and advising the Company on potentially
new
affiliations;
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·
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Client
Maintenance - participation in weekly project management conference
calls
with clients; assisting ongoing internal and client advisory project
management, and, assisting in screening and identifying market markers
to
sponsor clients.
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2.2 The
Consultant shall use his best efforts to promote the interests of the Company
and, to the extent necessary to discharge the responsibilities assigned to
the
Consultant, perform faithfully and efficiently such
responsibilities.
2.3 Consultant
agrees to devote approximately 3-4 hours a day toward his duties and the Company
acknowledges that Consultant will have time-conflicting obligations as they
relate to his firm, Montecito Capital Management. Consultant will use his best
efforts to balance his obligations to the Company pursuant to this Agreement
and
his obligations to Montecito Capital Management.
2.4 The
Consultant shall report directly and only to Xx. Xxxxxxx Xxxxx.
2.5 The
Consultant shall primarily perform his duties in Santa Xxxxxxx or while
traveling, yet he will also make a best effort to work at the Company’s office
at 0000 Xx Xxxxxx Xxxx, Xxx Xxxxx, XX 00000 for approximately three days per
month, or at such other location as shall be approved by the Company’s board of
directors.
2.6 The
Consultant will, subject to the terms of this Agreement, comply promptly and
faithfully with the Company’s reasonable instructions, directions, requests,
rules and regulations as may be expected of a similarly situated consultant.
The
Company shall not be deemed to have waived the right to require the Consultant
to perform any duties hereunder by assigning the Consultant to any other duties
or services or by assigning another individual to perform the duties of the
Consultant.
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2.7 In
the
event of a change of control of the Company, the Consultant shall continue
to
serve the Company in the same capacity and have the same authority,
responsibilities and status as he had as of the date immediately prior to the
change of control. Following a change of control, the Consultant’s services
shall be performed at such location as may be mutually agreed upon between
the
Company and the Consultant. For the purposes of this Agreement, a “change
of control”
shall
be deemed to have occurred when:
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(a)
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a
person other than the current control person of the Company becomes
a
control person; or
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(b)
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a
majority of the directors elected at any annual or special general
meeting
of shareholders of the Company are not individuals nominated by the
Company’s then-incumbent board of
directors.
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3.0 REMUNERATION
AND BENEFITS
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3.1
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Cash
Compensation, Stock Compensation and Signing
Bonus
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The
Consultant shall initially receive $2,000 per month for his services during
the
Term of this Agreement and, beginning in the month that the Company first meets
the Minimum Investment Relations, $3,000 per month for his services
(collectively, “Cash
Compensation”).
During the Term of this Agreement, the Consultant will also receive an aggregate
of 180,000 shares of common stock of the Company (“Stock
Compensation”)
registered on Form S-8 and bearing a legend regarding the Consultant’s status as
an affiliate within the meaning of Rule 144 (“S-8
Shares”),
which
shall accrue monthly in equal amounts of 15,000 S-8 Shares per month and are
payable quarterly. The Consultant shall receive 25,000 S-8 Shares of the
Company’s common stock as a signing bonus. The term “Minimum
Investment Relations”
as
used
in this Agreement means the issuance by the Company of at least ten scheduled
or
anticipated press releases during the term of this Agreement and the
participation by Xx. Xxxxx in a combination of at least three scheduled or
anticipated road shows, presentations, exhibits and/or conferences related
to
the Company’s business.
3.2 Compensation
Milestones and Bonus Shares
3.2.1 If
during
the Term of this Agreement the milestones listed below are met, the Consultant
shall receive the amount of shares of restricted and/or registered common stock
of the Company as a bonus (“Stock
Bonus”)
as
listed after each milestone:
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·
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Per
quoted or listed company: 25,000 shares of the Company’s common stock
which will be restricted shares within the meaning of Rule 144 of
the
Securities Act of 1933, as amended (“Restricted
Shares”);
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·
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Per
new client signed and engaged: 25,000 Restricted Shares of the Company’s
common stock;
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·
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Any
new funding/financing received by the Company: 30,000 shares of which
50%
will be Restricted Shares and 50% will be registered on Form S-8
and bear
a legend regarding the Consultant’s status as an affiliate within the
meaning of Rule 144 (“S-8
Shares”);
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·
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Airplane
travel for an initial meeting in person with a funding/financing
source
that provides capital to the Company: 10,000 shares of which 50%
will be
Restricted Shares and 50% will be S-8
Shares;
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·
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The
Company’s common stock trades on the American Stock Exchange (the
“Amex”),
the National Association of Securities Dealers Automated Quotation
System
(the “NASDAQ”)
or the New York Stock Exchange (the “NYSE”)
(or any successor to such entities) or any other national securities
exchange: 50,000 Restricted Shares;
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·
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The
PCMC30 becomes a tradable vehicle: 30,000 Restricted
Shares;
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·
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Consultant
performs presentations and/or conference exhibits directed by the
Company
at industry, trade or other conferences or participates in such
conferences, presentations and/or exhibits on behalf of a client:
20,000
Restricted Shares per presentation or conference exhibit plus
reimbursement of expenses;
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·
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The
Company’s net income is $1,000,000 or more during the fiscal year ending
September 30, 2007, during any interim period beginning after the
Effective Date and ending prior to September 30, 2007 or during any
interim period beginning on October 1, 2006 and ending on or before
the
expiration of this Agreement: 85,000 shares, of which 50% will be
Restricted Shares and 50% will be S-8
Shares.
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The
Stock
Bonus pursuant to this subsection 3.2.1 is payable quarterly. For purposes
of
this subsection 3.2.1, the term “quoted
or listed company”
means
any existing or new client of the Company whose common stock is not cleared
for
quotation on the over-the-counter Bulletin Board or the NASDAQ, or listed,
or
authorized for listing, on the Amex or the NYSE (or any successor to such
entities) or any other national securities exchange as of the Effective Date,
but such common stock becomes cleared for quotation on any one of such quotation
systems or listed or authorized for listing on any one of such exchanges during
the Term of this Agreement.
3.3 Reimbursement
of Expenses
3.3.1 The
Company shall reimburse the Consultant for all reasonable expenses incurred
by
the Consultant in the performance of his duties pursuant to this Agreement
upon
the Consultant providing the Company with receipts for such expenses. Such
reimbursable expenses shall not include customary day-to-day office expenses,
including but not limited to copies, faxes, and office supplies.
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3.4 Paid
Time Off and Other Benefits
3.4.1 Consultant
will be entitled to six weeks of paid time off during the Term of this
Agreement. All Cash Compensation, Stock Compensation and Stock Bonus provided
for in this Agreement shall accrue during Consultant’s paid time off and
continue to be payable as provided for in this Agreement. The Company
acknowledges that Consultant may not be reachable by phone, fax, email or
otherwise for approximately two weeks during Consultant’s paid time
off.
3.4.2 In
addition to any other compensation or benefits to be received by the Consultant
pursuant to this Agreement, the Consultant shall be entitled to participate
in
all benefits which the Company may from time to time provide to its key
officers, employees and/or consultants.
3.5 Indemnification
3.5.1 The
Company shall to the fullest extent permitted by law or as set forth in the
Articles of Incorporation, and any future amendments, and the Bylaws of the
Company, indemnify, defend and hold harmless Consultant from and against any
and
all claims, demands, proceedings, liabilities, damages, losses and expenses
(including attorney's fees, court costs and disbursements) arising out of the
fact that he is or was serving as Consultant of the Company, or the performance
of his duties hereunder except in the case of Consultant’s gross negligence,
willful misconduct, criminal conduct or violations of law.
3.6 Insurance
3.6.1 In
the
event that the Company obtains director or officer insurance covering any person
during the Term of this Agreement, the Company will also take reasonable
measures to obtain such insurance covering Consultant.
3.7 Taxes
3.7.1 Consultant
shall be responsible for the payment of all taxes to the Internal Revenue
Service as well as any taxes payable in the United States including taxes
payable to any state or local jurisdiction. Consultant indemnifies the Company
with respect to the payment of any and all taxes owing and due for Cash
Compensation, Stock Compensation or Stock Bonus.
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4.0 RESTRICTIVE
COVENANTS
4.1 Non-Competition
4.1.1 During
the Term of this Agreement and for three months following termination of this
Agreement as provided in section 5.0 hereof, the Consultant shall not directly
or indirectly:
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(a)
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own,
operate, manage, control, invest, participate in any manner or have
any
interest in;
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(b)
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act
as an officer, director, agent, employee, advisor or consultant of;
or
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(c)
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assist
in any way or in any capacity, any person, firm, association, partnership,
corporation or other entity which is,
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a
business that is the same or substantially similar to and/or competes with
the
business then engaged in by the Company (the “Competitive
Entity”)
anywhere in the United States (the “Territory”).
4.1.2 The
restriction set out in subsection 4.1.1(a) above shall not apply to the
collective, direct or indirect, ownership of Consultant and his associates
(as
such term is defined in Regulation 14(A) promulgated under the Securities
Exchange Act of 1934, as in effect on the date first written above) of less
than
an aggregate of ten percent (10%) of the securities of any Competitive Entity,
but only if such investment is of a totally passive nature and does not involve
Consultant devoting time to the management or operations of such Competitive
Entity and Consultant is not otherwise involved in the business of such
Competitive Entity.
4.1.3 The
Consultant acknowledges that the restrictions contained in this subsection
4.1
are reasonable; however, in the event that any court should determine that
any
of the restrictive covenants contained in subsection 4.1.1 or 4.1.2 of this
Agreement, or any part thereof, are unenforceable because of the duration of
such provision or the area covered thereby, such court shall have the power
to
reduce the duration or area of such provision and, in its reduced form, such
provision shall then be enforceable and shall be enforced.
4.1.4 Nothing
in subsection 4.1 hereof shall restrict or preclude Consultant from engaging
in
any manner in the business of Montecito Capital Management as conducted by
Montecito Capital Management as of the Effective Date.
4.2 Delivery
of Records
4.2.1 Upon
the
termination of the Consultant’s engagement with the Company, the Consultant will
deliver to the Company all books, records, lists, brochures and other property
belonging to the Company or developed in connection with the business of the
Company.
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4.3 Confidentiality
4.3.1
The
term
“Confidential
Information”
means
any and all information concerning the business of the Company which the
Consultant may receive or develop as a result of his engagement. All documents,
procedures, policies, programs, reports, plans, proposals, technical
information, know-how, systems and other information unique to the Company,
its
customers or principals, received or developed by the Consultant are the
property of the Company and/or such parties. The Consultant shall not make
any
unauthorized disclosure or use of and shall use his best efforts to prevent
publication or disclosure or use of Confidential Information.
4.3.2 The
Consultant acknowledges that any unauthorized disclosure or use of Confidential
Information by the Consultant may result in material damages to the Company
and
consents to the issuance of an injunction or other equitable remedy to prohibit,
prevent or enjoin unauthorized disclosure or use of Confidential Information
by
the Consultant.
4.3.3
Except
as
authorized by the Company, the Consultant will not:
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(a)
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duplicate,
transfer or disclose nor allow any other person to duplicate, transfer
or
disclose any of the Company’s Confidential
Information;
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(b)
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use
the Company’s Confidential Information without the prior written consent
of the Company; or
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(c)
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incorporate,
in whole or in part, within any domestic or foreign patent application
any
proprietary or Confidential Information disclosed by the
Company.
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4.3.4 The
Consultant will safeguard all Confidential Information at all times so that
it
is not exposed to or used by unauthorized persons, and will exercise at least
the same degree of care to protect all Confidential Information whether or
not
developed by the Consultant.
4.3.5 The
restrictive obligations set forth above shall not apply to the disclosure or
use
of information which:
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(a)
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is
or later becomes publicly known under circumstances involving no
breach of
this Agreement by the Consultant;
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(b)
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is
already known to the Consultant at the time of receipt of the Confidential
Information from the Company;
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(c)
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is
lawfully made available to the Consultant by a third party having
the
right to disclose it to Consultant without violation of any obligation
to
the Company; or
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(d)
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is
required to be disclosed by the Consultant pursuant to legal process
(e.g., a subpoena), provided that Consultant notifies the Company
immediately upon receiving or becoming aware of the legal process
in
question.
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4.3.6 If
the
Consultant contends that any such information disclosed to him by the Company
is
in the public domain or was in the possession of the Consultant prior to such
disclosure and not under an obligation of confidence, the Consultant will,
within ten days of receipt by the Consultant of such disclosure give written
notice of such contention to the Company, which written notice shall include
a
complete identification of the information in question and the derivation
thereof, including particulars of any contract in which the Consultant or any
other person has made use of such concept or information. If the Consultant
has
not within ten days of receipt by the Consultant of such disclosure given such
written notice to the Company, then it shall be conclusively presumed that
all
information communicated by the Company to the Consultant concerning the
development originated with the Company and constitutes secret and confidential
information and know-how.
4.3.7 The
Consultant hereby certifies that he has not brought and will not bring with
the
Consultant to the Company or use while performing his Consultant duties for
the
Company any materials or documents of a former client of the Consultant which
are not generally available to the public except the know-how to which the
right
to use has been duly licensed to the Company by such former client. The
Consultant understands that while engaged by the Company, the Consultant is
not
to breach any obligation of confidence or duty and the Consultant agrees that
he
will fulfill all such obligations during his engagement with the
Company.
4.3.8 No
patent
right or licenses are guaranteed by this Agreement and patent rights or licenses
now or developed during the Term of this Agreement are the property of the
Company. The disclosure of Confidential Information under this Agreement shall
not result in any obligation for either party to grant any rights in its patent
rights or confidential information, and no other obligations of any kind are
assumed by or implied against either party, except for those stated in this
Agreement.
4.3.9 The
provision of subsection 4.3 hereof shall survive the termination of this
Agreement.
5.0 TERMINATION
5.1 The
Company may terminate the Consultant’s engagement under this Agreement at any
time upon the occurrence of any of the following events:
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(a)
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the
Consultant acting unlawfully, dishonestly, negligently, incompetently
or
in bad faith;
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(b)
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the
conviction of the Consultant of a
felony;
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(c)
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the
Consultant becoming permanently disabled or disabled for a period
exceeding 90 consecutive days or 90 days calculated on a cumulative
basis
during the Term of this Agreement;
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(d)
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the
breach or default of any term of this Agreement by the Consultant
if such
breach or default has not been remedied to the reasonable satisfaction
of
the Company within 14 days after written notice of the breach or
default
has been delivered by the Company to the Consultant;
or
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(e)
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at
the will of the Company, upon 30 days written notice to the Consultant
by
the Company upon a decision by the Company’s Chief Executive Officer,
which decision shall be in the Chief Executive Officer’s sole
discretion.
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5.2 The
Consultant may terminate his obligations under this
Agreement:
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(a)
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at
any time after the expiring of 120 days of the date on which there
is a
change of control, as described in subsection 2.7 of this Agreement
or the
Company has a successor as described in subsection 14.1 of this
Agreement;
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(b)
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upon
the default or breach of any term of this Agreement by the Company
if such
breach or default has not been remedied or is not being remedied
to the
reasonable satisfaction of the Consultant, within 14 days after written
notice of the breach or default has been delivered by the Consultant
to
the Company; or
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(c)
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at
the will of the Consultant, upon 30 days written notice to the Company
by
the Consultant.
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5.3 In
the
event of the termination of the Consultant’s engagement under this Agreement,
Consultant will be entitled only to the Cash Compensation, Stock Compensation
and Stock Bonus earned by Consultant hereunder as of the date of such
termination. The Consultant shall not be entitled to a severance of any kind
upon termination of this Agreement for any reason.
5.4 The
rights of the Company and the Consultant under section 5.0 hereof are in
addition to and not in derogation of any other remedies which may be available
to the Company or the Consultant at law or in equity.
6.0 PERSONAL
NATURE
6.1 This
Agreement is personal in nature and is entered into based upon the singular
skill, qualifications and experience of the Consultant.
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7.0 RIGHT
TO USE CONSULTANT’S NAME AND LIKENESS
7.1 The
Consultant hereby grants to the Company the right to use the Consultant’s name,
likeness and/or biography in connection with the services performed by the
Consultant under this Agreement and in connection with the advertising or
exploitation of any project with respect to which the Consultant performs
services for the Company.
8.0 WAIVER
8.1 No
consent or waiver, express or implied, by any party to this Agreement of any
breach or default by the other party in the performance of its obligations
under
this Agreement or of any of the terms, covenants or conditions of this Agreement
shall be deemed or construed to be a consent or waiver of any subsequent or
continuing breach or default in such party’s performance or in the terms,
covenants and conditions of this Agreement. The failure of any party to this
Agreement to assert any claim in a timely fashion for any of its rights or
remedies under this Agreement shall not be construed as a waiver of any such
claim and shall not serve to modify, alter or restrict any such party's right
to
assert such claim at any time thereafter.
9.0 NOTICES
9.1 Any
notice relating to this Agreement or required or permitted to be given in
accordance with this Agreement shall be in writing and shall be personally
delivered or mailed by registered mail, postage prepaid to the address of the
parties set out on the first page of this Agreement. Any notice shall be deemed
to have been received if delivered, when delivered, and if mailed, on the fifth
day (excluding Saturdays, Sundays and holidays) after the mailing thereof.
If
normal mail service is interrupted by strike, slowdown, or other cause, a notice
sent by registered mail will not be deemed to be received until actually
received and the party sending the notice shall utilize any other services
which
have not been so interrupted or shall deliver such notice in order to ensure
prompt receipt thereof.
9.2 Each
party to this Agreement may change its address for the purpose of section 9.0
hereof by giving written notice of such change in the manner provided for in
subsection 9.1 hereof.
10.0 APPLICABLE
LAW
10.1 This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Nevada and the federal laws of the United States applicable therein,
which shall be deemed to be the proper law hereof. The parties hereto hereby
submit to the jurisdiction of the courts of Xxxxx County, Las Vegas,
Nevada.
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11.0
SEVERABILITY
11.1 If
any
provision of this Agreement for any reason be declared invalid or unenforceable,
such declaration shall not effect the validity or enforceability of any
remaining portion of this Agreement, which remaining portion shall remain in
full force and effect as if this Agreement had been executed with the invalid
or
unenforceable portion thereof eliminated and is hereby declared the intention
of
the parties that they would have executed the remaining portions of this
Agreement without including therein any such part, parts or portion which may,
for any reason, be hereafter declared invalid or unenforceable.
12.0 ENTIRE
AGREEMENT
12.1 This
Agreement constitutes the entire agreement between the parties hereto and there
are no representations or warranties, express or implied, statutory or otherwise
other than set forth in this Agreement and there are no agreements collateral
hereto other than as are expressly set forth or referred to herein. This
Agreement cannot be amended or supplement except by a written agreement executed
by both parties hereto, provided that if the Company becomes listed on the
Amex,
NASDAQ or NYSE, the Company and the Consultant shall reasonably renegotiate
the
terms of this Agreement to the extent such terms are inconsistent with the
rules
and relations of such exchange or quotation system.
13.0 ARBITRATION
13.1 In
the
event of any dispute arising in the determination of the compensation to be
paid
pursuant to section 5.0 hereof or of the Consultant’s compensation as set out in
this Agreement, the matter in dispute shall be referred to the auditors of
the
Company for determination. If the auditors cannot agree on a determination
of
the matter in dispute within ten days following the referral to them, the matter
in dispute shall be referred to a single arbitrator under the Arbitration Act
then in effect federally, and the arbitration shall take place in Xxxxx County,
Las Vegas, Nevada.
14.0 LIMITATIONS
ON ASSIGNABILITY
14.1 Consultant’s
duties and responsibilities under this Agreement are not assignable or delegable
in whole or in part. The Company may assign this Agreement to a successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise)
to
all or substantially all of the business and/or assets of the Company; provided,
however, that the Company will require any successor to assume expressly 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 had taken
place. As used in this Agreement, the "Company"
shall
mean the Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid which assumes and agrees to perform this Agreement
by
operation of law, or otherwise.
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15.
0 BURDEN
AND BENEFIT
15.1 This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective heirs, executors, administrators, successors and permitted
assigns.
16.0 TIME
16.1 Time
is
of the essence of this Agreement.
17.0 COUNTERPART,
PHOTOCOPIES AND FAXES
17.1 This
Agreement may be executed in counterpart and such counterparts together shall
constitute one and the same instrument and notwithstanding the date of execution
shall be deemed to bear the date as set out on the first page of this Agreement.
It shall not be necessary in making proof of this Agreement or any counterpart
hereof to produce or account for any of the other counterparts. A copy of this
Agreement signed by one party and faxed to another party shall be deemed to
have
been executed and delivered by the signing party as though an original. A
photocopy of this Agreement shall be effective as an original for all
purposes.
IN
WITNESS WHEREOF the undersigned have duly executed this Agreement as of the
date
set out on the first page of this Agreement.
PUBLIC
COMPANY MANAGEMENT CORPORATION
/s/
Xxxxxxx
Xxxxx
Xxxxxxx
Xxxxx, President & CEO
CONSULTANT
/s/
Xxxxxx X.
Xxxxx
Xxxxxx
X.
Xxxxx, CFA
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