EXHIBIT 10-M
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement") is made as of the 1st day of
January, 1995, by and between Xxxxxx X. Xxxxxx ("Xxxxxx"), and Bindley Western
Industries, Inc., an Indiana corporation ("BWI"), and Priority Healthcare
Corporation, an Indiana corporation wholly owned by BWI ("PHC") (BWI and PHC are
sometimes collectively referred to herein as the "Company");
Recitals
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1. Concurrently with the execution of this Agreement, the Company closed
the purchase of all of the capital stock of IV-1, Inc. (which, together with its
wholly owned subsidiaries, IV-One Services, Inc. and National Pharmacy
Providers, Inc., are referred to collectively herein as the "IV-One Companies")
pursuant to a Stock Purchase Agreement (the "Acquisition Agreement").
2. Immediately prior to the consummation of the Acquisition Agreement,
Xxxxxx was a principal advisor to the IV-One Companies.
3. Xxxxxx is, and will continue to be, knowledgeable concerning the
business of the IV-One Companies and through years of experience has gained
valuable knowledge and expertise in the pharmaceutical and health care
businesses.
4. The Company desires to retain Xxxxxx as a consultant to PHC and Xxxxxx
desires to be so retained, upon the terms and conditions set forth in this
Agreement.
Agreement
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NOW, THEREFORE, in consideration of the foregoing and the mutual
undertakings contained herein and the consummation of the Acquisition Agreement,
the parties hereto agree as follows:
SECTION 1
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Term
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Section 1.1. Term. The term ("Term") of this Agreement shall commence on
January 1, 1995, and shall continue to and including December 31, 1998. At the
option of the Company, the Term of this Agreement may be extended for up to two
additional 12-month periods, upon written notice to Xxxxxx at least 30 days but
not more than 180 days prior to the expiration of the original term or the first
additional term, as the case may be.
SECTION 2
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Consulting Services
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Section 2.1. Creation of the Relationship. Upon the terms of this
Agreement, and in recognition of Xxxxxx'x extensive experience and expertise,
the Company hereby agrees to retain Xxxxxx, and Xxxxxx hereby agrees to be
retained by the Company, during the Term of this Agreement and on the terms and
conditions set forth herein, in the capacity of a consultant to PHC.
Section 2.2. Duties of Xxxxxx. During the Term hereof, Xxxxxx agrees to
render service to PHC as a consultant from time to time as may be reasonably
required by the Company, including but not limited to, advising PHC with respect
to all of the business, operations, assets, customers and products of the IV-One
Companies and PHC, as well as developing new opportunities for PHC to
participate in health care businesses in the United States and creating import
and export opportunities. There shall not be a prescribed minimum or maximum
number of hours to be devoted by Xxxxxx in fulfillment of Xxxxxx'x duties
hereunder. Xxxxxx may provide services to PHC under this Agreement from Xxxxxx'x
home or business location by telephone or in such other manner as is acceptable
to Xxxxxx and the Company. During the Term hereof, Xxxxxx shall be reimbursed by
the Company for any expenses that are approved in advance by PHC which Xxxxxx
may reasonably incur in the performance of Xxxxxx'x duties hereunder and which
are properly substantiated to the reasonable satisfaction of the Company. The
relationship of Xxxxxx to PHC hereunder shall be that of independent contractor
and not as employee.
SECTION 3
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Compensation
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Section 3.1. Regular Compensation. Xxxxxx shall be entitled to a fee of
$10,000 per month during the Term of this Agreement, payable in arrears on the
last day of each month.
Section 3.2. Additional Compensation.
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(a) Xxxxxx shall be entitled to receive 3% of the consolidated net
earnings of PHC after all charges but before any provision for income taxes
("Pre-Tax Net Profit") for the fiscal years ending December 31, 1995, 1996,
1997 and 1998.
(b) If the Term of this Agreement is extended at the option of the
Company for one or two additional 12-month periods, Xxxxxx shall be
entitled to 3% of the Pre-Tax Net Profit of PHC for the fiscal year ending
December 31,
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1999, in the case of one 12-month extension, or for the fiscal years ending
December 31, 1999 and 2000, in the case of two 12-month extensions.
(c) The Pre-Tax Net Profit of PHC shall be determined in accordance
with generally accepted accounting principles applied on a consistent
basis; provided, however, that Pre-Tax Net Profit shall not be charged with
any costs of an initial public offering by PHC or any of the IV-One
Companies.
(d) If 3% of the Pre-Tax Net Profit of PHC for the fiscal year ending
December 31, 1995, is less than $200,000, Xxxxxx shall still receive a
minimum payment of $200,000. To the extent that the amounts paid to Xxxxxx
under this Section 3.2 do not aggregate at least $1,000,000 for the four
fiscal years ending December 31, 1998, Xxxxxx shall be entitled to an
additional amount equal to the difference between $1,000,000 and the
amounts otherwise paid to Xxxxxx.
(e) All amounts owed to Xxxxxx under this Section 3.2 shall be paid
within 90 days after the end of the applicable fiscal year or years for
which a share of the Pre-Tax Net Profit is due.
3.3 Payments on Death. Notwithstanding the provisions of Sections
3.1 and 3.2 of this Agreement, if Xxxxxx dies during the Term of this Agreement,
Xxxxxx shall be entitled to the following and only the following compensation,
all of which shall be paid according to the regularly scheduled payment dates:
(a) If Xxxxxx dies in 1995, Xxxxxx shall be entitled to all amounts
payable under Sections 3.1 and 3.2 during or with respect to the fiscal
years ending December 31, 1995 and 1996; provided, however, if the
aggregate amounts so payable under Section 3.2 with respect to the 1995 and
1996 fiscal years is less than an aggregate of $500,000, Xxxxxx shall be
entitled to an additional amount equal to the difference between $500,000
and the amounts otherwise paid to Xxxxxx for such years;
(b) If Xxxxxx dies in 1996, Xxxxxx shall be entitled to all amounts
payable under Sections 3.1 and 3.2 during or with respect to the fiscal
years ending December 31, 1996 and 1997; provided, however, if the
aggregate amounts so payable under Section 3.2 with respect to the 1995,
1996 and 1997 fiscal years is less than an aggregate of $750,000, Xxxxxx
shall be entitled to an additional amount equal to the difference between
$750,000 and the amounts otherwise paid to Xxxxxx for such years;
(c) If Xxxxxx dies in 1997 or in 1998, Xxxxxx shall be entitled to all
amounts payable under Sections 3.1 and 3.2 during or with respect to the
fiscal years ending December 31, 1997 and 1998; provided, however, if the
aggregate amounts so payable under Section 3.2 with respect to the 1995,
1996, 1997 and
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1998 fiscal years is less than an aggregate of $1,000,000, Xxxxxx shall be
entitled to an additional amount equal to the difference between $1,000,000
and the amounts otherwise paid to Xxxxxx for such years; and
(d) If the original term of this Agreement is extended for one or two
additional 12-month periods and if Xxxxxx dies during such extended period
or periods, Xxxxxx shall be entitled to all amounts payable under Sections
3.1 and 3.2 during the extended Term of this Agreement.
Section 3.4. Rights to Acquire PHC Stock. If PHC determines to issue
common stock in an initial public offering, PHC shall offer to Xxxxxx
(concurrently with any offer to other executives, directors or consultants) the
right, at the election of Xxxxxx, to (a) acquire shares of PHC common stock at a
price equal to 85% of the initial public offering price, or (b) receive options
to acquire shares of common stock of PHC at 100% or the initial public offering
price, which options would be for a term of 10 years, would vest over a four-
year period and would have such other terms and conditions as set forth in PHC's
option plan. The number of shares of PHC common stock under either (a) or (b)
above would be equal to the lesser of 50,000 shares or 1% of the outstanding
shares of common stock of PHC immediately after the initial public offering.
Section 3.5. Breach of Non-Competition Agreement. Concurrently with
the execution of this Agreement, Xxxxxx is entering into a Non-Competition
Agreement with the Company. Notwithstanding any other provisions of this
Agreement, if Xxxxxx breaches any of Xxxxxx'x obligations under the Non-
Competition Agreement and such breach is not cured within 15 days after written
notice from the Company, Xxxxxx shall not thereafter be entitled to any
compensation or payments under this Agreement and this Agreement shall
terminate.
SECTION 4
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Miscellaneous
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Section 4.1. Benefit and Burden. Xxxxxx acknowledges that the duties
of Xxxxxx are unique and personal; accordingly, Xxxxxx may not delegate any of
Xxxxxx'x duties or obligations under this Agreement. The rights and obligations
of the Company under this Agreement shall inure to the benefit of, and be
binding upon, the successors and assigns of the Company. The rights of Xxxxxx
under this Agreement shall inure to the benefit of the heirs and legal
representatives of Xxxxxx.
Section 4.2. Nature of Relationship. The relationship of Xxxxxx to
PHC hereunder shall be that of an independent contractor, and not as an
employee, a partner or joint venturer of the Company for any purpose. Xxxxxx
shall not have any right to make contracts or commitments for or on behalf of
the Company, or to act in any manner as a representative of the Company, without
obtaining the written consent of the Chief Executive Officer of BWI.
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Section 4.3. Notices. Any notices to be given hereunder shall be deemed
sufficiently given when in writing and when (a) actually served on the party to
be notified, or (b) deposited in a receptacle of the United States mail,
certified or registered, postage prepaid, addressed appropriately as follows:
If to Company at:
Bindley Western Industries, Inc.
00000 X. Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Executive Vice President and
General Counsel
If to Xxxxxx at:
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Such addresses may be changed by any party by written advice given pursuant to
this Section.
Section 4.4. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Indiana.
Section 4.5. No Waiver. No failure on the part of any party at any time to
require the performance by any other party of any term of this Agreement shall
be taken or held to be a waiver of such term or in any way affect such parties'
right to enforce such term, and no waiver on the part of any party of any term
of this Agreement shall be deemed a continuing waiver or a waiver of any other
term hereof or the breach thereof.
Section 4.6. Modifications. This Agreement may not be amended, modified, or
supplemented without the written agreement of the parties at the time of such
amendment, modification, or supplement.
Section 4.7. Captions. The captions in this Agreement are for convenience
and identification purposes only, are not an integral part of this Agreement,
and are not to be considered in the interpretation of any part hereof.
Section 4.8. Arbitration and Counsel Fees.
(a) Notwithstanding any other provision of this Agreement to the
contrary, the parties hereto agree that any and all disputes with respect
to the provisions of this Agreement, shall be settled by arbitration in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association by an arbitrator appointed pursuant to such Rules,
and judgment upon the award
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rendered by such arbitrator may be entered in any court having jurisdiction.
Such arbitrator shall not have the authority or power to reform, alter, amend or
modify any of the terms or conditions of this Agreement or to enter an award
which reforms, alters, amends or modifies such terms or conditions. The decision
of such arbitrator shall be in writing, setting forth both findings of fact and
of law, and shall be final and conclusive upon the parties; and no suit at law
or in equity based on such dispute, controversy or claim shall be instituted by
any party hereto, other than to enforce the award of such arbitrator. Such
arbitration shall be conducted in Orlando, Florida, or in such other location as
the parties thereto may agree. The arbitrator shall be an existing or former
judge of a court of record within the United States or an attorney in good
standing admitted to practice for a period of at least ten (10) years within the
United States. No arbitration shall involve parties other than the parties
hereto and their respective successors and assigns or be in any respect binding
with respect to any such other parties.
(b) The parties to any arbitration arising hereunder shall have the right
to take depositions and to obtain discovery regarding the subject matter of the
arbitration and to use and exercise all of the same rights, remedies and
procedures, and be subject to all of the same duties, liabilities, and
obligations in the arbitration with respect to the subject matter thereof, as if
the subject matter of the arbitration were pending in a civil action before a
court of highest jurisdiction in the state where the arbitration is held. The
arbitrator shall have the power to enforce said discovery by imposition of the
same terms, conditions, consequences, liabilities, sanctions and penalties as
can be or may be imposed in like circumstances in a civil action by a court of
highest jurisdiction of the state in which the arbitration is held, except the
power to order the arrest or imprisonment of a person.
(c) In the event of a dispute, the prevailing party shall be entitled to be
reimbursed by the nonprevailing party or parties for such prevailing party's
reasonable attorney's fees and other expenses, including mediation and
arbitration fees.
(d) The parties agree that as a precondition to the commencement of
arbitration by any party, the dispute must be submitted to non-binding mediation
with a mediator agreed to by both parties. If the parties cannot agree on a
mediator within 14 days from the date of a request for mediation, the dispute
will be mediated by a person selected in accordance with the rules of the
American Arbitration Association.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
BINDLEY WESTERN INDUSTRIES, INC.
By: /s/ Xxxxxxx X. XxXxxxxxx
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EVP and General Counsel
PRIORITY HEALTHCARE CORPORATION
By: /s/ Xxxxxxx X. XxXxxxxxx
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EVP and General Counsel
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
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