CONSULTING AGREEMENT
Consulting Agreement ("Agreement"), dated as of October __, 2000, by
and between American Technical Ceramics Corp., a Delaware corporation (the
"Company"), and Xxxxxx X. Xxxx (the "Consultant").
WHEREAS, the Consultant intends on retiring as Senior Vice President -
Operations of the Company effective December 31, 2000;
WHEREAS, the Company desires to retain the consulting services of the
Consultant subsequent thereto, and the Consultant desires to provide such
consulting services to the Company, on the terms and conditions provided in this
Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Engagement; Duties.
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(a) The Company hereby engages the Consultant as a consultant to the
Company during the Term (as hereinafter defined) to provide such advisory and
other consulting services as the Company shall from time to time reasonably
request or require, and the Consultant hereby accepts such engagement, all upon
and subject to the terms and conditions hereinafter set forth. It is expected
that Consultant's duties shall include consulting relating to (i) marketing;
(ii) organizational and financial strategy; (iii) acquisitions and joint
ventures; (iv) analyses of operations and management processes; (v) key
personnel matters; and (vi) such other matters upon which the Company and the
Consultant may mutually agree.
(b) The Consultant shall make himself available to the Company to
provide such consulting services as the Company may request for a minimum of
nine full days and up to 15 full days (based upon eight working hours per day)
in each calendar quarter during the Term. Consultant shall not be required to
make himself available for more than 15 full days during any such calendar
quarter unless the Company and the Consultant mutually agree to a greater number
of full days. Unless the Company agrees otherwise, such consulting services
shall be provided at the Company's headquarters in Huntington Station, New York,
the Company's facilities in Jacksonville, Florida, or at the Consultant's place
of business. However, the Consultant shall be available to travel as the
Company's needs for his services require (subject to reimbursement of his
expenses as provided in Section 4(b) hereof).
(c) The Consultant shall not be prohibited from undertaking or engaging
in additional consultancies or other business activities, provided that (i) the
consultancies or business activities in which the Consultant so engages do not
result in a violation of Sections 5, 6 or 7 of this Agreement, and (ii) the
performance by the Consultant of his duties in connection with such additional
consultancies or business activities will not materially impair the Consultant's
ability to perform his obligations under this Agreement.
2. Nature of Relationship. In the performance of his obligations or the
provision of his services under this Agreement, the Consultant shall be an
independent contractor and not an agent or employee of the Company. As an
independent contractor, the Consultant shall not have, nor shall he hold himself
out as having, any right, power or authority to create any contract or
obligation, either express or implied, on behalf of, in the name of, or binding
upon, the Company or to pledge the Company's credit, or to extend credit in the
Company's name, without the prior written consent of the Company.
3. Term; Termination.
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(a) Provided the Consultant's employment with the Company is not
terminated prior thereto, the term of the Consultant's engagement under this
Agreement shall commence on January 1, 2001 (the "Effective Date") and shall
terminate on the earliest of (i) December 31, 2003, (ii) the death of the
Consultant, or (iii) such disability of the Consultant which results in an
inability to perform his consulting duties hereunder; provided that the Company
shall have the right to extend the term for an additional period of up to two
years, provided that it gives notice of its election to do so to the Consultant
on or before [June 30, 2002]. The term of the Consultant's engagement under this
Agreement, as it may be so extended, is referred to herein as the "Term."
(b) This Agreement may be terminated by the Company prior to the
expiration of the Term only for Cause (as defined below), upon written notice to
the Consultant. Upon termination of this Agreement, all rights, remedies, duties
and obligations of the parties hereunder shall immediately cease, except (i) for
those rights, remedies, duties and obligations which survive the termination of
this Agreement as specifically set forth herein, (ii) for those rights and
remedies to which the Company may be entitled as a result of the action or
inaction which gave rise to its right to terminate this Agreement, and (iii) the
Consultant shall remain entitled to all then accrued but unpaid amounts due
hereunder from the Company. For purposes of this Agreement, Cause shall mean:
(w) the Consultant's failure to perform his obligations under this Agreement
(other than such failure resulting from disability or death of the Consultant),
which failure continues for a period of fifteen days after notice thereof from
the Company to the Consultant; (x) any action or inaction on the part of the
Consultant which adversely affects the Company or any client or employee of the
Company; (y) conviction of a crime; or (z) any breach of fiduciary duty to the
Company.
4. Compensation and Benefits.
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(a) During the Term, in consideration of the services to be rendered by
the Consultant hereunder, and subject to the terms hereof, the Company shall pay
the Consultant a monthly fee of $6,000, payable on or before the 10th day of
each month during the Term. In addition, the Company shall pay to the Consultant
in respect of each calendar quarter ending during the Term the sum of $2,000 for
each full day during such calendar quarter more than nine full days that he
provides consulting services pursuant to this Agreement (such amount to be
payable on or before the 30th day after the end of the calendar quarter to which
such payment relates). The Consultant shall provide the Company within 10 days
after the end of each calendar quarter ending during the Term with a statement
reflecting the days during such quarter that he provided consulting services, a
description of such services and the number of hours during each such day that
such
services were performed. For the purposes of calculating the number of days
worked in a quarter, (i) hours worked shall include travel to and from any of
the Company's facilities or to any other situs that the Company requests that
the Consultant perform services if and only if the number of hours worked on
behalf of the Company during a day in which the Consultant travels on Company
business in less than eight, and provided that in no event shall the number of
hours worked on any such day, including travel time, exceed eight; and (ii) the
number of days worked in the quarter shall be determined by dividing the actual
number of hours worked in the quarter by eight and then rounding upward to the
nearest whole number. By way of example, and not by way of limitation, (x) if
the Consultant works nine hours (excluding travel time) on a day in which he
travels to and/or from one of the Company's facilities to perform services for
the Company, he shall not be given credit for any hours worked in respect of
travel time; (y) if the Consultant travels four hours to and/or from one of the
Company's facilities on a day in which he works six hours on behalf of the
Company, he shall be given credit for two hours worked in respect of travel
time; and (z) if the Consultant works 27 hours during a quarter, he shall be
credited with having worked four days during the quarter.
(b) During the Term, the Company shall reimburse the Consultant for his
reasonable and necessary business expenses incurred in providing his consulting
services as directed by the Company hereunder, to the extent the Consultant
shall document such expenses with receipts or other evidence to the satisfaction
of Xxxxxx Xxxxxxx or Xxxxxxxx Xxxxx or the successors to their respective
positions.
(c) During the first 18 months of the Term, the Company shall pay on
the Consultant's behalf the amount necessary under COBRA to continue to provide
to the Consultant the medical insurance coverage he is currently provided by the
Company, subject to the same limitations applicable to other retiring employees.
(d) The Consultant shall be responsible for all income or other taxes
based on the payment made to him hereunder (including, without limitation, the
payments made on his behalf in connection with the provision of medical
insurance coverage as set forth in Section 1(c) above). Accordingly, the Company
shall not make any tax withholding, FICA or similar payments from the fees or
other payments payable hereunder, except as may be required by law.
5. Confidentiality and Non-Disclosure. Beginning on the date hereof, and at any
time hereafter, the Consultant shall treat as confidential any proprietary,
confidential or secret information relating to the business or interests of the
Company or any future parent, subsidiary, affiliate or customer of the Company,
including, but without limitation, the organizational structure, operations,
business plans, or technical projects of the Company or any future parent,
subsidiary, affiliate or customer of the Company, and any research datum or
result, invention, trade secret, customer list, process, or other work product
developed by or for the Company or any future parent, subsidiary, affiliate or
customer of the Company, whether on the premises of the Company or elsewhere
("Confidential Information"). Beginning on the date hereof, and at any time
hereafter, the Consultant shall not disclose, utilize, or make accessible in any
manner or in any form any Confidential Information other than in connection with
performing the services required of him under this Agreement, without the prior
written consent of the Company.
6. Intellectual Property, Etc.
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(a) The Consultant hereby agrees that any and all information,
intellectual property, inventions and discoveries, whether or not patentable,
that he conceives and/or creates during the Term which are a direct or indirect
result of services performed hereunder, shall be work for hire and shall be the
sole and exclusive property of the Company. The Consultant hereby assigns to the
Company any and all right, title and interest which he has or may acquire in the
same. The Consultant further agrees that he will promptly execute any and all
applications, assignments or other instruments which an officer of the Company
or the Board of Directors of the Company shall deem necessary or useful in order
to apply for and obtain Letters Patent in the United States and all foreign
countries for said information, inventions and discoveries and in order to
assign and convey to the Company the sole and exclusive right, title and
interest in and to said information, inventions, discoveries, patent
applications, and patents thereon. The Company will bear the cost of preparation
of all such patent applications and assignments, and the cost of prosecution of
all such applications in the United States Patent Office and in the patent
offices of foreign countries.
(b) All documents, records, apparatus, equipment and other physical
property furnished to the Consultant by the Company or produced by the
Consultant or others in connection with his consulting shall be and remain the
sole property of the Company. The Consultant shall return and deliver such
property to the Company as and when requested by the Company.
7. Non-Competition; Non-Solicitation.
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(a) The Consultant agrees that he will not during the Term and for a
period of six months thereafter, engage in, or otherwise directly or indirectly
be employed by, or act as a consultant, advisor or lender to, or be a director,
officer, employee, stockholder, owner, or partner of, any other business or
organization which competes with the Company or any parent, subsidiary, or
affiliate of the Company. Notwithstanding anything contained herein to the
contrary, the provisions of this Section 7(a) will not be deemed breached merely
because the Consultant owns not more than 1% of the outstanding common stock of
a corporation, if, at the time of its acquisition by the Consultant, such stock
is listed on a national securities exchange, is reported on NASDAQ, or is
regularly traded in the over-the-counter market by a member of a national
securities exchange.
(b) The Consultant agrees that for a period of two years from the
termination of this Agreement he will not, directly or indirectly, employ or
solicit the employment or engagement by others of any employees of, or
consultants hired by, the Company or any future parent, subsidiary or affiliate
of the Company, within a period of one year after such person is no longer
employed or retained by the Company or any future parent, subsidiary or
affiliate of the Company.
8. Survival; Scope of Agreement. The Consultant acknowledges and agrees that the
restrictions contained in Sections 5,6 and 7 hereof are a condition of his
engagement by the Company and shall survive termination of this Agreement. The
Consultant further acknowledges and agrees that such restrictions are reasonable
in view of the nature of the business in which the Company is engaged and his
knowledge of the Company's business, and that any breach of his obligations
under Section 5,6 or 7 hereof will cause the Company
irreparable harm for which the Company will have no adequate remedy at law. As a
result, the Company shall be entitled to the issuance by a court of competent
jurisdiction of an injunction, restraining order, or other equitable relief in
favor of itself restraining the Consultant from committing or continuing any
such violation. Any right to obtain an injunction, restraining order, or other
equitable relief hereunder will not be deemed a waiver of any right to assert
any other remedy the Company may have under this Agreement or otherwise at law
or in equity.
9. Assignment.
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(a) This Agreement is a personal contract calling for the provision of
unique services by the Consultant, and the Consultant's rights and obligations
hereunder may not be assigned or transferred by him without the prior written
consent of the Company. In the event of any attempted assignment or transfer or
rights hereunder by the Consultant contrary to the provisions hereof, the
Company shall have no further liability hereunder.
(b) The Company may assign or transfer this Agreement to (i) a
successor entity in the event of a merger, consolidation, or transfer or sale of
substantially all of the assets of the Company, or (ii) any entity controlling,
under common control with or controlled by the Company. In the case of any such
assignment or transfer by the Company, the rights and obligations of this
Agreement shall be binding upon and inure to the benefit of such successors and
assigns of the Company.
10. Notices. Any notice or other communication required or permitted to be given
pursuant to this Agreement shall be in writing and shall be deemed to have been
duly given or made if (i) sent by registered or certified mail, return receipt
requested, (ii) hand delivered, (iii) sent by prepaid overnight courier service,
or (iv) sent by facsimile and confirmed by mail, to the parties at the following
addresses (or at such other addresses as shall be specified by the parties by
like notice):
To the Company: American Technical Ceramics Corp.
Xxx Xxxxxx Xxxx
Xxxxxxxxxx Xxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxx,
Vice President - Administration
Facsimile: (000) 000-0000
To the Consultant: Xxxxxx X. Xxxx
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Facsimile: (TBD)
Each notice or other communication shall be deemed to have been given
or made on the date of actual receipt, except that a facsimile sent after normal
business hours shall be deemed received on the next day that recipient's office
is open which is not a Saturday, Sunday or holiday.
11. Severability. In the event any of the provisions of this Agreement is
determined to be invalid, prohibited or unenforceable by a court or other body
of competent jurisdiction, this Agreement shall be construed as if such invalid,
prohibited or unenforceable provision has been more narrowly drawn so as not to
be invalid, prohibited or unenforceable. Notwithstanding the foregoing sentence,
in the event that any provision contained in this Agreement should be determined
to be invalid, prohibited or unenforceable, the validity, legality and
enforceability of the remaining provisions contained in this Agreement shall be
unaffected and shall continue in full force and effect.
12. Governing Law. This Agreement and all performance under this Agreement shall
be governed by the laws of the State of New York.
13. Waiver; Modification. No waiver or modification of this Agreement or of any
covenant, condition or limitation contained herein shall be valid or effective
unless it is in writing and duly executed by the Consultant and the Company. No
failure or delay by either the Company or the Consultant in exercising any right
or remedy under this Agreement will waive any provision of this Agreement, nor
will any single or partial exercise by either the Company or the Consultant of
any right or remedy under this Agreement preclude either of them from otherwise
or further exercising the rights or remedies contained herein or granted by any
applicable law.
14. Entire Agreement. The terms and provisions of this Agreement shall
constitute the entire agreement by the Company and the Consultant with respect
to the subject matter hereof and shall supersede any and all prior agreements or
understandings between the parties, whether written or oral. Without limiting
the generality of the foregoing, all obligations of the parties under the
letters dated June 26, 1996, August 22, 1996 and September 11, 1997 relating to
the Consultant's employment by the Company shall terminate upon the Effective
Date and shall be of no further force or effect.
15. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall constitute a duplicate original of this Agreement but
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and the Consultant have executed this
Agreement as of the day and year first above written.
AMERICAN TECHNICAL CERAMICS CORP.
By:
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Xxxxxx Xxxxxxx,
President and Chief Executive Officer
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Xxxxxx X. Xxxx
