CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT, made and entered into on the 1st
day of April, 1997, to be effective as of the 1st day of April, 1997, by
and between INTABEX S.A. (ZUG) ("Intabex"), and Xxxxxxx X.X. Xxxxxxx (the
"Consultant"). Terms not otherwise defined herein shall have the
meanings assigned thereto in the Stock Purchase Agreement, dated
February 14, 1997, by and among DIMON INCORPORATED, a Virginia
corporation ("DIMON"), Intabex and the shareholders of Intabex (the
"Stock Purchase Agreement"). DIMON joins in this Agreement for the
purposes provided in Section 9 hereof.
R E C I T A L S
DIMON and its affiliates are engaged in the business of
purchasing, processing, storing and selling leaf tobacco (the "Tobacco
Business"). Pursuant to the Stock Purchase Agreement, DIMON acquired all
of the outstanding capital stock of Intabex, an international company
also engaged in the Tobacco Business. The Consultant had heretofore been
employed by Intabex as its Chairman. Effective as of the Closing Date,
the Consultant will cease active employment and become non-executive
Chairman of the Board of Intabex. Because of his prior employment with
Intabex, the Consultant is experienced in, and knowledgeable concerning,
the Tobacco Business. Intabex desires to engage the Consultant as an
independent contractor to Intabex and its affiliates (the "Intabex
Group") for the purpose of providing certain advisory services related to
the Tobacco Business, and the Consultant desires to provide such services
to Intabex Group on the terms and for the fees and other remuneration set
forth herein.
NOW THEREFORE, in consideration of the mutual covenants and
obligations herein and the fees and other remuneration Intabex agrees
herein to pay the Consultant, and of other good and valuable
consideration, the receipt of which is hereby acknowledged, Intabex and
the Consultant agree as follows:
1. Engagement. Intabex hereby engages the Consultant as a
consultant to perform the Services (as defined below) for the Intabex
Group subject to the terms and conditions of this Agreement, and the
Consultant hereby accepts such engagement for and in consideration of the
compensation hereinafter provided and agrees to use his best efforts in
performing the Services. The Consultant shall perform his obligations
hereunder in compliance with the terms of this Agreement and any and all
applicable laws and regulations.
2. Services. At the request of Intabex, the Consultant agrees
to render consulting and advisory services to Intabex Group with respect
to business matters within the special competence, knowledge and
experience of the Consultant gained during his prior employment with
Intabex and which services are appropriate to and consistent with his
office as non-executive Chairman of the Board of Intabex (the
"Services"). The Consultant shall devote such portion of his
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professional time as reasonably shall be necessary to the performance of
the Services, provided, however, that the parties acknowledge that the
Consultant will have other business interests during the term of this
Agreement and will not devote the entirety of his professional time to
the provision of the Services. Consultant shall not be required to
perform the Services in the United States. Intabex shall give Consultant
reasonable advance notice of any request for Services which require
travel by Consultant away from his primary residence.
3. Limitations. Nothing in this Agreement shall be construed
to give the Consultant authority to represent Intabex or any other member
of the Intabex Group before any court or governmental or regulatory agency
without the express prior written authorization of Intabex. In addition,
all files, books, accounts, records and other information of any nature,
however recorded or stored, and related to Intabex Group (the "Records")
shall at times belong to Intabex Group and to the extent possessed by the
Consultant hereunder, such possession shall be for the benefit of Intabex
Group. The Consultant's possession of the Records is at the will of
Intabex and is solely for the purpose of enabling the Consultant to
perform his obligations hereunder. The Records shall be readily
separable from the records of the Consultant.
4. Term. The initial term of this Agreement shall commence on
the Closing Date and shall continue thereafter through October 31, 2000,
unless terminated earlier pursuant to Section 10 hereof. Following the
expiration of the initial term, the term of this Agreement shall
automatically be extended for consecutive one-year terms unless either
party shall elect to terminate it upon written notice delivered not less
than 10 days prior to the expiration of the then-current term.
5. Fee, Expenses and Taxes.
5.1 Fee. As compensation for the performance of the
Services, the Consultant shall be paid a fee of $370,000 per
year (the "Fee"), payable in arrears in four equal
installments of $92,500 on the last Business Day of each
calendar quarter.
5.2 Expenses. The Consultant shall be reimbursed for
all expenses incurred by him on behalf of Intabex or any
other member of the Intabex Group in accordance with the
policies from time to time in effect for Intabex Group.
5.3 Taxes. Except as required by law or otherwise
agreed by the parties, neither Intabex nor any other member
of Intabex Group will withhold from any fees or other
remuneration paid to the Consultant any amounts for any
income taxes or other contributions for the Consultant, nor
will Intabex or any other member of Intabex Group pay any
Social Security, Medicare, unemployment or similar tax with
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respect to the Consultant. The Consultant acknowledges that
such taxes are his sole responsibility.
6. Notices. All communications, notices and disclosures
required or permitted by this Agreement shall be in writing and shall be
deemed to have been given when delivered personally or by messenger or by
overnight delivery service (or when refused by the addressee upon
presentation thereof), or when received via telecopy, telex or other
electronic transmission, in all cases addressed to the person for whom it
is intended at the address set forth on the signature page hereof or to
such other address as a party shall have designated by notice in writing
to the other party in the manner provided by this Section.
7. Independent Contractor. In the performance of his work,
duties and obligations, it is mutually understood and agreed that the
Consultant is at all times acting and performing as an independent
contractor. Intabex shall neither have nor exercise any control or
direction over the methods by which the Consultant shall perform his work
and functions, the sole interest and responsibility of Intabex is to
assure that the Services shall be performed and rendered in a competent,
diligent and timely manner satisfactory to Intabex. Except to the extent
Intabex needs to specify that the Consultant meet with Intabex personnel
or others in connection with the Services, Intabex shall not control the
number of hours the Consultant devotes to the Services covered under this
Agreement. The Consultant shall not be construed to be an employee or
officer of Intabex or any other member of Intabex Group.
8. Standard of Care. (a) The Consultant warrants that he will
perform the Services in a competent, diligent and timely manner in
compliance with all applicable laws and regulations, the internal
policies and procedures of Intabex Group known to Consultant and the
highest professional and ethical standards. In addition, the Consultant
represents and warrants that any information which he may supply Intabex
Group during the term of this Agreement (i) to the knowledge of
Consultant, will have been obtained by the Consultant lawfully and from
publicly available sources, and (ii) to the knowledge of Consultant, will
not be confidential or proprietary to any third person. Nothing in this
Agreement shall be construed as authorizing or encouraging the Consultant
to obtain information for Intabex Group in violation of applicable laws
or regulations or any third party's rights to copyright or trade secret
protection.
(b) Consultant shall not be required to take any action
hereunder which Consultant reasonably believes to be in violation of
applicable laws or regulations or the internal policies or procedures of
Intabex Group.
9. Indemnification.
9.1 Indemnification by Consultant. The Consultant
shall defend, release, indemnify and hold Intabex Group and
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its directors, officers, stockholders, affiliates, employees
and agents and the personal representatives and assigns of
each, harmless from and against any and all claims, suits,
liability, costs and expenses, including, without limitation,
reasonable attorneys' fees and expenses, arising out of or
resulting from any act of gross negligence or willful
misconduct committed by the Consultant with respect to the
performance by the Consultant of the Services (an "Indemnity
Event"); provided, however, that the foregoing obligation
does not apply to any liability arising out of gross
negligence of or willful misconduct by any member of Intabex
Group or any of their respective officers, directors,
stockholders, affiliates, employees, independent contractors
or agents. The Consultant shall not, however, be required to
make any reimbursement to any member of Intabex Group or
their respective directors, officers, stockholders,
affiliates, employees or agents for any claims, losses,
damages, costs or expenses which are reimbursed to such
person by insurance or otherwise.
9.2 Indemnification by Intabex Group. In
consideration of the Services to be provided by Consultant to
the Intabex Group, Intabex Group shall defend, release,
indemnify and hold the Consultant and his estate, heirs and
representatives harmless from and against any and all claims,
suits, liability, costs and expenses, including, without
limitation, reasonable attorneys' fees and expenses,
resulting from, arising out of or in any way connected with
the conduct of the business or operations of Intabex Group or
the conduct of any of the officers, directors, stockholders,
affiliates, employees, independent contractors or agents of
any member of Intabex Group or any of the products of any
member of Intabex Group or by reason of the fact that he is
or was a consultant to Intabex Group to the same extent as if
Consultant was an officer or director of DIMON; provided,
however, that the foregoing obligation does not apply to any
liability arising out of or resulting from any act of gross
negligence or willful misconduct by the Consultant. DIMON
shall not, however, be required to make any reimbursement to
the Consultant or his estate, heirs or representatives for
any claims, losses, damages, costs or expenses which are
reimbursed to the Consultant or his estate, heirs or
representatives by insurance or otherwise.
9.3 Claims Procedure. The party seeking
indemnification pursuant to this Section 9.3 (the
"Indemnification Obligee") shall give reasonable notice to
the party from whom indemnification is sought (the
"Indemnification Obligor") after the Indemnification Obligee
has knowledge of any Indemnity Event or the commencement of
any Indemnity Event, provided that any delay in giving any
such notice shall not relieve the Indemnification Obligor
from its responsibilities hereunder, except to the extent
that it is prejudiced by such delay. If required by the
Indemnification Obligee, the Indemnification Obligor shall
assume the defense of any Indemnity Event by engaging counsel
reasonably satisfactory to the Indemnification Obligee. The
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Indemnification Obligee shall not be bound by any settlement
of any claim without its prior written consent.
9.4 Limitations on Liability. Except with respect to
any breach of the provisions of Section 11 of this Agreement,
the Indemnification Obligor shall not in any event be liable
or responsible to the Indemnification Obligee for any
indirect or consequential damages (including lost profits).
10. Termination. (a) Intabex may elect, at any time and
without notice to Consultant, to terminate its obligations hereunder, with
or without "cause," provided that Intabex shall give Consultant sixty (60)
days prior written notice of any termination without "cause." Except as
provided by applicable law or pursuant to this Section 10, upon
termination of this Agreement, all obligations of Intabex and all other
members of Intabex Group to the Consultant hereunder shall cease
immediately. For purposes of this Section 10 "cause" shall mean the
following:
(i) any willful misconduct of the Consultant in
connection with the performance of any of his duties,
including, without limitation, misappropriation of funds or
property of Intabex Group or securing or attempting to secure
any personal profit in connection with any transaction
entered into on behalf of Intabex Group;
(ii) any personal dishonesty of the Consultant, any
willful and continued failure to perform the Services, any
willful violation of any law, rule, regulation (other than
traffic violations or similar offenses) and any willful act
or failure to act of the Consultant, which in any such case
results in injury to the business or reputation of Intabex
Group;
(iii) any willful breach by or default of the
Consultant of the terms of or under this Agreement (other
than a breach resulting from Consultant's illness or injury);
or
(iv) for breach of each of the letters binding
Consultant to the terms of the Noncompetition Agreements each
dated as of April 1, 1997 by and between Intabex and Folium
Inc.
No act, or failure to act, by Consultant hereunder shall be considered
"willful" unless committed without good faith and without a reasonable
belief that the act or omission was in the best interest of Intabex
Group.
(b) In the event of termination for cause, the Consultant shall
be entitled to receive any earned but unpaid compensation under Section 3
hereof through the date of termination; provided, however, that any such
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compensation so to be paid to the Consultant shall be reduced by the
amount of any damages or expenses payable by the Consultant pursuant to
Section 9.1 as a result of the event giving rise to the termination for
cause.
(c) In the event of termination without cause, Intabex shall be
obligated to pay Consultant the full amount of any unpaid Fee relating to
the then-current term of this Agreement.
(d) This Agreement shall terminate automatically upon the death
of Consultant or his complete disability. "Complete disability" shall be
deemed to have occurred when, as a result of illness, disease or injury,
Consultant cannot or is unable to perform the Services for a period of 60
consecutive days or longer. Upon termination pursuant to this Section
10(d), the Consultant or his estate shall be entitled to receive any
earned but unpaid compensation under Section 3 hereof through the date of
termination.
(e) Consultant may elect, upon sixty (60) days prior written
notice to Intabex, to terminate his obligations hereunder. In the event
of any termination of this Agreement by Consultant, Intabex shall be
obligated to pay Consultant any earned but unpaid compensation under
Section 3 hereof through the date of termination.
11. Confidential Information. Except as specifically authorized
by Intabex in writing, from the date hereof and continuing forever,
Consultant agrees not to (i) disclose any Confidential Information (as
defined below) to any individual or entity, or otherwise knowingly permit
any person or entity to obtain or disclose any Confidential Information,
or (ii) use any Confidential Information, whether individually or on
behalf of another individual or entity, except pursuant to the
performance of his duties under this Agreement or as a director of any
member of the Intabex Group. For purposes hereof, "Confidential
Information" means any and all information relating to any part of the
business of Intabex Group, provided to Consultant or to which Consultant
has had access in connection with his duties under this Agreement, which
information is not a matter of public record or generally known to the
tobacco industry, including, without limitation: (i) financial and
operating information regarding Intabex Group; (ii) personnel data,
including compensation arrangements, relating to any employee of Intabex
Group; (iii) internal plans, practices and procedures of Intabex Group;
(iv) the names, addresses and requirements of any customers of Intabex
Group; (v) the terms and conditions of any supply agreements, customer or
vendor commitments and other agreements, documents and instruments to
which any member of Intabex Group is party; and (vi) any other
information expressly known by Consultant to be confidential. Consultant
acknowledges that a violation of this Section 11 by him would cause
irreparable harm to Intabex Group. Accordingly, Consultant hereby grants
Intabex Group the right to seek and be granted injunctive relief for any
such violation, in addition to any other legal remedies that may be
available to Intabex Group.
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In the event that Consultant is requested or required (by oral
question or request for information or documents in any legal proceeding,
interrogatory, subpoena, civil investigative demand or similar process)
to disclose any Confidential Information, Consultant will notify Intabex
promptly of the request or requirement and will cooperate with Intabex in
seeking an appropriate protective order or waive compliance with the
provisions of this Section 11; provided that, if prior to the issuance of
a protective order or the receipt of a waiver hereunder, Consultant is,
on the advice of counsel, compelled to disclose any Confidential
Information to any tribunal or else stand liable for contempt, Consultant
shall be permitted to make such disclosure without any responsibility or
liability to Intabex Group, but shall use his best efforts to obtain, at
the request and at the expense of DIMON, an order or other assurance that
confidential treatment will be accorded to such portion of the
Confidential Information required to be disclosed as DIMON shall
designate.
12. Miscellaneous.
12.1 Amendment. The provisions of this Agreement may
be waived, altered, amended or repealed, in whole or in part,
only on the written consent of Intabex and the Consultant.
12.2 Headings. Section headings and numbers used in
this Agreement are included for convenience of reference
only, and, if there is any conflict between any such numbers
and headings, and the text of this Agreement, the text shall
control. Each of the statements set forth in the premises of
this Agreement is incorporated into the Agreement is a valid
and binding representation of the party or parties to whom it
relates.
12.3 Choice of Law; Jurisdiction; Waiver of Jury
Trial.
(a) This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without
reference to the choice of law principles thereof.
(b) Each party hereto consents to submit to the
exclusive jurisdiction of the United States District Court
for the Southern District of New York or in the event (but
only in the event) such court does not have subject matter
jurisdiction, of the State Courts of New York sitting in New
York City, for any actions, suits or proceedings arising out
of or relating to this Agreement and the transactions
contemplated hereby. Each party hereto agrees not to
commence any action, suit or proceeding relating thereto
except in such courts. Each party hereto unconditionally
waives any objection to the laying of venue of any action,
suit or proceeding arising out of this Agreement or the
transactions contemplated hereby, in such courts, and waives
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and agrees not to plead or claim in any such court that any
such action, suit or proceeding brought in any such court has
been brought in an inconvenient forum.
(c) Consultant hereby irrevocably designates,
appoints, and empowers CT Corporation System, at 0000
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other address
where such representative office may be located in New York
City, and its successors and assigns, as its true and lawful
agent for service of process to receive and accept on its
behalf service of process in any actions, suits or
proceedings arising out of or relating to this Agreement and
the transactions contemplated hereby. Consultant agrees that
the failure of such process agent to give any notice of any
service of process to it shall not impair or affect the
validity of service upon such agent or of any judgment based
thereon.
(d) EACH PARTY HERETO IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED UPON ANY CONTRACT, TORT OR OTHERWISE) ARISING
OUT OF OR RELATING TO THIS AGREEMENT, THE TRANSACTIONS
CONTEMPLATED HEREBY OR IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.
12.4 Counterparts. This Agreement may be executed in
two counterparts, each of which shall be deemed an original,
but both of which together shall constitute one and the same
instrument.
12.5 Trademarks. Neither party shall have the right
under this Agreement to use the name, trademark or trade
names of the other, unless prior written approval has been
obtained. Any such approval or authorization shall cease
upon termination of this Agreement.
12.6 Injunction. In the event of a breach or
threatened breach by either party of the provisions of this
Agreement, the nonbreaching party shall, in addition to any
other rights and remedies available to it or him, at law or
otherwise, be entitled to an injunction to be issued by any
court of competent jurisdiction enjoining and restraining the
breaching party from committing any present violation or
future violation of this Agreement.
12.7 Waiver. Failure to insist upon strict compliance
with any provision hereof shall not be deemed a waiver of
such provision or any other provision hereof.
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12.8 Binding Effect; Assignment.
(a) This Agreement shall be binding upon, and inure to
the benefit of the Consultant and his heirs, executors,
administrators and legal representatives and Intabex and
DIMON and their respective successors and assigns.
(b) Neither this Agreement or any interest herein or
any rights hereunder shall be sold or assigned by the
Consultant, Intabex or DIMON, nor shall any of the duties of
the Consultant hereunder be delegated to any person, firm or
corporation, without prior written notice to and consent of
Intabex.
12.9 Confidentiality. Except for information that is
otherwise publicly available, each party agrees to keep
confidential and not to disclose the existence of this Agreement
or any terms hereof, except as required by applicable law.
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IN WITNESS WHEREOF, the parties have executed this
Consulting Agreement as of the date and year first above written.
DIMON INCORPORATED
By: /s/ Xxxxxx X. Xxxx, Xx.
Chairman and Chief
Executive Officer
DIMON Incorporated
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
INTABEX S.A. (ZUG)
By: /s/ X. X. Xxxxxx
Title: Director
Address: Xxxxxxxxx Xxxxxxx 00/00
XX-0000 Xxxxx
Xxxxxxxxxxx
CONSULTANT
/s/ Xxxxxxx X.X. Xxxxxxx
Address: Avontuur Wine Estate
(Pty) Ltd
Winery Road Intersection
Stellenbosch Road
Somerset West
Cape Provence
South Africa
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