CONSULTING AGREEMENT
This
CONSULTING AGREEMENT dated this 30th day of April, 2009, by and between
Xxxxxxx-Xxxxxx Corporation, a Delaware corporation (the "Company") and Xxxxxx
Xxxxx ("Bloom").
WITNESSETH:
WHEREAS,
Bloom has been serving as the Vice President of the Company and President of
Metal Improvement Company, LLC (“MIC”);
WHEREAS,
Bloom desires to retire from his positions as the Vice President of the Company,
and President of MIC, and otherwise as an employee and officer of the Company
and all of its affiliates effective as of April 30, 2009, (the “Retirement
Date”);
WHEREAS, the parties hereto desire
that, commencing after the Retirement Date, Bloom will serve as a consultant to
the Company as set forth herein; and
WHEREAS,
the parties desire to set forth the exact nature and the amount of compensation
and benefits to be provided to Bloom in respect of his prior service as an
employee and his consulting services to the Company.
NOW
THEREFORE, the parties hereto agree as follows:
I. Retirement
1.1 Retirement from Position as
Vice President.
Bloom
hereby confirms his retirement from his position as Vice President of the
Company and hereby resigns, effective as of the Retirement Date, from all of his
other positions as an officer of the Company and as a director and officer of
each of its affiliates and, effective as of the Retirement Date, Bloom shall
cease to be an employee of the Company and each of its affiliates for all
purposes. Following the Retirement Date, Bloom shall continue to
serve the Company as a consultant as provided for herein.
1.2. Related Matters to
Retirement.
(b) Medical, Dental and
Prescription Benefits; Certain Insurance Benefits. During the
period commencing on the Retirement Date and ending on April 30, 2012, the
Company shall continue on behalf of Bloom and his spouse the highest level of
medical, dental, vision, and prescription drug benefits as provided to its
current active employees; however, for purposes of the medical plan, Medicare
shall be Consultant’s
primary
insurance with the Company’s medical insurance being
secondary. During the "Consulting Period," as defined in
Section 2.1 of this Agreement, Bloom shall also be entitled to that business
travel accident and worker's compensation insurance which the Company offers
consultants to the Company in the ordinary course of business, paid at Company
expense.
(c) Automobile. The
Company shall provide Bloom through the Consulting Period with the use of his
Company provided automobile and cover all expenses related thereto in accordance
with the Company’s automobile policy, and then at the expiration of this
Agreement, or any extension thereafter, offer to sell to Bloom the automobile
currently provided to him by the Company, at wholesale value, in accordance with
the terms of the Company's automobile policy.
(d)
Financial
Counseling. During the period extending from the date of this
Agreement through the Consulting Period, the Company will continue to provide
Bloom with financial counseling services from the financial group then retained
by the Company to provide such services to its active senior executives, such
services to be provided at the expense of the Company and in accordance with the
Company’s financial planning policy.
(e) Executive
Physical. During the period extending from the date of this
Agreement through the Consulting Period, the Company will continue to provide
Bloom with an executive physical for him and his spouse from the executive
physical clinic then retained by the Company to provide such services to its
active senior executives, such services to be provided at the expense of the
Company and in accordance with the Company’s executive physical
policy.
(e) Withholding. The
Company shall have the right to deduct from any amounts payable under this
Section 1.2, any taxes or other amounts required by law to be
withheld.
II. Consulting
Period
2.1. Consulting
Services.
During
the period commencing on May 1, 2009 and ending on April 30, 2012,
(the "Consulting Period"), Bloom agrees to serve the Company as a consultant and
render such advisory and consulting services to the Company and its affiliates
in connection with the business of the Company and its affiliates as may
reasonably be requested by the Board or the Chief Executive Officer of the
Company, having due regard to Bloom’s health, residence and personal
circumstances at the time, in connection with any matter with respect to which
he has experience or special competence by reason of
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his prior
employment with the Company (the “Consulting
Services”). The Consulting Services shall be rendered at such
locations as shall be mutually convenient to the Company and
Bloom. The Company agrees that the Consulting Services shall be
appropriate for a former Vice President of the Company. This
Agreement may be renewed on its terms for two (2) additional periods of one (1)
year each with the approval of the Executive Compensation Committee of the Board
of Directors.
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2.2.
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Consulting
Fees.
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(a) In consideration for the
Consulting Services to be provided the Company and for the acceptance of the
terms contained in this Agreement, provided Bloom is then available to perform
Consulting Services for the Company, and provided further, that Bloom is not in
breach of, or has not committed a material breach (which has not been cured), of
any of the covenants contained in Section 3.1 hereof, the Company shall pay
Bloom, in equal monthly installments, a consulting fee at the annual rate of
$292,500.00 (the “Consulting Fees”).
(b) Bloom shall also be
entitled to an annual incentive payment with a maximum value of $161,000
(“Performance Bonus”). The Performance Bonus shall be based on
a number of performance goals mutually established and agreed to by Bloom and
the Chief Executive Officer at the commencement of this
Agreement. This Award shall be paid when such payments are
customarily paid by the Company under its management incentive compensation
plans.
(c) Bloom shall also be
entitled to an annual long term incentive payment with a target value of
$100,000.00 (“LTI Bonus”). The LTI Bonus shall be based on
three year aggregated performance goals established for senior management of the
Metal Treatment Segment of the Corporation. This Award shall be paid
in accordance with the same terms and conditions, and at the time such payments
are customarily paid by the Company under its management long term incentive
plan.
(d) Bloom shall also be
entitled to a one time equity issuance within 10 days of the effective date of
this agreement. Bloom shall be provided 13,362 shares of Company
Common Stock on the within 10 days of the Effective Date to offset the loss of
any previously issued time based restricted stock.
2.3. Reimbursement of
Expenses.
During
the Consulting Period, the Company shall promptly pay Bloom the reasonable and
actual expenses incurred by him in the performance of the Consulting Services,
including, without limitation, those incurred in connection with business
related travel or entertainment, or, if such expenses are paid directly by
Bloom, shall promptly
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reimburse
him for such payment, provided that Bloom properly accounts therefore in
accordance with the Company's current expense reimbursement policy.
2.4. Non-Employee
Status.
Bloom acknowledges that during the
Consulting Period and thereafter he will not be an “employee” (or person
of similar status) of the Company or any of its affiliates for purposes of the
Code. Bloom acknowledges that he will not be paid any “wages” (as
defined in the Code) in respect of the Consulting Services under Section 2.2 of
the Agreement, and that he shall be solely responsible for all taxes imposed on
him by reason of the payment of the Consulting Fees and/or any other
compensation, benefits or other amounts payable in respect of the Consulting
Services.
III. General
Provisions
3.1. Covenants.
(a) Unauthorized
Disclosure. Bloom agrees and understands that in his position
with the Company, Bloom has been and will continue to be exposed to and has and
will receive information relating to the confidential affairs the Company and
its affiliates, including but not limited to technical information, intellectual
property, business and marketing plans, strategies, customer information, other
information concerning the products, promotions, development, financing,
expansion plans, business policies and practices of the Company, its affiliates,
and other forms of information considered by the Company to be confidential and
in the nature of trade secrets (“Confidential Information”). Bloom
agrees that during the Consulting Period and for 10 years thereafter, Bloom will
not disclose such Confidential Information, either directly or indirectly, to
any third person or entity without the prior written consent of the Company;
provided, however, that (i) Bloom shall have no such obligation to the extent
such information is or becomes publicly known other than as a result of Bloom’s
breach of his obligations hereunder and (ii) Bloom may, after giving prior
notice to the Company to the extent practicable under the circumstances,
disclose such information to the extent required by applicable law or
governmental regulation or judicial or regulatory process. This
confidentiality covenant has no temporal, geographical or territorial
restriction. Upon the termination of the Consulting Period, Bloom
will, to the extent requested by the Company in writing, promptly supply to the
Company all property, keys, notes, memoranda, writings, lists, files, reports,
customer lists, correspondence, tapes, disks, cards, surveys, maps, logs,
machines, technical data or any other tangible product or document which has
been produced by, received by or otherwise submitted to Bloom during or prior to
the Consulting Period.
(b) Non-competition. By
and in consideration of the Company's entering into this Agreement and the
payments to be made and benefits to be provided by
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the
Company hereunder and in consideration for the amounts received and to be
received by Bloom hereunder, and further in consideration of Bloom’s exposure to
Confidential Information, Bloom agrees that he will not, during the Consulting
Period and for period of 10 years thereafter, or so long as he is receiving
benefits under this Agreement, whichever is greater (the "Non-competition
Term"), directly or indirectly, own, manage, operate, join, control, be employed
by, or participate in the ownership, management, operation or control of, or be
connected in any manner with, including but not limited to holding any position
as a shareholder, director, officer, consultant, independent contractor,
employee, partner, or investor in, any Restricted Enterprise (as defined below);
provided that
in no event shall ownership of less than 1% of the outstanding equity securities
of any issuer whose securities are registered under the Securities Exchange Act
of 1934, as amended, standing alone, be prohibited by this Section 3.1(b). For
purposes of this paragraph, the term “Restricted
Enterprise” shall mean any person, corporation, partnership or other
entity that competes, directly or indirectly, with any business or activity
conducted or proposed to be conducted by the Company or any of its subsidiaries
as of the Retirement Date.
(c) Non-solicitation. During
the Non-competition Term, Bloom shall not, and shall not cause any other person
to, interfere with or harm, or attempt to interfere with or harm, the
relationship of the Company or any of its affiliates with, or endeavor to entice
away from the Company or any of its affiliates, or hire, any person who at any
time during Bloom's employment with the Company or the Consulting Period was an
employee or customer of the Company or any of its affiliates or otherwise had a
material business relationship with the Company or any of its
affiliates.
(d) Remedies. Bloom
agrees that any breach of the terms of this Section 3.1 would
result in irreparable injury and damage to the Company and/or its affiliates for
which the Company and/or its affiliates would have no adequate remedy at law;
Bloom therefore also agrees that in the event of said breach or any threat of
breach, the Company and/or its affiliates, as applicable, shall be entitled to
an immediate injunction and restraining order to prevent such breach and/or
threatened intentional breach and/or continued breach by Bloom and/or any and
all persons or entities acting for or with Bloom, without having to prove
damages, in addition to any other remedies to which the Company and its
affiliates may be entitled at law or in equity. The terms of this
paragraph shall not prevent the Company and its affiliates from pursuing any
other available remedies for any breach and/or threatened intentional breach
hereof, including but not limited to the recovery of damages from Bloom, the
recovery of all prior payments made under this Agreement, the recovery of any
payments that had been made and still remain to be paid in the Xxxxxxx-Xxxxxx
Retirement Plan, and to discontinue any payments still due under the
Agreement. The parties hereto further agree that the provisions of
the covenants contained in this Section 3.1 are
reasonable and necessary to protect the businesses of the Company and its
affiliates because of Bloom’s access to
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Confidential
Information and his material participation in the operation of such
businesses. Bloom hereby acknowledges that due to the global aspects
of the Company’s and its affiliates’ businesses and competitors it would not be
appropriate to include any geographic limitation on this Section
3.1. Should a court or arbitrator determine, however, that any
provision of the covenants contained in this Section 3.1 are not
reasonable or valid, either in period of time, geographical area, or otherwise,
the parties hereto agree that such covenants should be interpreted and enforced
to the maximum extent which such court or arbitrator deems reasonable or
valid.
The
existence of any claim or cause of action by Bloom against the Company or its
affiliates under this Agreement shall not constitute a defense to the
enforcement by the Company of the covenants contained in Section
3.1(a).
Anything
contained in Section 3.1(d) to the contrary notwithstanding, the Company shall
be required to give Bloom prior written notice of any claimed failure by him to
comply with any provision of Section 3.1(b) or (c). If Bloom shall,
within fifteen (15) days after such notice, be in all material respects in
compliance with the provisions of Section 3.1(b) or (c) that is involved, the
Company shall not, by virtue of the provisions of this Agreement, be entitled to
an immediate injunction and restraining order to prevent such breach, provided,
however, that nothing contained herein shall relieve Bloom from any liability
for actual damages occurring as a result of any breach by him of the provisions
of this Agreement.
3.2. Independence, Severability
and Non-Exclusivity.
Each of
the rights enumerated in this Agreement hereof shall be independent of the
others and shall be in addition to and not in lieu of any other rights and
remedies available to the Company or Bloom at law or in equity. If
any provision of this Agreement is hereafter construed or adjudicated to be
invalid or unenforceable, the same shall not affect the remainder of the
Agreement or rights or remedies which shall be given full effect without regard
to the invalid portions.
3.3 Non-Exclusivity of
Rights
Nothing
in this Agreement shall limit or reduce such rights as Bloom may have under any
of the following Plans of the Company and any amounts or benefits which Bloom is
or shall become entitled to receive under any of those Plans shall be paid or
provided in accordance with the provisions of the Plans: Long-Term
Incentive Plan; Retirement Plan; Retirement Benefits Restoration Plan; Deferred
Compensation Plan Employee Stock Purchase Plan; and Savings and Investment
Plan.
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3.4 Rights of
Termination.
(a) For
Cause. The Company shall have the right, at any time effective
upon notice to Bloom, to terminate this Agreement for "cause" (as hereinafter
defined). For purposes of this Agreement, "cause" means: (1) Bloom
acting fraudulently in his relations with the Company or on behalf of Company,
(2) Bloom misappropriating or doing material, intentional damage to the property
of the Company, (3) Bloom being convicted of a felony, (4) Bloom's acts or
omissions amounting to willful misconduct or recklessness by Bloom in the
performance of his duties under this Agreement or the habitual neglect of such
duties or (5) any other material breach by Bloom of any of the terms of this
Agreement.
(b) Disability;
Death. In the event of Bloom's permanent and total disability
due to physical or mental illness or incapacity, the Company shall have the
right to terminate this Agreement upon 30 days' prior written
notice. In the event that Bloom is able to and recommences rendering
services and performing his duties hereunder within such 30-day notice period,
Bloom shall be reinstated and such notice shall be without further force or
effect. If Bloom dies during the Term, this Agreement shall terminate
immediately upon his death.
3.5 Effects of
Termination.
(a) In
the event that the Agreement is terminated pursuant to Section 3.4(a), (i) this
Agreement shall immediately cease and (ii) the Company shall pay to Bloom his
accrued and unpaid consulting fees and expense reimbursement through the date of
termination in accordance with the Company's usual procedures.
(b) In
the event that the Agreement is terminated pursuant to Section 3.4(b), (i) this
Agreement shall cease in accordance with Section 3.4(b), (ii) the Company shall
pay to Bloom or his Estate any unpaid consulting fees and Performance Bonus due
for the year in which Bloom dies or becomes disabled, and expense reimbursement
through the date of termination in accordance with Company's usual
procedures.
(c) In
the event that this Agreement is terminated by Bloom, then: (i) the Company
shall pay Bloom his accrued and unpaid Consulting Fees and expense reimbursement
through the date of termination in accordance with Company’s usual
procedures.
(d) Bloom’s obligations
pursuant to Sections 3.1 shall survive any termination of this Agreement for any
reason whatsoever.
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3.6. Successors.
This
Agreement shall be binding upon and shall inure to the benefit of the Company
and any and all of its successors and assigns, which, for purposes of this
Agreement, shall include a corporation or other entity acquiring all or
substantially all of the assets and business of the Company, as the case may be,
whether by operation of law or otherwise. The Company shall require
its successors and assigns to expressly assume 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 or assignment had taken
place. Neither this Agreement nor any right or interest hereunder
shall be assignable or transferable by Bloom, his beneficiaries or legal
representatives, except by will or by the laws of descent and
distribution. This Agreement shall inure to the benefit of and be
enforceable by Bloom’s legal personal representative.
3.7. Notices.
All
notices, consents or other communications required or permitted to be given by
any party hereunder shall be in writing and shall be given by
personal delivery, or certified or registered mail, postage prepaid, as
follows:
To the Company:
Attn:
Chief Executive Officer
Xxxxxxx-Xxxxxx
Corporation
0 Xxxxxx
Xxxx Xxxx
Xxxxxxxx,
Xxx Xxxxxx 00000
To Bloom:
0000
Xxxxxx Xxxxx Xxxxx
Xxx Xxx
Xxxxx, Xxxxxxx 00000
or at
such other address as either party may from time to time specify to the
other. Any notice, consent or other communication required or
permitted to be given hereunder shall be deemed to have been given on the date
of mailing or personal delivery and shall be conclusively presumed to have been
received on the fourth business day following the date of mailing or, in the
case of personal delivery, the day of delivery thereof, except that a change of
address shall not be effective until actually received.
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3.8. Modifications and
Waivers.
No term,
provision or condition of this Agreement may be modified or discharged unless
such modification or discharge is authorized by the Executive Compensation
Committee and is agreed to in writing and signed by Bloom. No waiver
by either party hereto of any breach by the other party hereto of any term,
provision or condition of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time.
3.9 Entire
Agreement.
This
Agreement constitutes the entire understanding between the parties hereto
relating to the subject matter hereof, superseding all negotiations, prior
discussions, preliminary agreements and agreements relating to the subject
matter hereof made prior to the date hereof.
3.10. Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of the
State of New Jersey, without giving effect to conflicts of laws principles
thereof. Notwithstanding the foregoing, and except with respect to
any proceeding for an injunction and restraining order under Section 3.1(d), if
a dispute hereunder shall exist either party shall have the right (but not the
obligation), in addition to all other rights and remedies provided by law, to
compel arbitration of the dispute in the County of Bergen, State of New Jersey,
under the rules of the American Arbitration Association, by giving written
notice of arbitration to the other party within thirty (30) days after notice of
such dispute has been received by the party to whom notice has been given; any
decision and award under the arbitration shall be final and binding on the
parties hereto, and judgment on the decision and award may be entered in any
court of competent jurisdiction, and
3.11. Headings.
The
headings contained in this Agreement are for reference purposes only and shall
not affect the meaning or interpretation of this Agreement.
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and
year set forth above.
_________________________________ Xxxxxx
Xxxxx
XXXXXXX-XXXXXX
CORPORATION.
By:
Name: Xxxxxx
X. Xxxxxxx
Title: Chief
Executive Officer
327544
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