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Exhibit 10.2(c)
CONSULTING AGREEMENT
This Consulting Agreement is entered into by and between Xxxxxxx Xxxxx
Corporation, a Pennsylvania corporation (the "Corporation") and Xxxxxxx X. Xxxx,
an individual (the "Executive"), effective April 25, 2001.
WHEREAS, the Corporation and the Executive entered into an Employment
Agreement dated April 12, 1988 and subsequently amended the Employment Agreement
by Supplemental Agreement No. 1 dated March 17, 1992, Supplemental Agreement No.
2 dated October 1, 1994, Supplemental Agreement No. 3 dated June 1, 1995,
Supplemental Agreement No. 4 dated March 1, 1998, and Supplemental Agreement No.
5 dated September 7, 1999 (hereinafter collectively the "Agreement"); and
WHEREAS, at a Special Meeting of the Board of Directors on April 24, 2001,
the Executive retired from the position of Chief Executive Officer of the
Corporation, and the Board of Directors elected Xxxxxx X. Xxxxxxx, Xx. to
succeed the Executive in such position, both actions to take effect on April 25,
2001; and
WHEREAS, the Corporation and the Executive now desire to further amend the
Agreement in recognition of the change in the Executive's status, and to take
this opportunity to consolidate, restate and supercede the original Employment
Agreement and prior Supplements with this one document for ease of future
reference and use;
NOW THEREFORE, in consideration of the mutual promises contained herein and
other good and valuable consideration, and intending to be legally bound hereby,
THE PARTIES AGREE AS FOLLOWS:
1. Consulting Arrangement. Commencing April 26, 2001 and continuing until
April 26, 2003 unless terminated earlier pursuant to Section 4 of this
Consulting Agreement, Executive will serve as a consultant to the
Corporation to perform such executive or policy duties as the Corporation
and Executive may mutually agree. The purpose of this consulting
arrangement is to enable the Corporation to continue to take advantage of
the knowledge and experience of the Executive in dealing with the business
and affairs of the Corporation, and the parties shall mutually agree on
effective ways of making this knowledge and experience available to its
Corporation consistent with Executive's retirement from full time service
and the performance of not more than approximately eight days service by
Executive in each calendar month. The period within which Executive serves
as a consultant is hereinafter called the "Consulting Term."
2. Compensation. During the Consulting Term, the Corporation shall pay the
Executive annual compensation equal to 25% of the salary of the Executive
in effect on April 25, 2001 (or 25% of $425,006.40). Payment of such
compensation shall be made in equal monthly installments.
In consideration of the Executive's compensation during the Consulting
Term, and the Executive's benefits as provided herein, the Executive shall
be responsible for any out-of-pocket expenses incurred by the Executive in
the conduct of the Corporation's business,
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including costs of his office. However, if the Executive travels at the
Corporation's request outside the Pittsburgh area on the Corporation's
business, the Corporation shall reimburse the Executive his reasonable
travel expenses in accordance with the travel policy then in effect for the
Corporation.
During the Consulting Term, the Executive shall be independent contractor
as distinguished from an employee of the Corporation, and as such shall be
solely responsible to report income to the proper authorities and pay
appropriate taxes.
3. Benefits. In recognition of the Executive's service to the Corporation both
as an employee and consultant, in addition to the compensation provided
during the Consulting Term under Section 2 of this Consulting Agreement,
the Corporation shall provide the following for the Executive:
(a) Health Insurance. The Corporation shall pay the cost of the "65
Special" health insurance and coverage for the Executive and his
spouse for the duration of their respective lives.
(b) Life Insurance. The Corporation shall maintain for the duration of the
Executive's life the existing Unum whole life insurance policy on the
Executive's life in the amount of Two Hundred and Fifty Thousand
Dollars ($250,000). Notwithstanding the above, the Corporation may
elect at its option to substitute for such policy, comparable coverage
for the Executive as part of a group insurance policy involving other
Corporation executives.
In addition to the existing $250,000 whole life policy referred to
above, during his employment as a full-time employee of the
Corporation and as provided by the Corporation's benefits program, the
Executive acquired Three Hundred and Twenty Five Thousand Dollars
($325,000) in group life insurance. Upon ceasing to be a full-time
employee of the Corporation on April 25, 2001, the Executive may elect
to either port such insurance pursuant to the ____ Act or convert such
insurance to an individual whole life policy. The Executive must make
such election within thirty (30) days after ceasing to be a full-time
employee of the Corporation, or he shall have waived his right to do
so.
If the Executive elects to port or convert such insurance, the
Corporation will pay an amount not to exceed $25,000 annually toward
the actual costs incurred by the Executive to maintain such insurance.
Notwithstanding the above, the Corporation may elect at its option, in
lieu of contributing $25,000 annually to the costs of such coverage,
to substitute for such policy comparable coverage for the Executive as
part of a group insurance policy involving other Corporation
executives.
(c) Supplemental Retirement Benefit. Commencing at the expiration of the
Consulting Term and for the remainder of the life of Executive or his
spouse, whichever shall be longer, the Corporation will pay Executive
or his spouse $5,000.00 per month as an additional retirement benefit.
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4. Termination. The following events shall terminate the Consulting Term
at the times indicated:
(a) Death. The death of Executive shall terminate the Consulting Term
on the date thereof. In the event of death of the Executive
during the Consulting Term, the Corporation will pay the spouse
of Executive, should she survive him, one full year's
compensation at the rate in effect at the time of death pursuant
to the provisions of Paragraph 2, such compensation to be payable
in equal monthly installments over a three year period.
(b) Disability. In the event the Board of Directors of the
Corporation determines that, by reason of illness or incapacity,
Executive is no longer able to perform his duties hereunder and
such failure to so perform shall have continued for a continuous
period of not less than three months, the Corporation may, by
notice to the Executive, terminate the Consulting Term effective
at any time after such three month period,. In such event, the
Corporation shall continue to pay Executive one-half of the
compensation provided for in Section 2, less any benefits
received by the Executive from the Corporation's then existing
Long-Term Disability plan, for a period of two years following
termination.
(c) Termination for Cause. In the event that, in the judgment of the
Board of Directors of the Corporation, the Executive shall have
(a) been guilty of an act of dishonesty material with respect to
the Corporation, (b) committed a crime involving moral turpitude
or (c) intentionally disregarded the provisions of this
Consulting Agreement or the express instructions of the Board of
Directors of the Corporation with respect to matters of policy
continuing for a period of not less than 30 days after notice of
such disregard, the Corporation may terminate this Consulting
Agreement and all its continuing obligations hereunder effective
at such date as it shall specify.
(d) Termination by Executive. Executive may terminate his obligations
under this Consulting Agreement (other than those contained in
Section 8 hereof) at any time upon not less than 90 days notice
to the Corporation. Unless such termination by Executive occurs
after a Material Event (defined in Paragraph 5 hereof), the
Corporation's obligations under this Consulting Agreement shall
terminate on the effective date of such termination.
5. Material Event. A material event shall be deemed to have occurred if a
person, other than the Corporation's ESOP, shall have acquired or have
the contractual right to acquire 20% or more of the outstanding stock
of the Corporation, considering all classes of common stock as one
class.
6. Compensation in the Event of Material Event. In the event that the
Consulting Agreement is terminated by Executive after the occurrence
of a Material Event during the Consulting Term or by the Corporation
other than pursuant to the provisions of Paragraph 4(a), (b) or (c),
the Corporation shall be obligated to pay Executive all amounts which
would be due him were the Consulting Term hereunder to continue until
its scheduled expiration, and to satisfy all of the Corporation's
obligations set forth in Section 3, Benefits as if this Consulting
Agreement remained in full force and effect.
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7. Taxes. In the event that any payment, coverage or benefit provided
under the Agreement would in the reasonable opinion of counsel for the
Corporation be deemed not deductible in whole or in part by the
Corporation in the calculation of its federal income tax by reason of
Section 280G of the Internal Revenue Code, the amounts payable
pursuant to the provisions hereof shall be reduced to the maximum
amount which would be so deductible; provided, however, that in no
event shall such amounts be equal to less than 50% of the compensation
remaining for the Consulting Term of Executive.
8. Confidentiality and Non-Competition.
(a) Non-Disclosure of Confidential Information. Executive shall not,
during the Consulting Term or thereafter, and whether this
Consulting Agreement expires or is terminated with or without
cause: (a) use directly or indirectly for Executive's own
benefit, or for the benefit of any corporation, partnership,
proprietorship, firm, person or other entity; or (b) disclose to
any corporation, partnership, proprietorship, firm, person or
other entity, other than Corporation, any Confidential
Information used by the Corporation and made known to Executive,
whether or not with knowledge and permission of the Corporation
and whether or not developed, devised, or otherwise created in
whole or in part by the efforts of the Executive, during or by
reason of his employment or retention as a consultant by the
Corporation. For purposes hereof, Confidential Information shall
mean and include information concerning the Corporation's sales,
sales volume, sales methods, customers, identity of customers,
identity of key purchasing personnel in the employ of customers,
amount or kind of customers purchases from the Corporation, the
formula, processes, methods, machines, manufacture, compositions,
ideas, improvements, inventions or other confidential or
proprietary information belonging to the Corporation or related
to the Corporation's affairs.
(b) Non-Competition. Executive covenants and agrees that for a period
of five (5) years following the expiration of the Consulting
Term, or termination with or without cause of the Consulting
Agreement, whichever occurs earlier, Executive will not, in any
area of the United States of America, or in any other area in
which the Corporation or any Subsidiary has carried on its
business during the six-month period prior to such expiration or
termination, engage directly or indirectly, as a principal,
agent, employee, employer, independent contractor, officer,
director, partner or substantial stockholders of any corporation,
partnership, proprietorship, firm or person, in any business
competitive with the Corporation's business during the three
years prior to such expiration or termination.
If the Corporation seeks judicial enforcement of this paragraph,
the period of time during which Executive is restricted from
competing with the Corporation shall extend to three years after
the date of the judicial order or settlement requiring
compliance.
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(c) Executive acknowledges that the remedies at law for any breach by
Executive of the provisions of Section 8 hereof will be
inadequate and that the Corporation shall be entitled to
injunctive relief against Executive in the event of any such
breach or anticipatory breach, in addition to any other remedies
and damages available. Executive acknowledges that the
restrictions contained herein are reasonable but agrees that if a
Court of competent jurisdiction shall hold such restrictions
unreasonable as to time, geographic area, activities or
otherwise, such restrictions shall be deemed to be reduced or
modified to the extent necessary in the opinion of such court to
make them reasonable.
(d) The Executive may, subject to the terms of Section 8, perform
services for third parties during the Consulting Term or
thereafter, provided they do not otherwise interfere with
performance of his responsibility under this Consulting
Agreement.
9. Indemnification Agreement. The Corporation agrees to indemnify, save
harmless and defend the Executive during the Consulting Term pursuant
to the Indemnification and Insurance Agreement attached hereto as
Exhibit A. This Indemnification Agreement is to be in addition to the
Indemnification and Insurance Agreement dated June 17, 1987 by and
between the Executive and the Corporation which is hereby ratified and
confirmed by the Corporation and the Executive.
10. Governing Law. This Consulting Agreement is made under the laws of the
Commonwealth of Pennsylvania and for all purposes shall be construed
and enforced in accordance with, and governed by, the laws of said
Commonwealth.
11. Notices. Any notice or other communications hereunder shall be in
writing and shall be mailed or delivered to the respective parties
hereto at the address set forth below:
THE CORPORATION:
Xxxxxxx Xxxxx Corporation
Xxxxxxx Xxxxxx Xxxx, Xxxxxxxx Xx. 0
000 Xxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx, Xx. , President and Chief Executive Officer
THE EXECUTIVE:
Xxxxxxx X. Xxxx
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Either party may change the address specified herein for receipt of
notices, by providing written notice to the other party as provided
herein.
12. Entire Agreement. This Consulting Agreement constitutes the entire
agreement between the parties with respect to the subject matter and
is in substitution for and merges and supersedes all previous
agreements and arrangements for services, either written or oral,
between Executive and Corporation including the Agreement. This
Consulting Agreement may not be changed orally, but only in an
agreement in writing and signed by both parties.
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13. No Assignment. This Consulting Agreement may not be assigned by either
party without the prior written consent of the other, except that
Corporation's obligations hereunder may be discharged by any direct or
indirect subsidiary of Corporation and the Corporation may transfer
its rights hereunder to any other corporation in connection with the
merger or consolidation with, or sale of all or substantially all the
assets of Corporation to, such other corporation. Subject to the
foregoing, this Consulting Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective heirs,
representatives, successors and assigns.
IN WITNESS WHEREOF, the parties have executed this Consulting Agreement as of
the day and year first above written.
ATTEST: XXXXXXX XXXXX CORPORATION
(The "Corporation")
/s/ H. Xxxxx XxXxxxxx By: /s/ Xxxxxx X. Xxxxxxx, Xx.
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H. Xxxxx XxXxxxxx Xxxxxx X. Xxxxxxx, Xx.
Secretary President & Chief Executive Officer
WITNESS: XXXXXXX X. XXXX
(The "Executive")
/s/ Xxxxxx X. Xxxx /s/ Xxxxxxx X. Xxxx
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