EXHIBIT 10.19
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Agreement") is made and
entered into as of this 14th day of November, 1996, between Stimsonite
Corporation, a Delaware corporation (the "Company"), and Xxx X. Xxxxxx (the
"Consultant").
RECITALS
A. The Consultant, up to the effective date hereof, pursuant
to an Employment Agreement dated May 30, 1996 between the Consultant and the
Company (the "Employment Agreement") has been the President and Chief Executive
Officer of the Company. On October 24, 1996, at the suggestion of the Company's
Board of Directors (the "Board of Directors"), the Consultant agreed to
conditionally resign from such positions with the Company and to terminate his
Employment Agreement, pending the hiring of, and the commencement of duties and
responsibilities and salary of, a new President and Chief Executive Officer of
the Company and of the adoption and execution by the Company of a consulting
agreement substantially in the form hereof.
B. The Consultant, as the President and Chief Executive
Officer of the Company, had significant policy-making and operational
responsibilities in the conduct of the Company's business.
C. The Consultant possesses valuable skills and experience of
a special and unique nature, and unique, personal and confidential business
knowledge about the operation of the Company's business.
D. The Company desires to secure for itself or its
subsidiaries the benefit of the Consultant's background, experience, ability and
expertise.
E. The Company desires to engage the Consultant to provide,
and the Consultant has indicated his willingness to provide, consulting and
advisory services on the terms and conditions set forth herein.
NOW, THEREFORE, on the basis of the foregoing and in
consideration of the mutual covenants and agreements contained herein, the
parties hereto agree as follows:
1. Term. Subject to the provisions and conditions of this
Agreement, the Consultant shall provide the Company with consulting services for
a two-year term (the "Initial Term") beginning on the date on which a new
President and Chief Executive Officer of the Company, appointed or elected by
the Board of Directors, becomes a salaried employee of the Company; provided,
however, that such term will, on each scheduled expiration date (each, an
"Expiration Date"), automatically be extended for an additional year unless, no
later than sixty (60) days prior to each Expiration Date, the Company or the
Consultant shall have given written notice that it or the Consultant, as the
case may be, does not wish to have such term extended (hereinafter referred to
as the "Consulting Term"), unless otherwise terminated pursuant to the terms
hereof.
2. Duties, Schedule and Location.
(a) Duties. During the Consulting Term, the Consultant shall
function in an advisory and consulting capacity, and shall assume and perform
such reasonable advisory and consulting responsibilities and duties as may be
assigned to him from time to time by the Chairman of the Board of Directors or
by the Company's Chief Executive Officer. The Consultant shall also (i)
undertake to facilitate the transition of the successor Chief Executive Officer
of the Company, (ii) continue to serve the remainder of his term as President of
ARTBA and serve as Chairman Emeritus thereof when and if elected or appointed
after the Consultant's term as President thereof, and while holding either such
office shall continue to represent the Company at ARTBA and (iii) continue to
represent the Company in such other trade associations with respect to which the
Consultant has been representing the Company; provided, however, that if the
successor Chief Executive Officer of the Company desires to participate in any
such trade association (other than ARPTRA) and would be precluded from such
participation by reason of the Consultant's representation of the Company in
such trade association, then the Consultant shall cease to represent the Company
in such trade association, although the Consultant may continue any personal
membership in such trade association. The Consultant shall perform his services
during the Consulting Term as an independent contractor and not as an employee
of the Company.
(b) Schedule and Location. During the Consulting Term, the
Consultant shall render consulting services to the Company during normal
business hours upon reasonable notice given to the Consultant by the Company.
During the Consulting Term, the Consultant shall be available for the
performance of his duties hereunder (including representing the Company at trade
associations pursuant to Section 2(a) above) for up to 80 hours per month (or
such higher number of hours as the Consultant and the Company shall agree with
respect to a particular month), subject to an aggregate of 720 hours each year
(subject to such lesser monthly availability resulting from any vacation of
Consultant for which Consultant has provided written notice to the Company and
unavailability due to illness of the Consultant). The Consultant shall perform
his consulting duties hereunder at such locations in the greater Chicago,
Illinois area as the Company may direct, subject to ordinary and normal business
trips as reasonably requested by the Company from time to time during the
Consulting Term. The Company shall provide the Consultant with office space and
such other services and equipment as may be required for the Consultant to
perform adequately his duties hereunder, provided that it shall be within the
Consultant's sole discretion whether and to what extent to make use of such
facilities.
3. Payments and Benefits. During the Consulting Term,
the Consultant shall be entitled to the following payments and
benefits:
(a) Compensation Payments. (i) The Company shall
pay the Consultant annually, in equal monthly installments (subject to such
adjustments as may be required from time to time hereunder), consulting fees
equal to difference of $222,600.00 less (x) any amounts actually paid to the
Consultant under the Participation Agreement for Supplemental Executive
Retirement Plan (the "SERP Plan") dated December 15, 1988 between Amerace
Corporation, a Delaware corporation ("Amerace"), and the Consultant, (y) any
amounts actually paid to the Consultant under the Company's pension plan and (z)
any directors retainer fees paid to the Consultant as a member of the Board of
Directors. The parties acknowledge that Exhibit A hereto sets forth the
calculation of such consulting fees as of the date hereof. Notwithstanding any
contrary provision of the SERP Plan, the date of the first day of the Consulting
Term shall be deemed to be the Consultant's Retirement Date, as such term is
used in the SERP Plan.
(ii) In addition, with respect to each tax year
for which the Consultant reports income received pursuant to Section 3(a)(i)
above, the Company shall pay the Consultant in April of the following year an
additional consulting fee equal to the difference between what the Consultant's
"FICA" contribution will be for such reported income, less what the Consultant's
FICA deduction would have been if such income had been wages of a salaried
employee of the Company during that period.
(b) Welfare Benefits. During the Consulting Term,
the Consultant shall continue to be entitled to participate in group health,
disability, vision and dental benefit plans (the "Health Plans") provided by the
Company to the same extent as are afforded from time to time hereafter to
executive employees of the Company, or substantially equivalent benefits shall
be provided by the Company.
(c) Automobile. The Company shall continue to
provide Consultant with the use, and shall reimburse the Consultant for the
costs of maintenance, of the automobile currently provided by the Company to the
Consultant (the "Vehicle") during the Consulting Term, to the same effect and
costs to the Company as existed at the effective date of the termination of the
Employment Agreement; provided that the Consultant shall pay his own fuel costs,
subject to reimbursement to the extent permitted by Section 7 hereof. The
Consultant shall have the option to (i) purchase from the Company, if the
Vehicle is then owned by the Company, at any time not more than ninety days
subsequent to the expiration of the Consulting Term, the Vehicle, at a purchase
price equal to the average book value for dealer purchases of such automobile on
the date of purchase as indicated in any "blue book" of automobile value which
the Company generally uses for such purpose, or (ii) assume the Company's rights
and obligations, by notice given no later than 90 days subsequent to the
expiration of the Consulting Term, pursuant to the lease agreement covering the
Vehicle, if leased by the Company, to the extent permitted by such lease
agreement.
(d) Club Membership. During the Consulting Term, the
Consultant shall be entitled to the use and benefit of the Company's membership
in the Royal Melbourne Country Club (the "Golf Club"); provided, however, that
the Consultant shall be responsible for and shall pay all expenses associated
with such use, including, without limitation, monthly dues and any charges or
expenses incurred by the Consultant at the Golf Club.
4. Board Membership. During the Consulting Term, the Company
shall use reasonable efforts to maintain the Consultant's membership on the
Board of Directors. While a member of the Board of Directors, the Consultant
shall be entitled to all of the rights and benefits (including, without
limitation, director or other fees, expenses and stock option grants) generally
available to members of the Board of Directors who are not employees of the
Company or its subsidiaries. If this Agreement is terminated by the Company
pursuant to Section 9(a) hereof, the Consultant shall resign from the Board of
Directors immediately following the effective time of such termination.
5. Amendment to Stock Options. (i) The Consultant's
outstanding stock option agreement dated October 6, 1992, which grants a
non-qualified stock option for the purchase of 87,500 shares of the Company's
Common Stock, par value $.01 per share ("Common Stock"), shall be amended to
provide that such option shall be exercisable through May 5, 1999, (ii) the
Consultant's outstanding stock option agreement dated February 13, 1996, which
grants a non-qualified, time vesting stock option for the purchase of up to
13,000 shares of Common Stock, shall be amended to provide that such option
shall continue to vest and be exercisable in accordance with the terms of such
option during the Initial Term and
shall fully vest and become exercisable on the expiration of the Initial Term
and such option shall be exercisable through May 5, 1999 and (iii) the
Consultant's outstanding stock option agreement dated February 13, 1996, which
grants a non-qualified, performance stock option for the purchase of up to
12,389 shares of Common Stock, shall be amended to provide that such option
shall, subject to Section 1(b) of such agreement relating to the number of
shares of Common Stock that may be purchased thereunder, shall continue to vest
and be exercisable in accordance with the terms of such option during the
Initial Term and shall fully vest and become exercisable on the expiration of
the Initial Term and such option shall be exercisable through May 5, 1999;
provided, however, that each such amendment shall provide that if this Agreement
is terminated by the Company pursuant to Section 9(a) hereof or by the
Consultant pursuant to Section 9(b)(i) hereof, the option subject to such
amendment shall cease to vest in any additional amount on the effective date of
any such termination, and shall expire 90 days after the effective date of any
such termination.
6. Prior Earned Bonus. Notwithstanding any requirements as to
employment status under the Company's executive bonus plan, the Consultant shall
be entitled to receive a bonus for his services as an executive of the Company
during its fiscal year ended December 31, 1996 equal in amount to the bonus he
would have received had he remained an employee of the Company as of December
31, 1996 multiplied by a fraction, the numerator of which is the number of days
during the Company's fiscal year ended December 31, 1996 that the Consultant was
an employee of the Company and the denominator of which is 366.
7. Reimbursement for Expenses. Upon the presentation of
itemized expenses, the Company shall reimburse the Consultant for all travel,
meals, program fees, membership dues and other expenses incurred by the
Consultant in connection with his representation of the Company in trade
associations pursuant to Section 2(a) hereof and for all other travel, meals,
entertainment and other expenses reasonably incurred by the Consultant in the
performance of his duties under this Agreement in accordance with the Company's
expense reimbursement policy as the same may be modified by the Company from
time to time.
8. Non-Exclusive. Subject to Section 11 hereof, the Consultant
shall not be prohibited from seeking or obtaining employment, engagement as a
consultant or otherwise providing services to any person or entity. Nothing in
this Agreement shall be deemed to prevent the Consultant from investing his
personal, immediate family or trust assets; provided, however, that with respect
to businesses that compete with the Company's business, his participation, or
that of his immediate family or such trust, is solely that of a passive investor
owning no more than 5% of any class of such company's outstanding debt or equity
securities, provided that such activities do not contravene the provisions of
Section 11 hereof.
9. Termination.
(a) If the Board of Directors determines that the
Consultant has (A) committed an act of fraud or embezzlement against the Company
or an act which he knew to be in gross violation of his duties to the Company
(including the unauthorized disclosure of confidential information); (B)
continually failed to render services to the Company in accordance with this
Agreement, which failure (I) amounts to gross neglect of his contractual
obligations to the Company and (II) is not remedied within ten (10) days after
notice thereof by the Company, or if such matter is not capable of remedy within
such 10 day period, such period shall be extended through the thirtieth (30th)
day after such notice; (C) been convicted of a felony; or (D) willfully
disregards the lawful directives of the Chairman of the Board of Directors or
the Chief Executive Officer of the Company which is not remedied within thirty
(30) days after notice thereof by the Company, the Company shall be entitled to
terminate this Agreement (other than Sections 11, 12 and 13 hereof unless
otherwise specified by the Company) and the consulting relationship established
hereby immediately upon the giving of written notice to the Consultant of such
termination specifying the grounds therefor.
(b) If (i) the Consultant gives notice to the
Company that he intends to terminate this Agreement (other than for reasons that
would entitle the Consultant to terminate this Agreement pursuant to Section
9(d) below), (ii) the Consultant gives notice pursuant to Section 1 that he does
not wish to have the term of this Agreement extended as provided therein (other
than for reasons that would entitle the Consultant to terminate this Agreement
pursuant to Section 9(d) below), or (iii) the Company gives notice pursuant to
Section 1 that it does not wish to have the term of this Agreement extended as
provided therein (other than for reasons that would entitle the Company to
terminate this Agreement pursuant to Section 9(a) above), this Agreement, other
than Sections 11, 12 and 13 hereof, and the consulting relationship established
hereby shall terminate immediately upon the receipt by the Company or the
Consultant, as the case may be, of such a notice or, if later, the effective
date of such termination as specified in such a notice.
(c) In the event that the Consultant dies or becomes
Disabled (as hereinafter defined) during the term of this Agreement, this
Agreement, other than Sections 11, 12 and 13 hereof, and the consulting
relationship established hereby shall terminate immediately upon the date on
which the Consultant dies or becomes Disabled, as the case may be. After the
effective date of termination under this Section 9(c), the Company shall make
any further payments under this Agreement to the Consultant or the Consultant's
heirs, executors, administrators or legal representatives, as the case may be,
of all amounts due the Consultant hereunder, including any amounts or benefits
to which the Consultant may be entitled under the terms of any benefit plan of
the Company, as in effect on the effective date of such termination. For
purposes of this Section 9(c) "Disabled" shall mean, as of any date, the
permanent disability of the Consultant as defined in the disability benefit
program of the Company generally available to executives of the Company.
(d) If the Consultant terminates this Agreement
following a Substantial Breach, as defined in this Section 9(d) (such
Substantial Breach having not been corrected by the Company within 30 days of
receipt of written notice from the Consultant of the occurrence of such
Substantial Breach, which notice shall specifically set forth the nature of the
Substantial Breach which is the reason for such termination), the Company shall
continue to provide the benefits and pay the Consultant as provided in Section 3
hereof. "Substantial Breach" shall mean any material breach by the Company of
its obligation under this Agreement including without limitation, (A) the
assignment of any duties to the Consultant materially inconsistent with the
Consultant's background and expertise; (B) the failure of the Company to pay
timely amounts due hereunder; (C) the failure by the Company to allow the
Consultant to participate in the Company's Health Plans, or to provide
substantially equivalent benefits, pursuant to Section 3(b) hereof; or (D) the
failure of any successor to all or substantially all of the business and/or
assets of the Company to assume this Agreement; provided, however, that the term
"Substantial Breach" shall not include (x) an immaterial breach by the Company
of any provisions of this Agreement including those referred to in clause (A)
above or (y) a termination for cause under Section 9(a) hereof. The date of
termination of this Agreement by the Consultant under this Section 9(d) shall be
30 days after receipt by the Company of written notice of such termination,
provided that the Substantial Breach specified in such notice shall not have
been corrected by the Company during such 30-day period.
(e) Notwithstanding anything in this Section 9 to
the contrary, the Consultant's participation in any Health Plans offered by the
Company shall be governed by the rules of such plans as well as by applicable
law and agreement.
(f) The Company shall not terminate this Agreement
for any reason whatsoever unless and until such termination has been approved by
the Board of Directors.
10. Termination Benefits.
(a) If the Consultant's consulting obligations are
terminated for any reason whatsoever during the Initial Term other than by the
Company pursuant to Section 9(a) hereof or by the Consultant pursuant to Section
9(b)(i) hereof, the Company shall (x) continue to provide the benefits and pay
to the Consultant as provided in Sections 3 and 6 hereof for the remainder of
such Initial Term, and (y) provide the Consultant with all of the benefits
(including, without limitation, director fees and stock option grants),
assuming, for all such purposes (including vesting of stock options) that the
Consultant remains a consultant to the Company and a member of the Board of
Directors, generally available to members of the Board of Directors who are not
employees of the Company or its subsidiaries for the remainder of such Initial
Term.
(b) If the Company terminates this Agreement
pursuant to Section 9(a) hereof during the Initial Term, the Company shall
continue to pay to the Consultant as provided in Sections 3(a) and 6 hereof for
the remainder of such two-year period.
11. Secrecy and Non-Competition.
(a) No Competing Employment. The Consultant
acknowledges that (i) the agreements and covenants contained in this Section 11
are essential to protect the value of the Company's business and assets and (ii)
by virtue of his past employment with Amerace and the Company, and the
consulting arrangement established hereby, the Consultant has obtained and will
obtain such knowledge, know-how, training and experience and there is a
substantial probability that such knowledge, know-how, training and experience
could be used to the substantial advantage of a competitor of the Company and to
the Company's substantial detriment. Therefore, the Consultant agrees that, for
the period (the "Restricted Period") commencing on the date of the first day of
the Consulting Term and ending on the date which is 12 months after the date on
which the Company ceases to make timely payments and provide the benefits
required by and in accordance with Section 3 hereof, the Consultant shall not,
in (a) any location where the Company, or any predecessor to the Company's
business, has conducted business during the three year period prior to the
expiration of the Consulting Term or (b) in any location in which the Company
then specifically intends to conduct business which location shall be described
in a written notice delivered to the Consultant within ninety (90) days
following the expiration of the Consulting Term (if the Company fails to provide
such written notice to the Consultant, the provisions of this Section 11(a)
shall apply only to those locations described in (a) above), participate or
engage, directly or indirectly, for himself or on behalf of or in conjunction
with any person, partnership, corporation or other entity, whether as an
employee, agent, investor or otherwise, in any business activities (a
"Competitive Activity") if such activity constitutes the manufacturing,
production, sale or provision of products or services that are similar to
products or services then
being manufactured, produced, sold or provided by the Company or any of its
subsidiaries; provided, however, that the Consultant may maintain and/or
undertake purely passive investments on behalf of himself, his immediate family
or any trust in companies engaged in a Competitive Activity so long as the
aggregate interest represented by such investments does not exceed 5% of any
class of the outstanding debt or equity securities of any company engaged in a
Competitive Activity. The Consultant shall not be bound by the restrictions
contained in this Section 11(a) if (i) this Agreement is terminated pursuant to
Section 9(d) hereof, and (ii) the Company shall have failed to comply with its
obligations under Section 10(a) hereof.
(b) Nondisclosure of Confidential Information. The
Consultant, except in connection with his duties or obligations hereunder or as
a member of the Board of Directors, shall not disclose to any person or entity
or use, either during the Consulting Term or at any time thereafter, any
information not in the public domain, in any form, acquired by the Consultant
while employed by the Company or any predecessor to the Company's business or
while performing services hereunder or, if acquired following the Consulting
Term, such information which, to the Consultant's knowledge, has been acquired,
directly or indirectly, from any person or entity owing a duty of
confidentiality to the Company or any of its affiliates, relating to the
Company, its subsidiaries and affiliates, including but not limited to trade
secrets, technical information, designs, drawings, processes, systems,
procedures, formulae, test data, know-how, improvements, price lists, financial
or other data (including the revenues, costs or profits associated with any of
the Company's products), business plans, code books, invoices and other
financial statements, computer programs, discs and printouts, sketches, plans
(engineering, architectural or otherwise), customer and supplier lists,
personnel files, equipment maintenance records, equipment warranty information,
sales and advertising material, telephone numbers, names, addresses or any other
compilation of information, written or unwritten, which is or was used in the
business of the Company, any predecessor of the Company or any subsidiary
thereof. The Consultant agrees and acknowledges that all of such information, in
any form, and copies and extracts thereof are and shall remain the sole and
exclusive property of the Company, and upon termination of his engagement by the
Company hereunder, the Consultant shall return to the Company the originals and
all copies of any such information provided to or acquired by the Consultant in
connection with the performance of his duties for the Company, and shall return
to the Company all files, correspondence and/or other communications received,
maintained and/or originated by the Consultant during the course of his
employment or while providing consulting services hereunder.
(c) No Interference. During the Restricted Period,
the Consultant shall not, whether for his own account or for the account of any
other individual, partnership, firm, corporation or other business organization
(other than the Company), intentionally solicit, endeavor to entice away from
the Company or any of its subsidiaries, or otherwise interfere with the
relationship of the Company or any of its subsidiaries with, any person who, to
the knowledge of the Consultant, is employed by or otherwise engaged to perform
services for the Company or any of its subsidiaries (including, but not limited
to, any independent sales representatives or organizations) or any entity who
is, or was within the then most recent twelve-month period, a customer or client
of the Company, its predecessor or any of its subsidiaries (a "Customer");
provided, however, that this Section 11(c) shall not prohibit the Consultant
from employing, for his own account, any person employed by a Customer or
supplier, if such employment is not in connection with a Competitive Activity.
(d) Inventions. During the Restricted Period and
thereafter, the Consultant shall sell, transfer and assign to the Company or to
any person or entity designated by the Company all of the entire right, title
and interest of the Consultant in and to all inventions, ideas, disclosures and
improvements, whether patented or unpatented, and copyrightable material, made
or conceived by the Consultant, solely or jointly, or in whole or in part,
during the term hereof (and including employment prior to the Consulting Period)
by the Company or Amerace or while performing services hereunder which are not
generally known to the public or recognized as standard practice and which (i)
relate to methods, apparatus, designs, products, processes or devices sold,
leased, used or under construction or development by the Company, any
predecessor of the Company or any subsidiary and (ii) arise (wholly or partly)
from the efforts of the Consultant during his employment with the Company or any
predecessor of the Company or during the course of performing services hereunder
(an "Invention"). During the Restricted Period and thereafter, the Consultant
shall communicate promptly and disclose to the Company, in such form as the
Company requests, all information, details and data pertaining to any such
Inventions; and, whether during the Restricted Period or thereafter, the
Consultant shall execute and deliver to the Company such form of transfers and
assignments and such other papers and documents as reasonably may be required of
the Consultant to permit the Company or any person or entity designated by the
Company to file and prosecute the patent applications and, as to copyrightable
material, to obtain a copyright thereon. The Company shall pay all costs
incident to the execution and delivery of such transfers, assignments and other
documents. Any invention by the Consultant within six months following the
termination of this Agreement shall be deemed to fall within the provisions of
this Section 11(d) unless the Consultant can prove that the Invention was first
conceived and made following such termination.
12. Deductions from Amounts. The Consultant agrees that the
Company shall be entitled to deduct and withhold from any amounts payable to the
Consultant hereunder any taxes in respect of the Consultant that the Company is
required to deduct and withhold under federal, state or local law.
13. SERP Plan. The Company has agreed to assume all
obligations of Amerace under the SERP Plan. The Company hereby agrees that it
shall assume and discharge the obligations of Amerace under the SERP Plan in
accordance with the terms thereof, and such agreement by the Company shall
survive the termination (for whatever reason) of this Agreement and the
Employment Agreement. The Consultant acknowledges and agrees that the Company
shall succeed to all of Amerace's rights under the SERP Plan.
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14. Company Representations. The Company represents and
warrants that this Agreement, all actions to be taken hereunder by the Company
(including without limitation all amendments to the Company's stock option plans
affecting the Consultant), and any other matters relating hereto requiring
approval or vote of the Board of Directors or an authorized committee thereof
have been or, prior to the effectiveness of this Agreement, will be duly and
timely approved by the Board of Directors or such committee.
15. Injunctive Relief. Without intending to limit the remedies
available to the Company, the Consultant acknowledges that a breach of any of
the covenants contained in Section 11 hereof may result in material irreparable
injury to the Company or its affiliates for which there is no adequate remedy at
law, that it will not be possible to measure damages for such injuries precisely
and that, in the event of such a breach or threat thereof, the Company shall be
entitled to obtain a temporary restraining order and/or a preliminary or
permanent injunction restraining the Consultant from engaging in activities
prohibited by Section 11 hereof or such other relief as may be required to
specifically enforce any of the covenants in Section 11 hereof. The Consultant
hereby agrees and consents that such injunctive relief may be sought in any
state or federal court of record in the State of Illinois, or in the state and
county in which such violation may occur, or in any other court, at the election
of the Company.
16. Extension of Restricted Period. In addition to the
remedies the Company may seek and obtain pursuant to Section 15 hereof, the
Restricted Period shall be extended by any and all periods during which the
Consultant shall be found by a court to have been in violation of the covenants
contained in Section 11 hereof.
17. Successors; Binding Agreement.
(a) In the event of any sale of all or substantially
all of the assets of the Company, or the merger, consolidation or other
corporate reorganization involving the Company, any successor to the Company by
reason of any such transaction shall succeed to all of the Company's
obligations, rights and benefits hereunder.
(b) Except as provided in subsection (a) above,
neither this Agreement, nor any rights or benefits hereunder, may be assigned,
delegated, transferred, pledged or hypothecated without the written consent of
both parties hereto, and any such assignment, delegation, transfer, pledge or
hypothecation without such consent shall be null and void and shall be
disregarded by the Company.
(c) The Company will require any successor of the
Company (as such term is used in subsection (a) above), whether by operation of
law or otherwise, to assume the Company's obligations under this Agreement in
the same manner and to the same extent that the Company would be required to
perform them if no such succession had taken place. Failure of the Company to
obtain such agreement prior to the effectiveness of any such succession shall
constitute a Substantial Breach by the Company and shall entitle the Consultant,
upon termination of this Agreement, to benefits described in Section 10 hereof
upon notice to the Company within three business days of the date such
succession becomes effective.
18. Waiver and Modification. Any waiver, alteration or
modification of any of the terms of this Agreement shall be valid only if made
in writing and signed by the parties hereto; provided, however, that any such
waiver, alteration or modification is consented to on the Company's behalf by a
member of the Board of Directors other than the Consultant. No waiver by either
of the parties hereto of their rights hereunder shall be deemed to constitute a
waiver with respect to any subsequent occurrences or transactions hereunder
unless such waiver specifically states that it is to be construed as a
continuing waiver.
19. Severability and Governing Law. The Consultant
acknowledges and agrees that the covenants set forth in Section 11 hereof are
reasonable and valid in geographical and temporal scope and in all other
respects. If any of such covenants or such other provisions of this Agreement
are found to be invalid or unenforceable by a final determination of a court of
competent jurisdiction (a) the remaining terms and provisions hereof shall be
unimpaired and (b) the invalid or unenforceable term or provision shall be
deemed replaced by a term or provision that is valid and enforceable and that
comes closest to expressing the intention of the invalid or unenforceable term
or provision. This Agreement shall be governed by and interpreted in accordance
with the internal laws of the State of Illinois, without regard to the conflict
of laws provisions thereof.
20. Blue-Pencilling. Notwithstanding the first sentence of
Section 19 hereof, if any of the provisions of Section 11 relating to the
geographic or temporal scope of the covenants contained therein or the nature of
the business restricted thereby shall be declared by a court of competent
jurisdiction to exceed the maximum restrictiveness such court deems enforceable,
such provision shall be deemed to be replaced herein by the maximum restriction
deemed enforceable by such court.
21. Arbitration. The parties agree to submit any dispute
arising under this Agreement to arbitration. Arbitration shall be by a single
arbitrator experienced in the matters at issue selected by the Company and the
Consultant in accordance with the commercial arbitration rules of the American
Arbitration Association. The decision of the arbitrator shall be final and
binding as to any matter submitted to him under this Agreement. All costs and
expenses incurred in connection with such arbitration proceeding shall be borne
by the party against whom the decision is rendered.
22. Notices. All notices and other communications under this
Agreement shall be in writing and shall be deemed effective and given upon
actual delivery if presented personally, one business day after the date sent if
sent by prepaid telegram, overnight courier service, telex, or by facsimile
transmission or five business days after the date sent if sent by certified or
registered mail, postage prepaid, return receipt requested, which shall be
addressed, in the case of the Company, Stimsonite Corporation, 0000 Xxxxx
Xxxxxxx Xxxxxx, Xxxxx, Xxxxxxxx 00000, Attention: Chairman, Fax (000) 000-0000,
with a copy to Xxxxxx X. Xxxxxxx, Esq., Xxxxx, Day Xxxxxx & Xxxxx, 00 Xxxx
Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx, 00000, Fax: (000) 000-0000 and, in the case of
the Consultant, Xxx X. Xxxxxx, 0000 Xxxx Xxxxx Xxxx, Xxxx Xxxxxx, Xxxxxxxx
00000, or, in each case, to such other address as may be designated in writing
by any such party.
23. Termination of Employment Agreement. Effective upon the
first day of the Consulting Term, the Employment Agreement shall be deemed
terminated and of no further force or effect.
24. Captions and Paragraph Headings. Captions and section
headings herein are for convenience only, are not a part hereof and shall not be
used in construing this Agreement.
25. Entire Agreement. This Agreement constitutes the entire
understanding and agreement of the parties hereto regarding the engagement of
the Consultant for consulting services.
26. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
STIMSONITE CORPORATION
By:
----------------------
----------------------
Title:
CONSULTANT
By:
----------------------
Xxx X. Xxxxxx
CONSULTING AGREEMENT
Exhibit A
Calculation of Consulting Fee
As of the date of the Consulting Agreement to which this Appendix A is attached,
the annual consulting fee required by Section 3(a) of such Consulting Agreement
is equal to $111,724, which amount was calculated by subtracting from $222,600
the following annual payments:
A. Payments of $69,696 payable in monthly installments, in
arrears, under the SERP Plan, computed as follows:
An initial SERP benefit of: $111,300
less (x) Social Security Benefits 16,128
less (y) Stimsonite Retirement Plan 21,180
less (z) Amerace Corporation ACAP Plan 4,296
------
Total Present SERP Deductions 41,604
= $69,696
B. Payments of $21,180, payable in monthly installments,
under the Company's retirement plan.
C. Retainer payments of $20,000 for service as a non-
employee member of the Board of Directors.
The actual annual consulting fee to be paid to the Consultant would thus be
computed as follows:
Total Annual Payments $222,600
Less (x) SERP Payments 69,696
Less (y) Company Retirement Plan Payments 21,180
Less (z) Outside Director Retainer Fees 20,000
-------
Annual Consulting Fee $111,724*
------------------------
* Plus any additional amounts payable pursuant to Section
3(a)(ii) of the Consulting Agreement.
Exhibit 10.19
CONSULTING AGREEMENT
Exhibit B
AMENDMENT TO NONQUALIFIED STOCK OPTION AGREEMENT
AMENDMENT TO NONQUALIFIED STOCK OPTION AGREEMENT, dated as of
March ___, 1997 (this "Amendment"), between Xxx X. Xxxxxx (the "Optionee") and
Stimsonite Corporation, a Delaware corporation (the "Company").
W I T N E S S E T H:
WHEREAS, the Optionee and the Company entered into a
Nonqualified Stock Option Agreement (the "Option Agreement") dated as of October
6, 1992 for the purchase of 87,500 shares of the Company's Common Stock, par
value $.01 per share;
WHEREAS, the Optionee has announced his intention to resign as
a senior executive of the Company;
WHEREAS, in connection with his resignation as a senior
executive of the Company, the Optionee and the Company entered into a Consulting
Agreement dated as of November 14, 1996 (the "Consulting Agreement") pursuant to
which the Consultant will provide the Company with consulting and advisory
services pursuant to the terms and conditions set forth therein;
WHEREAS, the Consulting Agreement provides for the amendment
of certain provisions of the Option Agreement;
WHEREAS, the execution of the Consulting Agreement and this
Amendment has been previously approved by the Board of Directors of the Company;
NOW, THEREFORE, in consideration of the foregoing and the
mutual agreements herein contained, the parties hereto hereby agree as follows:
1. Section 1(d) of the Option Agreement is amended to read as
follows:
"(d) This Option shall terminate on the earliest of the
following dates:
(i) On May 5, 1999.
(ii) 90 days after the Consulting Agreement is
terminated by the Company pursuant to
Section 9(a) thereof.
(iii) 90 days after the Consulting Agreement is
terminated by the Consultant pursuant to
Section 9(b)(i) thereof."
EXECUTED at Niles, Illinois this ___ day of March, 1997.
STIMSONITE CORPORATION
By ___________________
Xxxxxxxx X. Xxxxxxx
Chairman of the Board
OPTIONEE
By ________________
Xxx X. Xxxxxx
Exhibit 10.19
CONSULTING AGREEMENT
Exhibit C
STIMSONITE CORPORATION
Amendment to Non qualified Stock Option Agreement
AMENDMENT TO NON QUALIFIED STOCK OPTION AGREEMENT, dated as of
March ___, 1997 (this "Amendment"), between Xxx X. Xxxxxx ("Optionee") and
Stimsonite Corporation, a Delaware Corporation (the "Company").
W I T N E S S E T H:
WHEREAS, the Optionee and the Company entered into a Non
qualified Stock Option Agreement (the "Option Agreement") dated as of February
13, 1996 for the purchase of 13,000 shares of the Company's Common Stock, par
value $.01 per share;
WHEREAS, the Optionee has announced his intention to resign as
an employee of the Company;
WHEREAS, in connection with his resignation as an employee of
the Company, the Optionee and the Company entered into a Consulting Agreement
dated as of November 14, 1996 (the "Consulting Agreement") pursuant to which the
Consultant will provide the Company with consulting and advisory services
pursuant to the terms and conditions set forth therein;
WHEREAS, the Consulting Agreement provides for the amendment
of certain provisions of the Option Agreement;
WHEREAS, the execution of the Consulting Agreement and this
Amendment has been previously approved by the Board of Directors of the Company;
NOW, THEREFORE, in consideration of the foregoing and the
mutual agreements herein contained, the parties hereto hereby agree as follows:
1. Section 2(a) of the Option Agreement is amended to read as
follows:
"(a) Unless and until terminated as hereinafter
provided, the Option shall become exercisable to the extent of one-third of the
Option Shares (rounded to the nearest whole share) on December 31, 1998. The
Option shall become exercisable to the extent of the remaining Option Shares on
the expiration of the Initial Term (as such term is defined in the Consulting
Agreement). To the extent that the Option shall have become exercisable, it may
be exercised in whole or in part from time to time. Notwithstanding the
foregoing, if the Consulting Agreement is terminated by the Company pursuant to
Section 9(a) thereof or by the Optionee pursuant to Section 9(b)(i) thereof, the
Option shall cease to vest in any additional amount on the effective date of
such termination."
2. Section 4 of the Option Agreement is amended to read as
follows:
"4. Termination of Option.
The Option shall terminate on the earliest of the
following dates:
(a) May 5, 1999.
(b) 90 days after the Consulting Agreement is
terminated by the Company pursuant to Section 9(a) thereof.
(c) 90 days after the Consulting Agreement is
terminated by the Optionee pursuant to Section 9(b)(i) thereof."
This Amendment is executed by the Company and the Optionee as
of the ___ day of March 1997.
STIMSONITE CORPORATION
By _____________________
Xxxxxxxx X. Xxxxxxx
Chairman of the Board
OPTIONEE
By ____________________
Xxx X. Xxxxxx
