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EXHIBIT 10.6
CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement") is entered into as of
December 23, 1998, among Xxxxxxx Medical Products, a Utah corporation (the
"Company"), Xxxxxxxx-Xxxxx Corporation, a Delaware corporation
("Xxxxxxxx-Xxxxx"), and Xxxx X. Xxxxxxx (the "Consultant").
WHEREAS, the Consultant has acquired extensive knowledge of and
experience in the businesses conducted by the Company; and
WHEREAS, the Company desires to obtain the benefit of the Consultant's
knowledge and experience by retaining the Consultant, and the Consultant desires
to accept such position, for the term and upon the other conditions hereinafter
set forth; and
WHEREAS, concurrently herewith, the Company, Xxxxxxxx-Xxxxx, and Jazz
Acquisition Corp., a Utah corporation and a wholly-owned subsidiary of
Xxxxxxxx-Xxxxx ("Merger Sub"), are entering into an Agreement and Plan of Merger
dated as of the date hereof (as amended or supplemented from time to time, the
"Merger Agreement"), pursuant to which Merger Sub will be merged with and into
the Company and the Company will become a wholly-owned subsidiary of
Xxxxxxxx-Xxxxx, subject to the terms and conditions thereof; and
WHEREAS, the Consultant will cease to be a director and officer of the
Company and of all its subsidiaries and affiliates, effective as of the
Effective Time of the Merger (as such terms are defined in the Merger
Agreement); and
WHEREAS, concurrently herewith, the Company, Xxxxxxxx-Xxxxx and the
Consultant are entering into a Noncompetition Agreement (the "Noncompetition
Agreement") and a Severance Agreement and Release (collectively the "Other
Agreements") both of which are dated as of the date hereof; and
WHEREAS, the Executive recognizes and accepts that the compensation to
be paid under this Consulting Agreement shall serve as adequate consideration
for his execution of the Other Agreements.
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein, the adequacy and sufficiency of which are hereby acknowledged,
the Company, Xxxxxxxx-Xxxxx and the Consultant hereby agree as follows:
1. Term of the Agreement. The Company engages the Consultant as a
consultant, subject to the terms and conditions hereof, for the period
commencing at the Effective Time of the Merger and ending on the date which is
the one year anniversary of the Effective Time of the Merger (the "Consulting
Period"), subject to earlier termination pursuant to Section 5 hereof; provided,
however, that this Agreement shall terminate and shall be of no further force or
effect if the Merger
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Agreement shall be terminated and the Merger shall not become effective pursuant
to the terms thereof.
2. Consulting Services; Expenses. During the Consulting Period, the
Consultant shall make himself available either in person (at such times and
places as provided hereunder) or by telephone to perform consulting services
with respect to the businesses conducted, or in development, by the Company.
Such consulting services shall include those matters (appropriate to the former
Chief Executive Officer of the Company) as the President-Professional Health
Care Sector of Xxxxxxxx-Xxxxx may reasonably designate from time to time,
including but not limited to, providing introduction to the Company's employees,
customers, distributors, or other business contacts; review of the Company's
operations, including but not limited to, manufacturing, marketing (domestic and
international), financial, product and business development; responding to
inquiries by Xxxxxxxx-Xxxxx regarding the Company and its operations; and such
other matters as may arise from time to time. The Consultant shall accommodate
reasonable requests by the Company for the Consultant's consulting services and
shall devote reasonable time and his reasonable best efforts, skill and
attention to the performance of such consulting services, including travel
reasonably required in the performance of such consulting services, provided
that the Consultant only agrees to provide such consulting services for up to
four (4) eight hour days per week during the first three (3) months following
the Effective Time of the Merger; three (3) eight hour days per week during the
next three (3) months; and eighty (80) hours per month thereafter. The Company
shall reimburse the Consultant for all necessary travel and other reasonable
out-of-pocket expenses incurred by the Consultant in providing such consulting
services.
3. Independent Contractor. The Consultant shall perform the consulting
services described in Section 2 hereof as an independent contractor without the
power to bind, obligate or represent the Company or Xxxxxxxx-Xxxxx for any
purpose whatsoever. The Consultant shall not, by virtue of being a consultant
hereunder, be eligible to receive any benefits for which officers or other
employees of the Company or Xxxxxxxx-Xxxxx are eligible at any time, such as
insurance, participation in Company or Xxxxxxxx-Xxxxx pension plans or other
employee benefits. The Consultant hereby acknowledges his separate
responsibility for all federal and state withholding taxes, Federal Insurance
Contribution Act taxes, and workers' compensation and unemployment compensation
taxes, if applicable, and agrees to indemnify and hold the Company and
Xxxxxxxx-Xxxxx harmless from any claim or liability therefor.
4. Compensation. As compensation for the consulting services to be
performed by the Consultant hereunder, the Company shall pay the Consultant an
amount equal to $300,000, payable in four (4) equal installments of $75,000,
with the first installment due at the Effective Time of the Merger, and
succeeding installments due on the dates which are three, six and nine months
following the Effective Time of the Merger. No amounts shall be payable
following termination of this Agreement, except as provided in Section 5 hereof.
5. Termination. (a) This Agreement may be terminated at any time by the
Company or Xxxxxxxx-Xxxxx upon ten (10) days prior written notice to the
Consultant in the event that the Consultant shall breach any covenant contained
in Section 2 hereof or in Sections 2, 3 or 4 of the Noncompetition Agreement;
provided however that the
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Company and Xxxxxxxx-Xxxxx shall not be entitled to terminate this Agreement
pursuant to this Section 5(a) in the event that the Consultant shall cure any
such breach within such ten (10) day period. In the event of such termination by
the Company or Xxxxxxxx-Xxxxx, the obligation of the Company to pay compensation
to the Consultant pursuant to Section 4 hereof shall cease, effective on the
date of such termination.
(b) This Agreement may be terminated by the Consultant upon ten (10)
days prior written notice to the Company and Xxxxxxxx-Xxxxx in the event that
the Company or Xxxxxxxx-Xxxxx shall breach any of its obligations under Section
2 or 4 hereof; provided however that the Consultant shall not be entitled to
terminate this Agreement pursuant to this Section 5(b) in the event that the
Company or Xxxxxxxx-Xxxxx shall cure any such breach within such ten (10) day
period. In the event of such termination by Consultant, the Company shall pay to
Consultant all remaining payments due under Section 4 of this Agreement.
(c) This Agreement shall terminate immediately upon the death of the
Consultant or any disability of the Consultant which prevents him from
performing the services described hereunder. In the event of such termination
due to death or disability, the Company shall pay to Consultant, or Consultant's
estate, all remaining payments due under Section 4 of this Agreement.
6. Successors; Binding Agreement. This Agreement shall inure to the
benefit of and be enforceable by the Consultant and by his personal or legal
representatives, executors, administrators, heirs, distributees, devisees and
legatees, and by the Company and Xxxxxxxx-Xxxxx and their respective successors
and assigns.
7. Assignment. This Agreement is personal to the Consultant and shall
not be assigned or otherwise transferred by the Consultant.
8. Notices. All notices and other communications required or permitted
under this Agreement shall be in writing and shall be deemed to have been duly
given when personally delivered, when delivered by facsimile or by courier or
overnight express service or five days after having been sent by certified or
registered mail, postage prepaid, addressed: (a) if to the Consultant, to the
Consultant's address set forth in the records of the Company, or if to the
Company or Xxxxxxxx-Xxxxx, to Xxxxx X. Xxxxxx, President-Professional Health
Care Sector, Xxxxxxxx-Xxxxx Corporation, 0000 Xxxxxxx Xxxxxx Xxxx, Xxxxxxx, XX
00000, Fax: (000) 000-0000, with a copy to O. Xxxxxx Xxxxxxxx, Senior Vice
President-Law and Government Affairs, Xxxxxxxx-Xxxxx Corporation, 000 Xxxxxx
Xxxxx, Xxxxxx, XX 00000, Fax: (000) 000-0000, or (b) to such other address as
any party may have furnished to the other parties in writing in accordance
herewith, except that notices of change of address shall be effective only upon
receipt.
9. Governing Law; Validity. The interpretation, construction and
performance of this Agreement shall be governed by and construed and enforced in
accordance with the internal laws of the State of Utah without regard to
principles of conflicts of laws. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement, which other provisions shall remain in
full force and effect.
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10. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same instrument.
11. Miscellaneous. No provision of this Agreement may be modified or
waived unless such modification or waiver is agreed to in writing and executed
by the Consultant and by a duly authorized officer of the Company and of
Xxxxxxxx-Xxxxx. No waiver by any party hereto at any time of any breach by
another party hereto of, or failure to comply with, any condition or provision
of this Agreement to be performed or complied with by such other party shall be
deemed a waiver of any similar or dissimilar conditions or provisions at the
same or at any prior or subsequent time. Failure by the Consultant, the Company
or Xxxxxxxx-Xxxxx to insist upon strict compliance with any provisions of this
Agreement or to assert any right which the Consultant, the Company or
Xxxxxxxx-Xxxxx may have hereunder shall not be deemed to be a waiver of such
provision or right or any other provision of or right under this Agreement.
IN WITNESS WHEREOF, each of the Company and Xxxxxxxx-Xxxxx has caused
this Agreement to be executed by its duly authorized officer and the Consultant
has executed this Agreement as of the day and year first above written.
XXXXXXX MEDICAL PRODUCTS
By: /s/ XXXX X. XXXXXXX
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Xxxx X. Xxxxxxx
President
XXXXXXXX-XXXXX CORPORATION
By: /s/ XXXX X. XXXXXXXXX
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Name: Xxxx X. Xxxxxxxxx
Title: Senior Vice President and Chief
Financial Officer
CONSULTANT:
/s/ XXXX X. XXXXXXX
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Xxxx X. Xxxxxxx
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