EXHIBIT 10.22
CONSULTING AGREEMENT
This Consulting Agreement ("Agreement") is entered into as of April 27,
2004, by and between Xxxxx X. Xxxxxxxx ("Consultant") and Xxxxxxxxx
International Inc. (the "Company") (together, the "Parties").
WHEREAS, Consultant has held the office of Executive Vice President of the
Company; and
WHEREAS, as of the date hereof, the Board of Directors of the Company has
accepted the Consultant's resignation as an officer of the Company, and such
resignation has become effective; and
WHEREAS, in his capacity as Executive Vice President of the Company,
Consultant has gained invaluable and irreplaceable knowledge about the Company
and its operations, including knowledge regarding the Company's relationship and
negotiations with CanWest Global Communications Corp. ("CanWest"); and
WHEREAS, the Board of Directors of the Company has determined that it is
in the best interests of the Company and its shareholders that Consultant's
services be retained to permit the interim President and Chief Executive Officer
to avail himself of Consultant's knowledge and experience.
NOW, THEREFORE, the Parties have agreed as follows:
1. Duties of Consultant. Consultant is hereby engaged by the Company to assist
the Chief Executive Officer of the Company with respect to the Company's ongoing
relationship with CanWest, and to perform such other functions and tasks as
assigned by the Chief Executive Officer of the Company from time to time.
Consultant will act as an independent contractor in the performance of his
duties under this Agreement. Consultant shall have the discretion, in
consultation with the Company's Chief Executive Officer, to determine the manner
and means by which he shall perform his duties, the hours of work, and when and
where such services are to be performed.
2. Term. This Agreement shall be in effect from April 27, 2004, until February
28, 2005, unless earlier terminated by either party as set forth below (the
"Term").
3. Compensation. In consideration for services rendered by Consultant, the
Consultant shall be paid at the rate of US$30,000 per month.
4. Stock Options.
A. Notwithstanding anything to the contrary in any option plan or
agreement pursuant to which Consultant has been granted stock options:
1. Until and through April 30, 2004, Consultant shall be entitled to
exercise any and all of his options to purchase Company stock that
are fully vested on the date hereof (the "Vested Options").
Thereafter, the Vested Options may not be exercised.
2. The Company shall take all actions necessary to permit continued
vesting during the Term of any unvested stock options previously
granted to Consultant by the Company that would have vested during
the Term but for Consultant's resignation (the "Continuing
Options").
3. The Company shall take all actions necessary to vest any unvested
Continuing Options immediately upon (i) any termination of this
Agreement by the Company without Cause, or (ii) a Change in Control.
For purposes of this Agreement, the term "Change in Control" shall
have the definition set forth in Exhibit A attached hereto.
B. Notwithstanding anything to the contrary in any option plan or
agreement pursuant to which Consultant has been granted stock options, if
this Agreement is terminated by Consultant, or terminated for Cause by the
Company, then (i) the provisions of subparagraph A2 and A3 above shall not
apply, and (ii) Consultant shall forfeit the Continuing Options
retroactive to the date of this Agreement.
5. Office Services. During the Term, Consultant shall be provided with suitable
office space and appropriate secretarial and administrative assistance at the
Company's expense.
6. Expenses. The Company will reimburse Consultant for reasonable travel and
other expenses approved in advance by the Company and incurred in connection
with the services provided by Consultant pursuant to this Agreement, provided
that Consultant provides appropriate documentation to substantiate such
expenses.
7. Confidentiality. "Confidential Information" means all information, knowledge
and data relating to the business of the Company that is not otherwise in the
public domain. "Confidential Information" includes, but is not limited to, trade
secrets; financial information; manufacturing costs; pricing formulas; internal
and external marketing plans, strategies and studies; new product plans; product
manufacturing methods; inventory control methods; research and development
techniques and activities; selling strategies and/or methods; lists of existing
or potential vendors, suppliers, customers and advertisers; compilations and
other materials developed by or on behalf of the Company (whether in written,
graphic, audiovisual, electronic or other media, including computer software).
"Confidential Information" shall further mean information, knowledge and data of
any third party doing business with the Company, actively or prospectively,
which such third party identifies as being confidential. "Confidential
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Information" does not include any information, knowledge or data that is in the
public domain or otherwise publicly available (other than as a result of a
wrongful act by Consultant or Consultant's agent, or anyone else). Consultant
agrees that he will not, during the Term or at any time thereafter, divulge to
any person, directly or indirectly, any Confidential Information, except to the
Company or its officers and agents, or as reasonably required in connection with
his provision of consulting services to the Company, or with the prior written
consent of the Company, or as required by law. Consultant further agrees not to
use such Confidential Information, except on behalf of the Company or in
furtherance of the Company's interests.
8. Return of Company Property. Consultant agrees that if his consulting
relationship with the Company is terminated for any reason, he will return all
Company property, including but not limited to, records, papers and computer
data and any copies thereof immediately upon such termination. Consultant
acknowledges that all such papers, records, computer data and copies thereof are
and remain the property of the Company.
9. Termination. This Agreement may be terminated (i) by either party, without
Cause, upon 10 days' written notice or (ii) immediately by the Company for
Cause. For purposes of this Agreement, "Cause" shall mean (a) Consultant's
conviction of, or plea of guilty or nolo contendere to, a felony or any
misdemeanor involving moral turpitude; (b) a determination by the Company's
Special Committee, in its sole discretion, that Consultant has failed to
fulfill his obligations under the parties' Settlement Agreement, dated April 27,
2004; (c) the failure by Consultant to perform his duties and obligations under
this Agreement in any material respect; or (d) Consultant's willful misconduct
or violation of the law in connection with his engagement; provided however,
that with respect to clauses (b) and (c) above, the Company shall have provided
Consultant written notice of the facts and circumstances constituting such Cause
and Consultant shall have failed to cure such Cause within ten (10) days of such
notice, unless such facts and circumstances constituting Cause are incurable, in
which case no notice prior to termination shall be required. Upon the
termination of this Agreement for any reason, Consultant shall be entitled to
any earned but unpaid compensation set forth in Section 3 hereof, but shall not
be entitled to any further compensation for the remainder of the Term.
10. Severability. If any provision of this Agreement is found to be
unenforceable in whole or in part, it shall be construed or limited in such a
way as to make it enforceable, consistent with the intentions of the parties. If
such construction or limitation is not possible, the unenforceable provision
will be stricken, and the remaining provisions of this Agreement will remain
valid and enforceable.
11. No Employment Relationship. Nothing in this Agreement shall be construed to
create an employment or agency relationship, partnership or joint venture
between the parties. Consultant is an independent contractor and shall have no
authority to bind or represent the Company. Except as otherwise provided herein,
Consultant shall not be entitled to participate in and/or receive any benefits
which may be offered to the Company's employees from time to time. Consultant
shall be responsible for the payment of any and all taxes and withholding
obligations associated with the consulting fees paid to him hereunder.
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12. Successors. The Agreement shall apply to, and inure to the benefit of, the
predecessors, successors, and assigns of the Company.
13. Entire Agreement. This Agreement constitutes the entire agreement of the
Parties with respect to the subject matter hereof and supersedes all other prior
and contemporaneous agreements, understandings, and commitments between the
Parties with respect to the subject matter hereof. No provision of this
Agreement may be terminated, modified, or waived, by course of dealing or
otherwise, unless such termination, modification, or waiver is set forth in a
written agreement referencing this Agreement and executed by the Consultant and
the Chief Executive Officer of the Company.
14. No Waiver. Failure to insist upon Strict compliance with any of the terms,
covenants or conditions contained in this Agreement shall not operate as a
waiver of such term, covenant or condition, nor shall any waiver or
relinquishment of any right or power hereunder at any one or more time be deemed
a waiver or relinquishment of such right or power at any other time.
15. Governing Law; Choice of Forum; Jury Waiver. This Agreement and any claim
related directly or indirectly to this Agreement shall be governed and construed
in accordance with the laws of the State of Delaware, without regard to the
principles of conflicts of law thereof. All disputes arising out of or relating
to this Agreement or its breach shall be resolved in the courts located within
the State of Delaware, New Castle County, and Consultant and the Company hereby
submit exclusively to the jurisdiction and venue of those Delaware courts. EACH
PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE ARISING OUT OF THIS
AGREEMENT.
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first above written.
XXXXXXXXX INTERNATIONAL INC.
By: /s/ Xxxxxx X. Xxxxx
---------------------------
Name: Xxxxxx X. Xxxxx
Title: Treasurer
CONSULTANT
/s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx
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EXHIBIT A
DEFINITION OF "CHANGE IN CONTROL"
A "Change in Control" shall be deemed to have occurred if:
(a) Change in Ownership. Any "person" (as defined in Section 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")), excluding for this purpose, (i) the Company or any subsidiary of the
Company or (ii) any employee benefit plan of the Company or of any subsidiary of
the Company or any person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan which acquires beneficial
ownership of voting securities of the Company, is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly
of securities of the Company representing more than fifty percent (50%) of the
combined voting power of the Company's then outstanding securities; provided,
however, that no Change in Control will be deemed to have occurred as a result
of a change in ownership percentage resulting solely from an acquisition of
securities by the Company; or
(b) Change in Board. During any twenty-four (24) consecutive months,
individuals who at the beginning of such twenty-four (24)-month period
constitute the Board of Directors of the Company and any new directors (except
for any director designated by a person who has entered into an agreement with
the Company to effect a transaction described elsewhere in this definition of a
Change in Control) whose election by the Board or nomination for election by the
Company's stockholders was approved by a vote of at least two-thirds (2/3) of
the directors then still in office who either were directors at the beginning of
the period or whose election or nomination for election was previously so
approved (such individuals and any such new directors being referred to as the
"Incumbent Board") cease for any reason to constitute at least a majority of
such Board; or
(c) Business Combination. Consummation of a reorganization, merger
or consolidation, or sale or other disposition of all or substantially all of
the assets of the Company (a "Business Combination"), in each case, unless,
following such Business Combination, all or substantially all of the individuals
and entities who were the beneficial owners of outstanding voting securities of
the Company immediately prior to such Business Combination beneficially own,
directly or indirectly, more than fifty percent (50%) of the combined voting
power of the then outstanding voting securities entitled to vote generally in
the election of directors of the entity resulting from such Business Combination
(including, without limitation, an entity which, as a result of such
transaction, owns the Company, all or substantially all of the Company's assets,
either directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business Combination,
of the outstanding voting securities of the Company; or
(d) Liquidation. Consummation of a complete liquidation or
dissolution of the Company.
