EXHIBIT 99.2
CONSULTING AGREEMENT
This Agreement is entered into as of October 19, 2002 by Stericycle, Inc.,
a Delaware corporation ("Parent"), and Xxxxxx X. Xxxxxxx, Xx., a Georgia
resident ("Officer").
Background:
A. Concurrently with the execution of this Agreement, Parent, Sharps
Acquisition Corporation, a Delaware corporation and wholly owned subsidiary of
Parent ("MergerSub"), and Xxxxxxx Healthcare, Inc., a Delaware corporation
("Company") have entered into an agreement and plan of merger (the "Merger
Agreement").
B. The Merger Agreement contemplates a transaction (the "Merger") in which
Parent will acquire all of Company's outstanding capital stock for cash through
a reverse merger of MergerSub with and into Company.
C. Officer has been chairman of the board of directors of Company and
Company's chief executive officer since February 1995, its president since May
1998 and a director since 1977. He is also a principal stockholder of Company.
D. In view of Officer's knowledge, experience and judgment, Parent wants
Officer to provide consulting services to Parent following consummation of the
Merger to assist Parent in exploiting the business opportunities provided by the
Company's proprietary reusable sharps container and handling processes. Officer
is willing to provide consulting services on the following terms.
Now, therefore, in consideration of their mutual promises and intending to
be legally bound, the Parent and Officer agree as follows:
1. EFFECTIVE DATE
(a) This Agreement shall not be effective until the Effective Time. At
the Effective Time, this Agreement shall become effective automatically,
without the necessity of any further action by either Party. (The date on
which this Agreement becomes effective is the "Effective Date.")
(b) Pending consummation of the Merger, neither Party may unilaterally
terminate, revoke, modify or amend this Agreement. This Agreement shall be
terminated automatically, without the necessity of any further action by
either Party, and without any liability of any kind on the part of either
Party, if the Merger Agreement is terminated prior to the Effective Time in
accordance with its terms.
2. CONSULTING SERVICES
During the term of this Agreement, Officer shall provide consulting
services to Parent at its request, subject to the following conditions and
limitations:
(a) Officer's consulting services shall relate to the operation and
expansion, by the Company, Parent or an affiliate of Parent, of (i) the
Company's sharps container business or (ii) the Company's over-the-counter
healthcare products business.
(b) Officer's consulting services shall be of a nature commensurate
with Officer's position and role with the Company immediately prior to the
Merger.
(c) Parent shall provide at least 72 hours' prior notice of any
consulting services to be provided by Officer by telephone and at least 21
days' prior notice of any consulting services to be provided by Officer in
person.
(d) Officer shall not be required to provide consulting services in
person at any location other than Atlanta, Georgia, on more than one
occasion per month during the first year of this Agreement or on more than
one occasion per calendar quarter during each year of the remaining term of
this Agreement.
(e) Consulting services provided in person at a location other than
Atlanta, Georgia shall be provided at Parent's executive offices in Lake
Forest, Illinois, or at any other location mutually agreeable to Parent and
Officer. Parent shall reimburse Officer, upon submission of reasonable
supporting documentation, for Officer's reasonable travel, lodging and meal
expenses incurred in providing consulting services at a location other than
Atlanta, Georgia.
(f) Officer shall not be required to provide consulting services for
more than 100 hours during the first year of this Agreement, for more than
75 hours during the second year of this Agreement, or for more than 50
hours during the each year of the remaining term of this Agreement.
(g) Officer's reasonable time away from Atlanta shall be counted as
hours of consulting services in the case of consulting services provided in
person at a location other than Atlanta, Georgia.
3. CONSULTING FEE
In consideration of Officer's consulting services to be provided under this
Agreement, Parent shall pay Officer a consulting fee of $225,000 on the
Effective Date.
4. TERM
The term of this Agreement shall be three years, beginning on the Effective
Date and
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ending on the third anniversary of the Effective Date, unless otherwise
terminated earlier, as provided below. This Agreement shall automatically
terminate and Parent shall have no further obligations hereunder upon the first
to occur of (a) Officer's death or (b) Officer's violation of the
Non-Competition Agreement, entered into on October 19, 2002 by and between
Officer and Parent or (c) Officer's failure to provide consulting services as
required under the terms of this Agreement. If this Agreement is terminated
before the third anniversary of the Effective Date, Officer shall be required to
repay a pro-rata portion of the consulting fee corresponding to the maximum
number of hours of service Officer is required to perform under Section 2(f)
under this Agreement. (For example, if Officer breaches this Agreement after the
first anniversary of the Effective Date, but before the Second Anniversary of
the Effective Date, Officer shall be required to repay $125,000 to Parent.)
Parent shall have the right to offset any payments otherwise due to Officer
under any other agreement by any amounts owed by Officer to Parent by reason of
such repayment obligations.
5. RELATIONSHIP
Officer shall be an independent contractor and not an employee of Parent,
and nothing in this Agreement shall be construed to create an employment
relationship between Parent and Officer.
6. NOTICES
Each notice or other communication under this Agreement (a "notice") shall
be in writing and sent by certified or registered mail, overnight messenger
service, personal delivery or facsimile transmission, as follows:
(a) if to Parent, to:
Stericycle, Inc.
00000 Xxxxx Xxxxx Xxxxx
Xxxx Xxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxx X. Xxxxxx
Facsimile: (000) 000-0000
(b) if to Officer, to:
Xxxxxx X. Xxxxxxx, Xx.
0000 Xxxxxxxxx Xxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
In this regard:
(a) all notices sent by certified or registered mail shall be
considered to have been given three business days after being deposited in
the mail;
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(b) all notices sent by overnight courier service or personal delivery
shall be considered to have been given when actually received by the
intended recipient; and
(c) all notices sent by facsimile transmission shall be considered to
have been given when transmitted with confirmation that transmission was
made, so long as a copy was also sent on the same day in either manner
described in the preceding clauses (a) and (b).
A party may change its or his address or facsimile number for purposes of
this Agreement by notice in accordance with this Paragraph 6.
7. AMENDMENT
This Agreement may be amended only by a written agreement signed by the
parties expressly amending this Agreement's terms.
8. COUNTERPARTS
This Agreement may be signed in any number of counterparts, each of
which shall be considered an original, but all of which together shall
constitute one and the same instrument.
9. GOVERNING LAW
This Agreement shall be governed in accordance with the laws of the
State of Illinois.
10. NONASSIGNMENT
This is a personal services contract. Officer may not assign this
Agreement without Parent's express written consent, which may be withheld for
any reason.
11. BINDING EFFECT
This Agreement shall be binding on and shall inure to the benefit of
the parties and their respective heirs, legal representatives, successors and
assigns.
In witness, the Parties have executed this Agreement.
[SIGNATURE PAGE FOLLOWS]
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STERICYCLE, INC.
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
Title: President/CEO
/s/ Xxxxxx X. Xxxxxxx, Xx.
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XXXXXX X. XXXXXXX, XX.
