1
Exhibit 10 (a)
CONSULTING AGREEMENT
This Consulting Agreement ("Agreement") is made this 4th day of May, 2001, by
and between DELPHI AUTOMOTIVE SYSTEMS LLC, a company organized and existing
under the laws of Delaware ("DELPHI") and XXXXXXXXX XXXXXXXXX INC., a company
organized under the laws of Japan with a principal place of business at Believe
A Hamamatsucho 0X, 0-0-00 Xxxxxxxxx-xxx Xxxxxx-xx, Xxxxx 000-0000, Xxxxx
("Consultant") (each of DELPHI and Consultant individually a "Party" and
collectively the "Parties").
The Parties hereby agree as follows:
1. Appointment as Consultant
Subject to the terms and conditions set forth herein, DELPHI hereby appoints
Consultant to provide the consulting services described herein for a period of
twelve (12) months, it being understood that such period may be extended or
reduced in accordance with Section 11 below, and Consultant hereby accepts such
appointment.
2. Scope of Services
2.1 Consultant's responsibilities shall consist of the market analysis,
feasibility studies, strategic advice and other services contemplated
in the document entitled, "Proposal to Develop Delphi Japan Medium Term
Strategy" dated March 29, 2001 (the "Proposal"), attached hereto. The
performance of the activities contemplated in the Proposal will be
referred to as the "Consulting Services". All such Consulting Services
shall be carried out in collaboration with and subject to instructions
from DELPHI. For this purpose, DELPHI hereby designates Xx. Xxxxx Xxxx,
Vice President, to coordinate such Consulting Services on behalf of
DELPHI. The scope of the Consulting Services may be modified from time
to time by mutual agreement of the Parties in writing.
2.2 In the event of a conflict between this Agreement and the attached
Proposal, the terms of this Agreement will control. In particular, the
Proposal is clarified and modified as follows:
2.2 (1) Up to six DELPHI employees will be provided to Consultant to
assist in the Consulting Services.
2.2 (2) The Base Camp project referred to in the Proposal will be
completed within one year following signature of this
Agreement, which will take place following approval by the
DELPHI Board of Directors.
2
2
2.2 (3) The Consulting Services must include an evaluation of the
financial return Delphi could expect from implementing the
Proposal, taking into account that Delphi is committed to
earning 5% net income margins and 12.5% return on net assets.
The Consultant must determine and specify the resources
required to compete effectively for the business of the
Japanese Big 3.
2.2 (4) No work should be done in Program 2 of the Feasibility Studies
of the Proposal (CK Alliance) unless and until the potential
venture with CK is completed. With regard to Programs 1 and 3
of the Feasibility Study of the Proposal, any discussions with
the Japanese major car assemblers, Hitachi or other companies,
must include Xxxxx Xxxx or other appropriate DELPHI executives
approved by DELPHI.
2.2 (5) Consultant is to provide an analysis of what DELPHI must do to
penetrate and succeed in the Japanese automotive and
non-automotive connector industry.
2.2 (6) Consultant should provide an initial report to DELPHI's
Strategy Board (DSB) by September, 2001, covering the issues
mentioned in this entire Section 2, so that the DSB can decide
whether it makes sense to continue the study and, if so,
whether any adjustments in its focus would be desirable.
Following that DSB review, a review with the DELPHI Board of
Directors may be appropriate.
2.2 (7) Assuming the DSB elects to proceed, the Base Camp feasibility
study set forth in the Proposal should be completed by May
2002.
3. Dedicated Resources
During the term of this Agreement, Consultant shall dedicate approximately fifty
percent (50%) of the working hours of its principal shareholder, Mr. Shoichiro
Irimajira, and one hundred percent (100%) of the working hours of one assistant
(collectively, "Dedicated Professionals") to the performance of Consulting
Services under this Agreement. Consultant represents and warrants that all
Dedicated Professionals are well qualified and have sufficient experience and
expertise to perform the Consulting Services contemplated herein.
4. Work Product
4.1 All feasibility studies, market analyses, reports, presentations,
correspondence or other documents produced by Consultant for DELPHI
pursuant to this Agreement ("Work Product") shall be suitably
documented and provided to DELPHI. Consultant shall furnish DELPHI with
additional information relating to Consultant's activities hereunder as
DELPHI may reasonably request from time to time. All Work
3
3
Product shall be the exclusive property of DELPHI (other than content
already owned by others or in the public domain) and may be used freely
by DELPHI and any of its affiliates.
4.2 Immediately upon the request of DELPHI, Consultant shall deliver to
DELPHI, and shall cause the Dedicated Professionals to deliver to
DELPHI, all Work Product and any other documents or property belonging
to DELPHI, including all copies thereof, which may be in the possession
or control of Consultant or the Dedicated Professionals.
5. Compensation
In consideration of Consultant's services hereunder, DELPHI shall pay Consultant
the sum of fifty thousand United States dollars ($50,000) for each full month
Consultant performs Consulting Services as provided herein up to a maximum of
twelve (12) months subject to any extension or termination pursuant to Section
11 herein. The amounts due shall be payable in United States dollars by bank
transfer to a bank account specified by Consultant in Japan. Such sum shall
cover all expenses of Consultant and Dedicated Professionals related to the
Consulting Services, including but not limited to expenses for travel, office,
clerical support, accommodation, research and report production. Neither
Consultant nor any Dedicated Professional shall be entitled to any other fees or
expense reimbursement in connection with the Consulting Services or any business
opportunities resulting therefrom without the prior written approval of DELPHI.
6. Taxes
Consultant shall bear exclusive responsibility for the discharge of any income
tax and/or VAT arising out of the services performed and the compensation
received by it under this Agreement, and Consultant shall indemnify DELPHI and
hold it harmless against any and all claims for income and other taxes made
against it by any competent authority in connection therewith.
7. Exclusivity
Consultant represents and warrants that neither Consultant nor any of the
Dedicated Professionals is currently providing, either directly or through
another company, any consulting services relating to the Japanese automotive
market to or on behalf of any manufacturer or distributor of automotive
components or systems other than DELPHI. Neither Consultant nor the Dedicated
Professionals will undertake to provide such consulting services to or on behalf
of any such manufacturers or distributors during the term of this Agreement, or
during a period two (2) years after its termination, without DELPHI's prior
written consent.
4
4
8. Confidentiality
During the course of its services, Consultant may receive confidential or
proprietary information in written and oral form about Delphi's business and its
planned projects in Japan or elsewhere ("Confidential Information"). Consultant
may use such Confidential Information only for the purpose of performing
services hereunder and may disclose such information only to those of its
employees who require it to assist in providing such services, and to no other
persons without DELPHI's prior written consent. Consultant will maintain
reasonable internal controls to ensure that such information is not
involuntarily disclosed to any other person. Immediately upon the request of
DELPHI, Consultant shall return to DELPHI or destroy, and shall cause its
management or employees to return to DELPHI or destroy, all Confidential
Information and all copies thereof. The restrictions provided for by this
Section 8 shall remain in effect for a period of ten (10) years following the
termination of this Agreement.
The foregoing provisions of this Section 8 shall not be applicable to the
following information:
a) Information that is already in the possession of Consultant at the time
of its disclosure by Delphi;
b) Information that is disclosed to Consultant by third parties who are
free to disclose the information without obligation to Delphi;
c) Information that is or becomes publicly known through no wrongful act
of Consultant or breach of this Agreement;
d) Information for which Delphi approves disclosure or use in writing in
advance; and
e) Information for which relevant laws require disclosure.
9. Independent Contractor
In performing services hereunder, Consultant shall be acting as an independent
contractor, and neither Consultant nor any of its shareholders, directors or
employees shall be deemed to be the employee, agent or legal representative of
DELPHI or any of its affiliates for any purpose whatsoever. Neither Consultant
nor any of its shareholders, directors or employees shall have any express or
implied right or authorization to assume or to create any obligation or
responsibility on behalf of, or in the name of, DELPHI or any of its affiliate
or to bind DELPHI or any of its affiliate in any manner.
10. No Assignment
Neither this Agreement nor any right or obligation hereunder nor the payment of
all or any portion of any sum that may hereafter become payable
5
5
hereunder shall be transferable or assignable by either Party without the other
Party's prior written approval, provided, however, that DELPHI may assign its
obligation to pay any sums hereunder to any Delphi affiliate.
11. Term, Extension & Termination
11.1 This Agreement shall become effective as of the date first written
above, and shall remain in effect for twelve (12) months unless sooner
terminated or extended as hereinafter provided.
11.2 Either Party may terminate this Agreement for convenience, with or
without cause, by giving written notice to the other Party. Such
termination for convenience shall be effective thirty (30) days after
such written notice. If either Party commits a material breach or
default, the other Party may terminate this Agreement effective
immediately upon written notice to the other Party. Upon termination of
this Agreement for any reason, DELPHI shall have no obligation to make
any payment which would otherwise have become due after the effective
date of termination.
11.3 The Parties may extend this Agreement only by means of a written
extension agreement signed by both Parties.
11.4 Notwithstanding anything else provided herein, the provisions of
Section 8 hereof shall remain in effect for a period of ten (10) years
following the termination of this Agreement.
12. Notices
Any notices required or permitted to be given by either Party under or in
connection herewith shall be in writing and transmitted either by personal
delivery, by regular or registered mail, or by facsimile. Such notices shall be
directed to and addressed as follows:
If to DELPHI:
Delphi Automotive Systems Japan
Shinjuku Xxxxxx Xxxxxxxx 00X
Xxxx Xxx 0000
0-0, Xxxxx-Xxxxxxxx 1-chome
Facsimile: 00-0-0000-0000
Attention: Xxxxx Xxxx, Vice President
6
6
If to Consultant:
Xxxxxxxxx Xxxxxxxxx, Inc.
Believe A Hamamatsucho 5F
0-0-00 Xxxxxxxxx-xxx Xxxxxx-xx
Xxxxx 000-0000, Xxxxx
Facsimile: 00-0-0000-0000
Attention: Xxxxxxxxx Xxxxxxxxx, President
13. No Implied Waivers
The failure of either Party at any time to require performance by the other
Party of any provision of this Agreement shall in no way affect the full right
to require such performance at any time thereafter, nor shall the waiver by
either Party of a breach of any provision of this Agreement constitute a waiver
of any succeeding breach of the same or any other such provision nor constitute
a waiver of the provision itself.
14. Governing Law
This Agreement shall be governed by and construed in accordance with the laws of
the State of Michigan. In performing its services, Consultant will comply with
applicable laws of Japan and the United States, including the US Foreign Corrupt
Practices Act.
15. Entire Agreement
There are no agreements or understandings, oral or written, between the Parties
affecting the subject matter of this Agreement other than the terms set forth
herein or in the documents referenced herein. This Agreement may be executed in
counterparts.
16. Amendments
No amendment or subsequent agreement between the Parties which is at variance
with any of the provisions of this Agreement, or which imposes definite
obligations upon either Party not specifically imposed by this Agreement, or
which is intended to be effective or performed following the expiration or
termination of this Agreement shall be binding on either Party unless it is in
writing and is executed by a duly authorized representative of each Party.
7
7
DELPHI AUTOMOTIVE SYSTEMS LLC XXXXXXXXX XXXXXXXXX INC.
------------------------------ ------------------------------
By: Xx. Xxxxx Xxxx By: Xx. Xxxxxxxxx Xxxxxxxxx
Title: Vice President Title: President
Date: Date:
------------------------------
By: Xxxx X. Xxxxx
Title: Executive Vice President
Date:
