MANAGEMENT AGREEMENT
THIS AGREEMENT is made and entered into as of the
15th day of November, 1995, by and between ALEXANDER CITY
CASTING COMPANY, INC., an Alabama corporation, and INTERMET
CORPORATION, a Georgia corporation (collectively, "Company"); and
XXXXXX X. XXXXXXXX, XX., an individual resident of the State of
Alabama ("Xxxxxxxx").
BACKGROUND STATEMENT:
Xxxxxxxx has been employed as the President of both
Xxxxxxxx Foundry, Inc. ("RFI") and Xxxxxx-Xxxxxxxx, Inc. ("BRI"),
and in such capacity has become experienced in the aluminum
foundry business. Company has, concurrently herewith, (i)
purchased the assets of BRI pursuant to that certain Agreement
for Purchase and Sale of Assets of Xxxxxx-Xxxxxxxx, Inc., of even
date herewith, and (ii) purchased certain of the assets of RFI
pursuant to that certain Agreement for Purchase and Sale of
Certain Assets of Xxxxxxxx Foundry, Inc., of even date herewith
(such agreements being collectively referred to herein as the
"Purchase Agreements"), in each case used or useful in the
manufacture, sale and distribution of aluminum castings by the
lost foam process. In connection with such purchases, Company
desires to engage Xxxxxxxx for the purpose of providing, and
Xxxxxxxx desires to provide sales, consulting and management
services to Company and related to Company's manufacture, sale
and distribution of aluminum and other castings by the lost foam
process (the "Business").
NOW, THEREFORE, for and in consideration of the
premises and the mutual covenants and agreements herein
contained, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
AGREEMENT:
1. Engagement and Scope of Services; Control of Work.
(a) Company hereby engages Xxxxxxxx as an independent contractor
to provide sales, consulting and management services to Company
and its affiliates, and Xxxxxxxx hereby accepts such engagement.
The engagement hereunder is for a period of three years
commencing on the date hereof and terminating on the third
anniversary of this Agreement (the "Term"). Xxxxxxxx shall
devote such time and attention as shall be reasonably necessary
to provide sales, consulting and management services to Company
and their affiliates related to the Business and Company's and
affiliates other operations, businesses and affairs as Company
shall reasonably request from time to time, it being understood
and agreed that Xxxxxxxx shall continue to devote such time and
attention to the business and affairs of RFI and its affiliates
as may be necessary and prudent in the conduct of such
businesses.
(b) The parties to this Agreement understand and agree
that Xxxxxxxx shall not, without his consent, be required to:
(i) prepare or deliver any written report
regarding any consulting activity, project or services
performed hereunder;
(ii) attend meetings or provide services at times
other than during normal working hours, Monday through
Friday, holidays and vacations excluded;
(iii) perform services at a location other
than the Alexander City, Alabama area, unless in
Xxxxxxxx'x judgment (as concurred in by Company) other
locations would better facilitate the performance of
services hereunder;
(iv) incur any expenses in connection with the
services to be rendered hereunder unless such expenses
are paid for or reimbursed by Company;
(v) perform any specified minimum number of hours
of services or accomplish any specified minimum number
of projects or tasks; or
(vi) provide services hereunder or consult
hereunder except in regard to the Business.
2. Compensation. In consideration of the services to
be rendered hereunder (other than for the non-competition
provisions of Paragraph 3), Company shall pay to Xxxxxxxx the sum
of $490,000 on each of January 2, 1996, January 2, 1997, and
January 2, 1998. In consideration of the non-competition
provisions set forth in Paragraph 3, Company shall pay to
Xxxxxxxx the sum of $10,000 on each of January 2, 1996, January
2, 1997, and January 2, 1998. If any of such payments is not
received in full by Xxxxxxxx on or before the tenth (10th) day
after the above-stated payment date, the amount of the unpaid
portion of such payment shall bear interest at the rate of 8.75
percent annually computed from the date the payment was due
(January 2 of the particular year); provided, however, that,
except as provided in Paragraph 9 hereof, any portion of the
January 2, 1998 payment not timely made to Xxxxxxxx as a result
of Company exercising its offset rights as set forth in Paragraph
9 hereof shall not bear interest.
3. Covenant Against Competition. (a) Except as provided
in Paragraph 4(e), Xxxxxxxx agrees that during the Term and for a
period of five years thereafter, he shall not, without the prior
written consent of Company, for his own account or jointly or in
combination with another, directly or indirectly, for or on
behalf of any person or entity, as principal, agent or otherwise:
(i) engage in, render services to, consult with, or
own, control, manage or otherwise participate in the
ownership, control or management of a business (A) engaged
in the manufacture, assembly, purchase for resale, sale or
distribution anywhere in the world of aluminum castings and
other castings produced with Lost Foam Technology
("Products") which are competitive with those manufactured,
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assembled, sold or distributed by the Business during the
12-month period immediately preceding the date upon which
Xxxxxxxx ceases to provide services to Company hereunder
except as an employee of or consultant to and on behalf of
Company, or (B) which utilizes, or provides consulting,
engineering or other similar services regarding, Lost Foam
Technology ("Services"); or
(ii) solicit, call upon, or attempt to solicit the
patronage of any person or entity anywhere in the world and
to whom the Business sold any Products, rendered any
Services, or attempted to obtain the patronage of for any
Products or Services, during the 12-month period immediately
preceding the date upon which Xxxxxxxx ceases to provide
services to Company hereunder, for the purpose of obtaining
the patronage of any such person or entity for the purchase
of any products or services competitive with the Products or
the Services, as appropriate, except as an employee of or a
consultant to and on behalf of Purchaser; or
(iii) solicit or induce, or in any manner attempt
to solicit or induce, any individual who is employed by
Company to leave such employment, whether or not such
employment is pursuant to a written contract with Company or
otherwise.
(b) Notwithstanding anything herein to the contrary it
shall not be a breach of the covenants contained in this
Paragraph 3 for Xxxxxxxx to own capital stock or other equity
interests of RFI and BRI (provided that neither of them is
engaged in a business which Xxxxxxxx is otherwise prohibited from
engaging in pursuant to this Paragraph 3) or (with Xxxxxxxx s
ownership aggregated with that of BRI, RFI and Xxxxxxx X.
Xxxxxxxx) not more than two percent (2.0%) of the capital stock
or other equity interest of any entity whose shares or equity
interests are publicly traded.
(c) In agreeing to the terms and provisions of this
Paragraph 3, Xxxxxxxx acknowledges and agrees that the scope of
the Business as conducted by both BRI and RFI prior to the date
hereof, and as the same shall be continued by Company from and
after the date hereof, is world-wide as the customers of the
Business engage in business on a global scale. Xxxxxxxx further
acknowledges that to meet the product and service requirements of
the customers of the Business and to maintain such business,
Company must compete on a global scale as well. Given the
requirement of customers of the Business and that Xxxxxxxx is
intimately familiar with and knowledgeable of the Lost Foam
Technology and other confidential and proprietary business
information which gives the Business a significant competitive
advantage over other potential suppliers to such customers,
Xxxxxxxx expressly acknowledges and agrees that the time and
territorial limits to which he is agreeing are reasonable and
necessary in the circumstances to protect the legitimate business
interests of Company.
(d) For purposes of this Agreement, "Lost Foam Technology"
shall mean all technology, processes, know-how, technical
information, trade secrets, procedures and other intellectual
property and proprietary information related to the casting
process known variously in Company's industry as "expendable
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pattern casting process," "evaporative pattern casting," or "lost
foam casting" and acquired by Company from BRI and RFI, and as
the same may be further developed, improved and enhanced by
Company.
(e) Notwithstanding anything herein to the contrary, this
Agreement shall not be deemed to be a restriction or prohibition
of any kind whatsoever on Xxxxxxxx with respect to the following:
(i) the sale or manufacture of, or other activities
relating to, Products manufactured by RFI with its Disamatic
machinery;
(ii) engaging in the use of Lost Foam Technology in
RFI's iron business and the sale or manufacture of, or other
activities directly relating to, iron casting products
produced with such technology pursuant to the terms and
conditions of that certain License Agreement, of even date
herewith, between RFI and Alexander City Casting Company,
Inc. (the "License Agreement"); or
(iii) engaging in the use of Lost Foam
Technology in the performance of RFI's or his
obligations in connection with, and in strict
accordance with, the Lost Foam Technology transfer
contracts listed on Exhibit A to the License Agreement
(which Lost Foam Technology transfer contracts shall
not be amended or altered in any way to alter or amend
RFI's or Xxxxxxxx'x obligations thereunder).
4. Covenant of the Company. Company agrees that for
a period of five years after the date hereof, it shall not,
without the prior written consent of Xxxxxxxx or Xxxxxxx X.
Xxxxxxxx, for its own account or jointly or in combination with
another, directly or indirectly, for or on behalf of any person
or entity, as principal, agent or otherwise, solicit or induce,
or in any manner attempt to solicit or induce, any individual who
is employed by BRI, RFI, Xxxxxxxx Iron Corp., Xxxxxxxxxxx, Inc.,
or any business or entity controlled by Xxxxxxxx or Xxxxxxx X.
Xxxxxxxx to leave such employment, whether or not such employment
is pursuant to a written contract with such employer or
otherwise; provided, however, that Company may, for a period of
thirty (30) days after the date hereof, solicit for employment by
Company (i) all persons employed by BRI immediately prior to the
date hereof and (ii) those persons employed by RFI in its
"Aluminum Business" (as defined in the Xxxxxxxx Foundry, Inc.
Purchase Agreement) immediately prior to the date hereof.
5. Relationship; No Employee Benefits. Xxxxxxxx
shall be an independent contractor and shall not be deemed an
employee or agent of Company or any of its affiliates, or be
eligible for any employee benefits of Company or any of its
affiliates. As a result of this Agreement, Xxxxxxxx shall not
represent himself as an agent or employee of Company or any of
its affiliates. Nothing herein shall be construed to confer on
Xxxxxxxx any authority, express or implied, to bind or commit
Company or any of its affiliates to any third party.
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6. Inventions; Confidentiality. Xxxxxxxx will promptly
disclose to Company, and to no other person or entity, any
design, invention, idea, process, discovery, formula or other
information related to the Business, whether or not patentable,
and all improvements therein, which Xxxxxxxx may conceive,
produce or develop, either alone or in conjunction with others,
during his engagement hereunder, and as part of his services
provided hereunder, or within three months of any termination or
expiration thereof, and the same shall belong to Company.
Xxxxxxxx hereby assigns to Company, without further
consideration, any patents, patent applications, copyrights,
trade secrets and other intellectual property rights related to
the Business that he develops in connection with or during the
course of his engagement with Company. Xxxxxxxx shall hold and
treat the Lost Foam Technology in confidence, and will not,
without the prior written consent of Company, use or disclose or
give to any person or entity any of the Lost Foam Technology or
any of Company's other proprietary, confidential or business
information (the "Confidential Information"); provided, however,
that any action taken by Xxxxxxxx on behalf of RFI that complies
with the provisions of Paragraph 3 of the License Agreement shall
not constitute a violation of this Paragraph 6. Company and
Xxxxxxxx agree that the Confidential Information does not include
information which (a) is or becomes generally available to the
public other than as a result of an authorized disclosure by
Xxxxxxxx in compliance with this Agreement, (b) has been
disclosed by RFI or its representatives to the parties to the
technology transfer contracts listed on Exhibit A to the License
Agreement in strict accordance with the terms thereof, including,
without limitation, the representatives of such parties, or (c)
Xxxxxxxx is required by applicable law or regulation or by legal
process to disclose. Notwithstanding anything in the foregoing
to the contrary, in the event that Xxxxxxxx becomes legally
compelled to disclose any such Confidential Information, Xxxxxxxx
will provide Company with prompt notice so that Company may seek
a protective order or other appropriate remedy and/or waive
compliance with the provisions of this Agreement. In the event
that such protective order or other remedy is not obtained, or
that Company expressly in writing waives compliance with the
provisions of this Agreement, Xxxxxxxx will furnish only that
portion of the Confidential Information which Xxxxxxxx is advised
by opinion of legal counsel is legally required and Xxxxxxxx will
exercise his reasonable best efforts to obtain reliable assurance
that confidential treatment will be afforded the disclosed
portion(s) of the Confidential Information.
7. Nature of Obligations. Provided that Xxxxxxxx is
not in default of this Agreement and subject to the right of
offset in Paragraph 9, the obligation of Company to make payment
hereunder shall be absolute and unconditional, and shall not be
terminated, altered, or diminished by (i) the death or
disability of Xxxxxxxx, or (ii) any bankruptcy, insolvency,
receivership, or other creditors rights proceeding affecting
Company or Xxxxxxxx.
8. Certain Remedies. (a) Should Company fail to pay
any amount due hereunder within fifteen (15) days of the date
that Xxxxxxxx provides Company with written notice of its failure
to pay any such amount on its scheduled payment date (which shall
not include any amounts offset against such amounts due and owing
pursuant to the terms hereof), then (i) Xxxxxxxx may, without
further notice to Company or further action of any description,
declare all remaining payments hereunder to be immediately due
and payable, and (ii) the covenants of Xxxxxxxx set forth in this
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Agreement and in that certain Non-Competition Agreement, of even
date herewith, between Xxxxxxxx and Company shall immediately and
automatically terminate without further notice to Company or
further action of any description. Presentment, protest, demand,
and notice of protest and demand of any and all sums owed
hereunder are hereby waived by Company.
(b) Except as provided to the contrary in Paragraph
7(a), neither Company nor Xxxxxxxx shall be in default hereunder
unless it or he shall have received written notice from the other
party of any such default, shall have failed to cure any such
default to the reasonable satisfaction of the other party within
thirty (30) days of its or his receipt of such written notice,
and the other party shall deliver another written notice of such
uncured default declaring either Company or Xxxxxxxx, as the case
may be, in default hereunder. Upon any such declaration, the
parties hereto shall be entitled to exercise such remedies (each
of which are cumulative of one another) as are available under or
pursuant to this Agreement, at law or in equity.
9. Contractual Right of Offset. Any Purchaser Indemnitee
(as defined in either of the Purchase Agreements) shall have the
right to offset against, or request that Company offset against,
the payments due and payable on January 2, 1998 pursuant to
Paragraph 2 hereof the amount of any Purchaser Indemnified Losses
(as defined in the Purchase Agreements) in an amount up to the
$500,000 amount of such payments, for which an indemnification
claim is made by a Purchaser Indemnitee (as defined in the
Purchase Agreements) on or before the sixth month anniversary
after the Closing Date (as defined in the Purchase Agreements)
and which has not otherwise been fully satisfied (a "Six Month
Unsatisfied Claim"). If the January 2, 1998 payment shall become
due while any six Month Unsatisfied Claim is unresolved and/or
still subject to a pending litigation or arbitration proceeding,
Purchaser's obligation to make the January 2, 1998 payment with
respect to any amount in dispute shall be suspended (without
constituting a default under or breach of this Agreement or the
Purchase Agreements). If, and to the extent, it is ultimately
determined that Xxxxxxxx was entitled to some or all of that
portion of the January 2, 1998 payment withheld by Purchaser in
accordance with the preceding sentence, Xxxxxxxx shall be
entitled to receive interest at the rate of 8.75 percent per
annum on that portion of the January 2, 1998 payment initially
withheld and ultimately received by Xxxxxxxx, computed from
January 2, 1998 until receipt of such payment by Xxxxxxxx.
Xxxxxxxx acknowledges and agrees that he shall not be entitled to
object, and shall not object, to the validity or finality of any
Purchaser Indemnified Loss for which offset is sought or taken
hereunder if the Six Month Unsatisfied Claim for such Purchaser
Indemnified Loss (i) has not theretofor been disputed by any
Purchaser Indemnitor (as defined in the Purchase Agreements),
(ii) any Purchaser Indemnitor has admitted in writing its
liability therefor, (iii) has been settled in writing with any
Purchaser Indemnitor, or (iv) has been finally determined by
arbitration as evidenced by an arbitration award. If any such
Purchaser Indemnified Loss is unpaid and offset is sought
pursuant to the terms hereof, the amount of any such Purchaser
Indemnified Loss shall bear interest at the rate of 8.75 percent
annually, computed, (i) in the case of a third party claim, from
the date that a Purchaser Indemnitee satisfies or pays the
Purchaser Indemnified Loss or (ii) in the case of other than a
third party claim, from the date that Purchaser Indemnitee
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accrues the Purchaser Indemnified Loss on its books of account,
in each case until the amount thereof shall have been satisfied
in full, whether by offset or otherwise.
10. Notices. All notices, demands or other
communications required or permitted to be given or made
hereunder shall be in writing and (i) delivered personally, or
(ii) sent by pre-paid, first class, certified or registered mail,
return receipt requested, or (iii) by priority overnight national
express courier service, or (iv) by facsimile transmission
(followed by a hardcopy by U.S. mail or priority overnight
delivery as aforesaid), to the intended recipient thereof at its
address or facsimile number set out below. Any such notice,
demand or communication shall be deemed to have been duly given
(i) immediately if delivered personally, (ii) three business days
after mailing, (iii) the business day after delivery to a
national express courier service, or (iv) if given by confirmed
facsimile, immediately if received by recipient during its normal
business hours on a business day or, if not, at the beginning of
recipient's business on the next business day. In proving same
it shall be sufficient to show that the envelope containing the
same was duly addressed, stamped and posted (or that the envelope
was delivered to the national express courier service), or that
receipt of a facsimile was confirmed by the recipient. The
addresses and facsimile numbers of the parties for purposes of
this Agreement are as set forth below their signatures hereto.
Any party may change the address or facsimile number to which
notices, demands or other communications to such parties shall be
given or made by giving notice thereof to the other parties
hereto in the manner provided herein.
11. Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed an
original, and all of which shall constitute one and the same
instrument.
12. Entire Agreement. This Agreement supersedes all
prior discussions and agreements between the parties with respect
to the subject matter hereof, and this Agreement contains the
sole and entire agreement among the parties with respect to the
mates covered hereby. This Agreement shall not be altered or
amended except by an instrument in writing signed by all of the
parties hereto.
13. Governing Law. The validity and effect of this
Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Alabama, without regard
to conflicts of laws principles.
14. Dispute Resolution. (a) Any controversy, claim or
dispute arising out of or in any way relating to this Agreement
or its breach or the transactions contemplated hereby including
without limitation any claim that this Agreement or any of its
parts is invalid, illegal or otherwise voidable or void, shall be
submitted to arbitration before and, unless otherwise provided
herein, in accordance with the Commercial Arbitration Rules of
the American Arbitration Association (the "AAA").
Notwithstanding any provision of this Agreement relating to which
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state laws govern this Agreement, all issues relating to
arbitrability or the enforcement of the agreement to arbitrate
contained herein shall be governed by the Federal Arbitration Act
(9 U.S.C. Section 1 et seq.) and the federal common law of
arbitration.
(b) Judgment upon an arbitration award may be entered
in any court having competent jurisdiction and shall be final,
binding and non-appealable. The parties hereby waive to the
fullest extent permitted by law any right to or claim for any
punitive or exemplary damages against the other and agree that in
the event of a dispute between them, each shall be limited to the
recovery of only the actual damages sustained.
(c) The arbitration provisions of this Paragraph 14
are self-executing and shall remain in full force and effect
after the expiration or termination of this Agreement. If either
party fails to appear at any properly noticed arbitration
proceeding, an award may be entered against such party by default
or otherwise, notwithstanding such failure to appear. Unless
otherwise agreed to in writing by the parties, such proceeding
shall take place in Atlanta, Georgia. With respect to any
dispute involving $100,000 or more, arbitration proceedings shall
be conducted before three (3) neutral arbitrators. With respect
to any dispute involving less than $100,000, arbitration
proceedings shall be conducted by a single arbitrator in
accordance with the Expedited Rules of the AAA.
(d) The obligation herein to arbitrate shall not
prevent any party from seeking temporary restraining orders,
preliminary or permanent injunctions or other procedures in a
court of competent jurisdiction to obtain interim or permanent
relief when deemed necessary by such court to preserve the status
quo or prevent irreparable injury.
15. Successors and Assigns. No party may assign all
or any part of its rights, duties or obligations under or
pursuant to this Agreement. Except as otherwise provided, this
Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective heirs, executors, legal
representatives, successors and permitted assigns.
16. Partial Invalidity and Severability. All rights
and restrictions contained hereby may be exercised and shall be
applicable and binding only to the extent that they do not
violate any applicable laws and are intended to be limited to the
extent necessary to render this Agreement legal, valid and
enforceable. If any term of this Agreement, or part thereof, not
essential to the commercial purpose of this Agreement shall be
held to be illegal, invalid or unenforceable by a court of
competent jurisdiction, it is the intention of the parties that
the remaining terms hereof, or part thereof, shall constitute
their agreement with respect to the subject matter hereof and all
such remaining terms, or parts thereof, shall remain in full
force and effect. To the extent legally permissible, any
illegal, invalid or unenforceable provision of this Agreement
shall be replaced by a valid provision which will implement the
commercial purpose of the illegal, invalid or unenforceable
provision.
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17. Waiver. Any term or condition of this Agreement
may be waived at any time by the party which is entitled to the
benefit thereof, but only if such waiver is evidenced by a
writing signed by such party. No failure on the part of any
party hereto to exercise, and no delay in exercising any right,
power or remedy created hereunder, shall operate as a waiver
thereof, nor shall any single or partial exercise or any right,
power or remedy by any such party preclude any other or further
exercise thereof or the exercise of any other right, power or
remedy. No waiver by any party hereto of any breach of or
default in any term or condition of this Agreement shall
constitute a waiver of or assent to any succeeding breach of or
default in the same or any other term or condition hereof.
18. Headings. The headings of particular provisions
of this Agreement are inserted for convenience only and shall not
be construed as a part of this Agreement or serve as a limitation
or expansion on the scope of any term or provision of this
Agreement.
IN WITNESS WHEREOF, Xxxxxxxx and Company have caused
this Agreement to be executed as of the date first written above.
ALEXANDER CITY CASTING COMPANY, INC.
By: /s/ C. Xxxxx Xxxxxxxx
C. Xxxxx Xxxxxxxx, President
INTERMET CORPORATION
By: /s/ Xxxx Xxxxxxxxx
Xxxx Xxxxxxxxx, Chairman and CEO
Address:
0000 Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxx, Xxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxx Xxxxxxxxx, Chairman & CEO
/s/ Xxxxxx X. Xxxxxxxx, Xx.
XXXXXX X. XXXXXXXX, XX.
Address:
0 Xxxxxxxx Xxxx
X.X. Xxx 0000
Xxxxxxxxx Xxxx, Xxxxxxx 00000
Facsimile No.: (000) 000-0000
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