EXHIBIT 10.1
CONSULTING AGREEMENT
This Agreement is made as of October 1, 1998, between BINKS XXXXX
CORPORATION, a Delaware corporation ("BSC") and The Xxxxx-Xxxxxxxx Company
("Consultant").
WHEREAS, BSC desires to retain Consultant to provide services in
accordance with the following terms and conditions;
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants contained herein, BSC and Consultant hereby agree as follows:
1. SERVICES. Consultant will make available Xxxxxx X. Xxxxx to serve
as the President and Chief Executive Officer of BSC to provide such
management services consistent with such position as reasonably requested by
the Board of Directors of BSC from time to time. Xxxxxx X. Xxxxx will be
expected to devote an average of four days per week to the business and
affairs of BSC. In furtherance of the foregoing, the Board of Directors
shall elect Xxxxxx X. Xxxxx as the President and Chief Executive Officer, and
as a director, of BSC and of its principal subsidiary, Xxxxx X.X.
2. TERM. The term (the "Term") of this Agreement shall commence
immediately following the closing of the sale of certain assets by BSC to
Illinois Tool Works Inc. ("ITW") (the "Commencement Date") and shall end on
the second anniversary of the Commencement Date, subject to earlier
termination as provided in Paragraph 5, below. The Term may be extended by
further written agreement between BSC and Consultant.
3. MONTHLY FEE. BSC shall pay Consultant a monthly fee of $25,000,
which amount shall be payable on the Commencement Date and on the same day of
each month thereafter during the Term hereof.
4. TRAVEL AND OTHER EXPENSES. BSC will reimburse Consultant for (a)
reasonable travel and other direct, out-of-pocket expenses (which shall not
include overhead or similar expenses) actually incurred in the performance of
services hereunder, (b) medical insurance premiums paid by Consultant during
the Term hereof, with respect to Xxxxxx X. Xxxxx and his dependents, (c) the
$600 per month car allowance paid by Consultant with respect to Xxxxxx X.
Xxxxx, and (d) reasonable attorney's fees (not to exceed $5,000) incurred in
connection with the drafting and negotiation of this Agreement. Such
reimbursements shall be made within a reasonable time following Consultant's
submission of receipts for such expenses.
5. TERMINATION. Either BSC or Consultant may terminate the Term and
this Agreement upon seven (7) days' advance written notice to the other;
provided, however that this Agreement may be terminated immediately by BSC
for "cause" (as defined below). Upon termination of this Agreement,
Consultant shall be entitled to compensation pursuant to Paragraph 3 for
services
EXHIBIT 10.1
actually rendered to BSC through the date of termination, and Consultant
shall be relieved of any obligation hereunder to render further services to
BSC. Except as set forth below, no further payments shall be made or owed by
BSC to Consultant under this Agreement, other than properly incurred,
unreimbursed expenses; provided, however, that Consultant's rights with
respect to indemnification protection shall be determined pursuant to
Paragraph 6 below. In the event such termination occurs (a) prior to a
Change of Control (as defined in Paragraph 12 below) and (b) is by BSC for
reasons other than "cause" (as defined below) or by Consultant for "good
reason" (as defined below), then BSC shall pay to Consultant on the
termination date a lump sum payment in an amount equal to six (6) times the
sum of (i) the monthly fee set forth in Paragraph 3 above, (ii) the most
recent monthly medical premium reimbursed by BSC pursuant to Paragraph 4(b)
above, and (iii) the $600 monthly car allowance described in Paragraph 4(c)
above.
For purposes of this Paragraph 5, "cause" shall mean (A) the death or
disability of Xxxxxx X. Xxxxx, (B) the resignation of Xxxxxx X. Xxxxx from
the position of President and Chief Executive Officer of BSC (other than in
conjunction with the termination of this Agreement by Consultant for "good
reason"), (C) the willful misconduct of any Consultant Personnel, including
Xxxxxx X. Xxxxx, or the willful or continued failure by any Consultant
Personnel, including Xxxxxx X. Xxxxx (other than by reason of disability), to
substantially perform the duties and services contemplated by this Agreement,
which in either case has a material adverse effect on BSC, or (D) the willful
fraud or material dishonesty of any Consultant Personnel, including Xxxxxx X.
Xxxxx, in connection with the performance of duties and services for BSC.
This Agreement shall not be deemed terminated for "cause" unless and until
Consultant receives a copy of a resolution adopted by the Board finding, in
the good faith opinion of the Board, Consultant Personnel is guilty of acts
or omissions constituting cause, which resolutions has been duly adopted by
an affirmative vote of the majority of the Board (excluding Xxxxxx X. Xxxxx)
and any such vote shall be taken at a meeting of the Board called and held
for such purpose, after reasonable written notice is provided to Consultant
setting forth in reasonable detail the facts and circumstances claimed to
provide a basis of termination for cause and Consultant is given an
opportunity, together with counsel, to be heard before the Board. To the
extent possible, Consultant shall have the opportunity to cure any such acts
or omissions within fifteen (15) days of receipt of such resolution.
For purposes of this Paragraph 5, "disability" shall mean the inability
of Xxxxxx X. Xxxxx to perform his duties for BSC on account of physical or
mental illness or incapacity for a period of six (6) consecutive months, or
for a period of one hundred eighty (180) calendar days, whether or not
consecutive, during any three hundred sixty-five (365) day period.
For purposes of this Paragraph 5 "good reason" shall mean (x) any
failure by BSC to comply with the compensation provisions hereof or any other
material breach by BSC of its obligations hereunder, which failure or breach
is not remedied by BSC within fifteen (15) days of receipt of written notice
thereof from Consultant (y) the removal of Xxxxxx X. Xxxxx from the position
of President and Chief Executive Officer of BSC or as a director thereof
(other than in conjunction with
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EXHIBIT 10.1
the termination of this Agreement for cause), or (z) the relocation of BSC's
headquarters outside the metropolitan Chicago area, such that Consultant
Personnel will be required to relocate in order to perform services hereunder.
6. INDEMNIFICATION. During the Term and continuing for a period of
three (3) years thereafter, BSC shall maintain in force Director and Officer
Liability Insurance in the aggregate amount of not less than $30 million,
including Xxxxxx X. Xxxxx as a director and officer covered under that
policy. In addition, Xxxxxx X. Xxxxx shall be entitled to the benefits of
the indemnification provisions of BSC's charter and by-laws, and shall become
a party to any indemnification or similar agreements whiion. During the Term
and continuing for a period of three (3) years thereafter, BSC shall maintain
in force Director and Officer Liability Insurance in the aggregate amount of
not less than $30 million, including Xxxxxx X. Xxxxx as a director and
officer covered under that policy. In addition, Xxxxxx X. Xxxxx shall be
entitled to the benefits of the indemnification provisions of BSC's charter
and by-laws, and shall become a party to any indemnification or similar
agreements which BSC may from time to time enter into with its directors or
officers. The provisions of this Section 6 shall survive termination of this
Agreement.
7. ASSIGNMENT. Neither Consultant nor BSC may assign this Agreement
without the prior written consent of the other. Any assignment prohibited
hereby shall be null and void.
8. EMPLOYMENT STATUS. BSC and Consultant acknowledge that Xxxxxx X.
Xxxxx and any other individuals (Xxxxxx X. Xxxxx and such individuals
hereinafter referred to as "Consultant Personnel") who perform services for
Consultant hereunder will not be employees of BSC. Consultant Personnel will
at all times remain either employees of Consultant or self-employed
independent contractors. Consultant Personnel will at all times remain under
the supervision and control of Consultant and not under the supervision or
control of BSC, except that BSC, through its Board of Directors, shall have
the authority to specify the services to be provided by Consultant and to
monitor the performance of such services. Consultant and/or Consultant
Personnel, if applicable, will be solely responsible for the payment of its
and/or their own benefits, workers' compensation or contributions to any
similar program, and for fulfilling any tax and other obligations associated
with employment or self-employment. Consultant Personnel are not eligible
to, nor will they, participate in or earn service under any BSC benefits plan
or program now existing or hereafter created for employees of BSC or any of
its subsidiaries or affiliates.
9. REPRESENTATIONS AND WARRANTIES. Consultant represents and warrants
to BSC, for the term of this Agreement, that it is not subject to any
restrictive covenants arising from any consulting or other agreement which
would prohibit or materially affect the services to be rendered pursuant to
this Agreement.
10. NON-COMPETITION. During the term of this Agreement, neither
Consultant nor any Consultant Personnel will perform services that are
similar to the services provided under this Agreement for, or in support of
the activities of, any company that is in direct and substantial competition
with the finishing equipment business of BSC.
11. CONFIDENTIALITY. Consultant agrees that any and all Confidential
Information is and shall remain the property of BSC and shall be held in
strict confidence by Consultant and Consultant
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EXHIBIT 10.1
Personnel solely for the benefit of BSC, and shall not be used or otherwise
disclosed to any other parties at any time, without obtaining the prior
written consent of BSC, except as may be required by laws. "Confidential
Information" includes all nonpublic technical, business and personnel
information, or other nonpublic information which relates to past, present or
future research, development and business activities of BSC and its
subsidiaries and affiliates (including but not by way of limitation
information about employees, customers and suppliers), however communicated
or disclosed to Consultant or Consultant Personnel in connection with the
performance of any services for BSC. Confidential Information shall not
include information which is or becomes generally available to the public
(other than by prohibited acts or omissions of Consultant or Consultant
Personnel). Consultant's obligations under this Paragraph 11 shall survive
termination of this Agreement.
12. CHANGE OF CONTROL. In the event of a Change of Control (as
hereinafter defined) after the Commencement Date hereof, BSC shall,
simultaneously with the Change of Control, pay to Consultant all amounts due
to and including the date of that Change of Control, shall remain obligated
to provide the Director and Officer Liability Insurance provided by Paragraph
6 and, in addition, shall, within five (5) business days after the date of
the Change of Control, pay Consultant a lump sum payment in an amount equal
to twelve (12) times the sum of (i) the monthly fee set forth in Paragraph 3
above, (ii) the most recent monthly medical premiums reimbursed by BSC
pursuant to Paragraph 4(b), and (iii) the $600 monthly car allowance
described in Paragraph 4(c). In the event of a Change of Control at any time
within the six (6) month period following termination of this Agreement (i)
by BSC for reasons other than "cause", or (ii) by Consultant for "good
reason," BSC shall, within five (5) business days after the date of the
Change of Control, pay Consultant a lump sum payment in an amount equal to
six (6) times the sum of (i) the monthly fee set forth in Xxxxxxxxx 0, xxxxx,
(xx) the most recent monthly medical premiums reimbursed by BSC pursuant to
Paragraph 4(b), above, and (iii) the $600 monthly car allowance described in
Paragraph 4(c). "Change of Control" of BSC shall mean: (a) BSC is merged
or consolidated or reorganized into or with another corporation or other
legal person (an "Acquiror") and as a result of such merger, consolidation or
reorganization less than 50% of the outstanding voting securities or other
capital interests of the surviving, resulting or acquiring corporation or
other legal person are owned in the aggregate by the stockholders of BSC,
directly or indirectly, immediately prior to such merger, consolidation or
reorganization, other than by the Acquiror or any corporation or other legal
person controlling, controlled by or under common control with the Acquiror;
(b) BSC sells, transfers or conveys all of its business and/or assets to an
Acquiror, of which less than 50% of the outstanding voting securities or
other capital interests are owned in the aggregate by the stockholders of
BSC, directly or indirectly, immediately prior to such sale, other than by
any corporation or other legal person controlling, controlled by or under
common control with the Acquiror; (c) there is a report filed on Schedule
13D or Schedule 14D-1 (or any successor schedule, form or report), each as
promulgated pursuant to the Exchange Act, or other public announcement
disclosing that any person or group (as the terms "person" and "group" are
used in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act and the
rules and regulations promulgated thereunder) has become the beneficial
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EXHIBIT 10.1
owner (as the term "beneficial owner" is defined under Rule 13d-3 or any
successor rule or regulation promulgated under the Exchange Act) of more than
50% of the issued and outstanding shares of voting securities of BSC, other
than (i) a trustee or other fiduciary holding securities under any employee
benefit plan of BSC or any subsidiary, (ii) a corporation owned directly or
indirectly by the stockholders of BSC in substantially the same proportion as
their ownership of stock in BSC, (iii) Xxxxx X. Xxxxx, his spouse or any of
their descendants or any spouse of their descendants, Xxxxxxx X. Xxxxx, his
spouse or any of their descendants or any spouse of their descendants, any
trust or other arrangement for the benefit of Xxxxx X. Xxxxx, Xxxxxxx X.
Xxxxx, the spouse of either of them, or any of their descendants or the
spouse of any such descendants (Xxxxx X. Xxxxx, Xxxxxxx X. Xxxxx and such
other individuals, trusts or other arrangements, collectively, the "Roche
Family"), or (iv) any group which includes the Roche Family if a majority of
the voting securities of BSC beneficially owned by such group are
beneficially owned by the Roche Family; or (d) individuals who are members
of the Incumbent Board cease to constitute a majority of the Board of
Directors of BSC; or (e) the dissolution or liquidation of BSC is approved by
its stockholders. For this purpose, "Incumbent Board" means (i) the members
of the Board of Directors of the BSC after the Commencement Date and (ii) any
individual who becomes a member of the Board of Directors of the Corporation
after the Commencement Date, if such individual's election or nomination for
election as a Director was approved by the affirmative vote of the then
Incumbent Board.
13. EQUAL EMPLOYMENT OPPORTUNITY. Consultant expressly agrees not to
discriminate against any of its employees or applicants for employment
because of age, race, color, religion, sex, national origin, ancestry,
disability, handicap or veteran status or any other basis prohibited by
applicable federal, state or local law and further agrees to comply with all
applicable rules and regulations relating to such equal employment
opportunity. Consultant further agrees to comply with BSC's policy of
maintaining a business environment free of all forms of discrimination,
including sexual harassment.
14. WAIVER. Any delay or failure of either party hereto at any time to
require performance by the other party of any provision of this Agreement
shall in no way affect the right of such party to require performance of that
or any other provision of this Agreement and shall not be construed as a
waiver of any subsequent breach of that provision, a waiver of the provision
itself, or a waiver of any other right under this Agreement.
15. PUBLICITY. Consultant shall not refer, either directly or
indirectly, to BSC or any of their subsidiaries or affiliates in any
advertising or other published material without the prior written consent of
BSC, which consent may be withheld in BSC's sole discretion.
16. AMENDMENT. No provision of this Agreement shall be deemed amended
by either party unless such amendment shall be in writing and signed by the
party against which the amendment is to be enforced. However, if the scope
of any restriction or requirement contained in this Agreement is too broad to
permit enforcement of such restriction or requirement to its full extent,
then such
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EXHIBIT 10.1
restriction or requirement shall be enforced to the maximum extent permitted
by law, and Consultant consents and agrees that any court of competent
jurisdiction may so modify such scope in any proceeding brought to enforce
such restriction or requirement.
17. ENTIRE AGREEMENT. This Agreement, including all exhibits attached
hereto, constitutes the entire agreement between the parties with respect to
the subject matter hereof; all prior agreements, representations, statements,
negotiations and undertakings on the subject matter hereof are superseded
hereby.
18. INVALIDITY OF ANY PROVISION. If any one or more of the provisions
of this Agreement should be invalid, illegal or unenforceable in any respect
under any applicable statute or rule of law, they are, to that extent, deemed
to be omitted from this Agreement.
19. GOVERNING LAW. This Agreement shall be construed under and
governed by the internal laws, and not the choice of law principles, of the
State of Illinois applicable to contracts to be performed wholly within the
State of Illinois.
20. NOTICE. Any notice or other communication permitted or required
hereunder shall be in writing and provided to the respective party as set
forth below:
(a) If to Consultant, to:
The Xxxxx-Xxxxxxxx Company
0000 Xxxx 00xx Xxxxx
Xxxxxxx Xxxx, XX 00000
Attention: Xx. Xxxxxx X. Xxxxx
(b) If to BSC, to:
Binks Xxxxx Corporation
0000 Xxxxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000-0000
Attention: Chairman of the Board
or, to such other address as either party shall have theretofore
designated by notice in writing.
All written notices are to be delivered by hand, by reputable commercial
delivery service, or by certified mail, return receipt requested. All notices
provided in accordance with this paragraph shall be deemed to have been given
upon the date of delivery as indicated on the written receipt for
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EXHIBIT 10.1
delivery by commercial service or by certified mail, or in the case of hand
delivery, upon the date actually received.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first set forth above.
THE XXXXX-XXXXXXXX COMPANY BINKS XXXXX CORPORATION
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxxxx
------------------------------- -------------------------------
Title: President Title: Chairman of the Board
---------------------------- ----------------------------
Date: October 5, 1998 Date: October 2, 1998
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