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EXHIBIT 10.2
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Agreement"), made and entered into this
24th day of July, 1998, by and between AHL SERVICES, INC., a Georgia corporation
("AHL") and XXXXX X. XXXX (hereinafter referred to as "Consultant").
W I T N E S S E T H:
WHEREAS, pursuant to a Purchase Agreement (as amended, the "Purchase
Agreement") dated June 17, 1998, by and among Gage Marketing Group, LLC
("Gage"), Adistra, LLC ("Adistra"), the members of Adistra and Xxxxxxxxxxx,
Inc., a Georgia corporation as successor in interest to AHL, Xxxxxxxxxxx agreed
to purchase the membership units of Adistra, following the transfer to Adistra
of certain assets of Gage, and all of the equity interests in Gage, Inc.
("Gage-Texas"), Gage Marketing Group De Mexico, S.A. De C.V. ("Gage-Mexico," and
together with Adistra, the "MSS Group");
WHEREAS, Consultant was a shareholder or member, as applicable, of each
entity comprising the MSS Group; and
WHEREAS, the execution and delivery of this Agreement by Consultant and AHL
is a condition for the consummation of the Purchase Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein, the parties hereto, intending to be legally
bound, hereby agree as follows:
SECTION 1. Term and Time.
1.1 Term. The term of Consultant's consulting arrangements hereunder
(the "Consulting Term") shall be the date hereof (the "Term Date") until the
earlier of (i) the three year anniversary of the Term Date, (ii) the termination
by Consultant on at least 90 days' prior written notice, or (iii) the
termination by AHL of the Consultant's service hereunder, upon prior written
notice to the Consultant, for "good cause," as determined in good faith by AHL's
Board of Directors. For purposes of this Agreement, "good cause" for termination
of the Consultant's engagement will exist (A) if the Consultant is convicted of,
pleads guilty to, or admits in writing to any felony or any act of fraud,
misappropriation or embezzlement, (B) if the Consultant has engaged in a
dishonest act or in conduct or activities materially damaging to the property,
business, or reputation of AHL or an
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affiliate of AHL, or (C) if the Consultant fails to comply with the terms of
this Agreement, and, within 30 days after written notice from AHL of such
failure, the Consultant has not corrected such failure or, having once received
such notice of failure and having so corrected such failure, the Consultant at
any time thereafter again fails to comply with the terms of this Agreement by
reason of the same such failure.
1.2 Time. Consultant agrees to devote the requisite effort during the
Consulting Term in places, times and a manner reasonably sufficient to fulfill
the duties, as set forth on Exhibit 1, consistent with past practices of
Consultant in running the business prior to the date hereof.
SECTION 2. Services.
2.1 Consulting Services. Subject to the terms hereof, Consultant hereby
agrees to serve as a consultant to AHL. Throughout the Consulting Term,
Consultant shall provide such consulting and advisory services, and perform such
consulting and advisory duties, as are listed in Exhibit 1. Any and all travel
by Consultant in connection with his performance of such duties shall be by the
mutual consent of the parties. During the Consulting Term, Consultant shall have
access to AHL's corporate staff (including, without limitation, finance, human
resources, information services and corporate development personnel), facilities
and other resources, to the same extent as other senior officers of AHL and as
necessary and reasonable, in the discretion of the President of AHL, in
connection with his performance of duties hereunder. Services shall be rendered
by Consultant both inside and outside the offices of the MSS Group as Consultant
deems appropriate.
2.2 Scope of Consulting Services. The scope of services and duties set
forth in Section 2.1 hereof and Exhibit 1 shall encompass services and duties
comparable to the services and duties now performed by Consultant for the MSS
Group. Consultant shall perform such services and duties in a similar manner as
Consultant has performed similar services and duties for the MSS Group in the
past.
2.3 Position Reporting. Consultant shall hold the position of President
of AHL's Marketing Support Services division so long as Consultant's time
commitment is sufficient, in the sole opinion of the President of AHL, to
properly manage and operate such business. During the Consulting Term,
Consultant shall report to the President of AHL, currently Xx. Xxxxxx X. Xxxxxx.
SECTION 3. Compensation.
3.1 Compensation. AHL will pay Consultant a consulting fee as set forth
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in Exhibit 1. AHL will also reimburse Consultant for any reasonable business
expenses incurred by him on behalf of, and at the request of, AHL, subject to
AHL's expense reimbursement policies and procedures in effect from time to time
and that are applicable to senior management of AHL and its affiliates.
Reimbursable business expenses will not include any personal expenses.
3.2 Effect of Termination. Upon the termination of the engagement of
Consultant hereunder by AHL without good cause, Consultant shall be entitled to
the compensation under Section 3.1 until the third anniversary of the Term Date.
3.3 Consulting Payments. AHL and Consultant hereby acknowledge that the
compensation payable to Consultant hereunder has been fully negotiated and
represents fair consideration for the consulting services to be rendered by
Consultant. Consultant further acknowledges that he is aware of the federal and
state income tax consequences which are applicable to income received for
consulting services. Neither Consultant nor AHL shall report the compensation
received by Consultant hereunder on any federal or state income tax return in
any manner other than as payment for consulting services, and neither Consultant
nor AHL shall assert in connection with any claim for a refund for income taxes
paid, in connection with any administrative or judicial proceeding, or in
connection with any proposed or actual assessments of additional income taxes
that the compensation received by Consultant hereunder was paid by AHL other
than in consideration for the consulting services which Consultant is to render
hereunder.
3.4 Independent Contractor. In rendering services hereunder, Consultant
shall be acting as an independent contractor. This Agreement is not an
employment agreement and Consultant is not and will not become by performance of
services hereunder an employee of AHL. Consultant acknowledges that, as a
consultant, he shall not be entitled to any employee benefits, retirement
benefits, stock option benefits, health benefits, or other benefits which are
customarily made available to employees of AHL.
3.5 Other Commitments. AHL acknowledges that Consultant owns and
manages the Excluded Businesses and the Affiliates of such businesses, and that
Consultant will continue to manage such businesses during the term hereof. AHL
consents to such activities and acknowledges that such activities in no way
represent a corporate opportunity that Consultant is obligated to offer to AHL
or its Affiliates. In addition, Consultant may continue to serve on the Board of
Directors of Xxxxxxx Companies, Inc., Supervalu Inc. and Fingerhut Companies,
Inc., and Consultant may serve as director of any other company that is not in
competition with AHL.
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3.6 Indemnification and Insurance. AHL will (a) indemnify Consultant to
the fullest extent available under Georgia law, as amended from time to time,
for any and all acts performed or required to be performed in furtherance of his
duties under the terms of this Agreement, (b) include Consultant for coverage
under the directors and officers insurance policy maintained for the senior
officers of AHL, (c) continue to maintain such insurance policy in full force
and effect during the Consulting Term, and (d) provide Consultant, within five
days of the date of this Agreement, with a copy of AHL's Directors and Officers
insurance policy.
SECTION 4. Miscellaneous.
4.1 Governing Law. This Agreement shall be deemed to be made in, and in
all respects shall be interpreted, construed and governed by and in accordance
with, the laws of the State of Minnesota (without regard to conflicts of law
principles thereof).
4.2 Headings. The section and paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
4.3 Notices. All notices, communications and deliveries hereunder shall
be in writing, signed by or on behalf of the party making the same and shall be
delivered personally or by telecopy transmission or sent by registered or
certified mail (return receipt requested) or by any national overnight courier
service (with postage and other fees prepaid) as follows:
(a) If to Consultant, addressed to:
Gage Marketing Group, LLC
00000 Xxxxxxx 00
Xxxxxxxx, Xxxxxxxxx 00000-0000
Attn: Xxxxx X. Xxxx
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxx & Whitney LLP
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxxx X. XxXxxxxxx, Esq.
Telecopy No.: (000) 000-0000
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(b) If to AHL, addressed to:
AHL Services, Inc.
0000 Xxxxxxxxx Xxxx, X.X.
Xxxxx 0000, Xxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
with a copy to:
King & Spalding
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
or to such other representative or at such other address of a party as such
party hereto may furnish to the other parties in writing. Any such notice,
communication or delivery shall be deemed given or made (a) on the date of
delivery if delivered in person (by courier service or otherwise), (b) upon
transmission by telecopy if receipt is confirmed by telephone, provided
transmission is made during regular business hours, or if not, the next business
day, or (c) on the fifth business day after it is mailed by registered or
certified mail.
4.4 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
4.5 Entire Agreement; Amendments. This Agreement is the entire
agreement and understanding between the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements and understandings
relating to such subject matter. This Agreement may be modified only by written
instrument signed by each of the parties hereto.
4.6 Waiver of Conditions. Any party may, at its option, waive in
writing any or all of the conditions herein contained to which its obligations
hereunder are subject. No waiver of any provision of this Agreement, however,
shall constitute a waiver of any other provision (whether or not similar), nor
shall such waiver constitute a continuing waiver unless otherwise expressly
provided.
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4.7 Survival. Each of the representations, obligations and agreements
of the parties included or provided for herein shall survive the consummation of
the transactions contemplated by this Agreement, notwithstanding any
investigation heretofore or hereafter made by any of them or on behalf of any of
them.
4.8 Assignment. This Agreement and all of the provisions hereof shall
be binding upon, and inure to the benefit of, Consultant and AHL and, in the
case of AHL, its successors and assigns and, in the case of Consultant, his
personal representatives, executors, heirs, beneficiaries and permitted assigns.
4.9 Litigation; Prevailing Party. In the event of any litigation with
regard to this Agreement, the prevailing party shall be entitled to receive from
the non-prevailing party and the non-prevailing party shall pay all reasonable
fees and expenses of counsel for the prevailing party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed, as of the date first above written.
/s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx
AHL SERVICES, INC.
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer and Vice
President
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EXHIBIT 1
Duties and Compensation of Consultant
1. During the Consulting Term, Consultant will be responsible, subject to the
approval and direction of the President of AHL, for:
The operations and strategic direction of the Marketing Support Services
("MSS") division of AHL, including the direct management of the general
managers of such division, as such division is described in the attached
June, 1998 presentation by AHL to Consultant. Such division will include
the financial results of RightSide Up, Inc. AHL will use its best efforts
to encourage the coordination and cooperation of the sales and operational
activities of RightSide Up, Inc. and MSS but such operations may be treated
separately for internal management reporting purposes. AHL will also
include in such division any acquisitions by AHL of businesses in the same
industry as such division, and AHL will use its best efforts to cause such
acquisitions to report to Consultant, if in the sole discretion of the
President of AHL if it is consistent with AHL's strategic and operational
objectives to have such acquired businesses report to Consultant.
2. During the Consulting Term, Consultant will be compensated in the following
manner:
A. During months 1 - 18, Consultant will be compensated at an amount
equal to $150,000 per year, for spending 1/2 (one-half) of
Consultant's time performing the services listed above in paragraph 1.
B. During months 19 - 36, Consultant will be compensated at an amount
equal to $100,000 per year, for spending 1/4 (one-quarter) of
Consultant's time performing the services listed above in paragraph 1.
C. Consultant shall have the option to extend the term of paragraph A for
an additional 6 months, with a corresponding decrease of 6 months for
the term of paragraph B.
3. During months 19 - 36, AHL will identify or hire an individual for the
position of Chief Operating Officer of AHL/Gage. Consultant agrees to train
this individual for this position and assume the role of mentor to this
individual.
4. A reasonable amount of time spent by Consultant managing the activities of
Gage International shall be included in determining if Consultant has met
the obligations set forth in Sections 2.A and 2.B above.
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