AMENDED AND RESTATED
CONSULTING AGREEMENT
This Agreement, as amended and restated, is made as of January 30, 2001,
between XXXXX CORPORATION, a Delaware corporation ("Xxxxx") and THE
XXXXX-XXXXXXXX COMPANY ("Consultant").
WHEREAS, Xxxxx desires to continue 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, Xxxxx and Consultant hereby agree as
follows:
1. SERVICES. During the Management Term (as defined below), Consultant
will make available Xxxxxx X. Xxxxx to continue to serve as the President,
Chief Executive Officer and the Chairman of the Board of Directors of Xxxxx
to provide such management services consistent with such positions as
reasonably requested by the Board of Directors of Xxxxx from time to time. In
such capacity, Xxxxxx X. Xxxxx shall primarily focus his attention on the
sale of Xxxxx, SEC filings (including the Form 10-K and proxy), annual
shareholder meeting (however, he need not attend the meeting), shareholder
communication (including meeting with large shareholders), CIT/Xxxxx
financing, and litigation matters. Xxxxxx X. Xxxxx will be expected to devote
an average of four days per week to the business and affairs of Xxxxx during
the Management Term. The parties acknowledge and agree that, effective April
27, 2001 Xxxxxx X. Xxxxx shall resign from his position as President, Chief
Executive Officer and Chairman of the Board of Directors of Xxxxx and shall
resign as President-Director General and a member of the Board of Directors
of Xxxxx X.X. and as an officer and director of any other subsidiary of
Xxxxx. After April 27, 2001, Xxxxxx X. Xxxxx shall not serve as an officer or
director of, or provide management services to, Xxxxx or any subsidiary
thereof. During the Consulting Term (as defined below), Consultant will make
available Xxxxxx X. Xxxxx to provide such consulting services at such times
and in such number of consulting hours as reasonably requested by Xxxxx from
time to time; provided, however, that Xxxxxx X. Xxxxx will not be required to
devote more than forty (40) hours per month to the providing of non-sale
related consulting services to Xxxxx without his prior written consent;
further provided, however, that such consulting services shall not include
restructuring Xxxxx unless otherwise agreed to by Consultant. Xx. Xxxxx may
take planned vacations at reasonable times (and he will inform Xxxxx of such
vacations 30 days in advance) and the taking of such planned vacations shall
not be deemed a violation of this Agreement.
2. TERM. The Management Term shall commence on the date hereof and
shall end on April 27, 2001. The Consulting Term shall commence on April 28,
2001, and shall continue until October 31, 2001.
3. COMPENSATION. During the Management Term, Xxxxx shall pay
Consultant a monthly fee of $25,000 which amount shall be payable on the
first day of each month during the Management Term. Consultant acknowledges
that he has received the monthly fee for January and February, 2001. During
the Consulting Term, Consultant shall be entitled to receive a fee of $325
for each hour spent by Xxxxxx X. Xxxxx in providing consulting services to
Xxxxx
including, without limitation, all time spent in rendering advice or
assistance on various operational or financial matters, travel time incurred
at the request of Xxxxx and all time spent in litigation support matters
(including the giving of testimony and background information and preparing
for and attending depositions). On the first day of the Consulting Term and
on the first day of each calendar month thereafter during the Consulting
Term, Xxxxx shall deliver to the Consultant a retainer in an amount
determined by Xxxxx which it believes will provide sufficient compensation
for the consulting services to be provided by Consultant during such month.
The retainer creates a credit balance to be applied against Consultant's
invoices for services rendered to Xxxxx during the Consulting Term. When the
retainer and the credit balance has been exhausted, Consultant shall have no
further obligation to provide any consulting services to Xxxxx until an
additional retainer has been paid to Consultant. If a retainer amount has
been paid to Consultant which has not been credited against invoices at the
time of termination of this Agreement, the remaining amount (after satisfying
all invoices of Consultant) will be refunded, without interest, to Xxxxx.
Consultant will, within ten (10) days after the completion of each calendar
month, submit to Xxxxx a statement detailing the consulting services provided
to Xxxxx during the preceding month, the number of hours spent by Xxxxxx X.
Xxxxx in providing such consulting services and the balance remaining on the
retainer as of the end of such month.
4. OPTION. As of the date hereof, Xxxxxx X. Xxxxx has been granted
options to purchase 113,000 shares of Xxxxx stock (100,000 shares at an
exercise price of $17.25 per share; 10,000 shares at an exercise price of
$14.625 per share; and 3,000 shares at an exercise price of $13.50 per
share). Xxxxx acknowledges and agrees that (i) each of the options will be
fully vested upon Xxxxxx X. Xxxxx'x resignation on the last day of the
Management Term, and (ii) each option has a ten (10) year exercise period
from the date of grant. Xx. Xxxxx'x resignation shall be treated as a
retirement with respect to such options.
5. TRAVEL AND OTHER EXPENSES. During the Management Term, Xxxxx 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 Management Term with respect
to Xxxxxx X. Xxxxx and his dependents, and (c) the $600 per month car
allowance paid by Consultant with respect to Xxxxxx X. Xxxxx. During the
Consulting Term, Xxxxx will reimburse Consultant for 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.
Such reimbursements shall be made within five (5) days following Consultant's
submission of receipts for such expenses.
6. TERMINATION. Xxxxx may terminate this Agreement upon seven (7)
days' advance written notice to Consultant; provided, however, that this
Agreement may be terminated immediately by Xxxxx for "cause" (as defined
below). During the Management Term, this Agreement may be terminated by
Consultant only for "good reason" (as defined below). During the Consulting
Term, this Agreement may not be terminated by Consultant.
Upon termination of this Agreement, Consultant shall be entitled to
compensation pursuant to Paragraph 3 for services actually rendered to Xxxxx
through the date of termination, reimbursement of properly incurred and
unreimbursed expenses and Consultant shall be relieved of any obligation
hereunder to render further services to Xxxxx. Except as set forth below in
this
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Section 6, no further payments shall be made or owed by Xxxxx to Consultant
under this Agreement; provided, however that Consultant's rights with respect
to indemnification protection shall be determined pursuant to Paragraph 7,
below. In the event termination of this Agreement occurs (a) prior to April
28, 2001 and (b) is by Xxxxx for reasons other than "cause" (as defined
below) or is by Consultant for "good reason" (as defined below), then Xxxxx
shall pay to Consultant on the termination date the Retainer (as defined
below) and the Consultant shall remain eligible for the Sale Bonus (as
defined below) pursuant to the terms hereof. In the event that termination of
this Agreement by Xxxxx occurs (a) on or after April 28, 2001 and prior to
October 31, 2001 and (b) is for reasons other than "cause" (as defined
below), then Consultant may retain the Retainer and shall remain eligible for
the Sale Bonus (as defined below) pursuant to the terms hereof. In the event
that this Agreement is terminated by Xxxxx for "cause" (as defined below) at
any time during the term hereof, Consultant shall not be paid the Retainer
(and if such Retainer has already been paid, Consultant shall promptly refund
and return such Retainer to Xxxxx) and Consultant shall not be eligible for
the Sale Bonus (as defined below).
Unless this Agreement has been earlier terminated by Xxxxx for "cause"
(as defined below), on the earlier of (i) five (5) days following the Board
of Directors' determination that Xxxxx shall abandon the sale process to be
sold, (ii) the termination of this Agreement by Xxxxx without "cause" or by
Consultant for "good reason", or, (iii) April 27, 2001, Xxxxx shall pay
Consultant $156,000 (the "Retainer") in consideration of Consultant making
Xxxxxx X. Xxxxx available to provide the consulting services to be performed
by Consultant during the Consulting Term pursuant to the terms hereof. In the
event that Consultant fails to provide the consulting services to be performed
by Consultant during the Consulting Term pursuant to the terms hereof (other
than due to death or disability), Consultant shall promptly return and refund
the Retainer to Xxxxx.
For purposes of this Paragraph 6, "cause" shall mean (A) the resignation
of Xxxxxx X. Xxxxx from the position of President and Chief Executive Officer
of Xxxxx or a member of the Xxxxx Board of Directors during the Management
Term (other than in conjunction with the termination of this Agreement by
Consultant for "good reason"), (B) the willful misconduct of 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 Xxxxx, or (C) the
willful fraud or material dishonesty of any Consultant Personnel, including
Xxxxxx X. Xxxxx, in connection with the performance of duties and services
for Xxxxx. 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 resolution 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.
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For purposes of this Paragraph 6, "disability" shall mean the inability
of Xxxxxx X. Xxxxx to perform his duties for Xxxxx 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 6, "good reason" shall mean (x) any
failure by Xxxxx to comply with the compensation provisions hereof or any
other material breach by Xxxxx of its obligations hereunder, which failure or
breach is not remedied by Xxxxx within fifteen (15) days of receipt of
written notice thereof from Consultant, or (y) the relocation of Xxxxx'
headquarters outside the metropolitan Chicago area, such that Consultant
Personnel will be required to relocate in order to perform services hereunder.
7. INDEMNIFICATION. During the Management Term and continuing for a
period of three (3) years thereafter, Xxxxx 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 Xxxxx' charter and by-laws, and shall
become a party to any indemnification or similar agreements which Xxxxx may
from time to time enter into with its directors or officers. The provisions
of this Section 7 shall survive termination of this Agreement.
8. ASSIGNMENT. Neither Consultant nor Xxxxx may assign this Agreement
without the prior written consent of the other. Any assignment prohibited
hereby shall be null and void.
9. EMPLOYMENT STATUS. Xxxxx 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 Xxxxx. 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 Xxxxx, except that Xxxxx, 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 Xxxxx benefits plan
or program now existing or hereafter created for employees of Xxxxx or any of
its subsidiaries or affiliates.
10. REPRESENTATIONS AND WARRANTIES. Consultant represents and warrants
to Xxxxx, 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.
11. NON-COMPETITION. During the Management Term, 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
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competition with the finishing equipment business of Xxxxx. From April 28,
2001 through April 30, 2002, neither Consultant nor any Consultant Personnel
will perform services to (a) Illinois Tool Works Inc. or (b) any person or
entity which has entered into a confidentiality agreement with or for the
benefit of Xxxxx during the current sales process to sell Xxxxx.
12. CONFIDENTIALITY. Consultant agrees that any and all Confidential
Information is and shall remain the property of Xxxxx and shall be held in
strict confidence by Consultant and Consultant Personnel solely for the
benefit of Xxxxx, and shall not be used or otherwise disclosed to any other
parties at any time, without obtaining the prior written consent of Xxxxx,
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 Xxxxx 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
Xxxxx. 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 12 shall survive termination of this Agreement.
13. CHANGE OF CONTROL. In the event of a Change of Control (as
hereinafter defined) of Xxxxx on or prior to April 30, 2002, Xxxxx 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
7 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 Four Hundred Sixty-Eight Thousand Dollars ($468,000) (the "Sale Bonus").
Notwithstanding the foregoing, in the event this Agreement is terminated by
Xxxxx for "cause" at any time during the term hereof or by the Consultant for
reasons other than "good reason" during the Management Term, Consultant shall
not be entitled to the payment contemplated by the immediately preceding
sentence upon a Change of Control. "Change of Control" of Xxxxx shall mean:
(a) Xxxxx 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 Xxxxx, directly or indirectly, immediately prior to such
merger, consolidation or reorganization; (b) Xxxxx or Xxxxx X.X. sells,
transfers or conveys all or substantially all of its business and/or assets
(including, without limitation, a sale, conveyance or transfer by Xxxxx of a
majority of the issued and outstanding stock of Xxxxx X.X. to an unaffiliated
third party) 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 Xxxxx, directly or indirectly, immediately prior to such
sale; (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 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 Xxxxx, other
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than (i) a trustee or other fiduciary holding securities under any employee
benefit plan of Xxxxx or any subsidiary, (ii) a corporation owned directly or
indirectly by the stockholders of Xxxxx in substantially the same proportion
as their ownership of stock in Xxxxx, (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 Xxxxx 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 Xxxxx; or (e) the dissolution or liquidation of Xxxxx or Xxxxx X.X. is
approved by its stockholders. For this purpose, "Incumbent Board" means (i)
the members of the Board of Directors of the Xxxxx after the Commencement
Date, and (ii) any individual who becomes a member of the Board of Directors
of the Corporation after the date hereof, if such individual's election or
nomination for election as a Director was approved by the affirmative vote of
the then Incumbent Board.
14. CIT WAIVER. Consultant shall use its best efforts to secure an
irrevocable waiver by CIT of Section 10(j) of The CIT Group/Business Credit,
Inc. and Xxxxx Electrostatic, Inc. Loan Agreement dated October 21, 1998, as
amended, by and between Xxxxx and CIT so that such waiver has been obtained
and is effective prior to the earlier of (i) April 27, 2001 and (ii) the date
that Xxxxxx X. Xxxxx is no longer the Chief Executive Officer of Xxxxx. Such
waiver shall be at no cost or expense or other detriment to Xxxxx.
15. 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 Xxxxx' policy of
maintaining a business environment free of all forms of discrimination,
including sexual harassment.
16. 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.
17. PUBLICITY. Consultant shall not refer, either directly or
indirectly, to Xxxxx or any of their subsidiaries or affiliates in any
advertising or other published material without the prior written consent of
Xxxxx, which consent may be withheld in Xxxxx' sole discretion.
18. 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
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extent, then such 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.
19. 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, including,
without limitation, the Amended and Restated Consulting Agreement dated March
1, 2000 between the parties, are superseded hereby.
20. 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.
21. 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.
22. 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 Xxxxx, to:
Xxxxx Corporation
0000 Xxxxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000-0000
Attention: Chairman of the Board
with a required copy to:
Vedder, Price, Xxxxxxx & Kammholz
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxx X. Xxxxxx, Esq.
or, to such other address as either party shall have therefore
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
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for 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 XXXXX CORPORATION
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx Name: Xxxxxx X. Xxxxx
Title: President Title: President
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