Exhibit 10.8
CONSULTING AGREEMENT
THIS AGREEMENT is made as of March 1, 2002, by and among Xxxxxxx X. Xxxxxxx
("Xxxxxxx"), Xxxxxxxx Corporation, a New York corporation ("Xxxxxxxx"), and
EnPro Industries, Inc., a North Carolina corporation ("EnPro" and with Xxxxxxxx,
the "Companies").
WITNESSETH:
WHEREAS, Xxxxxxxx has announced its intention to spin-off its Engineered
Industrial Products business unit that would result in Xxxxxxxx becoming two
independent companies, Xxxxxxxx and EnPro;
WHEREAS, Xxxxxxxx, as EnPro's sole shareholder, and EnPro are desirous that
Holland serve initially as a consultant to Xxxxxxxx in connection with the
spin-off and then as a director and non-executive Chairman of the Board of the
Board of Directors of EnPro; and
WHEREAS, Holland, who is also a director of the board of Directors of
Xxxxxxxx, is desirous of serving as a consultant and then as a director and
non-executive Chairman of the Board of the Board of Directors of EnPro,
NOW THEREFORE, in consideration of the above-stated premises and mutual
promises and covenants hereinafter contained it is agreed as follows:
1. ANTICIPATED ELECTION TO POSITION OF DIRECTOR AND NON-EXECUTIVE
CHAIRMAN
Xxxxxxxx, as sole shareholder of EnPro, has requested that Holland
serve as a consultant and then as a director of EnPro and to serve as
the Non-Executive Chairman of the Board of Directors of EnPro. Holland
has agreed to do so, and accordingly it is expected that the Board of
Directors of EnPro will elect Holland to the position of Non-Executive
Chairman of the Board of Directors of EnPro. The Companies anticipate
that Holland will serve in these positions for the foreseeable future.
2. RESPONSIBILITIES
The responsibilities ("Responsibilities") of Holland under this
Agreement are broken into two components as described below in this
Section 2. The responsibilities of Holland in serving as a consultant
to Xxxxxxxx prior to the spin-off are as follows:
o Providing advice and counsel in the initial formation and
composition of an independent Board of Directors of EnPro in
connection with the spin-off of EnPro from Xxxxxxxx (the
"Spin-off");
o Assisting in the selection and development of a senior management
team, including assisting the chief executive officer of EnPro in
developing his skills as the leader of an independent public
company;
o Providing advice relating to the corporate governance of EnPro;
The responsibilities of Holland in serving as the Non-Executive
Chairman of EnPro are as follows:
o Serving as a director and chairman of and presiding over the
meetings of the Board of Directors of EnPro, presiding over the
meetings of the shareholders of EnPro, and serving as chairman of
and presiding over the meetings of any Executive Committee or
similar committee of the Board of Directors of EnPro;
o Providing advice relating to the ongoing corporate governance of
EnPro;
o Participating in communications with financial analysts, the
business community and the news media regarding EnPro;
o Engaging in such other activities as, from time to time, may be
requested by the Board of Directors of EnPro and that are
consistent with service as a director and Non-Executive Chairman
of EnPro;
o Performing all of the foregoing Responsibilities in a manner
consistent with the duties of a director of a North Carolina
corporation.
For the period ending on the completion of the Spin-off, Holland
acknowledges that he will owe fiduciary duties to Xxxxxxxx, as sole
shareholder of EnPro. Following the completion of the Spin-Off,
Holland's fiduciary duties will be those of a director of a public
company. Holland acknowledges that those duties include, among others,
the duty of loyalty and duty of due care, and an ancillary duty of
confidentiality. Holland also acknowledges that service as a director
of EnPro may prevent him from serving in any capacity with entities
that compete with EnPro, and confirms to the Companies that he
presently knows of no conflicting interests, agreements or obligations
with any other party that would interfere with his performance of the
Responsibilities, and is under no contractual or other obligation or
prohibition that prohibits his service
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as a director and Non-Executive Chairman of the Board of Directors of
EnPro or performing the Responsibilities.
3. HOURS AND LOCATION
Holland will perform the Responsibilities at least in part at EnPro's
principal offices (which are temporarily located at Xxxxxxxx'x
principal offices in Charlotte, North Carolina) or at such other
locations as EnPro may reasonably request. It is anticipated that
Holland will need to be available for at least 16 hours each week to
perform the Responsibilities. Holland shall perform the
Responsibilities in a manner consistent with his duties as a director
of EnPro. To assist Holland in the performance of the
Responsibilities, the Companies will provide access to and utilization
of the Companies' incidental support services, such as office space
and secretarial assistance.
4. FEES
Holland shall be paid the sum of Thirty-six Thousand Dollars ($36,000)
per month for the period beginning March 1, 2002 and ending June 30,
2002. Beginning July 1, 2002, Holland shall be paid Fifteen Thousand
Dollars ($15,000) per month. The fees referred to above shall be in
addition to any compensation or fees to which Holland may be entitled
as a director of EnPro. Although the Board of Directors of EnPro shall
have the continuing authority to remove Holland from the position of
Non-Executive Chairman or from the position of director at any time,
EnPro shall nevertheless pay Holland the fees set forth above through
April 30, 2003. Holland shall also be reimbursed for reasonable and
necessary out-of-pocket travel expenses (including, but not limited
to: airfare, hotel, meals, rental car, telephone, and incidental
expenses) incurred by him in the performance of the Responsibilities
and in traveling to and from the locations at which the
Responsibilities are rendered, provided that such expenses are in
accordance with the company's standard reimbursement policy for
directors regarding such type of expenses in effect at the time they
are made (initially, these policies are the same as Xxxxxxxx'x
standard policies for reimbursements to its directors). Invoices for
fees and expenses to be reimbursed will be accompanied by supporting
documentation in accordance with EnPro's standard policies for
directors. Liability for the payment of fees, granting of stock and
reimbursement of expenses shall be as set forth in Section 8, below.
5. INDEMNIFICATION
As a director of EnPro, Holland will be entitled to indemnification
due to him as a director of EnPro under the applicable provisions of
EnPro's charter documents and North Carolina law. Until the completion
of the Spin-off, Holland will also be entitled to indemnification from
Xxxxxxxx to the full extent
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of the applicable provisions of Xxxxxxxx'x charter documents and New
York law. In addition, EnPro shall enter into an Indemnification
Agreement with Holland in the form adopted by the Board of Directors
of EnPro.
6. NATURE OF RELATLONSHIP AND LIMITATION OF AUTHORITY
It is understood that in the performance of the Responsibilities
Holland is acting solely as a director and not as an officer or
employee of the Companies. Further, nothing in this Agreement shall be
construed or applied to create a relationship of partners, agency,
joint venturers or of employer and employee. Holland will have only
such authority as he is from time to time granted or delegated in
writing by the Companies and accordingly Holland acknowledges that he
is not authorized to sign any agreements, contracts or other
obligations of EnPro without specific authorization. Holland also
understands that the Companies have no obligation to him under State
or Federal laws regarding employee liability.
7. TAXES
Holland shall be liable for all taxes applicable to any amounts paid
to Holland under this Agreement, and the Companies will neither
withhold nor pay any amounts for Federal, State or Municipal income
tax, Social Security, Unemployment or Workmen's Compensation. In
accordance with current law, the Companies shall annually file with
the Internal Revenue Service a Form 1099-MISC., U. S. Information
Return for Recipients of Miscellaneous Income, reflecting the gross
annual payments by the Companies to Consultant, net of any reimbursed
expenses incurred by Holland on behalf of the Companies, pursuant to
this Agreement. Holland hereby acknowledges his personal income tax
liability for the self-employment tax imposed by Section 1401 of the
Internal Code, and the payment, when applicable, of estimated
quarterly Internal Revenue Service Form 1040-ES, Declaration of
Estimated Tax by Individuals. Upon reasonable request by the
Companies, Holland agrees that he will provide evidence of his
compliance with the above applicable tax laws in regard to amounts
received under this Agreement.
8. SEVERAL OBLIGATIONS OF XXXXXXXX AND ENPRO
The obligations of the Companies under this Agreement are several and
not joint. Xxxxxxxx shall be liable for all Fees, expense
reimbursements and indemnification obligations relating to Services
provided before the completion of the Spin-off. EnPro shall be liable
for all Fees, expense reimbursements and indemnification obligations
relating to the Services provided on the date of the Spin-off and at
all times thereafter.
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IN WITNESS WHEREOF, the parties have hereunto executed this Agreement as of
the date and year first above written.
XXXXXXXX CORPORATION
/s/ Xxxxx X. Burner
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Xxxxx X. Burner
Chairman and Chief Executive Officer
ENPRO INDUSTRIES, INC.
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
President and Chief Executive Officer
XXXXXXX X. XXXXXXX
/s/ Xxxxxxx X. Xxxxxxx
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