EXHIBIT 10.39
CONSULTANT AGREEMENT
This Consultant Agreement ("AGREEMENT"), including the attached Exhibit A,
is entered into between CORNELL CORRECTIONS, INC., a Delaware corporation having
offices at 0000 Xxxx Xxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000 ("COMPANY"),
and XXXXX X. XXXXXXX, an individual currently residing at 0000 Xxxxx, Xxxxxxx,
Xxxxx 00000 ("CONSULTANT"), on December 15, 1999, to be effective as of
September 1, 1999 (the "EFFECTIVE DATE").
WITNESSETH:
WHEREAS, the Company is desirous of obtaining the services of Consultant
pursuant to the terms and conditions and for the consideration set forth in this
Agreement, and Consultant is desirous of providing services to the Company
pursuant to such terms and conditions and for such consideration;
NOW, THEREFORE, for and in consideration of the mutual promises,
covenants, and obligations contained herein, the Company and Consultant agree as
follows:
ARTICLE 1: TERM AND DUTIES:
1.1 The Company agrees to retain Consultant, and Consultant agrees to
provide services to the Company, beginning as of the Effective Date and
continuing as set forth on Exhibit A, subject to the terms and conditions of
this Agreement. The Company and Consultant agree that this Agreement shall
automatically terminate at the end of the Initial Term (as defined on Exhibit
A), unless the Company and Consultant both agree in writing to renew the
Agreement for one additional period commencing at the end of the Initial Term
and continuing for a period of time as set forth on Exhibit A (the "RENEWAL
TERM").
1.2 Consultant initially shall perform the services and duties set forth
on Exhibit A.
1.3 Consultant shall, during the Initial Term and any Renewal Term, devote
Consultant's best efforts to the business and affairs of the Company. Consultant
shall serve as a director and as non-executive Chairman of the Board, as set
forth on and subject to Exhibit A.
1.4 In connection with Consultant's performance of services for the
Company, the Company will provide Consultant access to confidential information
pertaining to the business and services of the Company as is appropriate for
Consultant's duties and responsibilities. The Company also shall provide to
Consultant the opportunity to develop business relationships pertaining to the
business and services of the Company that are appropriate for Consultant's
duties and responsibilities, and all business and corporate opportunities made
known to Consultant during the Initial Term and any Renewal Term pertaining to
the business and services of the Company shall belong to the Company.
1.5 It is understood and agreed that Consultant will perform the
consulting services as an independent contractor and Consultant will not
be deemed to be an employee of the Company. Consultant will not be entitled to
any benefits provided by the Company to its employees except as specifically
provided hereunder. Consultant agrees that he will be personally responsible for
any and all taxes and other payments due on payments received by him from the
Company hereunder.
1.6 It is understood and agreed that Consultant shall have no authority to
act on behalf of the Company or to bind the Company to any contract or
obligation whatsoever. The foregoing shall not affect the Consultant's ability
to identify himself as a director and as non-executive Chairman of the Board
during the time he holds such positions.
ARTICLE 2: COMPENSATION AND BENEFITS
2.1 Consultant's monthly base compensation during the Initial Term and
during the Renewal Term, if applicable, shall be not less than the amounts set
forth under the heading "Monthly Base Compensation" on Exhibit A, subject to
increase at the sole discretion of the Company, which shall be paid in monthly
installments. Any calculation to be made under this Agreement with respect to
Consultant's Monthly Base Compensation shall be made using the then current
Monthly Base Compensation in effect at the time of the event for which such
calculation is made. Consultant shall be entitled to a Fixed Bonus as described
and subject to the terms on Exhibit A. Consultant shall be entitled to a Monthly
Non-Compete Fee during the Initial Term as described on Exhibit A. The Monthly
Base Compensation, the Fixed Bonus and the Monthly Non-Compete Fee are
hereinafter referred to as the "AGREED PAYMENT AMOUNT," it being understood that
the Monthly Non-Compete Fee is paid during the Initial Term only but
Consultant's obligations with respect thereto shall remain in effect for the
full Covenant Period defined in Section 5.2.
2.2 During the effectiveness of this Agreement (both during the Initial
Term and the Renewal Term, if applicable), Consultant shall be allowed to
participate solely in those benefit plans and programs listed on Exhibit A.
Consultant shall not be entitled to participate in any benefit plans and
programs not expressly referenced herein. Notwithstanding anything to the
contrary herein, upon termination of the effectiveness of this Agreement for any
reason, Consultant (or his heirs, administrators or legatees) shall be entitled
to receive benefits vested or accrued with respect to Consultant's service prior
to such termination according to the provisions of such benefit plans and
programs.
2.3 The Company shall not by reason of this Article 2 be obligated to
institute, maintain, or refrain from changing, amending, or discontinuing, any
such benefit plan or program, so long as such actions are similarly applicable
to covered participants generally. Moreover, except as specifically provided
herein to the contrary, none of the benefits or arrangements described in this
Article 2 shall be secured or funded in any way, and each shall instead
constitute an unfunded and unsecured promise to pay money in the future
exclusively from the general assets of the Company.
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2.4 The Company may withhold from any compensation, benefits, or amounts
payable under this Agreement all federal, state, city, or other taxes as may be
required pursuant to any law or governmental regulation or ruling.
ARTICLE 3: TERMINATION PRIOR TO EXPIRATION OF INITIAL TERM OR RENEWAL TERM, IF
ANY, AND EFFECTS OF SUCH TERMINATION:
3.1 Notwithstanding any other provisions of this Agreement, the Company
shall have the right to terminate the consulting relationship created by this
Agreement at any time prior to the expiration of the Initial Term or any Renewal
Term for any of the following reasons:
a. For "CAUSE" upon the good faith determination by the Company's
Board of Directors that Cause exists for the termination of the consulting
relationship. As used in this Section 3.1.a, the term Cause shall mean (i)
Consultant's gross negligence or willful misconduct in the performance of the
duties and services required of Consultant pursuant to this Agreement, (ii)
Consultant's final conviction of a felony, or (iii) Consultant's material breach
of any provision of this Agreement which is willful and intentional and which
remains uncorrected for sixty (60) days following written notice to Consultant
by the Company of such breach;
b. for any other reason whatsoever, including termination without
Cause, in the sole discretion of the Company, on ninety (90) days prior written
notice to Consultant;
c. upon Consultant's death; or
d. upon Consultant's becoming disabled as to entitle Consultant to
benefits under the Company's long-term disability plan or, if Consultant is not
eligible to participate in such plan or if such plan is not available, then
Consultant is permanently and totally unable to perform Consultant's duties for
the Company as a result of any medically determinable physical or mental
impairment as supported by a written medical opinion to the foregoing effect by
a physician selected by the Company and Consultant's spouse or other member of
Consultant's immediate family. With respect to options granted pursuant to the
Amended and Restated 1996 Stock Option Plan, Consultant shall be considered
"disabled" in accordance with, and "disability" shall have the meaning set forth
in, the Amended and Restated 1996 Stock Option Plan, as in effect at the time of
such disability.
The termination of Consultant's consulting relationship by the Company
prior to the expiration of the Initial Term shall constitute a "TERMINATION FOR
CAUSE" if made pursuant to Section 3.1.a, and the effect of such termination is
specified in Section 3.4. The termination of Consultant's consulting
relationship by the Company prior to the expiration of the Initial Term or
Renewal Term, if any, shall constitute an "INVOLUNTARY TERMINATION" if made
pursuant to Section 3.1.b, and the effect of such termination is specified in
Section 3.5. The effect of the consulting relationship being terminated pursuant
to Section 3.1.c as a result of Consultant's death is specified in Section 3.6.
The effect of the consulting relationship being terminated pursuant to Section
3.1.d as a result of the Consultant becoming disabled is specified in Section
3.7.
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3.2 Consultant shall have the right to terminate the consulting
relationship under this Agreement at any time prior to the expiration of the
Initial Term or the Renewal Term, if applicable, for any reason whatsoever, in
the sole discretion of Consultant, on ten (10) days prior written notice to the
Company.
a. The termination of Consultant's consulting relationship by
Consultant prior to the expiration of the Initial Term or prior to the
expiration of the Renewal Term, if applicable, except upon any Change of Control
or within the ninety (90) days immediately following any Change of Control,
shall constitute a "VOLUNTARY TERMINATION" if made pursuant to this Section
3.2.a, and the effect of such termination is specified in Section 3.3.
b. The termination of Consultant's consulting relationship by
Consultant prior to the expiration of the Initial Term or prior to the
expiration of the Renewal Term, if applicable, upon or within the ninety (90)
days immediately following any Change of Control, shall constitute an
Involuntary Termination if made pursuant to this Section 3.2.b, and the effect
of such termination is specified in Section 3.5.
3.3 Upon a Voluntary Termination of the consulting relationship by
Consultant prior to expiration of the Initial Term or the Renewal Term, if
applicable, all future compensation to which Consultant is entitled and all
future benefits for which Consultant is eligible, with the exception of any and
all statutory rights and benefits, shall cease and terminate as of the date of
such termination. Consultant shall be entitled to pro rata Monthly Base
Compensation and pro rata Monthly Non-Compete Fee through the date of such
termination, but Consultant shall not be entitled to any bonuses not yet paid at
the date of such termination.
3.4 If Consultant's consulting relationship hereunder shall be terminated
by the Company for Cause prior to expiration of the Initial Term or prior to
expiration of the Renewal Term, if applicable, all future compensation to which
Consultant is entitled and all future benefits for which Consultant is eligible,
with the exception of any and all statutory rights and benefits, shall cease and
terminate as of the date of termination. Consultant shall be entitled to pro
rata Monthly Base Compensation and pro rata Monthly Non-Compete Fee through the
date of such termination, but Consultant shall not be entitled to any other
bonuses not yet paid at the date of such termination.
3.5 Upon an Involuntary Termination of the consulting relationship prior
to expiration of the Initial Term, Consultant shall be entitled, in
consideration of Consultant's continuing obligations hereunder after such
termination, to receive the payments, compensation, benefits and perquisites
upon Involuntary Termination set forth on Exhibit A under the heading "Payments
and Benefits Upon Involuntary Termination" for the remainder of the Initial
Term. Upon an Involuntary Termination of the consulting relationship subsequent
to the commencement of the Renewal Term, if applicable, but prior to the
expiration of the Renewal Term, if applicable, Consultant shall be entitled, in
consideration of Consultant's continuing obligations hereunder after such
termination, to receive the payments, compensation, benefits and perquisites
upon Involuntary Termination set forth on Exhibit A under the heading "Payments
and Benefits Upon Involuntary Termination" for the remainder of the Renewal
Term.
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3.6 Upon termination of the consulting relationship during the Initial
Term as a result of Consultant's death, Consultant's heirs, administrators, or
legatees shall be entitled to receive the payments, compensation, benefits and
perquisites set forth on Exhibit A under the heading "Payments and Benefits Upon
Termination as a Result of Death." Upon termination of the consulting
relationship during the Renewal Term, if any, as a result of Consultant's death,
Consultant's heirs, administrators, or legatees shall be entitled only to
compensation and benefits accrued prior to such termination, subject to the
terms and provisions of the plans and programs pursuant to which such benefits
were accrued, and as set forth on Exhibit A under the heading "Payments and
Benefits Upon Termination as a Result of Death."
3.7 Upon termination of the consulting relationship during the Initial
Term as a result of Consultant's disability, Consultant shall be entitled to
receive the payments, compensation, benefits and perquisites set forth on
Exhibit A under the heading "Payments and Benefits Upon Termination as a Result
of Disability." Upon termination of the consulting relationship during the
Renewal Term, if any, as a result of Consultant's disability, Consultant shall
be entitled only to compensation and benefits accrued prior to such termination,
subject to the terms and provisions of the plans and programs pursuant to which
such benefits were accrued, and as set forth on Exhibit A under the heading
"Payments and Benefits Upon Termination as a Result of Disability."
3.8 Upon termination of the consulting relationship as a result of the
expiration of the Agreement upon expiration of the Initial Term or upon
expiration of the Renewal Term, if any, Consultant shall be entitled to no
further compensation or benefits, with the exception of (a) any and all
statutory rights and benefits and (b) compensation and benefits vested or
accrued prior to such termination, subject to the terms and provisions of the
plans and programs pursuant to which such benefits were accrued. Notwithstanding
anything to the contrary contained in this Agreement, any indemnification
obligations of the Company to Consultant in connection with his status as a
director shall not be affected by any termination of this Agreement.
3.9 In all cases, the compensation and benefits payable to Consultant
under this Agreement upon termination of the consulting relationship shall be
offset against any amounts to which Consultant may otherwise be entitled under
any and all severance plans, and policies of the Company or its affiliates.
3.10 Termination of the consulting relationship does not terminate those
obligations imposed by this Agreement which are continuing obligations,
including, without limitation, Consultant's obligations under Articles 5 and 6.
Termination of the consulting relationship also does not terminate Consultant's
right to receive any compensation and benefits which he is entitled to receive
as a director while Consultant remains a director.
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ARTICLE 4: CONTINUATION OF CONSULTING RELATIONSHIP BEYOND THE RENEWAL TERM;
TERMINATION AND EFFECTS OF TERMINATION:
4.1 Should the Company continue to retain the Consultant and should the
Consultant continue to provide services to the Company beyond the expiration of
the Renewal Term, if any, such consulting relationship shall convert to a
month-to-month relationship terminable at any time by either the Company or
Consultant for any reason whatsoever, with or without Cause. Upon expiration of
the Initial Term, the Company shall have no obligation to agree to any renewal
of this Agreement or to offer Consultant a new consulting agreement. Upon
expiration of the Renewal Term, if any, the Company shall have no obligation to
offer Consultant a new consulting agreement.
ARTICLE 5: POST-CONSULTING RELATIONSHIP OBLIGATIONS:
5.1 As part of the consideration for the compensation and benefits to be
paid to Consultant hereunder, in keeping with Consultant's duties as a
fiduciary, and in order to protect the Company's interest in the trade secrets
of the Company, and as an additional consideration and incentive for the Company
to enter into this Agreement, the Company and Consultant agree to the provisions
of this Article.
5.2 The obligations in this Article shall commence on the Effective Date
and shall continue for a period of ten (10) years (the "COVENANT Period"). The
obligations in this Article shall continue for the full Covenant Period
regardless of any prior termination of the consulting relationship pursuant to
Article 3 hereof.
5.3 Consultant hereby acknowledges and agrees that: (i) the Company would
not enter into this Agreement or retain the Consultant if the Consultant had not
executed and delivered this Agreement to the Company; (ii) the Consultant has
had, throughout the term of the existence of the Company, and will have
throughout his consulting relationship with the Company or its Affiliates (as
defined below), access to information that is confidential to the Company,
constitutes a valuable, special and unique asset of the Company, and with
respect to which the Company is entitled to the protections afforded by this
Agreement and to the remedies for enforcement of this Agreement provided by law
or in equity (including, without limitation, those remedies the availability of
which may be within the discretion of the court in which any action for
enforcement of this Agreement is brought); (iii) the Company would not grant the
Additional Options listed on Exhibit A to the Consultant if the Consultant had
not executed and delivered this Agreement to the Company; and (iv) the Company
would not pay the Consultant the Monthly Non-Compete Fee listed on Exhibit A if
the Consultant had not executed and delivered this Agreement to the Company.
5.4 In consideration of the Consultant's noncompetition and nondisclosure
agreements set forth herein, the Company shall pay to Consultant the Monthly
Non-Compete Fee listed on Exhibit A, subject to the other terms and conditions
of this Agreement.
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5.5 During the Covenant Period, Consultant shall not, and shall cause each
of his Affiliates not to:
1) within the United States (the "TERRITORY"), transact any
Competitive Business (as defined below), carry on or be engaged or
otherwise take part in any Competitive Business (whether for his own
account or for the account of any person or entity, other than the
Company), or render any service (whether for or without compensation) to
any person or entity (other than the Company) who or which is, to the
knowledge of Consultant, engaged in any Competitive Business at the time
the service is rendered.
2) share in the earnings of, or beneficially own or hold any
security issued by, or otherwise own or hold any interest (including,
without limitation, any debt) in, any person or entity who or which is
directly or indirectly engaged in any Competitive Business within the
Territory.
5.6 Without limiting the generality of the provisions of this Article 5,
the Consultant (or an Affiliate of the Consultant) shall be deemed to transact
or be engaged in a particular business if the Consultant or any Affiliate which
he controls (whether alone or in association with one or more other persons or
other entities) is, without limitation, an owner, proprietor, partner, member,
stockholder, officer, employee, agent, independent contractor, director or joint
venturer of, or a consultant or lender to, or an investor in any manner in, any
person or entity who or which is, to the knowledge of Consultant, directly or
through an Affiliate engaged in any such Competitive Business, including,
without limitation, any such person or entity with respect to which a member of
the immediate family of the Consultant is an Affiliate. Notwithstanding the
foregoing provisions of this Article 5, the Consultant (or an Affiliate of the
Consultant) may own, solely as an investment, securities if the Consultant (or
an Affiliate of the Consultant) (i) is not an Affiliate of the issuer of such
securities and (ii) does not, directly or indirectly, beneficially own more than
5% of the class of which such securities are a part.
5.7 During the Covenant Period, the Consultant shall not, and shall cause
each of his Affiliates not to, whether for his own account or for the account of
any other person or other entity (other than the Company or any Affiliate of the
Company), solicit the employment or services of, or cause or attempt to cause to
leave the employment or services of the Company or any Affiliate of the Company,
any person or entity who or which is employed by, or otherwise engaged to
perform services for the Company or any Affiliate of the Company (whether in the
capacity of employee, consultant, independent contractor or otherwise).
5.8 Consultant acknowledges that money damages would not be sufficient
remedy for any breach of this Article 5 by Consultant, and the Company shall be
entitled to enforce the provisions of this Article 5 by terminating any payments
then owing to Consultant under this Agreement and/or to specific performance and
injunctive relief as remedies for such breach or any threatened breach. Such
remedies shall not be deemed the exclusive remedies for a breach of this Article
5, but shall be in addition to all remedies available at law or in equity to the
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Company, including, without limitation, the recovery of damages from Consultant
and his agents involved in such breach.
ARTICLE 6: MISCELLANEOUS:
6.1 For purposes of this Agreement, "AFFILIATE" means, with respect to any
person or entity, any person or entity that, directly or indirectly, Controls,
is Controlled by, or is under common Control with, such person or entity in
question. For the purposes of the definition of Affiliate, "Control" (including,
with correlative meaning, the terms "Controlled by" and "under common Control
with") as used with respect to any person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such person or entity, whether through the ownership of voting
securities or by contract or otherwise.
6.2 For purposes of this Agreement "COMPETITIVE BUSINESS" means (i) any
business, enterprise or activity, whether or not for profit, that provides
management, maintenance, construction, consultation, services, contracts,
properties, facilities, plans or designs relating to correction, detention,
treatment, education or pre-release services or (ii) any business, enterprise or
activity, whether or not for profit, that the Company, or any of its Affiliates,
is engaged in or has stated its intent to engage in prior to the time the
Consultant commences or becomes associated with such a business, enterprise or
activity.
6.3 For purposes of this Agreement the term "CHANGE OF CONTROL" means (i)
the Company merges or consolidates with any other entity, and the Company's
stockholders do not own, directly or indirectly, at least 50% of the voting
capital stock of the surviving entity, (ii) the Company sells all or
substantially all of its assets to any other person or entity, (iii) the Company
is dissolved, (iv) if any third person or entity together with its Affiliates
shall become, directly or indirectly, the beneficial owner of the least 51% of
the Voting Stock of the Company, or (v) if the individuals who constituted the
members of the Company's Board of Directors ("INCUMBENT Board") as of the date
of this Agreement cease for any reason to constitute at least a majority
thereof, provided that for purposes of this clause (v) any person becoming a
director whose election or nomination for election by Company stockholders was
approved by a vote of at least eighty percent (80%) of the directors comprising
the Incumbent Board (either by the specific vote or approval of the proxy
statement of the Company in which such person is named as a nominee for
director, without objection to such a nomination) shall be, for purposes of this
clause (v), considered as though such person were a member of the Incumbent
Board. "VOTING STOCK" means all the outstanding shares of capital stock of
Company entitled to vote generally in elections for directors, considered as one
class; provided, however, that if Company has shares of Voting Stock entitled to
more or less than one vote for any such share, each reference to a proportion of
shares of Voting Stock shall be deemed to refer to such proportion of the votes
entitled to be cast by such shares. Notwithstanding the foregoing, a transaction
shall not be considered a Change of Control for purposes of this Agreement if
the transaction is approved by a vote of at least eighty percent (80%) of the
directors comprising the Incumbent Board.
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6.4 For purposes of this Agreement, notices and all other communications
provided for herein shall be in writing and shall be deemed to have been duly
given when personally delivered or when mailed by United States registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Company, to:
Cornell Corrections, Inc.
0000 Xxxx Xxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Secretary
With a copy to:
Xxxxx Xxxxxxx & Xxxx LLP
0000 Xxxxx Xxxxx
000 Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxx
If to Consultant, to the address shown on the first page hereof.
With a copy to:
Xxxxxx, Xxxx & Xxxxxxxx
0000 Xxxxxxxxxxx Xxxxxx XX
Xxxxxxxxxx, X.X. 00000-0000
Attention: Xxxxx Xxxxxxxx
Either the Company or Consultant may furnish a change of address to the other in
writing in accordance herewith, except that notices of changes of address shall
be effective only upon receipt.
6.5 This Agreement shall be governed in all respects by the laws of the
State of Texas, excluding any conflict-of-law rule or principle that might refer
to the construction of the Agreement to the laws of another State or country.
6.6 No failure by either party hereto at any time to give notice of any
breach by the other party of, or to require compliance with, any condition or
provision of this Agreement shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time.
6.7 If a dispute arises out of or related to this Agreement, other than a
dispute regarding Consultant's obligations under Article 5, and if the dispute
cannot be settled through
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direct discussions, then the Company and Consultant agree to first endeavor to
settle the dispute in an amicable manner by mediation, before having recourse to
any other proceeding or forum.
6.8 The Company's principal place of business is in Houston, Xxxxxx
County, Texas. This Agreement shall be performed in Houston, Xxxxxx County,
Texas. Any litigation that may be brought by either the Company or Consultant
involving the enforcement of this Agreement or the rights, duties, or
obligations of this Agreement, shall be brought exclusively in the state or
federal courts sitting in Houston, Xxxxxx County, Texas. In the event that
service of process cannot be effected upon a party, each party hereby
irrevocably appoints the Secretary of State for the State of Texas as its or his
agent for service of process to receive the summons and other pleadings in
connection with any such litigation. In the event of litigation between the
parties regarding this Agreement, the prevailing party shall, in addition to any
sums recovered in the litigation, be entitled to recover all sums expended by
that party (including reasonable costs, reasonable attorneys' fees and
reasonable expert witness' fees) in connection with that litigation.
6.9 It is a desire and intent of the parties that the terms, provisions,
covenants and remedies contained in this Agreement shall be enforceable to the
fullest extent permitted by law. If any such term, provision, covenants, or
remedy of this Agreement or the application thereof to any person, association,
or entity or circumstances shall, to any extent, be construed to be invalid or
unenforceable in whole or in part, then such term, provision, covenant, or
remedy shall be construed in a manner so as to permit its enforceability under
the applicable law to the fullest extent permitted by law. In any case, the
remaining provisions of this Agreement or the application thereof to any person,
association, or entity or circumstances other than those to which they have been
held invalid or unenforceable, shall remain in full force and effect.
6.10 This Agreement shall be binding upon and inure to the benefit of the
Company, and any other person, association, or entity which may hereafter
acquire or succeed to all or substantially all of the business or assets of the
Company by any means whether direct or indirect, by purchase, merger,
consolidation, or otherwise. This Agreement shall be binding upon and inure to
the benefit of Consultant, and his heirs, successors and permitted assigns.
Consultant's rights and obligations under Agreement hereof are personal and such
rights, benefits, and obligations of Consultant shall not be voluntarily or
involuntarily assigned, alienated, or transferred, whether by operation of law
or otherwise, without the prior written consent of the Company. The Company
shall not assign this Agreement without the prior written consent of Consultant.
6.11 This Agreement replaces and merges previous agreements and
discussions pertaining to the following subject matters covered herein:
Consultant's prior employment by the Company and any agreements regarding such
relationship and the nature of Consultant's relationship with the Company and
the term and termination of such relationship. This Agreement constitutes the
entire agreement of the parties with regard to such subject matters, and
contains all of the covenants, promises, representations, warranties, and
agreements between the parties with respect to such subject matters; provided
that Consultant shall also comply with all policies and procedures of the
Company as established from time to time. Each party to this Agreement
acknowledges that no representation, inducement, promise, or agreement, oral or
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written, has been made by either party with respect to such subject matters,
which is not embodied herein, and that no agreement, statement, or promise
relating to the relationship between the Company and Consultant that is not
contained in this Agreement shall be valid or binding. Any modification of this
Agreement will be effective only if it is in writing and signed by each party
whose rights hereunder are affected thereby, provided that any such modification
must be authorized or approved by the Board of Directors of the Company.
(THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK;
COUNTERPART SIGNATURE PAGES FOLLOW.)
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IN WITNESS WHEREOF, the Company and Consultant have duly executed this
Agreement in multiple originals to be effective on the Effective Date of the
Agreement.
Company: Consultant:
CORNELL CORRECTIONS, INC. XXXXX X. XXXXXXX
By: /s/ XXXXXX X. XXXXX /s/ XXXXX X. XXXXXXX
Name: Xxxxxx X. Xxxxx This 1st day of September, 1999
Authorized Signatory
This 1st day of September, 1999
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EXHIBIT A TO
CONSULTANT AGREEMENT
BETWEEN CORNELL CORRECTIONS, INC.
AND XXXXX X. XXXXXXX
Consultant Name: Xxxxx X. Xxxxxxx
Initial Term: This Agreement shall commence on the Effective Date
through the Second Anniversary of the Effective Date.
This Agreement shall automatically renew for five
additional one-year terms, without any requirement for
action on the part of the Company or Consultant, unless
sooner terminated as provided in this Agreement. The
two-year term together with the five additional one-year
terms, comprising seven years in the aggregate, are
herein referred to as the "INITIAL TERM".
Renewal Term: From Conclusion of the Initial Term through the Third
Anniversary of such Conclusion
Duties and Services: Consultant shall serve the Company as non-executive
Chairman of the Board from the Effective Date through
the Fourth Anniversary of the Effective Date, to the
extent Consultant is a member of the Board of Directors
during such period. The Company shall nominate
Consultant to stand for election as a director to serve
through the expiration of the Initial Term, subject to
the fiduciary duties of the Company's Board of
Directors. Consultant shall perform such consulting
responsibilities consistent with his rank and position
with the Company as reasonably determined by the Board
of Directors, including, without limitation, assisting
with development of business, acquisitions and obtaining
financings. The projects on which Consultant works shall
be subject to Consultant's consent, not to be
unreasonably withheld.
Location: Houston, Xxxxxx County, Texas
Reporting Relationship: In his role as a Consultant, Consultant shall report
directly to the Company's Chief Executive Officer. This
reporting requirement shall not apply to Consultant's
status as Chairman of the Board and as a director.
A-1
Monthly Base Compensation:
First 48 Months of Initial Term $21,250.00
Remaining 36 Months of Initial Term $15,000.00
Renewal Term, if applicable, $25,000.00
Monthly Non-Compete Fee:
Initial Term $10,000.00
Fixed Bonus: Consultant will receive a bonus equal to (i) $75,000
during the first four years of the Initial Term, and
(ii) $60,000 during the last three years of the Initial
Term and during any Renewal Term, if applicable. The
foregoing notwithstanding, in the event that the Board
determines at the end of any year that the Company does
not have or is not reasonably likely to have adequate
working capital timely to meet its obligations, the
Company shall be under no obligation to pay Consultant
such bonus for such year; however, such bonus must be
paid if a bonus is paid to a senior executive officer
for such fiscal year.
Options: As of December 9, 1999, Consultant has 296,124 options
under the Company's Amended and Restated 1996 Stock
Option Plan ("EXISTING OPTIONS"), as follows: 126,124 of
which were granted during the Company's 1996 fiscal year
and were exercisable prior to the Effective Date; 10,000
of which were granted during the Company's 1998 fiscal
year, of which 8,000 were not exercisable prior to the
Effective Date; and 160,000 of which were granted during
the Company's 1999 fiscal year, of which 160,000 were
not exercisable prior to the Effective Date. The Company
will grant Consultant options for One Hundred Twenty
Thousand (120,000) additional shares ("ADDITIONAL
OPTIONS") in four equal annual grants beginning on the
First Anniversary of the Effective Date, subject to the
terms of the Company's Amended and Restated 1996 Stock
Option Plan, or such other stock option plan of the
Company as shall be in effect from time to time (the
"PLAN"). The option agreement ("OPTION AGREEMENT")
pursuant to which the Additional Options shall be
granted to Consultant shall provide that the Additional
Options shall vest at the time such options are granted.
The exercise price of the Additional Options shall be
the Fair Market Value, as defined in the Plan, on the
date of grant. The Option Agreement pursuant to which
the Additional Options shall be granted shall specify
that the Additional Options shall be exercisable only to
the extent that Consultant has exercised,
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subsequent to the Effective Date, or exercises
simultaneously therewith an equal or greater number of
Existing Options.
Payments and Benefits
upon Involuntary
Termination: In the event of an Involuntary Termination of
Consultant's consulting relationship pursuant to Section
3.1.b or Section 3.2.b, Consultant shall be entitled to
the following in accordance with Section 3.5:
o Consultant will receive pro rata Agreed Payment
Amounts accrued prior to such Involuntary
Termination, but not yet paid, and a lump sum
payment equal to the net present value (calculated
on the date payment is tendered with a discount
rate of 8%) of the sum of all pro rata Agreed
Payment Amounts to become due (a) during the
remainder of the Initial Term, if such Involuntary
Termination occurs during the Initial Term, or (b)
during the remainder of the Renewal Term, if such
Involuntary Termination occurs during the Renewal
Term.
o The Company will grant and Consultant will receive
any of the Additional Options which have not been
granted prior to the date of the Involuntary
Termination on the date of the Involuntary
Termination, even if none of the Existing Options
have been exercised as of such date; provided,
however, that the Additional Options shall be
exercisable only to the extent that Consultant has
exercised, subsequent to the Effective Date, or
exercises simultaneously therewith an equal or
greater number of Existing Options.
o With regard to Existing Options which are not
vested, such Existing Options shall immediately
become vested. With regard to the Existing Options
which were granted during the Company's 1998 and
1999 fiscal year, the period during which such
Existing Options are exercisable shall be
extended, if necessary, so that such Existing
Options are exercisable until 90 days after August
31, 2006.
o Consultant shall be entitled to the same level of
medical and disability coverage through the
remainder of the Initial Term or the Renewal Term,
if applicable, as he received prior to the date of
Involuntary Termination.
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o Consultant shall be entitled to continue to
receive the Monthly Allowance described below
until the Fourth Anniversary of the Effective
Date.
Payments and Benefits
Upon Termination as a
Result of Death: Upon termination of the consulting relationship pursuant
to Section 3.1.c as a result of Consultant's death,
Consultant's heirs, administrators, or legatees shall be
entitled to the following in accordance with Section
3.6:
o If termination of the consulting relationship
occurs during the Initial Term, Consultant's
heirs, administrators, or legatees shall be
entitled to (i) Consultant's pro rata Agreed
Payment Amount through the date of such
termination and to a lump sum payment equal to the
net present value (calculated on the date payment
is tendered with a discount rate of 8%) of the
lesser of (a) the pro rata Agreed Payment Amount
due during the remainder of the Initial Term and
(b) the pro rata Agreed Payment Amount due during
the two (2) years immediately following such
termination, and (ii) the Additional Options
described below.
o If termination of the consulting relationship
occurs during the Renewal Term, if any,
Consultant's heirs, administrators, or legatees
shall be entitled only to compensation and
benefits accrued prior to such termination,
subject to the terms and provisions of the plans
and programs pursuant to which they were accrued.
o The Company will grant and Consultant's heirs,
administrators, or legatees will receive any of
the Additional Options which have not been granted
prior to the date of the termination on the date
of the termination, even if none of the Existing
Options have been exercised as of such date;
provided, however, that the Additional Options
shall be exercisable only to the extent that
Consultant or his heirs, administrators, or
legatees exercise, subsequent to the Effective
Date, or exercise simultaneously therewith an
equal or greater number of Existing Options.
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Payments and Benefits
Upon Termination as a
Result of Disability: Upon termination of the consulting relationship pursuant
to Section 3.1.d as a result of Consultant's disability,
Consultant shall be entitled to the following in
accordance with Section 3.7:
o If termination of the consulting relationship
occurs during the Initial Term, Consultant shall
be entitled to (i) Consultant's pro rata Agreed
Payment Amount through the date of such
termination and to a lump sum payment equal to the
net present value (calculated on the date payment
is tendered with a discount rate of 8%) of the
lesser of (a) the pro rata Agreed Payment Amount
due during the remainder of the Initial Term and
(b) the pro rata Agreed Payment Amount due during
the two (2) years immediately following such
termination, (ii) the Additional Options described
below and (iii) the medical coverage described
below.
o If termination of the consulting relationship
occurs during the Renewal Term, if any, Consultant
shall be entitled only to compensation and
benefits accrued prior to such termination,
subject to the terms and provisions of the plans
and programs pursuant to which such benefits were
accrued.
o The Company will grant and Consultant will receive
any of the Additional Options which have not been
granted prior to the date of the termination on
the date of the termination, even if none of the
Existing Options have been exercised as of such
date; provided, however, that the Additional
Options shall be exercisable only to the extent
that Consultant has exercised, subsequent to the
Effective Date, or exercises simultaneously
therewith an equal or greater number of Existing
Options.
o Until such time as Consultant is eligible to
receive Medicare coverage, Consultant shall be
provided with the same level of medical coverage
after the date of termination as he received prior
to the termination.
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Benefits: The Company reaffirms its obligations under the Cornell
Corrections, Inc. Split-Dollar Insurance Agreement
between the Company, Consultant and Xxxxx X. Xxxxxxx XX,
Trustee, dated April 26, 1999, and its obligations under
the Cornell Corrections, Inc. Split-Dollar Insurance
Agreement between the Company, Consultant and Xxxx
Xxxxxxxxx Xxxxxxx Xxxxxxx, Trustee, dated April 26, 1999
and shall continue to pay each life insurance premium as
it becomes due, subject to the terms of such agreements.
Notwithstanding anything to the contrary in this
Agreement, the Company shall fulfill all of its
obligations under such Split-Dollar Insurance
Agreements, even though this Agreement is terminated
prior to the time such obligations are fulfilled. During
the Initial Term and the Renewal Term, if any,
Consultant shall be provided with medical and disability
coverage with benefits and on terms and conditions at
least comparable to the coverage provided to the
Company's senior executives. Consultant will elect
Medicare coverage as soon as Consultant is eligible, and
the Company will pay for all reasonably available
supplemental coverage. During the Initial Term, so long
as Consultant is a member of the Board of Directors,
Consultant shall be entitled to receive benefits
accorded to outside directors and to participate in
benefit plans made available to outside directors,
subject to eligibility requirements and the other terms
of such plans.
Secretarial Assistance: During the period commencing on the Effective Date and
continuing through the Fourth Anniversary of the
Effective Date, the Company shall provide Consultant
with the services of a secretary who shall be Xx. Xxx
Xxxxxx. If Xx. Xxxxxx is for any reason unavailable, the
Company shall furnish a secretary reasonably acceptable
to Consultant.
Monthly Allowance: During the period commencing on the Effective Date and
continuing through the Fourth Anniversary of the
Effective Date, Consultant shall be entitled to a
Monthly Allowance of Two Thousand Five Hundred Dollars
($2,500) for any and all direct and indirect expenses
associated with establishing and maintaining an office
at a location separate from the Company's headquarters.
Such payment is intended to cover all expenses
associated with maintaining an office, including,
without limitation, leasehold improvements, office
furniture and equipment, utilities, insurance, parking
and transportation to and from the office. No other
business expenses or costs shall be paid to Consultant
unless advance written approval of the project with
which the expenses
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are associated is granted by the Company's Chief
Executive Officer. Expense reimbursements shall be
subject to approval by the Audit Committee of the Board
of Directors.
Legal Fees: The Company shall pay to Consultant up to Fifteen
Thousand Dollars ($15,000.00) of Consultant's legal fees
relating to negotiation of this Agreement upon
submission of a xxxx or invoice to the Company.
(THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK;
COUNTERPART SIGNATURE PAGES FOLLOW.)
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IN WITNESS WHEREOF, the Company and Consultant have duly executed this
Exhibit A in multiple originals to be effective on the Effective Date of the
Agreement.
Company: Consultant:
CORNELL CORRECTIONS, INC. XXXXX X. XXXXXXX
By: /s/ XXXXXX X. XXXXX /s/ XXXXX X. XXXXXXX
Name: Xxxxxx X. Xxxxx This 1st day of September, 1999
Authorized Signatory
This 1st day of September, 1999
