EXHIBIT 10.55
CONSULTING AGREEMENT
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THIS CONSULTING AGREEMENT (the "Agreement") is effective as of
this 1st day of June, 1996 (the "Effective Date"), by and between XXXXXXX X.
XXXXXXXX (the "Consultant"), whose mailing address is 00000 Xxxxx Xxxxxx Xxxx,
Xxxxx Xxxxx, Xxxxxxxx, 00000, and CAPITAL ASSOCIATES, INC., a Delaware
corporation and Capital Associates International, Inc. A Colorado corporation
(collectively the "Company"), whose principal place of business is 0000 Xxxx
Xxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxx, Xxxxxxxx 00000.
WHEREAS, the Company desires to engage Consultant to provide,
and Consultant desires to provide, consulting services for the Company as
provided herein, all in accordance with the terms and conditions set forth in
this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
1. CONSULTING AGREEMENT. The Company hereby engages
Consultant as a consultant to the Company and Consultant hereby accepts such
engagement for the period extending from the Effective Date to the fifth
anniversary of the Effective Date or the earlier termination of such engagement
as provided in paragraph 5 hereof (the "Consulting Term"). The Consulting Term
may be extended for additional one (1) year periods upon mutual consent of the
parties hereto.
2. CONSULTING DUTIES. During the Consulting Term, Consultant
will provide services on a project basis, at the request of the Executive
Committee of the Board of Directors (the "Board"),including (a) assisting the
Company in locating and negotiating with candidates for acquisitions or other
business combinations and reviewing the terms of such transactions, (b)
assisting the Company with corporate finance projects, such as raising equity or
debt, in accordance with the Company's strategic goals,(c) assisting the Company
with the development of marketing programs, (d) assisting the Company with the
development of management programs and (c) such other services as the Executive
Committee (or the Board) may request Consultant to perform.
Consultant will perform his services under the direction of
the Executive Committee and the Board, consistent with the best interests of the
Company, to the best of his ability, in a diligent manner and consistent with
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the policies and guidelines of the Company as in effect at any time and from
time to time.
3. CONSULTING FEE. During the Consulting Term, the Company
agrees to pay to Consultant fees (the "Consulting Fees") as follows:
(a) $187,500 per fiscal year of the Company (the "Base
Consulting Fee"), payable in twice monthly installments of $7,812.50 per
installment, in arrears.
(b) In addition, to compensate Consultant for his
contributions to the overall success of the Company as reflected in its earnings
and in enhanced value to stockholders, and to the extent that the Company
reaches the goals in the Business Plan for the fiscal year ended May 31, 1997,
incentive compensation will be in such form and amount as the Special Committee
of the Board shall determine, in its sole discretion.
(c) In addition, to compensate for his contribution to
the overall success of the Company as reflected in its earnings and in enhanced
value to stockholders, and to the extent that the Company reaches the goals in
the Business Plan for each of the fiscal years ending May 31, 1998 and 1999,
Consultant will be entitled to receive a bonus payment of 4% (the "Base
Incentive Payment Percentage") of the Company's pre-tax earnings for each such
fiscal year (the "Base Incentive Payment"). The Base Incentive Payment will be
adjusted either up or down by adjusting the Base Incentive Payment Percentage in
an amount equal to the percentage change in the average closing price of the
Company's stock for the last four months of the applicable fiscal year as
compared to the same period in the prior fiscal year; provided, however, that in
no event shall the Base Incentive Payment Percentage adjusted lower than 3% or
higher than 6%. The portion of the compensation described in this subparagraph
(b) is referred to herein as the "Incentive Payment".
(d) The Company will reimburse Consultant for his
reasonable expenses which are incurred during the Consulting Term in connection
with his engagement with the Company, provided that standard documentation
and/or receipts are submitted to the Company by Consultant in accordance with
the Company's standard policies and practices.
(e) Payments due to Consultant hereunder will be reduced
by any payments received by Consultant from June 1, 1996 under the former
Executive Committee Compensation Plan.
4. INDEPENDENT CONTRACTOR. The parties hereby acknowledge,
understand and agree that Consultant is an independent contractor and shall not
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be considered an employee or agent of the Company pursuant to the terms of this
Agreement for any purposes whatsoever and Consultant shall have no right or
authority to assume or create any obligation or liability, express or implied,
on behalf of the Company or any of its affiliates, or to bind the Company or
such affiliates in any manner or thing whatsoever, without the Company's express
prior written consent.
5. TERMINATION.
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(a) Anything herein to the contrary notwithstanding, upon
the happening of any one of the following events, the Company may terminate this
Agreement by giving Consultant written notice of such termination: (i) an act or
omission of Consultant constituting Cause (as defined below); or (ii) a
violation by Consultant of any of the provisions of Section 6. hereof. For the
purpose of clause (i) of this paragraph (a), "Cause" shall mean (A) conviction
in a court of law of any crime or offense involving money or other property of
the Company or any of its affiliates, or (B) the determination by the Company,
acting in good faith, that the Consultant has knowingly and willfully committed
an offense described in clause (A) above or committed an act of fraud with
respect to money or other property of the Company or an affiliate of the
Company. Termination pursuant to this paragraph (b) shall be effective five (5)
days after the date of such notice or as otherwise provided therein.
(b) The Company's right of termination pursuant to
paragraph (a) shall be in addition to the rights and remedies available to the
Company at law or in equity and such rights and remedies shall survive
termination of this Agreement.
(c) In the event of termination of this Agreement
pursuant to paragraph (a), Consultant shall have no right to receive any
compensation for any period subsequent to the date of such termination, except
for any pro-rated or other amounts earned prior to such termination.
(d) In the event of termination of this Agreement for any
reason other than as set forth in paragraph (a), Consultant shall be entitled to
receive the greater of (i) three (3) times the annual Base Consulting Fee or
(ii) the Base Consulting Fee for the remainder of the Consulting Term, plus the
pro-rated amount of the Incentive Payment for the fiscal year in which such
termination occurs.
6. CONFIDENTIALITY AGREEMENT. Consultant agrees that he
shall not disclose, during the Consulting Term or any extension thereof and for
a period of two (2) years after the expiration of the Consulting Term or any
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extension thereof, any Confidential Information (as defined below) to which he
becomes privy to any person, firm, corporation, association, partnership or
other entity for any reason or purpose whatsoever, other than employees of the
Company who have a need to know such information in connection with the
performance of their duties on behalf of the Company, or as required in the
performance of his duties hereunder, or use any Confidential Information for any
purpose not expressly authorized in writing by the Company. For purposes of this
Agreement, "Confidential Information" means any information, whether disclosed
electronically, in writing or orally, heretofore or hereafter designated or
otherwise treated as "confidential" by the Company, including, but not limited
to, all financial statements, corporate records and other information and data
relating to the operations, assets, liabilities, financial condition, future
prospects, employees, customers, financing and litigation of the Company or any
of its affiliates, all technical and business information, know-how or trade
secrets, or any other information relating to the Company or its affiliates,
which is of a confidential or proprietary nature.
7. INDEMNIFICATION. The Company shall indemnify, defend and
hold Consultant harmless from and against any and all losses, claims, damages,
liabilities, expenses (including, without limitation, reasonable attorneys'
fees) or costs (collectively, the "Claims") incurred by Consultant arising from
the services provided by Consultant to the Company under this Agreement;
PROVIDED, HOWEVER, that such indemnification shall not extend to Claims which
arise from, relate to or are caused by the Consultant's gross negligence or
willful misconduct.
8. MISCELLANEOUS.
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(a) NOTICES. Any notice to any party under this
Agreement shall be in writing and shall be delivered by facsimile transmission,
overnight delivery or certified mail, return receipt requested, to the parties
at the following addresses:
If to Consultant:
Xxxxxxx X. Xxxxxxxx
MCC Financial Corporation
0000 Xxxxxxxxxx Xxxxx, Xxxxx 0000
XxXxxx, XX 00000
Telecopy number: (000) 000-0000
If to the Company:
Capital Associates, Inc.
Capital Associates International, Inc.
0000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxx 0000
0
Xxxxxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
Telecopy number: (000) 000-0000
(b) SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of the parties hereto, and their
respective successors in interest and assigns, but in no event shall any party
be relieved of its obligations hereunder without the express written consent of
the other party.
(c) ENTIRE AGREEMENT. This Agreement, together with the
instruments and agreements contemplated hereby, represents the entire agreement
of the parties with respect to the subject hereof, and all agreements entered
into prior hereto with respect to the subject matter hereof are revoked and
superseded by this Agreement, and no representations, warranties, inducements or
oral agreements have been made by any of the parties except as expressly set
forth herein, or in other contemporaneous written agreements. This Agreement may
not be changed, modified or rescinded except in writing, signed by the parties
hereto.
(d) GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the law of the State of Colorado, excluding its
laws regarding choice of law.
(e) COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement
may be executed simultaneously in one or more counterparts, each of which shall
be deemed an original but all of which together shall constitute one and the
same instrument. Each party hereto agrees to be bound by its own facsimile
signature and to accept the facsimile signature of the parties to this
Agreement.
(f) SEVERABILITY. If any provisions of this Agreement
shall be held to be excessively broad as to duration, geographical scope,
activity or subject, such provisions shall be construed by limiting or reducing
the same so as to render such provision enforceable to the extent compatible
with applicable law.
(g) WAIVER. Failure on the part of the Company to
exercise any right or option arising out of a breach of this Agreement shall not
be deemed a waiver of any right or option with respect to any subsequent or
different breach, or the continuance of any existing breach.
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement effective as of the date first above written.
CONSULTANT:
/s/X. X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
COMPANY:
Capital Associates, Inc.
a Delaware corporation
By: /s/Xxxxxx Xxxxx
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Name: Xxxxxx Xxxxx
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Title: President and CEO
Capital Associates International, Inc.
a Colorado corporation
By: /s/Xxxxxx Xxxxx
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Name: Xxxxxx Xxxxx
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Title: President and CEO
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