EXHIBIT 10.3
AMENDED AND RESTATED
CONSULTING AGREEMENT
This Agreement, as amended and restated, is made as of March 1, 2000,
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. Consultant will make available Xxxxxx X. Xxxxx to continue
to serve as the President and Chief Executive Officer and, effective April 25,
2000, as 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. Xxxxxx X. Xxxxx will be expected to devote
an average of four days per week to the business and affairs of Xxxxx. In
furtherance of the foregoing, the Board of Directors shall continue to elect
Xxxxxx X. Xxxxx as the President and Chief Executive Officer, and will
renominate him as a director and Chairman of Xxxxx when his current term expires
in 2001.
2. TERM. The term (the "Term") of this Agreement, as amended and
restated, shall commence on March 1, 2000 (the "Commencement Date") and shall
end on the second anniversary of the Commencement Date, subject to earlier
termination as provided in Paragraph 7, below. The Term may be extended by
further written agreement between Xxxxx and Consultant.
3. MONTHLY FEE. Xxxxx shall pay Consultant a monthly fee of $25,000,
which amount shall be payable on the Commencement Date and on the same day of
each month thereafter during the Term hereof.
4. ANNUAL BONUS. Consultant shall be entitled to participate in Xxxxx'
annual bonus plan, with any bonus to be determined in the sole discretion of
Xxxxx' Board of Directors for the plan years 2000 and 2001.
5. INCENTIVE BONUS. For calendar years 2000 and 2001, the Consultant
shall be paid the lesser of (i) 1.5% of Xxxxx' plan for operating income or (ii)
3% of the difference between Xxxxx' operating income and one-half of Xxxxx' plan
for operating income. If Xxxxx' operating income is less than one-half of its
plan, no Incentive Bonus shall be payable for such year. The parties agree that
Xxxxx' plan for operating income for calendar year 2000 is $8,000,000.
EXHIBIT 10.3
6. OPTIONS. On April 25, 2000, Xxxxxx X. Xxxxx shall be granted 3,000
options to purchase Xxxxx stock, with the price of each option equal to the
closing price of Xxxxx stock on that date. On the date of Xxxxx' annual
stockholders meeting in 2001, Xxxxxx X. Xxxxx shall be granted 10,000 options to
purchase Xxxxx stock, with the price of each option equal to the closing price
of Xxxxx common stock on the date of the grant.
7. TRAVEL AND OTHER EXPENSES. 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
Term hereof, 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.
Such reimbursements shall be made within a reasonable time following
Consultant's submission of receipts for such expenses.
8. TERMINATION. Either Xxxxx or Consultant may terminate the Term and
this Agreement upon seven (7) days' advance written notice to the other;
provided, however that this Agreement may be terminated immediately by Xxxxx for
"cause" (as defined below). 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, and Consultant shall be
relieved of any obligation hereunder to render further services to Xxxxx. Except
as set forth below, no further payments shall be made or owed by Xxxxx to
Consultant under this Agreement, other than properly incurred, unreimbursed
expenses; provided, however, that Consultant's rights with respect to
indemnification protection shall be determined pursuant to Paragraph 8 below. In
the event such termination occurs (a) prior to a Change of Control (as defined
in Paragraph 14 below) and (b) is by Xxxxx for reasons other than "cause" (as
defined below) or by Consultant for "good reason" (as defined below), then Xxxxx
shall pay to Consultant on the termination date a lump sum payment in an amount
equal to twelve (12) times the sum of (i) the monthly fee set forth in Paragraph
3 above, (ii) the most recent monthly medical premium reimbursed by Xxxxx
pursuant to Paragraph 6(b) above, and (iii) the $600 monthly car allowance
described in Paragraph 6(c) above.
For purposes of this Paragraph 8, "cause" shall mean (A) the death or
disability of Xxxxxx X. Xxxxx, (B) the resignation of Xxxxxx X. Xxxxx from the
position of President and Chief Executive Officer of Xxxxx (other than in
conjunction with the termination of this Agreement by Consultant for "good
reason"), (C) the willful misconduct of any Consultant Personnel, including
Xxxxxx X. Xxxxx, or the willful or continued failure by 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 (D) 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
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EXHIBIT 10.3
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.
For purposes of this Paragraph 8, "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 8, "good reason" shall mean (w) failure
to elect Xxxxxx X. Xxxxx as Chairman of the Board of Directors of Xxxxx, (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, (y) the removal of Xxxxxx X. Xxxxx from the position of
President and Chief Executive Officer of Xxxxx, Chairman of the Board or as a
director thereof (other than in conjunction with the termination of this
Agreement for cause), or (z) 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.
Notwithstanding anything in the foregoing to the contrary, if this
Agreement is not renewed at the expiration of the Term on terms that are
mutually satisfactory to the parties, or if the Consultant elects to retire at
the expiration of the Term, Xxxxx shall pay the Consultant a single sum of
$150,000 within ten (10) business days after the expiration of the Term.
9. INDEMNIFICATION. During the 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 6
shall survive termination of this Agreement.
10. 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.
11. 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
3
EXHIBIT 10.3
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.
12. 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.
13. NON-COMPETITION. During the term of this Agreement, 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 competition with
the finishing equipment business of Xxxxx.
14. 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 13 shall survive
termination of this Agreement.
15. CHANGE OF CONTROL. In the event of a Change of Control (as
hereinafter defined) after the Commencement Date hereof, 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 6
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
twenty-four (24) times the sum of (i) the monthly fee set forth in Paragraph 3
above, (ii) the most recent monthly medical premiums reimbursed by Xxxxx
pursuant to Paragraph 6(b), and (iii) the $600 monthly car allowance described
in Paragraph 6(c).
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EXHIBIT 10.3
In the event of a Change of Control at any time within the six (6) month period
following termination of this Agreement (i) by Xxxxx for reasons other than
"cause", or (ii) by Consultant for "good reason," Xxxxx 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 twelve (12) times the sum of (i) the monthly fee
set forth in Xxxxxxxxx 0, xxxxx, (xx) the most recent monthly medical premiums
reimbursed by Xxxxx pursuant to Paragraph 6(b), above, and (iii) the $600
monthly car allowance described in Paragraph 6(c). "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, other than by the Acquiror or any corporation
or other legal person controlling, controlled by or under common control with
the Acquiror; (b) Xxxxx sells, transfers or conveys all or substantially all of
its business and/or assets 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, other than by any corporation or other legal person
controlling, controlled by or under common control with the Acquiror; (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
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 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 Commencement Date, if such
individual's election or nomination for election as a Director was approved by
the affirmative vote of the then Incumbent Board.
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EXHIBIT 10.3
16. 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.
17. 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.
18. 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.
19. 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 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.
20. 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 are superseded
hereby.
21. 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.
22. 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.
23. 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:
6
EXHIBIT 10.3
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
or, to such other address as either party shall have theretofore
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 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: Xxxxxx X. Xxxxx By: Xxxxxx Xxxxx
---------------------------- --------------------------
Title: President Title: Vice President
------------------------- ------------------------
Date: June 15, 2000 Date: June 15, 2000
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