CONSULTING AGREEMENT
Exhibit
10.1
This
Consulting Agreement, dated as of the 12th day of December, 2007 (this
“Agreement”), between Xxxxx Xxxxxxxxx and PPC Liquidation Corporation (the
“Consultant”) and Xxxxxx Plastics Company LLC, a Connecticut limited liability
company (the “Company”).
W
I T
N E S S E T H,
WHEREAS,
the Company and the Consultant are parties to an Employment Agreement, dated
as
of November 9, 2004 (the “Prior Agreement”), which was entered into in
connection with the Company’s acquisition of the assets of Xxxxxx Plastics
Corporation (“PPC”).
WHEREAS,
the Consultant was the President and Chief Executive Officer of PPC prior to
the
execution and delivery of the Prior Agreement.
WHEREAS,
the Consultant’s execution and delivery of the Prior Agreement was a condition
precedent to (a) the Company’s willingness to acquire the assets of PPC and (b)
the willingness of Memry Corporation, a Delaware corporation and the parent
of
the Company (the “Parent”), to issue options to the Consultant to acquire shares
of its common stock to the Consultant pursuant to the Parent’s Amended and
Restated 1997 Long-Term Incentive Plan (the “1997 Plan”).
WHEREAS,
the Consultant resigned as the President of the
Company, and Company desires to retain the Consultant to provide services,
and
the Consultant desires to perform such services, pursuant to the terms
below.
NOW,
THEREFORE, in consideration of the premises and of the covenants and agreements
set forth herein, the parties agree as follows:
1. Consulting
Services.
(a) The
Company hereby engages the Consultant as an independent contractor to render
services as requested from time to time by the Company. The services shall
consist of technology services and services as a member of the Board of
Directors of the Parent (the “Services”). Subject
to the terms of this Agreement, Consultant will render the services set forth
in
Project Assignment(s) (Exhibit A). The parties understand and agree that the
Consultant will have the sole discretion to determine the method and means
of
performing the Services, and that the Company has no right to, and will not,
control or determine the method or means of the performance of the Services.
The
Consultant shall provide the Services in a timely and professional manner and
in
compliance with the highest current standards of relevant established industry
practice.
The Consultant shall comply with all reasonable instructions given to the
Consultant by the Company in relation to the Services and shall keep the Company
informed of the Consultant’s activities under this Agreement.
2. Term.
The
Consulting Period
shall commence on the date hereof. The Consulting Period may be terminated
by
either party for any reason upon prior written notice.
3. Compensation;
Expenses.
(a) In
consideration of the services rendered and to be rendered by the Consultant,
the
Company shall pay the Consultant $140.00 per hour, payable monthly in arrears.
The Consultant acknowledges and agrees that the Services do not include payment
for services as a member of the Board of Directors of the Parent. The
compensation payable under this Section 3 compensates him only for those
services outlined in Exhibit A and any other assignments as may be requested
from time to time.
(b) The
Company shall reimburse the Consultant for reasonable pre-approved out-of-pocket
expenses incurred by Consultant in the course of performing the Services under
this Agreement, subject to the Company’ requirements with respect to reporting
and documentation of such expenses.
4. Nonsolicitation.
(a) From
the
date hereof through May 8, 2009 (the “Restriction Period”), the Consultant will
not, directly or indirectly, either for himself or for any other person or
entity (i) solicit (A) any employee of the Company or any affiliate of the
Company to terminate his or her employment with the Company or such affiliate
during his or her employment with the Company or such affiliate or (B) any
former employee of the Company or an affiliate of the Company for a period
of
one year after such individual terminates his or his employment with the Company
or such affiliate, (ii) solicit any customer or client of the Company or any
such affiliate (or any prospective customer or client of the Company or such
affiliate) as of the date hereof to terminate its relationship with the Company
or such affiliate, or do business with any third parties, or (iii) take any
action that is reasonably likely to cause injury to the relationships between
the Company or any such affiliate or any of their respective employees and
any
lessor, lessee, vendor, supplier, customer, distributor, employee, consultant
or
other business associate of the Company or any such affiliate as such
relationship relates to the Company’s or such affiliate’s conduct of its
business. In the event of Consultant’s breach of this subsection (b), the
Restriction Period shall be extended by the amount of time during which the
Consultant is in breach.
(b) If
the
final judgment of a court of competent jurisdiction declares that any term
or
provision of this Section 4 is invalid or unenforceable, the parties agree
that
the court making the determination of invalidity or unenforceability shall
have
the power to reduce the scope, duration, or area of the term or provision,
to
delete specific words or phrases, or to replace any invalid or unenforceable
term or provision with a term or provision that is valid and enforceable and
that comes closest to expressing the intention of the invalid or unenforceable
term or provision, and this Agreement shall be enforceable as so modified after
the expiration of the time within which the judgment may be appealed.
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5. Covenant
Not to Disclose Information.
The
Consultant agrees that during the Consulting Period and thereafter, he will
not
use or disclose, other than to another employee of the Company qualified by
the
Company to receive that information in the normal course of business, any
confidential information or trade secrets of the Company or any affiliate of
the
Company which were made known to him by the Company, its officers or employees
or affiliates, or learned by him while in the Company’s employ or during the
Consulting Period, without the prior written consent of the Company, and that
upon termination of the Consulting Period for any reason, he will promptly
return to the Company any and all properties, records, figures, calculations,
letters, papers, drawings, schematics or copies thereof or other confidential
information of the Company and its affiliates of any type or description and
he
will promptly delete any copies of any such information from his personal
computer, BlackBerry or other electronic device. It is understood that the
term
“trade secrets” as used in this Agreement is deemed to include, without
limitation, lists of the Company’s and its affiliates’ respective customers,
information relating to their practices, know-how, processes and inventions,
and
any other information of whatever nature which gives the Company or any
affiliate an opportunity to obtain an advantage over its competitors who do
not
have access to such information. In the event that the Consultant becomes
legally compelled to disclose all or any portion of any confidential information
or trade secrets of the Company or any affiliate of the Company, the Consultant
will provide the Company with prompt notice thereof, so that the Company may
seek a protective order or other appropriate remedy. In the event that such
protective order or other remedy is not obtained, the Consultant will furnish
only that portion of the confidential information or trade secret which is
legally required and the Consultant will exercise the Consultant’s best efforts
to obtain reliable assurance that confidential treatment will be afforded such
portion of the confidential information and/or trade secret.
6. Inventions
and Improvements.
With
respect to any and all inventions (as defined in Section 6(e) below) made or
conceived by the Consultant, whether or not during his hours of employment
with
the Company or during the hours in which he provides the Services, either solely
or jointly with others, without additional consideration:
(a) The
Consultant shall promptly inform the Company of any such invention.
(b) Any
such
invention, whether patentable or not, shall be the property of the Company,
and
the Consultant hereby assigns and agrees to assign to the Company all his rights
to any such invention, and to any United States and/or foreign letters patent
granted upon any such invention or any application therefor.
(c) The
Consultant shall apply, at the Company’s request and expense, for United States
and/or foreign letters patent either in the Consultant’s name or otherwise as
the Company may desire.
(d) The
Consultant shall acknowledge and deliver promptly to the Company, without charge
to the Company but at its expense, all sketches, drawings, models and figures
and other information and shall perform such other acts, such as giving
testimony in support of his inventorship, as may be necessary in the opinion
of
the Company to obtain and maintain United States and/or foreign letters patent
and to vest the entire right and title thereto in the Company.
(e) For
purposes of this Section, the term “invention” shall be deemed to mean any
discovery, concept or idea (whether patentable or not), including but not
limited to processes, methods, formulas, techniques, hardware developments
and
software developments, as well as improvements thereof or know-how related
thereto, (i) concerning any present or prospective activities of the Company
and
its affiliates and (ii) (A) which the Consultant becomes acquainted with as
a
result of his employment by the Company or through his provision of the
Services, (B) which results from any work he may do for, or at the request
of,
the Company or any of its affiliates, (C) which relate to the Company’s or any
affiliates’ business or actual or demonstrably anticipated research and
development, or (D) which are developed in any part by use of the Company’s or
any such affiliates’ equipment, supplies, facilities or trade
secrets.
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(f) If
the
Company is unable, after reasonable effort, to secure the signature of the
Consultant with respect to any document needed by the Company to enforce its
rights under this Section 6, any executive officer of the Company shall be
entitled to execute any such papers as the agent and the attorney-in-fact of
the
Consultant, and the Consultant hereby irrevocably designates and appoints each
executive officer of the Company as his agent and attorney-in-fact to execute
any such papers on his or her behalf, and to take any and all actions as each
the Company may deem necessary or desirable in order to protect its rights
and
interests in any invention, under the conditions described in this
sentence.
The
parties hereto agree that the covenants and agreements contained in this Section
6 are, taken as a whole, reasonable in their scope and duration, and no party
shall raise any issue of the reasonableness of the scope or duration of any
such
covenants in any proceeding to enforce any such covenants.
7. Remedy
at Law Inadequate.
The
Consultant acknowledges that any remedy at law for breach of any of the
covenants set forth in Sections 4, 5 and 6 contained in this Agreement would
be
inadequate and the Company shall be entitled to preliminary and permanent
injunctive relief in the event of any such breach, without any requirement
to
post bond.
8. Effect
of Termination.
Upon
termination of the Consulting Period for any reason whatsoever, all rights
and
obligations of the parties under this Agreement shall cease, except that the
Consultant shall continue to be bound by the covenants set forth in Sections
4,
5, 6 and 7 hereof, and the Company shall be bound to pay to the Consultant
accrued compensation to the date of termination.
9. Independent
Contractor Status.
It is
the express intention of the parties to this Agreement that the Consultant
is an
independent contractor, and is classified by the Company as such for all
employee benefit purposes, and the parties expressly agree that the Consultant
is not an employee, agent, joint venturer, or partner of the Company. Nothing
in
this Agreement shall be interpreted or construed as creating or establishing
an
employment relationship between the Company and the Consultant. Both parties
understand and agree that the Consultant may, and probably will, perform
services for others during the term of this Agreement.
10. Obligations
of the Consultant.
(a) The
Consultant will supply all equipment necessary to perform the
Services.
(b) The
Consultant is solely responsible for all taxes, withholdings, and other similar
statutory obligations with respect to Consultant’s services
hereunder, and the Consultant agrees to defend, indemnify and hold Company
and
its affiliates harmless from any and all claims made by any entity on account
of
an alleged failure by the Consultant to satisfy any such tax or withholding
obligations.
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(c) Since
the
Consultant is not an employee of Company, the Consultant agrees and understands
that the Consultant is not entitled to any of the benefits which Company may
make available to its employees, such as group insurance, workers’ compensation,
disability insurance, vacation, sick pay, profit-sharing, stock options, or
retirement benefits. In addition, the Consultant shall be responsible for
providing, at his expense and in his name, disability, workers compensation
or
other insurance as well as any and all licenses and permits usual or necessary
for conducting the services described in this Agreement.
(d) The
Consultant will indemnify and hold the Company and its affiliates harmless
from,
and will defend the Company and its affiliates against, any and all loss,
liability, damage, claims, demands, or suits and related costs and expenses
to
persons or property that arise, directly or indirectly, from acts or omissions
of the Consultant, or from the breach of any term or condition of this Agreement
attributable to the Consultant or his agents.
11. Stock
Options.
The
Consultant acknowledges and agrees that the stock options previously granted
to
him pursuant to the 1997 Plan and the Parent’s 2006 Long-Term Incentive Plan
(the “2006 Plan”) shall cease vesting as of the date hereof. As a result, the
options previously granted to the Consultant under the 2006 Plan shall be
unvested and forfeited as of the date hereof. The vested and outstanding options
granted to the Consultant under the 1997 Plan shall remain exercisable for
three
months following the date he ceased to be an employee and shall terminate upon
the earlier of (a) the date of exercise and (b) the close of business on the
date that is three months following the date thereof.
12. Directors’
Fees.
The
Consultant acknowledges and agrees that, as a result of his prior status as
an
officer of PPC, he is ineligible to receive any compensation as a non-employee
director under the 2006 Plan. In recognition of the responsibilities and
activities of the Consultant as a Director of the Company, the Company shall
pay
the Consultant a retainer of $1,000 per month.
13. Miscellaneous.
(a) This
Agreement may not be assigned by the Consultant. The Company may assign this
Agreement in connection with a Change in Control of the Company.
(b) In
the
event that any provision of this Agreement is found by a court of competent
jurisdiction to be invalid or unenforceable, such provision shall be, and shall
be deemed to be, modified so as to become valid and enforceable, and the
remaining provisions of this Agreement shall not be affected.
(c) This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Connecticut.
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(d) No
modification of this Agreement shall be effective unless in a writing executed
by both parties.
(e) This
Agreement constitutes the entire agreement of the parties with respect to the
subject matter hereof, and supercedes all prior agreements, representations
and
promises by either party or between the parties. For purposes of clarification,
this Agreement does not supercede or replace Section 8(e) of the Asset Purchase
Agreement entered into as of November 9, 2004 by and among the Parent, PPC
and
the Consultant.
(f) For
purposes of this Agreement, “Change in Control of the Company” shall mean: (i) a
sale or exchange by the stockholders of more than fifty percent (50%) of the
Company’s voting stock (whether in a single or a series of related
transactions), (ii) a merger or consolidation in which the Company is a party,
(iii) the sale, exchange or transfer of all or substantially all of the assets
of the Company (whether in a single or a series of related transactions), or
(iv) a liquidation or dissolution of the Company, wherein, upon any such event
described in clauses (i) through (iv) above , the stockholders of the Company
immediately before such event do not retain immediately after such event direct
or indirect beneficial ownership of more than fifty percent (50%) of the total
combined voting power of the outstanding voting stock of the Company, its
successor, or the corporation to which the assets of the Company were
transferred, as the case may be. For purposes of the preceding sentence,
indirect beneficial ownership shall include, without limitation, an interest
resulting from ownership of the voting stock of one or more corporations which,
as a result of such event, own the Company or the transferee corporation(s),
as
the case may be, either directly or through one or more subsidiary
corporations.
[Signature
page follows.]
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IN
WITNESS WHEREOF, the parties hereto have signed this Agreement as of the date
first above written.
| Xxxxxx Plastics Company LLC | ||
| |
|
|
| By: | /s/ Xxxx Xxxxxxxxx | |
|
Name: Xxxx Xxxxxxxxx |
||
| Title: President and Chief Operating Officer | ||
| |
|
|
| /s/ Xxxxx Xxxxxxxxx | ||
|
Xxxxx Xxxxxxxxx |
||
| |
|
|
| /s/ Xxxxx Xxxxxxxxx | ||
|
PPC Liquidation Corporation |
||
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Exhibit
A
Consulting
Duties:
| 1. |
Assist
on technical issues and projects as
required
|
| 2. |
Assist
with customers on the technical and commercial
issues
|
| 3. |
Continue
to mentor the PPC staff on technical issues and
capabilities
|
| 4. |
Assist
with quotes and proposals as needed
|
| 5. |
Other
duties as assigned and requested.
|
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