Exhibit 99.3
XXXXX, LLC
FULL-TIME PERMANENT ENGAGEMENT RESOURCES
AGREEMENT
August 21, 2006
Xx. Xxxxx X. Xxxxxx
Interim Chief Executive Officer
Del Global Technologies Corp.
Dear Xxx:
Xxxxx, LLC ("Xxxxx") understands that Del Global Technologies Corp. (the
"Company") desires to hire Xxxx X. Xxxxx, one of our partners, as an employee of
the Company (the "Employee"). The Company acknowledges that the Employee is and
will remain a partner in our firm so that he or she will have access to our
firm's resources for use in his or her employment with the Company. This
Full-Time Permanent Engagement Resources Agreement (the "Resources Agreement")
sets forth the rights of the Company, through the Employee, to use such
resources for the benefit of the Company and for the payment for such services
and for making the Employee available for service to the Company.
Since the Employee will be under the control and direct management of the
Company, and not Xxxxx, Xxxxx'x obligations to the Company are exclusively those
set forth in this Resources Agreement. This document will serve as the entire
agreement between the Company and Xxxxx.
COMPENSATION
The Company will pay directly to Xxxxx, as compensation for resources provided,
resource fees ("Resource Fees") equal to the sum of (i) $58,250 (payable as
follows: (a) the $20,000 deposit currently being held by Xxxxx will be applied
toward this amount immediately upon the beginning of employment of the Employee
(b) the balance of $38,250 will be paid in three monthly installments of $12,750
each beginning September 15, 2006), plus (ii) 25% of any bonus paid for the
period beginning the date of employment under this agreement ("Beginning Date")
until the date 12 months after Beginning Date. Any amounts payable based on
bonuses paid Employee, will be paid to Xxxxx at the time the bonus is paid to
the Employee, and (iii) $1,000 per month during the term of this Resources
Agreement, including any months with respect to which any severance payment is
made, payable at the same time the Employee is paid. If a bonus or bonuses are
paid to the Employee subsequent to 12 months from the Beginning date (the "Bonus
Period"), for work performed during the Bonus Period, the amount owing to Xxxxx
will be calculated proportionally based on the number days for which the bonus
was paid that fall within the Bonus Period divided by the total number of days
for which the bonus was paid.
If the Employee is no longer employed by the Company, for whatever reason, as of
the six-month anniversary of the Beginning Date, then Xxxxx agrees to promptly
return to the Company any compensation paid to Xxxxx pursuant to the above
paragraph. Xxxxx further agrees that Xxxxx shall not be entitled to any
additional Resource Fees from the Company pursuant to this Resources Agreement.
In addition, the Company acknowledges that the Employee will share with Xxxxx
15% of any cash proceeds realized from any Equity Bonus that the Employee may be
granted.
For purposes hereof, "Equity Bonus" means any stock, option, warrant, or similar
right (i.e., not yet realized in cash) that is granted, in each case in
connection with services rendered by the Employee and "Salary" means all
compensation paid to Employee, except bonuses and benefits (including medical
benefits subsidy paid to Employee). All compensation payable or deliverable to
Xxxxx is referred to herein as the "Resource Fee."
Payment of the Signing Fee will be made concurrently with the signing of this
Resources Agreement. All other payments to Xxxxx should be made by direct
deposit through the Company's payroll, or by an automated clearing house ("ACH")
payment at the same time as payments are made to the Employee.
TERMINATION
This Resources Agreement will terminate immediately upon the effective date of
termination or expiration of the Employee's employment with the Company or upon
the Employee ceasing to be a partner of Xxxxx.
In the event that either party commits a breach of this Resources Agreement and
fails to cure the same within seven (7) days following delivery by the
non-breaching party of written notice specifying the nature of the breach, the
non-breaching party will have the right to terminate this Resources Agreement
immediately effective upon written notice of such termination.
HIRING EMPLOYEE OUTSIDE OF RESOURCES AGREEMENT
During the twelve (12)-month period following termination or expiration of this
Resources Agreement, other than in connection with another Xxxxx agreement, the
Company will not employ the Employee, or engage the Employee as an independent
contractor, to render services of substantially the same nature as those for
which Xxxxx is making the Employee available pursuant to this Resources
Agreement. The parties recognize and agree that a breach by the Company of this
provision would result in the loss to Xxxxx of the Employee's valuable expertise
and revenue potential and that such injury will be impossible or very difficult
to ascertain. Therefore, in the event this provision is breached, Xxxxx will be
entitled to receive as liquidated damages an amount equal to forty-five percent
(45%) of the Employee's Annualized Compensation (as defined below), which amount
the parties agree is reasonably proportionate to the probable loss to Xxxxx and
is not intended as a penalty. If, however, a court or arbitrator, as applicable,
determines that liquidated damages are not appropriate for such breach, Xxxxx
will have the right to seek actual damages. The amount will be due and payable
to Xxxxx upon written demand to the Company. For this purpose, "Annualized
Compensation" will mean the Employee's most recent annual Salary and the maximum
amount of any bonus for which the Employee was eligible with respect to the then
current bonus year.
INSURANCE
The Company wil provide Employee with the same level of directors' and officers'
insurance as other most senior executives and board members of the Company,
including "tail" coverage.
DISCLAIMERS, LIMITATIONS OF LIABILITY & INDEMNITY
It is understood that Xxxxx does not have a contractual obligation to the
Company other than to make its resources available to the Employee (by virtue of
2
the Employee being a partner in Xxxxx) for the benefit of the Company under the
terms and conditions of this Resources Agreement. The Resource Fee will be for
the resources provided and for making the Employee available for service to the
Company. Xxxxx assumes no responsibility or liability under this Resources
Agreement other than to render the services called for hereunder and will not be
responsible for any action taken by the Company in following or declining to
follow any of Xxxxx'x advice or recommendations.
Xxxxx represents to the Company that Xxxxx has conducted its standard screening
and investigation procedures with respect to the Employee becoming a partner in
Xxxxx, and the results of the same were satisfactory to Xxxxx. Xxxxx disclaims
all other warranties, either express or implied. Without limiting the foregoing,
Xxxxx makes no representation or warranty as to the accuracy or reliability of
reports, projections, forecasts, or any other information derived from use of
Xxxxx'x resources, and Xxxxx will not be liable for any claims of reliance on
such reports, projections, forecasts, or information. Xxxxx will not be liable
for any non-compliance of reports, projections, forecasts, or information or
services with federal, state, or local laws or regulations. Such reports,
projections, forecasts, or information or services are for the sole benefit of
the Company and not any unnamed third parties.
In the event that any partner of Xxxxx (including without limitation the
Employee to the extent not otherwise entitled in his or her capacity as an
officer of the Company) is subpoenaed or otherwise required to appear as a
witness or Xxxxx or such partner is required to provide evidence, in either case
in connection with any action, suit, or other proceeding initiated by a third
party or by the Company against a third party, then the Company shall reimburse
Xxxxx for the costs and expenses (including reasonable attorneys' fees) actually
incurred by Xxxxx or such partner and provide Xxxxx with compensation at Xxxxx'x
customary rate for the time incurred.
The Company agrees that, with respect to any claims the Company may assert
against Xxxxx in connection with this Resources Agreement or the relationship
arising hereunder, Xxxxx'x total liability will not exceed two (2) months of the
then current monthly Resource Fee.
As a condition for recovery of any liability, the Company must assert any claim
against Xxxxx within three (3) months after discovery or sixty (60) days after
the termination or expiration of this Resources Agreement, whichever is earlier.
Xxxxx will not be liable in any event for incidental, consequential, punitive,
or special damages, including without limitation, any interruption of business
or loss of business, profit, or goodwill.
ARBITRATION
If the parties are unable to resolve any dispute arising out of or in connection
with this Resources Agreement, either party may refer the dispute to arbitration
by a single arbitrator selected by the parties according to the rules of the
American Arbitration Association ("AAA"), and the decision of the arbitrator
will be final and binding on both parties. Such arbitration will be conducted by
the Chicago, Illinois office of the AAA. In the event that the parties fail to
agree on the selection of the arbitrator within thirty (30) days after either
party's request for arbitration under this paragraph, the arbitrator will be
chosen by AAA. The arbitrator may in his discretion order documentary discovery
but shall not allow depositions without a showing of compelling need. The
3
arbitrator will render his decision within ninety (90) days after the call for
arbitration. The arbitrator will have no authority to award punitive damages.
Judgment on the award of the arbitrator may be entered in and enforced by any
court of competent jurisdiction. The arbitrator will have no authority to award
damages in excess or in contravention of this Resources Agreement and may not
amend or disregard any provision herein. Notwithstanding the foregoing, no issue
related to the ownership of intellectual property will be subject to arbitration
but will instead be subject to determination by a court of competent
jurisdiction, and either party may seek injunctive relief in any court of
competent jurisdiction.
MISCELLANEOUS
Xxxxx will be entitled to receive all reasonable costs and expenses incidental
to the collection of overdue amounts under this Resources Agreement, including
but not limited to attorneys' fees actually incurred.
The Company agrees to allow Xxxxx to use the Company's logo and name on Xxxxx'x
website and other marketing materials for the sole purpose of identifying the
Company as a client of Xxxxx. Xxxxx will not use the Company's logo or name in
any press release or general circulation advertisement without the Company's
prior written consent.
Neither the Company nor Xxxxx will be deemed to have waived any rights or
remedies accruing under this Resources Agreement unless such waiver is in
writing and signed by the party electing to waive the right or remedy. This
Resources Agreement binds and benefits the successors of Xxxxx and the Company.
Neither party will be liable for any delay or failure to perform under this
Resources Agreement (other than with respect to payment obligations) to the
extent such delay or failure is a result of an act of God, war, earthquake,
civil disobedience, court order, labor dispute, or other cause beyond such
party's reasonable control.
The terms of this Resources Agreement are severable and may not be amended
except in a writing signed by Xxxxx and the Company. If any portion of this
Resources Agreement is found to be unenforceable, the rest of the Resources
Agreement will be enforceable except to the extent that the severed provision
deprives either party of a substantial portion of its bargain.
The provisions in this Resources Agreement concerning payment of compensation
and reimbursement of costs and expenses, limitation of liability, directors' and
officers' insurance and arbitration will survive any termination or expiration
of this Resources Agreement.
This Resources Agreement will be governed by and construed in all respects in
accordance with the laws of the State of New York, without giving effect to
conflicts-of-laws principles.
Nothing in this Resources Agreement shall confer any rights upon any person or
entity other than the parties hereto and their respective successors and
permitted assigns and the Employee.
Each person signing below is authorized to sign on behalf of the party
indicated, and in each case such signature is the only one necessary.
4
This Resources Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, and all of which together shall constitute
one and the same instrument, and may be executed by delivery of a facsimile copy
of a signed signature page.
ELECTRONIC PAYMENT INSTRUCTIONS FOR DEPOSIT AND RESOURCE FEE:
Bank Name: Bank of America
Branch: Atlanta
Routing Number:
For ACH Payments: xxx xxx xxx
For Wires: xxx xxx xxx
Account Name: Xxxxx, LLC
Account Number: xxx xxx xxx xxx
Please reference Del Global Technologies Corp. in the body of the wire.
Please sign below and return a signed copy of this letter to indicate the
Company's agreement with its terms and conditions.
We look forward to serving you.
Sincerely yours,
XXXXX, LLC
/s/ Xxxx X. Xxxxxx
-----------------------------------
SIGNATURE
Xxxx X. Xxxxxx
Area Managing Partner for
XXXXX LLC
Acknowledged and agreed by:
DEL GLOBAL TECHNOLOGIES CORP.
By: /s/ Xxxxx X. Xxxxxx
----------------------------
Title: Interim CEO/President
--------------------------
Date: 8/27/06
--------------------------
5
