CONSULTING AGREEMENT, dated as of July 31, 1997, between Fairfield
Manufacturing Company, Inc. (the "Company"), and Xxxxxxxxx X. Xxxxxxx, an
individual residing at 0000 Xxxxxxxxxx Xxxxxx, Xxxxxxxxx, XX (the "Consultant").
The parties hereto agree as follows:
1. Retention of Consultant. On the terms and subject to the conditions
set forth herein, the Company hereby retains the Consultant to provide the
consulting services described in section 2, and the Consultant hereby agrees to
provide such consulting services to the Company or, if requested by the Company,
to any affiliate(s) of the Company.
2. Services. During the period commencing (on the date of this
Agreement) and ending on the fourth anniversary thereof (the "Consulting
Period"), Consultant shall provide to the Company consulting services
commensurate with his status and experience, including, but not limited to, such
assistance as the Company shall reasonably request as to significant corporate
transactions involving the Company (e.g., financing, acquisitions and
divestitures), and providing continuity with respect to important customers of
or vendors to the Company.
3. Compensation: Expenses. In consideration for the services to be
provided by the Consultant hereunder, the Company will pay to the Consultant a
consulting fee at a rate of $250,000 per annum during the Consulting Period,
payable in quarterly installments of $62,500 in advance, for an aggregate total
during the Consulting Period of $1,000,000. The Company will reimburse the
Consultant for all reasonable out-of-pocket expenses incurred by the Consultant
in connection with the performance by the Consultant of his services under this
Agreement.
4. Independent Contractor Status. The Consultant shall not, solely by
virtue of the consulting services provided hereunder, be considered to be an
officer, employee or part-time employee of the Company during the Consulting
Period, and shall not have the power or authority to contract in the name of or
bind the Company, except as may be expressly stated in a written delegation of
such authority from the Board. The Consultant will be responsible for all
applicable taxes and other matters, if any, required of self-employed
individuals by any government authority; provided that if the Company shall
determine that the Consultant should properly be treated as an employee of the
Company for tax purposes, the Company shall be entitled to withhold any
applicable employment-related withholding taxes or other similar taxes.
5. Non-Competition; Confidential Information; Non-Solicitation.
(a) During the Consulting Period the Consultant will not, directly or
indirectly, either individually or as owner, partner, agent, employee,
consultant or otherwise, engage in any activity in material competition with the
business of the Company.
(b) During, and at all times after the expiration of, the Consulting
Period, the Consultant will keep confidential any trade secrets or confidential
or proprietary information of the Company which are now known to the Consultant
or which hereafter may become known to the Consultant as a result of his
employment or association with the Company and shall not directly or indirectly
disclose any such information to any person, firm or corporation, or use the
same in any way other than in connection with the business of the Company.
(c) During the Consulting Period, the Consultant will not, directly or
indirectly, induce any employee of the Company who is a member of management to
engage in any activity in which the Consultant is prohibited from engaging under
this Section, and will not directly or indirectly, either individually or as
owner, agent, employee, consultant or otherwise, employ or offer employment to
any such person who is or was employed by the Company unless such person shall
have ceased to be employed by the Company or its subsidiaries for a period of at
least 6 months.
(d) During the Consulting Period, the Consultant shall not solicit or
otherwise attempt to establish for the Consultant or any other person, firm or
entity, any business relationship with any person, firm or corporation which
during the Consulting Period is a customer of the Company or a prospective
customer.
6. Death of Executive. If the Consultant dies prior to the end of the
Consulting Period or is unable to perform the services requested of him
hereunder due to physical or mental disabilities, as determined by a doctor
mutually acceptable to the Company and the Consultant (or his legal
representatives), the Company shall pay to the Consultant's legal
representatives or beneficiaries such amounts as would have been paid or
provided by the Company to the Consultant under this Agreement had the
Consultant continued to provide such services for the term of this Agreement.
7. Successors and Assigns. This Agreement and all of the provisions
hereof shall be binding upon, inure to the benefit of, and be enforceable by and
against the parties hereto and their respective successors and assigns. The
rights, interests and obligations hereunder shall not be assigned or delegated
in whole or in part by either party, except as provided in Section 6 hereof and
except that the Company may assign any of its rights, interests and obligations
hereunder to any of its affiliates.
8. Governing Law. This Agreement shall be deemed to be a contract made
under, and is to be governed and construed in accordance with, the laws of the
State of New York, without regard to the conflict of laws principles or rules
thereof.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
FAIRFIELD MANUFACTURING COMPANY, INC.
By: ____________________________
Name: Xxxxxxx X. Xxxxx
Title: President & CEO
____________________________
Xxxxxxxxx X. Xxxxxxx
