Exhibit 10(n)
CONSULTING AGREEMENT
CONSULTING AGREEMENT ("Agreement") made as of Nov. 8, 1999 by and
between AMSCAN INC., a New York corporation with a principal place of business
at 00 Xxxxxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000 (the "Company") and XXXXXXX X.
XXXXXX, an individual residing at 000 Xxxxxx Xxxxx, Xxxx 000, Xxxxxxxx,
Xxxxxxxxxxx 00000 (the "Consultant").
WHEREAS, Consultant has previously rendered services to the Company as
an officer and employee of the Company; and
WHEREAS, the employment relationship between the Company and the
Consultant has terminated; and
WHEREAS, the Company desires to continue to benefit from the knowledge
and expertise of the Consultant and thereby wishes to retain the consulting
services of the Consultant and the Consultant is willing to provide certain
consulting services to the Company relating to the marketing and sale of the
Company's products;
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
agree as follows:
1. APPOINTMENT. The Company hereby retains the Consultant during the Term, as
defined in Section 2, to render to the Company, its subsidiaries and
affiliates, services of an advisory or consultative nature in the area of
sales, marketing, pricing and customer relations so that the Company may
have the benefit of the experience, knowledge and contacts gained by the
Consultant as an employee and officer of the Company (the "Services") and
career with the industry. Consultant hereby agrees to render to the Company
the Services during the Term in accordance with the terms and provisions of
this Agreement.
2. TERM.
(a) TERM. The term of this Agreement shall commence as of the date hereof
and shall, unless sooner terminated as provided herein, continue in
full force and effect until September 30, 2002 (the "Term").
(b) TERMINATION. Notwithstanding the foregoing, the Consultant's retention
by the Company hereunder shall terminate upon the occurrence of any of
the following events:
(i) the mutual agreement, in writing, at any time, by the
Consultant and the Company to terminate such retention;
(ii) the death of the Consultant;
(iii) the unilateral cessation or discontinuance by the
Consultant of his rendering the Services to the Company;
(iv) upon thirty (30) days written notice by the Company and the
payment of the amount set forth in Paragraph 2(e); or
(v) the termination of the Consultant's retention by the
Company, for "Cause", as hereinafter defined.
(c) TERMINATION FOR CAUSE. For the purposes of this Agreement, "Cause"
shall mean any of the following:
(i) the violation by the Consultant of any law or the
commission by the Consultant of any crime or an act of
fraud against the Company;
(ii) a breach of any of the terms of the Separation Agreement
between the Company and the Consultant dated as of the date
hereof;
(iii) any material breach of this Agreement; or
(iv) any conduct on the part of the Consultant which has a
material adverse effect upon the performance by the
Consultant of his duties hereunder or a material adverse
effect upon the relationship of any customers and/or
employees of the Company or potential customers or
employees of the Company with the Company.
(d) NO RIGHTS AFTER TERMINATION. Upon the termination of the Consultant's
retention hereunder, whether at the natural end of the Term or in the
event of the earlier termination of the Term as provided herein, the
Consultant shall have no further rights under this Agreement, except
as expressly set forth herein. Nothing herein contained shall be
deemed to preclude the Company from enforcing any remedies available
to it at law or equity in consequence
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of a breach by the Consultant of his obligations to the Company or
available to the Company under the provisions of this Agreement,
including without limitation, the enforcement of any confidentiality
obligations or restrictive covenants hereunder, all of which shall
survive the termination of the Term and the termination of the
Consultant's retention hereunder by the Company.
(e) Upon termination of this Agreement pursuant to Paragraph 2(b)(iv),
Consultant shall be entitled to receive an amount equal to the
compensation payable for the remaining term of this Agreement.
3. STOCKHOLDERS' AGREEMENT.
(a) WAIVER OF CALL RIGHTS. The Company agrees that during the term of this
Agreement, it shall not exercise its "call rights" pursuant to
Paragraph 4.1 of that certain Stockholders Agreement, dated December
19, 1997, as amended by Amendment No. 1 dated as of August 6, 1998
(the "Stockholders' Agreement") among the Company and its
stockholders.
(b) EFFECT OF TERMINATION ON STOCKHOLDERS AGREEMENT. The parties hereby
expressly agree that the termination of the Company's retention of the
Consultant hereunder, whether upon the natural expiration of the Term
or pursuant to the provisions of clause (b) or clause (c) above, shall
result in the Company immediately having the right to exercise its
call rights set forth in Paragraph 4.1 of the Stockholders Agreement.
4. PERFORMANCE OF SERVICES.
(a) SERVICES. During the Term, the Consultant shall devote such business
time, skill and efforts to the affairs of the Company as the Company
shall reasonably determine is necessary to permit the faithful and
diligent performance of his duties hereunder.
(b) COMMUNICATIONS WITH COMPANY AND PERSONNEL. Notwithstanding anything to
the contrary otherwise contained herein, all communication by the
Consultant with the Company, its employees, customers and suppliers
shall be made exclusively through Xxxxx Xxxxxxxxxx unless otherwise
specifically requested by Xx. Xxxxxxxxxx.
(c) INDEPENDENT CONTRACTOR. The Consultant shall at all times act strictly
and exclusively as an independent contractor and shall not be
considered as having employee status under any law, regulation or
ordinance or as being
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entitled to participate in or benefit under any plan or program
established at any time by the Company for its employees. The
Consultant shall have no managerial authority or responsibility of an
officer or supervisor of the Company. The Consultant shall not have
any authority to bind the Company to any contract or to commit the
Company in any manner whatsoever. The Consultant shall not hold
himself out as representative or agent of the Company.
(d) APPLICABLE LAWS. The Consultant shall perform the Services in
conformity with all applicable laws, regulations, decrees, policies
and orders and shall at all times provide the Services in a
professional manner.
5. COMPENSATION. The Company agrees to pay, and the Consultant agrees to
accept, in full consideration for the performance by Consultant of the
Services, annual compensation of $220,500. Such compensation shall be
payable in monthly installments. In the event of the termination of the
Consultant's retention hereunder before the end of any 12 month period, the
compensation for the year of termination shall be pro-rated to the date of
termination.
6. RESTRICTIVE COVENANT. In consideration of his special and unique services,
as Executive Vice President of Sales while employed by the Company and his
position as a key executive officer of the Company and as a result of his
retention as Consultant hereunder, Consultant has been brought and will be
brought into close contact with trade secrets, proprietary information and
other confidential material and assets of the Company and Consultant
covenants and agrees as follows with the Company:
(a) For the purposes of this Agreement, the term "Confidential
Information" shall mean any data, proprietary information, financial
information, trade secrets, and other materials and information,
including, without limitation, contracts, customer lists, supplier
lists, and the names of representatives of customers and suppliers
responsible for entering into contracts with the Company information
as to specific customer needs, requirements and purchasing history
pricing information, information relating to costs, marketing,
selling, customers and suppliers, servicing, technology, plans,
processes, techniques, inventions, discoveries, designs, patterns or
devices in any way concerning the operation of the Company's business.
The term Confidential Information does not include any information
which (i) at the time of disclosure is generally available to the
public (other than as a result of a disclosure directly or indirectly
by Consultant, or (ii) has been
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independently acquired or developed by a third party not obligated to
keep such information confidential.
(b) Consultant hereby agrees that during the term of this Agreement and at
all times thereafter that he: (i) will keep confidential and protect
all Confidential Information (as hereinabove defined) known to him or
in his possession, (ii) will not disclose any Confidential Information
to any person or entity, except as may be required in the performance
by him of his duties as of the Company, (iii) will not use any
Confidential Information except for the exclusive benefit of the
Company and (iv) will return any Confidential Information and/or
documents containing Confidential Information at the end of the term
or at any time at the Company's request.
(c) As used in this Agreement, the term "Covenant Period" shall mean the
period commencing on the date of this Agreement and ending on the date
that is three (3) years after the last day of Consultant's retention
hereunder. During the Covenant Period, Consultant shall not directly
or indirectly (whether as owner, principal, agent, partner, officer,
employee, independent contractor, consultant, stockholder, or
otherwise), engage or participate or have any financial interest in or
perform services for, any entity which offers any service in
competition with the Company or engage in or perform services in any
business or activity involved in or related to the business which the
Company any of its affiliates is now or may hereafter become engaged
in, any location where such activity would be in competition with the
business of the Company. The Employee acknowledges that the Company
now carries on its business in many trading areas throughout the world
and in particular in the United States and Canada.
(d) During the Covenant Period, Consultant shall not, for himself or with
or as an agent for any other person, firm, corporation or entity,
directly or indirectly, solicit or provide services to or divert or
otherwise interfere with the business relationship of the company with
(i) any person or entity who is a client or customer of the Company at
any time during the Covenant Period or (ii) any potential clients or
customers with whom the Company is actively negotiating at the time of
termination of Consultant's retention hereunder.
(e) During the Covenant Period, Consultant shall not directly or
indirectly, for his own benefit or for the benefit of any other
person, firm, corporation or entity, divert, or attempt to divert,
solicit, recruit, entice or hire away any employees, consultants,
artists or independent contractors of the Company, whether or not any
such person is a full-time, part-time or temporary
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employee, consultant or independent contractor and whether or not such
person's employment or engagement is for a determined period or at
will, unless such person shall have ceased to be employed by such
entity for a period of at least 12 months. For purposes of the
provision, employees shall be deemed to include independent
contractors.
(f) SEVERABILITY. If a court of competent jurisdiction shall determine
that the covenant contained in this Section 6 shall be enforceable
only if limited to a shorter period of time or to a smaller
geographical area than is herein expressly provided, or otherwise
limited, then and in such event, such covenant shall be deemed to be
limited to the extent so determined to be enforceable, in the same
manner and to the same extent as if such limitations were expressly
provided herein.
7. RIGHTS AND REMEDIES.
(a) REMEDIES. The Consultant acknowledges that he will be performing
unique duties for the Company and that the provisions of Section 6 are
reasonable and necessary for the protection of the Company. Each of
the rights and remedies enumerated herein shall be independent of the
other, and shall be severally enforceable and all of such rights and
remedies shall be in addition to, and not in lieu of, any other rights
and remedies available to the Company under law or in equity.
Consequently, in the event that the Consultant commits a breach, or
threatens to commit a breach, of any of the provisions of Section 6 of
this Agreement, the Company, in addition to any other remedies it may
have at law or in equity, shall have the following rights and
remedies:
(i) The right and remedy to obtain a preliminary or permanent
injunction enjoining such breach or threatened breach, it
being acknowledged and agreed that any such breach or
threatened breach will cause irreparable injury to the
Company and that money damages alone will be difficult to
determine and will provide an inadequate remedy to the
Company; and
(ii) The right and remedy to require the Consultant to account
for and pay over to the Company all compensation, profits,
or other benefits derived or received by the Consultant as
the result of any transactions constituting a breach of any
of the provisions of Section 5 or Section 6 of this
Agreement, and the Consultant hereby agrees to account for
and pay over same to the Company.
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8. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and shall
inure to the benefit of the parties and their respective successors and
assigns hereto; provided, however, that neither this Agreement nor any of
the rights, duties and obligations of the Consultant shall be assignable,
transferable or subject to delegation without the prior written consent of
the Company and any attempted assignment, transfer or delegation without
such written consent shall be null and void.
9. AMENDMENT. This Agreement may be amended only in writing signed by the
party against which such amendment is sought to be enforced.
10. WAIVERS, ETC. Compliance with any provision hereof may be waived only in
writing signed by the party against which such waiver is sought to be
enforced. No exercise of or failure to exercise any right hereunder, and no
partial or single exercise of any such right, shall operate as a waiver, or
otherwise affect such exercise or any other exercise, of that or any other
right, it being understood that all such rights and all remedies therefor
are intended to be cumulative and not exclusive.
11. NOTICES. All notices and other communications required or permitted
hereunder shall be in writing (including facsimile) and shall be deemed to
have been duly given when delivered by hand, faxed or mailed, certified or
registered mail, return receipt requested and postage prepaid to the
parties at their respective addresses and facsimile numbers set forth
below, or at such other address or facsimile number as the party to be
notified may have otherwise designated, by notice in writing, to the other
party:
(a) If to the Company: Amscan Inc.
00 Xxxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxx
Facsimile No.: 000-000-0000
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with a copy to: Xxxxxxx & Xxxxxxxxx, LLP
Xxx Xxxxx Xxxxxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Attention: Xxxx X. Lever, Esq.
Facsimile No.: 914-285-9855
(b) If to the Consultant: Xx. Xxxxxxx Xxxxxx
000 Xxxxxx Xxxxx
Xxxx 000
Xxxxxxxx, XX 00000
Facsimile No.:
with a copy to:
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12. GOVERNING LAW. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York.
13. COUNTERPARTS. This Agreement may be executed 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.
14. FACSIMILE SIGNATURES. Receipt of facsimile copies of signature pages
hereof, as between the recipient thereof and the party that executed and
sent the same, shall constitute delivery of such signature pages; provided,
however, that originals are promptly delivered by commercial courier
service.
15. SEVERABILITY. If any provision of this Agreement, or the application
thereof to any person, place or circumstance, shall be held to be invalid,
unenforceable or void in any jurisdiction, the remainder of this Agreement
and such provisions as applied to other persons, places and circumstances
shall remain in full force and effect and such holding shall not effect the
validity, legality or enforceability of such provisions in any other
jurisdiction.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on the date first written above.
AMSCAN INC.
By: /s/ XXXXX X. XXXXXXXX
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Name:
Title:
/s/ XXXXXXX X. XXXXXX
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XXXXXXX X. XXXXXX
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