EXHIBIT 10(F)
CONSULTING AGREEMENT
THIS AGREEMENT, made as of February 1, 2001, by and between XXXX XXXXXXXX,
of Minneapolis, Minnesota ("Consultant") and NORSTAN, INC., a Minnesota
corporation (the "Company"),
W I T N E S S E T H:
WHEREAS, Consultant has been employed with the Company for a period in
excess of 20 years in various executive management positions and more recently
pursuant to the terms and conditions of the Amended and Restated Employment
Agreement dated April 7, 1995 (the "Employment Agreement"); and
WHEREAS, the continued availability of Consultant's experience and
knowledge are considered to be important to the continued success of the
Company's business after the termination of his Employment Agreement; and
WHEREAS, the Company wishes to retain the services of Consultant as an
adviser and consultant to the Company and to restrict his right to compete with
the Company, for the term of this Agreement, and Consultant is willing to
provide such services and to agree to such restrictions on the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises, and of the mutual
covenants hereinafter set forth, the parties do hereby agree as follows:
1. Consulting Period. The Company agrees to retain the services of
Consultant and Consultant agrees to provide the services hereinafter described,
for the period beginning on the expiration of his current Employment Agreement
with the Company (the "Commencement Date") and ending on the date three (3)
years from such Commencement Date (the "Consulting Period"). Consultant shall
have the right, at any time, to terminate the Employment Agreement and begin
receiving compensation payments under this Consulting Agreement.
2. Duties.
a. Consulting Services. During the Consulting Period, Consultant
shall hold himself available to consult with and advise the officers, directors,
and other representatives of the Company concerning such matters relating to the
operations of the Company and as the Chief Executive Officer and Board of
Directors shall determine. Consultant shall make himself available to render
such services at all reasonable times by telephone or letter and, upon
reasonable advance notice, in person; provided, that Consultant shall not be
required to perform consulting or advisory services during any period in which
he is precluded from doing so by reason of incapacity or ill health.
b. Services as a Director. The Company agrees, except for due cause,
to have him included among management's nominees for election to its Board of
Directors for each succeeding term ending not later than one year after the
expiration of the Consulting Period. Consultant agrees that, except insofar as
he may be unable to do so by reason of incapacity or ill health, he shall serve
as a Director of the Company and of any of its subsidiaries during any part of
the Consulting Period for which he may be elected to such a position. Consultant
shall be
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entitled to standard Director's fees for any period during which he is serving
as a Director of the Company, which fees shall be in addition to any
compensation payable to Consultant pursuant to this Agreement.
3. Compensation. During the Consulting Period, Consultant shall be
compensated as follows:
a. Retainer. During the Consulting Period, Consultant shall be paid
a retainer at the rate of $255,000 per year, payable in equal monthly
installments of $21,250 with the first payment due on the first day of the month
following the Commencement Date, provided that in no event shall Consultant
receive compensation in any manner under this Agreement and this Agreement shall
become void if Consultant is (i) terminated pursuant to Sections 4 or 7(a) of
his Employment Agreement, or (ii) receiving payments pursuant to Sections 5 or 8
of his Employment Agreement, or (iii) receiving payments pursuant to a
termination without cause under his Employment Agreement.
b. Facilities. During the Consulting Period, Company shall provide
office space and secretarial services as necessary to enable Consultant to
perform his services under this Agreement.
c. Travel Expenses. Consultant shall be reimbursed by the Company
for all reasonable travel expenses incurred by him at the request of the Company
in the performance of his duties pursuant to this Agreement, to the extent such
expenses are substantiated and are consistent with the general policies of the
Company relating to the reimbursement of such expenses.
d. Fringe Benefits Consultant shall not be entitled to participate
in any of the pension, profit sharing, or other employee benefit plans or fringe
benefit programs which are from time to time maintained by the Company for its
employees, except pursuant to a COBRA election for the applicable period
available under the law
e. Stock Options/Grants. Consultant's current outstanding stock
options and grants shall continue to be governed by the terms and conditions of
the applicable stock option and restricted stock agreements through the
expiration of the Consulting Period.
4. Death or Disability. If Consultant shall die or become disabled during
the Consulting Period, the Company shall continue to pay the retainer to
Consultant or, in the event of death, to his estate under section 3.a. for the
balance of the Consulting Period.
5. Competition.
a. Consultant covenants and agrees that during the Consulting
Period, he will not, except with the express written consent of the Board of
Directors of the Company, engage directly or indirectly in, or permit his name
to be used in connection with, any competitive business in the geographic area
serviced by the Company or its subsidiaries.
b. For the purposes of this paragraph 5: (i) the phrase, "engage
directly or indirectly in" shall encompass: (A) all of Consultant's activities
whether on his own account or as an employee, director, officer, agent,
consultant, independent contractor, or partner of or in any person, firm, or
corporation (other than the Company and its subsidiaries), and (B) Consultant's
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ownership of more than 10% of the voting stock of any corporation, 5% or more of
the gross income of which is derived from any business or businesses in which
Consultant may not then engage; and (ii) the phrase "competitive business shall
mean: (A) the sale of telephone, telecommunications, data, network or similar
equipment, (B) sale of consulting and/or maintenance services, and (C) any other
business in which the Company or its subsidiaries is then engaged.
6. Enforcement. If, at the time of enforcement of any provision of
paragraph 5, a court shall hold that the period, scope, or geographical area
restrictions stated therein are unreasonable under circumstances then existing,
the maximum period, scope, or geographical area reasonable under the
circumstances shall be substituted for the stated period, scope, or area. In the
event of a breach by Consultant of any of the provisions of paragraph 5, the
Company may, in addition to any other rights and remedies existing in its favor:
(a) discontinue the payment of any amounts, or the provision of any benefits,
required to be paid or provided to Consultant pursuant to this Agreement; and
(b) apply to any court of law or equity of competent jurisdiction for specific
performance and/or injunctive or other relief in order to enforce or prevent any
violations of the provisions hereof.
7. Status of Consultant. During the Consulting Period, Consultant's
relationship to the Company shall be solely that of an independent contractor.
Subject to the provisions of paragraph 5 hereof, Consultant shall be free to
dispose of such portion of his time during normal business hours as he is not
obligated to devote to the Company hereunder in such manner, and to such
persons, firms, and corporations, as he sees fit. Consultant agrees that he will
not take any position inconsistent with his status as an independent contractor
hereunder in any federal, state, or local income or other tax return.
8. Successors.
a. Of the Company. The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation, or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would have been required to perform it if no such
succession had taken place. As used in this Agreement, "Company" shall mean the
Company as herein before defined, and any successor to the business and/or
assets of the Company which executes and delivers the agreement provided for in
this paragraph 8 or which otherwise becomes bound by all the terms and
provisions of this Agreement as a matter of law.
b. Of Consultant. This Agreement shall inure to the benefit of and
shall be enforceable by Consultant, his legal representative, or other
successors in interest.
9. General Provisions.
a. Assignment. It is agreed that neither Consultant nor any
beneficiary shall have any right to commute, sell, assign, transfer, or
otherwise convey the right to receive any payment or other benefit hereunder,
which payments and benefits, and the rights thereto, are expressly declared to
be non-assignable and nontransferable. Except as provided in paragraph 8.a., the
Company shall have no right to assign or transfer its rights or obligations
under this Agreement, and of any beneficiary or Consultant, shall be solely
those of an unsecured creditor of the Company. Any asset acquired by the
Company, in connection with the liabilities assumed
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by it under this Agreement shall not be deemed to be held under any trust for
the benefit of the Consultant or his beneficiaries or to be considered security
for the performance of the obligations of the Company, but shall be, and remain,
a general, un-pledged, unrestricted asset of the Company.
b. Headings. The headings of all of the paragraphs and subparagraphs
of this Agreement are inserted for convenience of reference only, and shall not
affect the construction or interpretation of this Agreement.
c. Modification. Amendment. Waiver. No modification, amendment, or
waiver of any provision of this Agreement shall be effective unless approved in
writing by both parties. The failure at any time to enforce any of the
provisions of this Agreement shall in no way be construed as a waiver of such
provisions and shall not affect the right of either party thereafter to enforce
each and every provision of this Agreement in accordance with its terms.
d. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be held to be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
e. No Strict Construction. The language used in this Agreement shall
be deemed to be the language chosen by the parties thereto to express their
mutual intent, and no rule of strict construction shall be applied against any
person.
f. Applicable Law. All questions concerning the construction,
validity, and interpretation of this Agreement shall be governed by the laws of
the State of Minnesota without giving effect to the principles of conflict of
laws of such state.
g. Notices. Any notice to be served under this Agreement shall be in
writing and shall be mailed by registered or certified mail, registry or
certification fee and postage prepaid and return receipt requested, addressed:
If to the Company, to:
Norstan, Inc.
0000 Xxxxx Xxx Xxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Attention: Board of Directors; or
If to Consultant, to:
XXXX XXXXXXXX
000 Xxxxxxxxx Xxxx
Xxxxx, Xxxxxxxxx 00000;
or to such other place as either party may specify in writing, delivered in
accordance with the provisions of this subparagraph.
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i. Survival. The rights and obligations of the parties shall survive
the term of the Consulting Period to the extent that any performance is required
under this Agreement after the expiration or termination of such term.
j. Entire Agreement. This Agreement constitutes the entire agreement
of the parties with respect to the subject matter thereof, and supersedes all
previous agreements between the parties relating to the same subject matter.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
NORSTAN, INC. By /s/ Xxxx Xxxxxxxx
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XXXX XXXXXXXX
By /s/ Xxxxx X. Xxxxxxx
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President and Chief Executive Officer
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