CONSULTING AGREEMENT
THIS AGREEMENT is effective as of June 1, 1996 between ELTRAX SYSTEMS,
INC., a Minnesota corporation (the "COMPANY"), and XXXXXXX X. X'XXXXXX (the
"CONSULTANT").
WHEREAS, the Consultant serves as a member of, and as Chairman of, the
Board of Directors of the Company (the "BOARD"); and
WHEREAS, the Company desires to engage the Consultant to perform certain
consulting services in order to benefit from the Consultant's management
experience and abilities, and the Consultant desires to accept such engagement,
all upon the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises contained herein,
the Company and the Consultant, each intending to be legally bound, agree as
follows:
1. ENGAGEMENT. Subject to all of the terms and conditions of this
Agreement, the Company agrees to engage the Consultant to assist the Company in
seeking out and identifying various opportunities for the Company to increase
its operations and revenues including, but not limited to, possible
acquisitions, joint ventures, marketing agreements and other growth
opportunities, as well as various management and other duties as may be agreed
to from time to time between the Board and the Consultant, and the Consultant
agrees to accept such engagement.
2. DUTIES.
a. During the term of this Agreement, the Consultant agrees to
consult with the Board and the Company regarding such matters, and to
provide such services to the Board and the Company, as may reasonably
be requested by the Board consistent with the Consultant's expertise and
experience and the Consultant's position as Chairman of the Board of
Directors of the Company and agreed to by the Consultant.
b. The services to be rendered by the Consultant to the Company
pursuant to this Agreement will be as an independent contractor, and this
Agreement does not make the Consultant an employee, agent or legal
representative of the Company for any purpose whatsoever, including without
limitation participation in any benefits or privileges given or extended
by the Company to its employees. No right or authority is granted to the
Consultant to assume or create any obligation or responsibility, express
or implied, on behalf of or in the name of the Company. The Company will
not withhold from the amounts paid to the Consultant under this Agreement
for any federal or state taxes, and the Consultant agrees that he will pay
all taxes due on such amounts paid.
c. Notwithstanding anything to the contrary contained in this
Agreement other than in Section 7 hereof, nothing shall be construed to
limit the ability of the Consultant to consult for or serve on the Board
of Directors of such other corporations, trade associations, charitable
organizations or other entities as the Consultant shall from time to time
deem appropriate and to engage in such other activities as the Consultant
shall reasonably deem not to be in conflict with his duties to the Company.
3. TERM. The term of this Agreement will commence on June 1, 1996 and,
subject to earlier termination in accordance with Section 4 below, will continue
for a period of one (1) year. The term of this Agreement will automatically
renew for an additional one (1) year term unless earlier terminated in
accordance with Section 4 below.
4. TERMINATION. Subject to the respective continuing obligations of the
Company and the Consultant under Sections 5(b), 6, 7 and 9 of this Agreement:
a. This Agreement may be terminated by the Company immediately upon
written notice to the Consultant "for cause," with the basis for
termination specified in such notice. For purposes of this Agreement,
"FOR CAUSE" will mean (i) dishonesty, fraud, gross misrepresentation,
embezzlement or material and deliberate injury or attempted injury, in
each case related to the Company or its business, (ii) any unlawful or
criminal activity of a serious nature, (iii) any willful breach of duty,
habitual neglect of duty or unreasonable job performance, or (iv) a
material breach of any provision of this Agreement.
b. This Agreement may be terminated by the Company or the Consultant
upon not less than thirty (30) days prior written notice without cause.
c. This Agreement may be terminated by the Company ninety (90) days
following the Consultant's Total Disability. For purposes of this
Agreement, "TOTAL DISABILITY" will be as defined in the long-term
disability plan of the Company then in effect for employees of the Company
(regardless of whether the Consultant is covered by such plan) or, if no
such plan exists, "Total Disability" will mean such disability that
prevents the Consultant from performing his duties under Section 2 of this
Agreement for a continuous period of ninety (90) days
d. This Agreement will be automatically terminated upon the death of
the Consultant.
5. COMPENSATION.
a. ANNUAL CONSULTING FEE. In consideration of the Consultant's
services under this Agreement, the Company will pay the Consultant a fee
as determined by the Company's Board of Directors or the Compensation
Committee of such Board, payable in accordance with the Company's normal
payroll practices commencing June 1, 1996.
b. EXPENSES. The Company will pay or reimburse the Consultant for
reasonable expenses that the Consultant incurs while performing his duties
under this Agreement, whether as a Consultant, Chairman or a director,
provided that such expenses are incurred and properly accounted for in
accordance with the Company's policies regarding reimbursement of business
expenses as may be in effect from time to time.
6. CONFIDENTIAL INFORMATION.
a. DEFINITION. "CONFIDENTIAL INFORMATION," as used in this
Section 6, means information that is not generally known and that is
proprietary to the Company or that the Company is obligated to treat as
proprietary. This information includes, without limitation:
(i) trade secret or other proprietary information about the
Company and its products; and
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(ii) proprietary information concerning any of the Company's
past, current, or possible future products, including (without limitation)
proprietary information about the Company's research, development,
engineering, purchasing, manufacturing, accounting, marketing, selling or
leasing.
Notwithstanding anything to the contrary contained herein, the term
"Confidential Information" does not include information which (i) is or becomes
available to the public other than as a result of a disclosure by the
Consultant, (ii) was within the Consultant's possession prior to its being
furnished to the Consultant by or on behalf of the Company pursuant to this
Agreement, or (iii) becomes available to the Consultant on a non-confidential
basis from a source other than the Company or its representatives.
b. NONDISCLOSURE. The Consultant will not, either during or after
his engagement by the Company, use or disclose Confidential Information
to any person not authorized by the Company to receive it, except (i) as
required in the performance of the Consultant's duties to the Company,
(ii) as required to enforce this Agreement, or (iii) as otherwise required
by law.
c. RETURN OF INFORMATION. When the Consultant's engagement with
the Company ends, he will, upon the Company's request, promptly turn over
to the Company all records and any compositions, articles, devices,
apparatus and other items that disclose, describe or embody Confidential
Information, including all copies, reproductions and specimens of the
Confidential Information in his possession, regardless of who prepared
them.
7. COMPETITIVE ACTIVITIES. The Consultant agrees that during the term
of this Agreement and for a period of two (2) years after termination of this
Agreement, regardless of the reason for such termination:
a. He will not alone, or in any capacity with another firm:
(i) directly or indirectly compete with the Company's business,
as the Company has conducted it during the Consultant's engagement with
the Company, within any state in the United States or any country in
which state or country the Company directly or indirectly markets or
services products or provides services or reasonably plans or intends
during Consultant's engagement period to market or service products or
provide services;
(ii) solicit or encourage any Company customer or potential
customer to cease to do business with or to not do business with the
Company in such products; or
(iii) employ or attempt to employ any of the Company's then
employees on behalf of any other entity competing with the Company.
b. The Consultant may, however, accept employment or service with an
entity competing with the Company so long as the business of such entity
is diversified, and the employment or service by the Consultant is with a
separately managed and operated part of its business that does not compete
with the Company.
8. NO ADEQUATE REMEDY. The Consultant understands that if he fails to
fulfill his obligations under this Agreement, the damages to the Company would
be very difficult to determine. Therefore, in addition to any other rights or
remedies available to the Company at law, in equity or by statute, the
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Consultant hereby consents to the specific enforcement by the Company of
Sections 6 and 7 of this Agreement through an injunction or restraining order
issued by an appropriate court.
9. INDEMNIFICATION; DIRECTORS AND OFFICERS LIABILITY INSURANCE.
a. The Company shall pay or reimburse to the Consultant the fees
and expenses of personal counsel for their professional services rendered
to the Consultant in connection with this Agreement and any other agreement
or benefit plan entered into or adopted in connection herewith and matters
related hereto and thereto (PROVIDED; HOWEVER, that the fees and expenses
of such counsel in connection with the execution and delivery of this
Agreement shall not exceed $5,000), including in connection with any
enforcement hereof and thereof if the Consultant is the prevailing party in
any such dispute or enforcement action. Without limiting the foregoing, in
the event that the Company terminates, or seeks to terminate this
Agreement, alleging as justification for such termination "for cause" as
specified in Section 4 hereof and the Consultant in good faith disputes
such termination or attempted termination, and the Company disputes its
obligations pursuant to any provision of this Agreement, the Company shall
pay, or reimburse to the Consultant, all reasonable costs incurred by the
Consultant in such dispute, including attorneys' fees and costs, if the
Consultant is the prevailing party in any such dispute or enforcement
action.
b. The Company shall indemnify and hold the Consultant harmless
against all claims, damages, judgments, fines, amounts paid in settlement
and reasonable expenses, including attorneys' fees and expenses, incurred
by the Consultant: (i) for any breach of any covenant of the Company
contained herein, or in any agreement entered into in connection herewith,
or (ii) in connection with the defense of, or as a result of any action or
proceeding (or any appeal from any action or proceeding) (x) brought by the
Company or any third party challenging the validity or enforceability of
all or any portion of this Agreement and any other agreement entered into
or adopted in connection herewith or (y) in which the Consultant is made or
is threatened to be made a party by reason of the fact that the Consultant
is or was an officer or director of the Company, regardless of when such
action or proceeding may be brought and regardless of whether such action
or proceeding is one brought by or in the right of the Company to procure
a judgment in its favor (or other than by or in the right of the Company).
The undertakings of subparagraph (a) are independent of and shall not be
limited or prejudiced by the undertakings of this subparagraph (b).
c. In addition to the foregoing (and not in limitation):
(i) the Consultant will at all times be entitled to
indemnification from the Company in accordance with Article V of the
Amended and Restated Bylaws of the Company as in effect on the date
hereof, the Consultant will be deemed to be an "Indemnified Person"
as defined therein for all purposes, and the Consultant's rights
thereunder will not be adversely affected by any subsequent amendment
thereof; and
(ii) the Company will maintain in full force and effect one or
more policies of directors and officers liability insurance providing
for such coverage (in amounts not less than present amounts) as may be
determined from time to time by the Board.
d. The provisions of this Section 9 shall survive the termination
of this Agreement.
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10. MISCELLANEOUS.
a. SUCCESSORS AND ASSIGNS. This Agreement may not be assigned by
either party without the other party's prior written consent.
b. MODIFICATION. This Agreement may be modified or amended only
by a writing signed by each of the parties hereto.
c. GOVERNING LAW. The laws of the State of Minnesota will govern
the validity, construction, and performance of this Agreement, without
regard to the conflict of laws provisions of any jurisdictions. Any legal
proceeding related to this Agreement will be brought in an appropriate
Minnesota court, and each of the parties hereto hereby consents to the
exclusive jurisdiction of such courts for this purpose.
d. CONSTRUCTION. Wherever possible, each provision of this
Agreement will be interpreted so that it is valid under applicable law.
If any provision of this Agreement is to any extent invalid under
applicable law in any jurisdiction, that provision will still be effective
to the extent it remains valid. The remainder of this Agreement also will
continue to be valid, and the entire Agreement will continue to be valid in
other jurisdictions.
e. NON-WAIVER. No failure or delay by either the Company or the
Consultant in exercising any right or remedy under this Agreement will
waive any provision of the Agreement. Nor will any single or partial
exercise by either the Company or the Consultant of any right or remedy
under this Agreement preclude either of them from otherwise or further
exercising these rights or remedies, or any other rights or remedies
granted by any law or any related document.
f. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which will constitute an original, but all of which,
when taken together, will constitute one and the same instrument.
g. ENTIRE AGREEMENT. This Agreement supersedes all previous and
contemporaneous oral negotiations, commitments, writings, and
understandings among the parties hereto concerning the matters in this
Agreement, including, without limitation, any policy or personnel manuals
of the Company or any of its subsidiaries or affiliates.
h. NOTICES. All notices and other communications required or
permitted under this Agreement will be in writing and hand delivered or
sent by registered first-class mail, postage prepaid, and will be
effective upon receipt, if sent to the following address or such other
address as either party will have notified the other party:
IF TO THE COMPANY: Eltrax Systems, Inc.
Rush Lake Business Park
0000 Xxx Xxxxxxx 0
Xx. Xxxx, Xxxxxxxxx 00000-0000
Attn: Chief Executive Officer
IF TO THE CONSULTANT: Xxxxxxx X. X'Xxxxxx
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
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IN WITNESS WHEREOF, the Company and the Consultant have executed this
Agreement as of the date first above written.
ELTRAX SYSTEMS, INC.
By
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Its
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CONSULTANT
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Xxxxxxx X. X'Xxxxxx
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