Exhibit 10(f)
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CONSULTING AGREEMENT
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THIS CONSULTING AGREEMENT is entered into this ___ day of
________________, 2002 by and between XXXXX X. XXXXXX (the "Consultant"), and
XXXXXXXX XXXXX, INC., a Delaware corporation (the "Company").
WITNESSETH:
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WHEREAS, the Company desires to retain the services of the Consultant
and to have the Consultant serve as Chief Financial Officer of the Company on an
interim basis, and the Consultant desires to serve in such capacity, upon the
terms and conditions hereinafter set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Term and Duties.
(a) The Company hereby retains the Consultant, and the
Consultant hereby accepts retention by the Company, as a consultant on the terms
and subject to the conditions set forth herein, for the period which commenced
as of February 14, 2002 and which will end on August 31, 2002, unless terminated
earlier as provided herein (the "Consulting Period"). During the Consulting
Period, the Consultant shall furnish to the Company, its subsidiaries and
affiliates, such advisory and consulting services within his areas of
experience, as may be assigned or delegated to him from time to time by the
Company's President and Chief Executive Officer (the "Executive"), with any
additions to the scope of such duties within the field of operations of the
Company, its subsidiaries or affiliates as may be agreed upon from time to time
by the Consultant and the Company. In connection with furnishing consulting
services hereunder, the
Consultant shall serve during the Consulting Period as Chief Financial Officer
of the Company and in such capacity have such responsibilities, duties and
authority as are customarily associated with such position, subject to the
supervision and direction of the Executive. The Consultant further agrees to
serve the Company faithfully and to the best of his ability in the capacity of
Chief Financial Officer, and shall furnish consulting services to the Company at
such times during the Consulting Period as are reasonably requested by the
Company. The Consultant shall devote substantially all of his business time,
attention, knowledge, energy and skills to the performance and discharge of his
duties and responsibilities and agrees not to engage in any other business
activity whatsoever during the Consulting Period, except for civil, charitable
or investment activities of a personal nature (including, without limitation,
time spent in connection with a certain start-up enterprise with which the
Consultant is currently affiliated) so long as such activities do not and would
not violate (i) the terms of Section 4 of this Agreement, or (ii) interfere with
the execution of the Consultant's services hereunder. Subject to the limitations
contained herein, the Consultant shall have sole control over the means of
performing his duties under this Agreement. The Consultant shall be entitled to
take paid vacation periods during the Consulting Period as follows: from June 7
through 14, 2002 and at such other times with the prior approval of the
Executive.
2. Consulting Fee. In consideration for the Consultant's execution and
delivery of this Agreement and his performance of the consulting services to be
rendered hereunder, the Company agrees to pay to the Consultant a fee during the
Consulting Period at the rate of Thirty-Five Thousand Dollars ($35,000.00) per
calendar month (the "Consulting Fee"), payable semi-monthly in advance (it being
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acknowledged that the Consultant has already received consulting payments from
the Company for the period through March 15, 2002).
3. Termination.
(a) Death. In the event of the death of the Consultant during
the Consulting Period, this Agreement shall automatically terminate and the
Company shall have no further obligations hereunder, except to pay the
Consultant's beneficiary or legal representative any amounts to which the
Consultant may otherwise have been entitled prorated to the date of death.
(b) Disability. In the event of the Disability, as defined
herein, of the Consultant during the Consulting Period, the Company shall have
the right, upon written notice to the Consultant, to terminate the consulting
arrangement hereunder, effective upon the giving of such notice (or such later
date as shall be specified in such notice). Upon such termination, the Company
shall have no further obligations hereunder, except to pay the Consultant any
amounts to which the Consultant may otherwise have been entitled but for the
Consultant's Disability prorated to the effective date of termination. The term
"Disability" shall mean the Consultant's inability to perform effectively the
substantial portion of his duties hereunder because of a medical determination
of physical or mental disability continuing for a period of 30 consecutive days
or for shorter periods aggregating 30 days during the Consulting Period. Any
such medical determination of Disability shall be in writing and shall be from a
medical doctor acceptable to both the Company and the Consultant.
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(c) Cause. The Company shall have the right, upon written
notice to the Consultant, to terminate the consulting arrangement under this
Agreement for Cause, as defined herein, effective upon the giving of such notice
(or such later date as shall be specified in such notice), and the Company shall
have no further obligations hereunder, except to pay the Consultant any amounts
to which the Consultant may otherwise have been entitled prorated to the
effective date of termination. The term "Cause" shall mean any of the following:
(i) the Consultant's material breach of, or willful failure or refusal to
perform and discharge, his duties, responsibilities or obligations under this
Agreement, after written notice to the Consultant by the Company's Board of
Directors (the "Board"), specifying in reasonable detail the manner in which the
Consultant has breached or refused to perform and discharge his duties hereunder
that is not cured or waived, (ii) the Consultant's refusal, after written
notice, to obey any reasonable direction of the Board given in good faith and
consistent with the terms of this Agreement that is not cured or waived, (iii) a
determination by the Board in exercise of its good faith business judgment that
the Consultant has taken acts which constitute fraud, theft, dishonesty,
embezzlement or other misappropriation of property of the Company or unlawful
appropriation of a corporate opportunity of the Company or (iv) the conviction
of or the entry of a plea of nolo contendere by the Consultant for any felony or
any misdemeanor involving moral turpitude.
(d) Without Cause. The Company shall have the right, upon
written notice to the Consultant, to terminate the consulting arrangement under
this Agreement Without Cause, as defined herein, effective upon the giving of
such notice (or such later date as shall be specified in such notice), in which
case the Company shall pay the Consultant the Consulting Fee for the
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remaining term of the Consulting Period on the same basis and according to the
same schedule, as if such notice of termination had not been given. The
Consultant shall have the right, upon written notice to the Company, to
voluntarily terminate the consulting arrangement under this Agreement, provided
that such notice of termination is furnished to the Company at least 30 days
prior to the effective date of termination, in which case the Company shall have
no further obligations hereunder, except to pay the Consultant any amounts to
which the Consultant otherwise may have been entitled prorated to the effective
date of termination. The term "Without Cause" shall mean the Company's
termination of the consulting arrangement hereunder for reasons other than for
Cause.
The termination of the consulting arrangement hereunder for whatever
reason shall automatically terminate the Consultant's status as an officer of
the Company and as an officer of any corporation, firm or entity which is a
subsidiary or affiliate of the Company.
4. Confidentiality; No Solicitation. (a) The Consultant acknowledges
that he will have access at the highest level to, and the opportunity to acquire
knowledge of, sensitive, confidential, proprietary and non-public information
relating to the Company, including, without limitation, information concerning
the Company's business; operations; affairs; plans; policies; business methods;
systems; trade secrets; know-how; employees, officers and directors and their
performance and personalities; customers and manufacturing processes
(collectively, the "Information"). The Consultant acknowledges the
confidentiality of the Information and that the Company has a legitimate and
significant business interest in preventing the unauthorized disclosure of the
Information. The Consultant shall not divulge, in any manner whatsoever, any
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Information to any third party or entity, except in furtherance of the
performance of his consulting duties hereunder on behalf of the Company and then
only as is necessary and appropriate in the regular course of the Company's
business. The term "Information" shall not include information or data that: (i)
is, or becomes, generally known to the public, other than by reason of the
Consultant's breach of his confidentiality obligations hereunder; (ii) was known
by the Consultant at the time of the Company's disclosure to him as evidenced by
the Consultant's written records in existence prior to the Company's disclosure
thereof to him; (iii) is disclosed to the Consultant by a third party who, to
the Consultant's knowledge, has a legal right to make such disclosure; or (iv)
is required to be disclosed by law or a court of competent jurisdiction (it
being acknowledged and agreed that in such event, the Consultant shall promptly
notify the Company of such requirement and provide the Company an opportunity
(if it so elects) to contest such law or court order and the Consultant shall
cooperate with the Company, at the Company's cost and expense, in any efforts to
contest such law or court order). The Consultant shall deliver to the Company on
or before the expiration or termination of the Consulting Period, all documents,
notes, programs, data and any other materials of the Company (including any
copies thereof) which the Consultant acquires possession or control of during
the Consulting Period and which are in his possession or under his control as of
the expiration or termination of the Consulting Period.
(b) During the Consulting Period and one year thereafter, the
Consultant shall refrain, without first obtaining the written consent of the
Company, from directly or indirectly soliciting, enticing, persuading, inducing
or hiring any employee, consultant, agent, independent contractor or other
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person (other than secretarial and clerical personnel) who is employed or
retained by the Company on the date the Consulting Period expires or terminates
or who has been employed or retained by the Company during the 12 month period
preceding such date to become employed or retained by any person, firm, entity
or corporation or approach any such person for any of the foregoing reasons.
(c) The Consultant acknowledges that all developments,
including, without limitation, inventions, patentable or otherwise, discoveries,
improvements, patents, trade secrets, designs, reports, computer software, flow
charts and diagrams, procedures, data, documentation, ideas and writings and
applications thereof relating to the Company's business or planned business
that, alone or jointly with others, the Consultant may conceive, create, make,
develop, reduce to practice or acquire during his consulting arrangement
hereunder (collectively, the "Developments") are works made for hire and shall
remain the sole and exclusive property of the Company and the Consultant hereby
assigns to the Company all of his right, title and interest in and to all such
Developments. If, for any reason, such Developments are not deemed works for
hire, the Consultant shall assign, and hereby assigns to the Company all of the
Consultant's right, title and interest (including, but not limited to copyright,
patent, and all rights of inventorship) in and to such Developments. The
Consultant agrees that he will, at any time upon request and at the expense of
the Company, promptly execute all instruments and papers and perform all acts
whatsoever, which are necessary or desired by the Company to vest and confirm in
the Company, and its successors, assigns and nominees, fully and completely, all
rights created by this section and which may be necessary or desirable to enable
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the Company, and its successors, assigns and nominees, to secure and enjoy the
full benefits and advantages thereof. The Consultant shall assist and cooperate
with the Company or its representatives, at the Company's cost and expense, in
any controversy or legal proceeding relating to such Developments, or to any
patents, copyrights or trade secrets with respect thereto. If for any reason the
Consultant refuses or is unable to assist the Company in obtaining or enforcing
its rights with respect to such Developments, the Consultant hereby irrevocably
designates and appoints the Company and its duly authorized agents as the
Consultant's agents and attorneys-in-fact to execute and file any documents and
to do all other lawful acts necessary to protect the Company's rights in the
Developments. The Consultant expressly acknowledges that the special foregoing
power of attorney is coupled with an interest and is therefore irrevocable and
shall survive the death of or incompetency of the Consultant as well as any
termination or expiration of this Agreement.
(d) The Consultant grants to the Company all right, title and
interest in and to all developments, including, without limitation, inventions,
patentable or otherwise, discoveries, improvements, patents, trade secrets,
designs, reports, computer software, flow charts and diagrams, procedures, data,
documentation, ideas and writings and applications, which are not within the
scope of Developments as defined herein but which are conceived or made by the
Consultant during the hours which he is furnishing the consulting services to
the Company hereunder or with the use or assistance of the Company's facilities
or materials and personnel.
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For purposes of Section 4 hereof, the term the "Company" shall include
not only Xxxxxxxx Xxxxx, Inc., but also all subsidiaries and affiliated
corporations, organizations or entities thereof.
(e) The duties and obligations imposed on the Consultant by
virtue of Section 4 hereof shall survive the termination or expiration of the
Consulting Period and shall be in addition to any other duties and obligations
to which the Consultant may be subject by virtue of statutory or common law
including, without limitation, any duties and obligations based upon the
Consultant's status as an officer of the Company.
5. Expense Reimbursement; Benefits Waiver; Indemnification. (a) The
Company agrees to reimburse the Consultant for all reasonable and necessary
travel, entertainment and other business expenses which are incurred by the
Consultant during the Consulting Period in connection with the performance of
the Consultant's duties hereunder, provided that such expenses are itemized and
presented to the Company with appropriate supporting documentation.
(b) The Consultant expressly acknowledges and agrees that the payment
of the Consulting Fee and the reimbursement of business expenses provided or
described in this Agreement shall constitute the sole and entire compensation
and benefits due or to become due to him in connection with his consulting
arrangement with the Company (and the termination thereof) (other than any
rights to indemnification to which the Consultant may be or become entitled
pursuant to the Company's Bylaws (by virtue of his status as an officer of the
Company), statutory or common law provisions or otherwise, and other than any
rights in connection with any directors' and officers' liability insurance
coverage which the Company may maintain). The Consultant further acknowledges
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and agrees that as an independent contractor to the Company, he is not eligible
to participate in, nor receive any benefits under, any employee benefit plan or
arrangement (including, without limitation, any retirement or health and welfare
benefit plan) and that the Company shall have no obligation to provide to the
Consultant any wages, salary, bonuses, vacation pay, stock options or other
stock awards, benefits or compensation of any kind or nature whatsoever, except
as specifically provided for or described in this Agreement. Without limiting
the generality of the foregoing, the Consultant expressly acknowledges and
agrees that, as an independent contractor to the Company, he is not eligible to
participate in, nor will he seek to participate in or assert any rights or
claims under any of the Company's employee benefit plans including, without
limitation, the Salaried Associate Retirement Profit-Sharing Plan, the 401(k)
plan, any excess benefit plan, the Senior Managers' Supplemental Retirement
Plan, Senior Managers' Pre-Retirement Life Insurance Plan, Senior Managers' Life
Insurance Plan and any health and dental insurance plans, and if notwithstanding
the foregoing, the Consultant is deemed to be eligible to participate in any of
the Company's employee benefit plans, then he hereby forever voluntarily and
irrevocably waives and relinquishes such participation rights.
(c) The parties acknowledge that the Company's Board of Directors has
elected the Consultant to the office of Chief Financial Officer of the Company.
The Company further acknowledges and agrees that as an officer of the Company,
the Consultant shall be entitled to (i) indemnification from the Company in
accordance with the terms, provisions, conditions and limitations of the
Company's Bylaws, as amended from time to time, in addition to any other
indemnification to which the Consultant may be or become entitled under
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applicable law, and (ii) coverage under any applicable Directors' and Officers'
liability insurance policy that the Company may maintain, subject to the terms,
provisions and exclusions of such policy or policies.
6. Assumption of Contract. The Consultant acknowledges that the Company
is, and has been, in active negotiations with its senior secured lenders over a
restructuring of the indebtedness owed to such lenders. The Consultant further
acknowledges that while as of the date hereof no agreement has been reached
between the Company and its senior secured lenders with respect to such a
restructuring, it is possible that a restructuring could be implemented by the
Company's filing of a reorganization proceeding under the applicable bankruptcy
laws. The Company covenants and agrees that if it files for any reorganization
proceeding under the applicable bankruptcy laws, then it will seek to assume and
honor all of its obligations under this Agreement by filing an appropriate
motion with the Bankruptcy Court on the first day of any such bankruptcy filing
or as soon as practicable thereafter, subject to the Company's rights to
terminate this Agreement as expressly provided herein.
7. Notices. All notices and other communications hereunder shall be
given in writing by hand delivery, sent via facsimile to the facsimile number
below with telephone confirmation, sent by overnight carrier or registered or
certified mail, return receipt requested, postage prepaid, addressed to the
party to receive the same at his or its respective address set forth below, or
at such other address as may from time to time be designated by any party to the
other hereunder in accordance with this Section 7:
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If to Consultant:
Xxxxx X. Xxxxxx
0000 Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Or
c/o Xxxxxxxx Xxxxx, Inc.
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Fax: (000) 000-0000
If to the Company:
Xxxxxxxx Xxxxx, Inc.
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: General Counsel
Fax: (000) 000-0000
All such notices and communications hereunder shall be effective and
deemed given if sent by overnight carrier, the next day; if sent via facsimile,
upon telephone confirmation of receipt; if mailed, when received, as evidenced
by the acknowledgment of receipt issued with respect thereto by the applicable
postal authorities, and, if delivered by hand, when received, as evidenced by
the signed acknowledgment of receipt of the person to whom such notice or
communication shall have been addressed.
8. Remedies. The parties hereby acknowledge and agree that the
consulting services to be rendered by the Consultant hereunder are of such a
special, unique and extraordinary character and that such services have a
peculiar value impossible of replacement and for the loss of which the Company
cannot be reasonably or adequately compensated in damages, and the Consultant
acknowledges and agrees that any breach by him of the provisions of Section 4
hereof will cause the Company irreparable injury and damage. The Consultant,
therefore, expressly agrees that in addition to any other remedies the Company
may have under this Agreement or otherwise, the Company shall be entitled to
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injunctive and/or other equitable relief to prevent an anticipatory or
continuing breach of Section 4 hereof and to secure its enforcement. Nothing
herein shall be construed as a waiver by the Company of any right it may now
have or hereafter acquire to monetary damages by reason of any injury to its
property, business or reputation or otherwise arising out of any wrongful act or
omission of the Consultant hereunder.
9. Severability. In case any one or more of the provisions of this
Agreement should be found to be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby.
10. Entire Agreement. This Agreement supersedes and terminates any and
all prior agreements, arrangements and policies between the Consultant and the
Company with respect to the subject matter hereof.
11. Waiver. No failure by either party hereto to exercise, and no delay
in exercising, any right hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any right hereunder by either party preclude
any other or future exercise of that right or any other right hereunder by that
party.
12. Governing Law; Arbitration. This Agreement, and the respective
rights, duties and obligations of the parties hereunder, shall be governed by
and construed in accordance with the internal laws of the State of North
Carolina, without regard to conflicts of law principles. Any controversy or
dispute arising out of or relating to this Agreement shall be settled
exclusively (except for claims seeking injunctive and/or equitable relief
pursuant to Section 8 hereof) by arbitration in
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accordance with the rules of the American Arbitration Association under its
commercial arbitration rules before a panel of three arbitrators with experience
in the textile industry, with the Consultant designating one arbitrator, the
Company designating one arbitrator and the two arbitrators jointly selecting a
third independent arbitrator. The parties agree that service of process or
notice of motion or other application in connection with any arbitration shall
be delivered personally. Any award or determination made by the arbitrators as
provided for hereunder shall be binding and conclusive upon the Company and the
Consultant. The Consultant and the Company shall bear its own costs and
expenses, including without limitation attorneys' fees, incurred in connection
with any such arbitration.
13. Binding Effect; Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns. With respect to the Consultant, the term "successors" as
used herein includes heirs, devisees, executors, custodians, guardians,
conservators and personal representatives. Notwithstanding the foregoing, the
obligations of the Consultant may not be delegated and the Consultant may not
assign, transfer, pledge, encumber, hypothecate or otherwise dispose of this
Agreement, or any of his rights hereunder, and any such attempted delegation or
disposition shall be null and void and without effect. The Company may assign
its rights under this Agreement to, and it shall inure to the benefit of and be
binding upon, any affiliate which succeeds to all or substantially all of its
assets and business.
14. Amendment. This Agreement may not be amended, terminated or
superseded except by an agreement in writing between the Company and the
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Consultant, provided, however, that the Consultant shall not execute or
authorize any amendment to this Agreement on behalf of the Company.
15. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original hereof but all of which
together shall constitute one and the same document.
16. Independent Contractor. The consulting services to be performed by
Consultant hereunder are those of an independent contractor and not of an
employee, joint venture or partner of the Company, and nothing in this Agreement
shall be interpreted or construed as creating or establishing a relationship of
employer and employee between the Company and Consultant. The Company shall not
be responsible for, nor shall it withhold any portion of Consultant's
compensation hereunder for payment of, unemployment or disability insurance,
Social Security, income taxes or other state, federal or business license,
income, disability or unemployment taxes. IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be duly executed on the date first above written.
THE CONSULTANT:
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Xxxxx X. Xxxxxx
THE COMPANY:
XXXXXXXX XXXXX, INC.
By: _______________________________
Name: _____________________________
Title: ______________________________
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