AMENDED AND RESTATED CONSULTING AND NON-COMPETE AGREEMENT
Exhibit 10(a)(9)
AMENDED AND RESTATED
CONSULTING AND NON-COMPETE AGREEMENT
CONSULTING AND NON-COMPETE AGREEMENT
DATE:
|
July 10, 2009 | |||
PARTIES:
|
Xxxxxxx X. Xxxxxx | Universal Forest Products, Inc. | ||
| 0000 Xxxxx Xx. XX | (and its affiliates and subsidiaries) | |||
| Xxxxx Xxxxxx, XX 00000 | 0000 Xxxx Xxxxxxxx XX | |||
| Xxxxx Xxxxxx, XX 00000 | ||||
| (herein the “Advisor”) | (herein “UFP”) |
Whereas, the parties entered into a Consulting and Non-Compete Agreement dated December 17, 2007;
and,
Whereas, the agreement provided a formula for calculation of the amount of payments due to the
Advisor based in part on the compensation of the advisor subsequent to December 17, 2007;
Now, therefore, the parties hereby amend and restate the Consulting Agreement to provide the actual
payments due under the formula, and to combine the Consulting Agreement and Nondisclosure
Agreement, the latter of which is hereby terminated.
PURPOSE OF THE AGREEMENT.
Advisor has served UFP for many years as its Senior Executive Officer and presently serves as
Chairman of the Board of Directors. Advisor’s leadership has been an important force in the
success, growth and prosperity of UFP.
Advisor intends to retire as an officer of UFP as of July 21, 2009. UFP wishes to continue to
utilize the experience, ability and skills of Advisor as an advisor and consultant following his
retirement. Advisor has agreed to (1) provide those services upon the terms and conditions set
forth in this Agreement, and (2) restrict his services from being provided to any competitors of
UFP.
The Parties agree as follows:
SECTION 1. RETENTION OF ADVISOR.
1.1 Effective Date. Effective with Advisor’s retirement from UFP, July 21, 2009,
(herein the “Effective Date”) and during the Consulting Term described in Section 4.1, UFP shall
retain Advisor as an independent contractor and consultant. Advisor accepts such consulting relationship upon the terms and conditions set forth in this
Agreement.
1.2 Services. Advisor agrees to provide business leadership, management, and investor
relations consulting services, as requested by senior management or the Board of Directors of UFP,
for the exclusive benefit of UFP. Advisor shall perform such consulting services faithfully for UFP
during the term of this Agreement. Such consulting services will require approximately five
hundred (500) hours per year of Advisor’s time. UFP will not pay consulting fees if the services
are not provided. Advisor agrees to serve on UFP’s Board of Directors during the term of this
Agreement.
1.3 Provision of Services. Advisor agrees to submit recommendations to the Chief
Executive Officer and Board of Directors of UFP regarding business leadership, management, and
investor relations, and such other aspects of the business of UFP as he, in his professional
judgment and discretion, deems appropriate. Advisor shall also provide specific consultation and
recommendations on particular issues or areas, as submitted to him by senior management or the
Board of Directors of UFP. Advisor shall, in providing these services, exercise autonomy in
determining the means and methods of accomplishing the result. If at any time during the
Consulting Term, Advisor engages in other full time employment, Advisor shall not be deemed to be
in breach of this Agreement, only if such employment consists of the Advisor providing services to
one or more (a) charitable or non-profit organizations, or (b) Advisor’s family-owned for profit
entities, including corporations, trusts, partnerships, or LLC’s, otherwise the Consulting Term
shall terminate except for the provisions of Section 6 hereof, and UFP shall have no further
obligations under this Agreement. Notwithstanding the foregoing, subject to Section 6 hereof,
during the Consulting Term, Advisor may provide part-time services to third parties, including
serving as a member of the board of directors of any such party. For purposes of this Agreement,
full-time employment shall mean Advisor working in a position or positions, other than with UFP,
which require Advisor to devote substantially all of a standard forty (40) hour work week.
1.4 Personal Services. Advisor agrees that this Consulting Agreement is for the
personal services of the Advisor, based on his significant experience with the industry and his
thirty five (35) years of service to UFP, and may be assigned to Xxxxxx Holdings LLC or a third
party controlled by Advisor, provided however that the obligations to provide consulting services,
board services and not to compete with UFP shall remain personal obligations of Advisor.
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SECTION 2. CONSULTING FEE AND EXPENSE REIMBURSEMENT.
2.1 Consulting and Non-Compete Fee. In full satisfaction for any and all consulting,
board service and non-compete payments to Advisor during the Consulting Term under this Agreement,
UFP shall pay Advisor an annual fee equal to the average of the previous five years (2004-2008
inclusive) of compensation paid to Advisor while he was employed by UFP. The average annual
compensation for this period is $1,413,157.
The fee will be paid in monthly installments in arrears in the amount of One Hundred Seventeen
Thousand Seven Hundred Sixty-Three Dollars ($117,763.00).
2.2 Health Insurance. UFP will provide reimbursement to Advisor for health insurance
coverage pursuant to COBRA for eighteen (18) months after the Effective Date. Thereafter, UFP will
provide reimbursement to Advisor for health insurance costs up to Twelve Thousand Dollars
($12,000.00) per year.
2.3 Other Compensation and Fringe Benefit. Except as set forth in Section 3 of this
Agreement, Advisor shall not receive any other payments from UFP, nor shall Advisor or any
individual with whom he contracts to assist in the providing of services under this Agreement be
eligible to participate in or receive benefits under any UFP fringe benefit programs, including,
without limitation, disability, life insurance, and 401(k) benefits.
2.4 Allocation of Consideration. The consideration for the consulting services shall
be Five Hundred Thousand Dollars ($500,000.00) per year. The consideration for serving as Chairman
of the Board will be One Hundred Fifty Thousand Dollars ($150,000.00). Seven Hundred Sixty Three
Thousand One Hundred Fifty Seven Dollars ($763,157.00) shall be allocated to Advisor’s obligations
under Section 6 hereof.
2.5 Treatment of Stock Options. During the Consulting Term, Advisor will be
considered as an Employee for the sole purpose of the reference contained in the stock option
agreements and the stock grant described in Schedule 2.5.
SECTION 3. NATURE OF RELATIONSHIP; EXPENSES.
3.1 Independent Contractor. Except as otherwise expressly stated in this Agreement,
Advisor shall be an independent contractor and shall not be an employee, servant, agent, partner,
or joint venturer of UFP, or any of its officers, directors, or employees.
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3.2 Insurance and Taxes. Advisor agrees to arrange for Advisor’s own liability,
disability, and workers’ compensation insurance to cover himself and any of Advisor’s employees. Advisor agrees to be responsible for Advisor’s own tax obligations
accruing as a result of payments for services rendered under this Agreement, as well as for the tax
withholding obligations with respect to Advisor’s employees, if any. It is expressly understood
and agreed by Advisor that should UFP for any reason incur tax liability or charges whatsoever as a
result of not making any withholdings from payments for services under this Agreement, Advisor will
reimburse and indemnify UFP for the same.
3.3 Equipment, Tools, Employees, and Overhead. Other than the expense reimbursement
provided herein, UFP shall have no obligation to provide equipment or tools needed to provide
services under this Agreement, including the salaries of and benefits provided to any employees of
Advisor. Advisor shall be responsible for all of Advisor’s overhead costs and expenses.
SECTION 4. TERM.
4.1 Initial Term; Renewal. Unless otherwise terminated pursuant to the provisions of
Section 4.2, this Agreement shall commence on the Effective Date and continue in effect until the
third anniversary of the Effective Date (the “Consulting Term”).
4.2 Early Termination. The consulting fees and board fees payable under this
Agreement shall be terminated upon the death or Disability of Advisor, or by written notice from
UFP that, in UFP’s reasonable determination: (a) Advisor has refused, failed, or is unable to
render consulting services under this Agreement; or (b) Advisor has breached any of Advisor’s other
obligations under this Agreement. If the consulting relationship is terminated for any of the
reasons set forth in the preceding sentence, the right of Advisor to the compensation set forth in
Section 2 of this Agreement shall cease on the date of such termination, and UFP shall have no
further obligation to Advisor under any of the provisions of this Agreement. Disability shall mean
a physical or mental injury or illness that totally and permanently renders Advisor unable to
perform all of the functions called for under this Agreement.
4.3 Non-Compete Payments. In the event of death or disability of Advisor, as defined
in paragraph 4.2 above, the non-compete payments described in Section 6 will continue to be made to
the beneficiary of Advisor or to the Advisor’s conservator.
4.4 Life Insurance. Advisor and UFP may agree to insure payment of amounts due upon
the death of Advisor through a term life insurance policy or similar vehicle.
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4.5 Effect of Termination. Termination of the consulting relationship shall not
affect the provisions of the covenants set forth in Section 6, which provisions shall survive a
termination of this Agreement in accordance with their terms.
SECTION 5. DESIGNS, INVENTIONS, PATENTS AND COPYRIGHTS.
5.1 Intellectual Property. Advisor and UFP shall agree, at the outset of any project,
as to the scope of the project and Advisor’s role therein (the “Project Scope”). Advisor shall
promptly disclose, grant, and assign to UFP for its sole use and benefit any and all designs,
inventions, improvements, technical information, know-how and technology, and suggestions within
the Project Scope relating in any way to the products of UFP or capable of beneficial use by
customers to whom products or services of UFP are sold or provided, that Advisor may conceive,
develop, or acquire while consulting with UFP (whether or not during usual working hours), together
with all copyrights, trademarks, design patents, patents, and applications for copyrights,
trademarks, divisions of pending patent applications, applications for reissue of patents and
specific assignments of such applications that may at any time be granted for or upon any such
designs, inventions, improvements, technical information, know-how, or technology (Intellectual
Property).
5.2 Assignments and Assistance. In connection with the rights of UFP to the
Intellectual Property, Advisor shall promptly execute and deliver such applications, assignments,
descriptions, and other instruments as may be necessary or proper in the opinion of UFP to vest in
UFP title to the Intellectual Property and to enable UFP to obtain and maintain the entire right
and title to the Intellectual Property throughout the world. Advisor shall also render to UFP, at
UFP’s expense, such assistance as UFP may require in the prosecution of applications for said
patents or reissues thereof, in the prosecution or defense of interferences which may be declared
involving any of said applications or patents, and in any litigation in which UFP may be involved
relating to the Intellectual Property.
5.3 Copyrights. Advisor agrees to, and hereby grants to UFP, title to all
copyrightable material first designed, produced, or composed in the course of or pursuant to the
performance of work under this Agreement, which material shall be deemed “works made for hire”
under Xxxxx 00, Xxxxxx Xxxxxx Code, Section 1.01 of the Copyright Act of 1976. Advisor hereby
grants to UFP a royalty-free, nonexclusive, and irrevocable license to reproduce, translate,
publish, use, and dispose of, and to authorize others so to do, any and all copyrighted or
copyrightable material created by Advisor as a result of work performed under this Agreement but
not first produced or composed by Advisor in the performance of this Agreement, provided that the
license granted by this paragraph shall be only to the extent Advisor now has, or prior to the
completion of work under this Agreement or under any later agreements with UFP relating to similar
work may acquire, the right to grant such licenses without UFP becoming liable to pay compensation to others
solely because of such grant.
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SECTION 6. NON-COMPETE AGREEMENT
6.1 Advisor acknowledges that UFP’s trade secrets, private or secret processes as they exist
from time to time, and information concerning customers and their identity, products, developments,
manufacturing techniques, new product plans, equipment, inventions, discoveries, patent
applications, ideas, designs, engineering drawings, sketches, renderings, other drawings,
manufacturing and test data, computer programs, progress reports, materials, costs, specifications,
processes, methods, research, procurement and sales activities and procedures, promotion and
pricing techniques, and credit and financial data concerning customers of UFP, as well as
information relating to the management, operation, or planning of UFP, herein the (“Proprietary
Information”) are valuable, special, and unique assets of UFP, access to and knowledge of which may
be essential to the performance of Advisor’s duties under this Agreement. In light of the highly
competitive nature of the industries in which UFP conducts businesses, Advisor agrees that all
Proprietary Information obtained by Advisor as a result of his relationship with UFP shall be
considered confidential. In recognition of this fact, Advisor agrees that except as may be
necessary for UFP’s benefit, in Advisor’s reasonable judgment, Advisor will not, during and after
the Non-Compete Period, disclose any of such Proprietary Information to any person or entity for
any reason or purpose whatsoever without the written consent of UFP, and Advisor will not make use
of any Proprietary Information for Advisor’s own purposes or for the benefit of any other person or
entity (except UFP) under any circumstances.
6.2 In order to further protect the confidentiality of the Proprietary Information and in
recognition of the highly competitive nature of the industries in which UFP conducts its
businesses, and for the consideration set forth herein, Advisor further agrees that during and for
the period commencing on July 21, 2009 and ending on July 21, 2012 (the “Non-Compete Period”):
(a) Advisor will not directly or indirectly engage in any Business Activities (hereinafter
defined), other than on behalf of UFP, whether such engagement is as an officer, director,
proprietor, employee, partner, investor (other than as a holder of less than 1% of the outstanding
capital stock of a publicly-traded corporation), advisor, agent, or other participant, in any
geographic area in which the products or services of UFP have been distributed or provided
immediately prior to or during the Consulting Term. For purposes of this Agreement, the term
“Business Activities” shall mean the design, development, manufacture, sale, marketing, or
servicing of UFP’s products, together with all other activities engaged in by UFP or any of its
subsidiaries at any time immediately prior to the Consulting Term, and activities in any way related to activities with
respect to which Advisor renders consulting services under this Agreement.
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(b) Advisor will not directly or indirectly engage in any of the Business Activities (other
than on behalf of UFP) by supplying products or providing services to any customer with whom UFP
has done any business during the consulting relationship with UFP, whether such engagement is as an
officer, director, proprietor, employee, partner, investor (other than as a holder of less than one
percent (1%) of the outstanding capital stock of a publicly traded corporation), advisor, agent, or
other participant.
(c) Assistance to Others. Advisor will not directly or indirectly assist others in
engaging in any of the Business Activities in any manner prohibited to Advisor under this
Agreement.
(d) UFP’s Employees. Advisor will not directly or indirectly induce employees of UFP
to engage in any activity hereby prohibited to Advisor or to terminate their employment with UFP.
SECTION 7. INTERPRETATION.
Although Advisor and UFP consider the restrictions contained in Sections 6.1 and 6.2 of this
Agreement reasonable for the purpose of preserving the goodwill, proprietary rights, and going
concern value of UFP, if a final judicial determination is made by a court having jurisdiction that
the time or territory or any other restriction contained in Section 6.2 is an unenforceable
restriction on the activities of Advisor, the provisions of such restriction shall not be rendered
void but shall be deemed amended to apply as to such maximum time and territory and to such other
extent as such court may judicially determine or indicate to be reasonable. Alternatively, if the
court referred to above finds that any restriction contained in Section 6.2 or any remedy provided
in Section 7 of this Agreement is unenforceable, and such restriction or remedy cannot be amended
so as to make it enforceable, such finding shall not affect the enforceability of any of the other
restrictions contained in this Agreement or the availability of any other remedy. The provisions
of Sections 6.1 and 6.2 shall in no respect limit or otherwise affect the obligations of Advisor
under other agreements with UFP.
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SECTION 8. REMEDIES.
Advisor acknowledges and agrees that UFP’s remedy at law for a breach or threatened breach of
any of the provisions of Section 5 or Section 6 of this Agreement would be inadequate and, in
recognition of this fact, in the event of a breach or threatened breach by Advisor of any of the
provisions of Section 5, Advisor agrees that, in addition to its remedies at law, at UFP’s option,
all rights of Advisor, and obligations of UFP, under this Agreement may be terminated. UFP shall be entitled to equitable relief in the form
of specific performance, temporary restraining order, temporary or permanent injunction, or any
other equitable remedy that may then be available. UFP shall not be required to post bond, and
Advisor agrees not to oppose UFP’s request for equitable relief. Advisor acknowledges that the
granting of a temporary injunction, temporary restraining order or permanent injunction merely
prohibiting the use of Proprietary Information would not be an adequate remedy upon breach or
threatened breach of Section 5 or Section 6, and consequently agrees upon any such breach or
threatened breach to the granting of injunctive relief prohibiting the design, development,
manufacture, marketing or sale of products and providing of services of the kind designed,
developed, manufactured, marketed, sold or provided by UFP or its subsidiaries during the term of
Advisor’s relationship with UFP. Nothing contained in this Section 7 shall be construed as
prohibiting UFP from pursuing, in addition, any other remedies available to it for such breach or
threatened breach.
SECTION 9. MISCELLANEOUS PROVISIONS.
9.1 Assignment. Except as otherwise provided herein, this Agreement shall not be
assignable by either party, except by UFP to any subsidiary or affiliate of UFP (now or hereafter
existing) or to any successor in interest to UFP’s business, provided that in the case of
assignment to an affiliate or subsidiary, UFP shall remain liable as a guarantor for any payments
due to Advisor hereunder.
9.2 Binding Effect. The provisions of this Agreement shall be binding upon and inure
to the benefit of the heirs, personal representatives, successors, and assigns of the parties.
9.3 Notice. Any notice or other communication required or permitted to be given under
this Agreement shall be in writing and shall be mailed by certified mail, return receipt requested,
postage prepaid, addressed to the parties at the address stated on the first page of this
Agreement. The address of a party to which notices or other communications shall be mailed may be
changed from time to time by giving written notice to the other party.
9.4 Litigation Expense. In the event of a default under this Agreement, the
defaulting party shall reimburse the non-defaulting party for all costs and expenses reasonably
incurred by the non-defaulting party in connection with the default, including without limitation
reasonable attorney’s fees. The non-defaulting party may seek reimbursement in a court of competent
jurisdiction. Additionally, in the event a suit or action is filed to enforce this Agreement or
with respect to this Agreement, the prevailing party or parties shall be reimbursed by the other
party for all costs and expenses incurred in connection with the suit or action, including without limitation reasonable attorney’s fees
at the trial level and on appeal.
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9.5 Waiver. No waiver of any provision of this Agreement shall be deemed, or shall
constitute, a waiver of any other provision, whether or not similar, nor shall any waiver
constitute a continuing waiver. No waiver shall be binding unless executed in writing by the party
making the waiver.
9.6 Applicable Law. This Agreement shall be governed by and shall be construed in
accordance with the laws of the State of Michigan.
9.7 Entire Agreement. This Agreement constitutes the entire Agreement between the
parties pertaining to its subject matter, and it supersedes all prior contemporaneous agreements,
representations, and understandings of the parties. No supplement, modification, or amendment of
this Agreement shall be binding unless executed in writing by all parties.
| UNIVERSAL FOREST PRODUCTS, INC.: | ||||
| By: | ||||
| Its: | ||||
| ADVISOR: | ||||
| Xxxxxxx X. Xxxxxx | ||||
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SCHEDULE 2.5
Stock Options
Grant Date of Option: |
April 17, 2002 | March 1, 2003 | ||||||
Date Exercisable: |
April 17, 2011 | March 1, 2012 | ||||||
Expiration Date of Option: |
April 17, 2012 | March 1, 2013 | ||||||
Exercise Price: |
$ | 24.46 | $ | 17.10 | ||||
Number of Shares: |
30,000 | 30,000 | ||||||
Stock Grant
Date of Grant:
|
April 17, 2002 | |
Number of Shares:
|
10,000 | |
Conditions to Grant:
|
Shares are granted upon the first to occur of: | |
| (1) Advisor’s 65th birthday; | ||
| (2) A change in control; or | ||
| (3) Advisor’s death. |
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