EXHIBIT 2.7
CONSULTING AGREEMENT
This CONSULTING AGREEMENT ("Agreement") is made and entered into as of
February 18, 1998, between and among AD ART DISPLAYS, INC., a Florida
corporation (the "Company"), and XXX X. XXXXXX ("Consultant").
RECITALS:
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The Employee presently serves as a consultant to Company, a wholly-owned
subsidiary of La-Man Corporation ("Parent");
The Company desires that the Consultant continue to serve in a consulting
capacity to the Company, and the Consultant desires to continue to serve in such
capacity, pursuant to this agreement;
NOW, THEREFORE, the Company and the Consultant, in consideration of the
mutual covenants herein contained and intending to be legally bound hereby,
agree as follows:
1. DEFINITIONS. In addition to other terms defined herein, for purposes of
this Agreement, the following terms shall have the meanings specified in this
Section unless the context clearly requires otherwise:
1.01 "AFFILIATE" and "ASSOCIATE" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
1.02 "CAUSE" shall mean: (a) the repeated failure of the Consultant to
observe or perform any of the material terms or provisions of this Agreement,
which failure continues after written notice to the Consultant and remains
uncured for a period of 10 days following such written notice, except that there
shall be no cure period with respect to any violation of Section 7 or Section 8
hereof; (b) misappropriation of funds, or willful dishonesty towards, fraud
upon, or willful misconduct of a material nature to the injury of, the Company
or its Affiliates; (c) commission of a felony or other crime involving moral
turpitude; or (d) habitual insobriety or abuse of controlled substances.
1.03 "CONSULTING FEE" shall mean the consulting fee specified in Section 5.
1.04 "NOTICE OF TERMINATION" means a written notice which (a) indicates the
specific termination provision in this Agreement relied upon, (b) briefly
summarizes the facts and circumstances deemed to provide a basis for termination
of this Agreement under the provision so indicated and (c) specifies the
Termination Date. The Termination Date so specified shall be (i) a date not less
than 60 days from the delivery of such Notice of Termination to the Consultant
(in the case of termination by the Company other than for Cause), (ii) a date
not more than 30 days after the delivery of such Notice of Termination to the
Company (in the case of termination by the Consultant) or (iii) the date of
receipt of such Notice of Termination by the Consultant (in the case of
termination by the Company for Cause).
1.05 "PERSON" shall mean any individual, firm, corporation, partnership or
other entity.
1.06 "TERMINATION DATE" shall mean the date required to be specified in the
Notice of Termination, or the last day of the Consulting Term (as hereinafter
defined).
2. CONSULTING TERM.
2.01 CONSULTING TERM. The consulting term under this Agreement shall
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commence as of the date hereof (the "Effective Date"), and shall continue until
February 18, 2001 (the "Consulting Term").
2.02 TERMINATION. The Consulting Term may be terminated only in accordance
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with Section 10 hereof.
3. DUTIES AND RESPONSIBILITIES. Unless modified by mutual written consent, the
Consultant shall perform such services and discharge such duties and
responsibilities as may be prescribed from time to time by the Board of
Directors of the Company (the "Board") or such other persons as may be
designated by the Board; provided, however, that the services performed by, and
the duties and responsibilities of, the Consultant shall be consistent with
those usually associated with the position of consultant. The Consultant shall
serve in the capacities, titles and positions with respect to the Company, and
perform all duties and accept all responsibilities incidental to any such
capacities, titles and positions, as the Board may reasonably direct in
conformity with the foregoing sentence.
4. EXTENT OF SERVICE. The Consultant shall devote a minimum of three (3) days
per week to the business of the Company. The Consultant shall not be precluded
from engaging in any other business or activity, whether or not for profit,
provided that such other business or activity does not interfere with the
performance by the Consultant of his obligations under this Agreement. As soon
as practicable following the Effective Date and for so long as this Agreement
remains in effect, Parent shall use its reasonable best efforts to cause
Consultant to be nominated and elected to the Board of Directors of Parent.
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5. CONSULTING FEE. For all the services to be performed by the Consultant
hereunder, the Company shall pay the Consultant an annual Consulting Fee of
$100,000. Such Annual Consulting Fee shall be payable in equal monthly
installments.
6. BUSINESS EXPENSES; OTHER BENEFITS.
6.01 COMPANY AUTO. At Consultant's option, the Company will supply the
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Consultant with a leased Lincoln Town Car or equivalent vehicle, or a $600 per
month auto expense allowance.
6.01 BUSINESS EXPENSES. The Company will reimburse the Consultant for
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Company auto operating expenses and for all other ordinary, necessary and
reasonable out-of-pocket business expenses incurred by Consultant in connection
with his performance of services hereunder in accordance with the Company's
expense approval procedures in effect from time to time.
6.02 OTHER BENEFITS. The Company will provide the Consultant with such
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individual and dependant group medical insurance coverage as is or may in the
future be provided by the Company to its consultants in accordance with the
Company's policies.
7. CONFIDENTIAL INFORMATION. The Consultant acknowledges that, by reason of
his service to the Company, he will have access to confidential information of
the Company and its Affiliates, including, without limitation, information and
knowledge pertaining to products, developments, improvements, methods of
operation, sales and profit figures, customer and client lists and relationships
between the Company and its Affiliates and their agents, customers, clients,
suppliers and others who have business dealings with them (collectively,
"Confidential Information"). The Consultant acknowledges that such Confidential
Information is a valuable and unique asset of the Company and its Affiliates
and, in consideration of the benefits specified in this Agreement, covenants
that, both during and after the Termination Date, he will not use any
Confidential Information or disclose any Confidential Information to any Person
(except as his duties as an employee of the Company or any Affiliate may
require) without the prior written authorization of the Board. The obligation
of confidentiality imposed by this Section shall not apply to information which
becomes generally known in the industry through no act of the Consultant in
breach of this Agreement or to information which the Consultant is legally
compelled to disclose pursuant to subpoena, civil investigative demand or
similar process (in such event, the Consultant promptly shall provide the
Company with written notice thereof in order to allow the Company to seek a
protective order or other appropriate remedy).
8. NON-COMPETITION. The Consultant acknowledges that he will have access to
specialized knowledge and experience in the business of the Company and its
Affiliates and that if his knowledge, experience, reputation or contacts are
used by or on behalf of the Consultant to compete with the Company or its
Affiliates or to solicit employees or agents away from the Company or its
Affiliates, serious harm to the Company and its Affiliates may result. In
consideration of the benefits specified in this Agreement, the Consultant agrees
that during the
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Consulting Term and for a period of three (3) years after the Termination Date,
subject to the performance by the Company of its obligations under Section 10
hereof (whether prior to, or as the result of, expiration of the Consulting
Term), the Consultant shall not, unless acting pursuant hereto or with the prior
written consent of the Board, directly or indirectly, render any services of a
business, commercial, or professional nature to any Person, whether for
compensation or otherwise, within the United States or elsewhere in competition
with the Company or its Affiliates or which is in conflict with the Company's or
its Affiliates' interests, or solicit for employment or in any other fashion
hire any of the employees or agents of the Company or its Affiliates or, with
respect to the three-year period referred to above, any person who was an
employee or agent of the Company or its Affiliates at any time within six months
prior to the termination of consultancy hereunder; provided, however, that this
provision shall terminate in the event this Agreement is terminated by the
Company in violation of Section 10 hereof. For the purpose of this Section 8,
the phrases "in competition with" and "in conflict with" shall not be deemed to
apply to any Person whose activities do not involve similar lines of business
now or hereafter undertaken by the Company or any Affiliate. In the event that
the provisions of this Section should ever be adjudicated to exceed the time,
geographic, service or product limitations permitted by applicable law in any
jurisdiction, then such provisions shall be deemed reformed in such jurisdiction
to the maximum time, geographic, service or product limitations permitted by
applicable law.
9. EQUITABLE RELIEF. The Consultant acknowledges that the restrictions
contained in Sections 7 and 8 hereof are, in view of the nature of the business
of the Company and its Affiliates, reasonable and necessary to protect the
legitimate interests of the Company, and that any violation of any provisions of
those Sections will result in irreparable injury to the Company. The Consultant
also acknowledges that the Company shall be entitled to temporary and permanent
injunctive relief, without the necessity of proving actual damages, and to an
equitable accounting of all earnings, profits and other benefits arising from
any such violation, which rights shall be cumulative and in addition to any
other rights or remedies to which the Company may be entitled. In the event of
any such violation, the Company shall be entitled to commence an action for
temporary and permanent injunctive relief and other equitable relief in any
court of competent jurisdiction and Consultant further irrevocably submits to
the jurisdiction of any California court or Federal court sitting in the Eastern
District of California over any suit, action or proceeding arising out of or
relating to this Section 9. The Consultant hereby waives, to the fullest extent
permitted by law, any objection that he may now or hereafter have to such
jurisdiction or to the venue of any such suit, action or proceeding brought in
such a court and any claim that such suit, action or proceeding has been brought
in any inconvenient forum. Effective service of process may be made upon the
Consultant by mail under the notice provisions contained in Section 13 hereof.
10. TERMINATION.
10.01 TERMINATION WITHOUT CAUSE. The Company shall have the right to
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terminate this Agreement prior to expiration of the Consulting Term only as
follows:
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(a) As the result of partial or total disability as provided in
Section 10.02 hereof ;
(b) Upon death of the Consultant as provided in Section 10.03
hereof;
(c) For Cause as provided in Section 10.04 hereof;
(d) Upon breach by the Consultant of his obligations under Section 7
or Section 8 hereof; or
(e) For any other, or for no, reason; provided that on or as soon as
practicable following the Termination Date, the Company pays to the Consultant
as severance, less withholding required by law (if any), in a single lump sum
or, at the Company's option, in equal installments corresponding to what would
have been the Consultant's regular pay dates and amounts, an amount equal to the
Consulting Fee that would have otherwise have been payable to the Consultant for
the remainder of the Consulting Term.
The Consultant acknowledges and agrees that the Company shall have no obligation
to pay any severance or other compensation to the Consultant upon termination by
the Company for Cause or in the event the Consultant elects to terminate this
Agreement other than as the result of the failure of the Company to perform its
obligations under this Section 10.
10.02 PARTIAL OR TOTAL DISABILITY. In the event that the Consultant is
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unable to perform his duties and responsibilities hereunder to the full extent
required hereunder by reason of illness, injury or incapacity for six
consecutive months (herein defined as a "Disability") (during which time, if
during the Consulting Term, he shall be entitled to receive payments of the
difference between the Consulting Fee during such time, or portion thereof, and
the payments to which the Consultant is entitled pursuant to any applicable
disability insurance policy (less withholding required by law), each such
payment calculated and payable at the times corresponding to what would have
been the Consultant's regular pay dates during such time), this Agreement may be
terminated by the Company and the Company shall have no further liability or
obligation hereunder to the Consultant except for unpaid Consulting Fees accrued
through the date of termination. The Consultant agrees, in the event of any
dispute under this Section 10.02, to submit to a physical examination by a
licensed physician selected by the Company, the cost of such examination to be
paid by the Company.
10.03 DEATH. In the event that the Consultant dies, this Agreement shall
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terminate and thereafter the Company shall have no liability or obligation to
the Consultant, his executors, administrators, heirs, assigns or any other
person claiming under or through him except for unpaid Consulting Fees accrued
to the date of his death. Such payments shall be made to the Consultant's
surviving spouse, or if none, to the Consultant's surviving children, and the
surviving issue of deceased children, in equal shares per stirpes, or if none,
to the Consultant's estate.
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10.04 CAUSE. Nothing in this Consulting Agreement shall be construed to
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prevent the termination of this Agreement by the Company at any time for Cause.
Such termination for Cause shall not be effective until delivery to the
Consultant of a written decision of the Board (after reasonable notice in
writing to the Consultant of the basis for such termination and an opportunity
for the Consultant, together with his counsel, to be heard before the Board),
finding that in the good faith opinion of the Board the Consultant committed
conduct constituting Cause and specifying the particulars thereof in conformity
with the requirements for a Notice of Termination.
10.05 EFFECT OF TERMINATION. In the event of a termination of this
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Agreement, upon the satisfaction and performance by the Company of its
obligations under Section 10 hereof, the Company and its Affiliates and their
respective shareholders, directors, officers, and employees, shall be deemed
fully released by the Consultant from any and all claims, rights, demands,
actions, obligations, and causes of action of any and all kind, nature, and
character, known or unknown, which the Consultant may now have or may have had
against the Company or any predecessor to the termination of employment,
including, but not limited to, any claims to any federal or state agencies, or
lawsuits in federal or state courts against the Company alleging discrimination
(including, but not limited to, claims arising under the Civil Rights Act of
1866, as amended, the Civil Rights Act of 1964, as amended, the California Fair
Employment and Housing Act, as amended, the Age Discrimination in Employment Act
of 1967, the Americans with Disabilities Act of 1990, and the Civil Rights Act
of 1991), workers' compensation claims, any claim related to employment
contracts, express or implied, or any other claims related to Consultant's
employment or association with the Company or the circumstances surrounding
Consultant's employment or association with the Company, or the termination
thereof.
10.06 RETURN OF COMPANY PROPERTY. Promptly following the Termination Date,
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the Consultant shall turn over and surrender to the Company all property of the
Company then in his possession, including without limitation Company
automobiles, automobile keys and office keys, credit cards, debit cards,
telephone calling cards, and all business and financial records, statements,
memoranda, notebooks, correspondence and other documentation, and the Consultant
shall not retain in his actual or constructive possession copies or
reproductions of any of said items of property or information without the prior
written approval of the Company, the Consultant hereby acknowledging that all of
said items are and shall remain the sole and exclusive property of the Company
and that following the Termination Date the Consultant shall not have any
ownership interest in or right to use, either for his personal benefit or the
benefit of others, any of such items of property or information.
11. INDEPENDENT CONTRACTOR STATUS. The relationship of the Consultant to the
Company under this Agreement is that of an independent contractor, and not that
of an employee of the Company. The Company shall have no obligation to provide
to the Consultant, and shall not provide, any workers' compensation coverage or
life, or other benefits provided by the Company to its employees generally,
other than medical coverage. The Consultant shall be solely responsible for
paying and the Company shall have no responsibility or obligation to withhold,
any FICA tax or any federal, state, or local unemployment insurance, income tax,
or
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other taxes or similar charges or assessments of any nature whatsoever incurred
or payable as the result of the performance by the Consultant of his obligations
under this Agreement.
12. SURVIVAL. Notwithstanding the termination of the employment relationship
between the parties hereto, the obligations of the Consultant under Sections 7,
8, 9, 10.05 and 10.06 hereof shall survive and remain in full force and effect
and the Company shall be entitled to equitable relief against the Consultant
pursuant to the provisions of Section 9 hereof. In addition to and not in
limitation of the provisions of the preceding sentence, notwithstanding any such
termination of the employment relationship between the parties hereto,
obligations of the Company under this Agreement that are intended pursuant to
the terms hereof to survive any such termination shall survive and remain in
full force and effect and such obligations shall be enforceable by the
Consultant in accordance with the provisions of this Agreement.
13. NOTICE. Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally, telegraphed,
telexed, sent by facsimile transmission (provided acknowledgment of receipt
thereof is delivered to the sender) or sent by certified, registered or express
mail, postage prepaid. Any such notice shall be deemed given when so delivered
personally, telegraphed, telexed or sent by facsimile transmission or, if
mailed, three days after the date of deposit in the United States mails as
follows:
If to Consultant, to:
Xxx X. Xxxxxx
0000 Xxxxx Xx Xxx Xxxx
Xxxxxxxx, XX 00000
with a copy to:
Xxxxx X. Xxxxx
Attorney at Law
00 Xxxxxx Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
If to the Company, to:
Ad Art Displays, Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: J. Xxxxxxx Xxxxxxxx
Chairman
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with a copy to:
Xxxxxxxx X. Xxxxxx, Esq.
Broad and Xxxxxx
000 X. Xxxxxx Xxx., Xxxxx 0000
Xxxxxxx, XX 00000
or to such other names or addresses as the Company, Parent or the Consultant, as
the case may be, shall designate by notice to the other parties hereto in the
manner specified in this section.
14. REVIEW. The Consultant represents and acknowledges that (a) he has been
advised by the Company to consult his own legal counsel with respect to this
Agreement and (b) he has had full opportunity, prior to execution of this
Agreement, to review thoroughly this Agreement with his counsel.
15. GOVERNING LAW; VENUE. This Agreement shall be governed by, and construed
and interpreted under, the laws of the State of California without giving effect
to any conflict of laws provisions. Venue for any action by the parties to
enforce this Agreement shall be as provided in Section 9 hereof.
16. CONTENTS OF AGREEMENT; AMENDMENT AND ASSIGNMENT. This Agreement sets
forth the entire understanding between the parties hereto with respect to the
subject matter hereof and supersedes any and all prior or existing employment or
consulting agreements between the Company and the Consultant or his Affiliates,
including without limitation Canterbury Properties, Inc., and the Consultant
hereby releases and forever discharges the Company, Parent and all of their
respective Affiliates, shareholders, directors, officers, employees and agents
from any and all claims for additional fixed or incentive compensation or other
benefits, or other claims or causes of action of any nature whatsoever arising
out of or in connection with or under any and all such other agreements, it
being the mutual intent of the Company, Parent and the Consultant that any and
all such agreements are superseded in their entirety by this Agreement. This
Agreement cannot be changed, modified or terminated except upon written
amendment duly executed by the parties hereto. All of the terms and provisions
of this Agreement shall be binding upon and inure to the benefit of and be
enforceable by the respective heirs, representatives, successors and assigns of
the parties hereto, except that the duties and responsibilities of the
Consultant hereunder are of a personal nature and shall not be assignable in
whole or in part by the Consultant. The Consultant acknowledges that, from time
to time, the Company may establish, maintain and distribute employee manuals or
handbooks or personnel policy manuals, and officers or other representatives of
the Company may make written or oral statements relating to personnel policies
and procedures. Such manuals, handbooks and statements are intended only for
general guidance. No policies, procedures or statements of any nature by or on
behalf of the Company (whether written or oral, and whether or not contained in
any employee manual or handbook or personnel policy manual), and no acts or
practices of any nature, shall be construed to modify this Agreement.
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17. SEVERABILITY. If any provision of this Agreement or application thereof
to anyone or under any circumstances is adjudicated to be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect any other provisions or applications of this Agreement which can be given
effect without the invalid or unenforceable provision or application and shall
not invalidate or render unenforceable such provision in any other jurisdiction.
18. ENFORCEMENT; NO MITIGATION; NON-EXCLUSIVITY. Any party to this Agreement
that is required to incur any expenses associated with the enforcement of such
party's rights under this Agreement, whether by arbitration, litigation, other
legal action or otherwise, shall be entitled, upon successfully enforcing any
such rights, to recover from the party against whom such rights were
successfully enforced all such costs and expenses (including all reasonable
attorneys' fees and expenses). For purposes of this Section 18, "successfully
enforcing" shall mean the attainment of a final and binding determination
pursuant to any arbitration, litigation, or other legal action awarding damages,
equitable relief or other relief for the enforcement of the rights of any party
hereunder.
19. REMEDIES CUMULATIVE; NO WAIVER. No remedy conferred by this Agreement is
intended to be exclusive of any other remedy, and each and every such remedy
shall be cumulative and shall be in addition to any other remedy given hereunder
or now or hereafter existing at law or in equity. No delay or omission in
exercising any right, remedy or power hereunder or existing at law or in equity
shall be construed as a waiver thereof, and any such right, remedy or power may
be exercised from time to time and as often as may be deemed expedient or
necessary.
20. HEADINGS. All section headings contained in this Agreement are for
convenience of reference only, do not form a part of this Agreement and shall
not affect in any way the meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, the undersigned have executed or caused to be
executed this Agreement as of the date first above written.
AD ART DISPLAYS, INC.
By: /s/ J. Xxxxxxx Xxxxxxxx
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Name: J. Xxxxxxx Xxxxxxxx
Title: Chairman
/s/ Xxx X. Xxxxxx
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XXX X. XXXXXX
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