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Exhibit 10.12
MANAGEMENT ADVISORY
AND
CONSULTING AGREEMENT
AGREEMENT ("Agreement") made and entered into as of the 31st day of
August, 1999, by and between GALILEO CORPORATION, a Delaware corporation having
a place of business at Xxxxxxxxxx Xxxxxxxx Xxxx, Xxxxx 00, Xxxxxxxxxx, XX 00000
(the "Company"), and ANC MANAGEMENT CORP. ("Consultant").
W I T N E S S E T H:
WHEREAS, the Company is and has been engaged in a number of businesses,
primarily related to the manufacture, distribution and sale of products
utilizing certain optical technologies as applied in different industries (the
"Business"); and
WHEREAS, the Consultant is controlled by Xxxxxxx X. Xxxxxxxxx (the
"Principal"), who has extensive experience in the management, restructuring,
strategic planning repositioning, financing and operation of manufacturing
companies, as well as experience with certain optical technologies; and
WHEREAS, in addition to the Principal, the Consultant has a staff of
employees and representatives with significant financial advisory, strategic
planning, managerial and operational experience with companies similar to the
Company; and
WHEREAS, an affiliate of the Consultant has made a significant equity
investment in the Company, and the Consultant and such affiliate have a
substantial interest in the financial success of the Company; and
WHEREAS, the Company's prior President and CEO resigned his positions
with the Company effective July 6, 1999, the Principal has been named President
and CEO, and the Board has determined not to conduct a search for a new CEO at
this time; and
WHEREAS, the terms and conditions of this Agreement and the
transactions contemplated hereby have been approved by the disinterested
directors of the Company; and
WHEREAS, the Company desires to retain Consultant to provide consulting
services under the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
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1. ENGAGEMENT. Upon the terms and conditions contained in this
Agreement, the Company hereby retains Consultant, and Consultant hereby accepts
the engagement, and agrees to perform Consulting Services (as defined below) for
the Company.
2. CONSULTING SERVICES. During the term of this Agreement, as defined
in paragraph 4 below (the "Term"), at the request of the Company, Consultant
shall perform the services described on Schedule 1 annexed hereto and shall give
to the Company the benefit of skill and advice of the Principal and other
employees and representatives of Consultant to perform the services described on
Schedule 1 annexed hereto, and as to such other matters as the Board of
Directors of the Company ("Board") may from time to time reasonably request (the
"Consulting Services"). All services shall be provided at the request of the
Company, primarily through the Principal.
3. COMPENSATION. the Consultant for any Consulting Services rendered
under this Agreement shall be paid in accordance with Schedule 2.
4. TERM. The term of Consultant's engagement (the "Term") commenced as
of July 6, 1999 and shall continue until June 30, 2002 unless sooner terminated
as provided in Section 8 below.
5. INDEPENDENT CONTRACTOR; DUTIES.
(a) In the performance of the Consulting Services, Consultant
shall be deemed to be, and shall be, an independent contractor, and not a joint
venturer, partner, employee or agent with or of the Company. Without limiting
the generality of the foregoing, neither the Company nor Consultant shall have
the power to bind the other, contractually or otherwise; Consultant shall be
entitled only to the compensation and reimbursement set forth in paragraph 3 of
this Agreement and not to any other so-called "fringe benefits;" and Consultant
shall be solely responsible for all liabilities for any and all state and
federal taxes, withholding, FICA, FUTA, worker's compensation, or other payments
due in respect of the compensation paid to Consultant by the Company and paid by
Consultant to its employees. The Consultant shall file all tax returns and pay
all taxes required in such connection on or before the due date thereof.
(b) In connection with his services as President and CEO of
the Company, the Principal shall have such authority to act for and bind the
Company as shall be customarily within the scope of authority of the executives
holding such offices, subject to such limitations as may be imposed by the Board
and also subject to such additional power and authority as shall be authorized
by the Board. In discharging such positions, the Principal shall give due regard
to his duties and obligations as an officer and director of the Company.
(c) The Principal may be removed as President and CEO at any
time by the Board of Directors and, subject to the provisions of the Securities
Purchase Agreement dated as of December 22, 1998 by and between Andlinger
Capital XIII LLC and the Company, as a director by the shareholders of the
Company, all as provided in the Company's bylaws and the
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Delaware General Corporation Law, but such removal shall not otherwise affect
the duties and obligations of the parties hereunder.
(d) The Consultant may, with the approval of the Board of
Directors, engage third party professionals, consultants and other advisors to
assist Consultant in carrying out its duties or to provide services directly to
the Company, the costs of which shall be borne by the Company.
6. ASSIGNMENT. This Agreement shall bind and inure to the benefit of
only Consultant, the Company and their respective successors and assigns.
Neither party may assign any of its rights or delegate any of its obligations
under this Agreement without the express written consent of the other party. Any
attempted assignment or delegation which does not comply with this paragraph
shall be void.
7. CONFIDENTIAL INFORMATION; NON-COMPETITION.
(a) For purposes of this Agreement, "Confidential Information"
means all information, data and knowledge disclosed to the Consultant by the
Company concerning the organization, business, technology or finances of the
Company or of any third party that the Company is under an obligation to keep
confidential, including, but not limited to, trade secrets and other proprietary
ideas or confidential information respecting inventions (whether or not
patentable), patents, patent applications (under any divisions, continuations,
in whole or in part, patents issuing thereon and issues thereof), products,
designs, sketches, plans, calculations, prototypes, models, formulas,
specifications, procedures, discoveries, improvements, charts, diagrams, graphs,
writings, methods, know-how, techniques, systems, processes, hardware, software,
firmware, code, software programs, works of authorship, records, studies, trade
practices, customer lists, projects, plans and proposals, whether in written,
electronic, magnetic, optical or any other form.
"Affiliate" shall mean, with respect to an individual, the members of his or her
immediate family or any entity directly or indirectly controlled by such
individual; and with respect to an entity, any person or entity controlling,
controlled by or under common control with, such entity.
(b) From time to time the Company has disclosed to the
Consultant, and may continue to disclosure to Consultant, Confidential
Information for the purpose of obtaining management advisory and consulting
services from the Consultant. The Confidential Information includes, but is not
limited to, information relating to the Company's business strategy, financing
sources and structure, customer contacts and similar business information.
(c) All Confidential Information disclosed to the Consultant
by the Company shall remain the property of the Company.
(d) The Consultant shall use the Confidential Information only
for the purposes described in this Agreement and shall not use the Confidential
Information or assist
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others to use the Confidential Information for any other purpose and shall not
publish or otherwise disclose the Confidential Information or any part thereof
to any other person, firm or corporation; provided, however, that the obligation
not to disclose the Confidential Information shall not apply to any of the
following: (i) information that is already known to Consultant; (ii) information
that Consultant receives from a third party without restriction or without
breach of this Agreement; (iii) information that is approved for release by
written authorization by the Company; or (iv) information that is or becomes
publicly known other than through a knowing or wrongful act of the Consultant.
(e) Each of Consultant and Principal severally agree that, so
long as this Agreement is in effect and for a period of one (1) year after the
expiration hereof or its termination for any reason, Consultant and Principal
will not, directly or indirectly, except as a passive investor in publicly-held
companies, engage in competition with the Company or any of its subsidiaries, or
own or control any interest in, or act as a director, officer or employee of, or
consultant to, any firm, corporation or institution directly or indirectly
engaged in competition with the Company or any of its subsidiaries.
8. TERMINATION; SURVIVAL.
(a) This Agreement may be terminated at the election of the
Board of Directors at any time upon written notice for "cause". As used here
"cause" means (i) the Consultant's continued failure to render services to the
Company as provided herein, which failure continues for more than thirty (30)
days after written notice; (ii) willful misconduct or gross negligence in the
performance of its services hereunder; (iii) breach of any material fiduciary
duty to the Company; or (iv) breach of any material item of this Agreement which
remains uncured for a period of thirty (30) days after written notice.
(b) Upon the death or disability of the Principal or his
resignation, removal or other termination as President and CEO of the Company,
this Agreement may be terminated by the Company at any time upon no less than
ninety (90) days written notice.
(c) This Agreement may be terminated at the election of
Consultant at any time upon no less than ninety (90) days written notice.
(d) No termination of this Agreement by either party,
regardless of the circumstances or reasons, shall terminate, amend or in any way
affect the validity of the provisions of Section 7 hereof or any other agreement
executed by consultant relating to Confidential Information of the Company.
9. INDEMNIFICATION.
(a) In the event that the Consultant is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
based on acts or omissions under or relating to this Agreement, the Company
shall indemnify the Consultant against expenses (including attorneys' fees),
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judgments, fines and amounts paid in settlement actually and reasonably incurred
by the Consultant in connection with such action, suit or proceeding if the
Consultant acted in good faith and in a manner the Consultant reasonably
believed to be in, or not opposed to, the best interests of the Company, and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe the Consultant's conduct was unlawful. The termination of any action,
suit or proceeding by judgment, order, settlement, conviction or upon a plea of
nolo contendere or its equivalent, shall not, of itself, create a presumption
that the Consultant did not act in good faith and in a manner which the
Consultant reasonably believed to be in or not opposed to the best interests of
the Company, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that the Consultant's conduct was unlawful.
(b) To the extent that the Consultant has been successful on
the merits or otherwise in defense of any action, suit or proceeding referred to
in subsection (a) of this section, or in defense of any claim, issue or matter
therein, the Consultant shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred in connection therewith.
(c) Expenses (including attorneys' fees) incurred by the
Consultant in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the Company in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking by
or on behalf of the Consultant to repay such amount if it shall ultimately be
determined that the Consultant is not entitled to be indemnified by the Company
as authorized in this section. Such expenses (including attorneys' fees)
incurred by the Consultant may be so paid upon such terms and conditions, if
any, as the Company reasonably deems appropriate consistent with this Agreement.
(d) The indemnification and advancement of expenses provided
by, or granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to the Consultant notwithstanding the
termination of this Agreement and shall inure to the benefit of the successors
of the Consultant.
10. NO CONFLICTS. Consultant represents and warrants to the Company
that performance of Consultant's obligations under this Agreement does not and
will not violate any written or oral contract, agreement, or court order by
which Consultant is bound and Consultant covenants not to create such a
violation during the Term of this Agreement including, without limitation, such
violation created by using any information belonging to any third party, that
would be characterized as Confidential Information if such information belonged
to the Company.
11. SEVERABILITY. Should any provision of this Agreement be held by a
court of competent jurisdiction to be unenforceable, or enforceable only if
modified, such holding shall not affect the validity of the remainder of this
Agreement, which shall continue to be binding upon the parties hereto. The
parties further agree that any such court is expressly authorized to modify any
such unenforceable provision of this Agreement in lieu of severing the
unenforceable provisions from this Agreement in its entirety, whether by
rewriting the offending provision, adding additional language to this Agreement
or making such other modifications as the court
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deems warranted to carry out the agreement of the parties. The parties expressly
agree that this Agreement as so modified by the court shall be binding upon and
enforceable against each of them.
12. STANDARDS OF CONDUCT. Consultant agrees to adhere at all times to
Company policies and to conduct its services in compliance with applicable laws,
rules and regulations and use all reasonable efforts to maintain the highest
standards of business ethics.
13. EXCLUSIVITY. Consultant shall not, during the Term of this
Agreement, perform services related to the same subject matter as those
performed under this Agreement for any other individual, firm, association or
organization which directly or indirectly competes with the Company without
prior written notification to and consent by the Company. In those cases where a
potential conflict appears to exist, a mutually agreeable resolution shall be
made before such conflicting services are furnished or performed.
14. GENERAL PROVISIONS.
(a) Waiver of any provision of this Agreement, in whole or in
part, in any one instance shall not constitute a waiver of any other provision
in the same instance, nor any waiver of the same provision in another instance,
but each provision shall continue in full force and effect with respect to any
other then-existing or subsequent breach.
(b) Any notice required or permitted hereunder shall be in
writing and shall be sufficiently given if personally delivered, delivered by
facsimile telephone transmission, delivered by express delivery service (such as
Federal Express), or mailed first class U.S. mail, postage prepaid, addressed as
follows:
If to the Company:
Galileo Corporation
Sturbridge Business Park
XX Xxx 000
Xxxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx
Fax No.: 0-000-000-0000
with a copy to:
Xxxxxxx & Xxxxxx
000 Xxxxx Xxxx Xxx
Xxxx Xxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxx
Fax No.: 000-000-0000
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If to Consultant:
ANC Management Corp.
000 Xxxxx Xxxxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxxx
Fax No.: 0-000-000-0000
with a copy to:
Xxxxxxx X. Xxxxxx
000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Fax No.: 0-000-000-0000
(or to such other address as any party shall specify by written notice so
given), and shall be deemed to have been delivered as of the date so delivered
or three (3) days after mailing for domestic mail and seven (7) days for
international mail.
(c) This Agreement: (i) may be executed in any number of
counterparts, each of which, when executed by both parties to this Agreement
shall be deemed to be an original, and all of which counterparts together shall
constitute one and the same instrument; (ii) shall be governed by and construed
under the laws of Massachusetts applicable to contracts made, accepted, and
performed wholly within Massachusetts, without application of principles of
conflicts of law; (iii) may be amended, modified, or terminated, and any right
under this Agreement may be waived in whole or in part, only by a writing signed
by both parties; (iv) contains headings only for convenience, which headings do
not form part, and shall not be used in construction, of this Agreement; (v)
shall bind and inure to the benefit of the parties and their respective legal
representatives, successors and permitted assigns; and (vi) is not intended to
inure to the benefit of any third-party beneficiaries.
(d) This Agreement, together with Schedules 1 and 2 constitute
the entire agreement of the parties with respect to its subject matter,
superseding all prior oral and written communications, proposals, negotiations,
representations, understandings, courses of dealing, agreements, contracts, and
the like between the parties in such respect;
(e) The obligations imposed by this Agreement are unique.
Breach of any of such obligations would injure the parties to this Agreement;
such injury is likely to be difficult to measure; and monetary damages, even if
ascertainable, are likely to be inadequate compensation for such injury.
Therefore, the parties to this Agreement acknowledge and agree that protection
of the respective interests in this Agreement would require equitable relief,
including specific performance and injunctive relief, in addition to any other
remedy or remedies that the parties may have at law or under this Agreement,
including, without limitation, entitlement to reimbursement by the breaching
party or parties of the legal fees and expenses of the injured party or parties
prevailing in any such suit.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
COMPANY:
GALILEO CORPORATION
By: ________________________________
Xxxxxx X. Xxxxxxx,
Vice President and CFO
CONSULTANT:
ANC MANAGEMENT CORP.
By: ________________________________
Xxxxxxx X. Xxxxxxxxx, Chairman
The undersigned Xxxxxxx X. Xxxxxxxxx, in his individual capacity, agrees to the
provisions of Section 7 hereof.
Dated as of August 31, 1999 ____________________________________
Xxxxxxx X. Xxxxxxxxx
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SCHEDULE 1
SCOPE OF SERVICES
1. MANAGEMENT SERVICES.
a. Consultation and advice with respect to the overall
management and operation of the Company and its business, including advisory
services with respect to production, marketing and sales, finance,
administration and personnel matters.
b. Provision of the Principal as President and CEO of the
Company, to perform the duties customarily performed by such officer in similar
companies.
2. STRATEGIC SERVICES.
a. Consultation and advice with respect to the development,
implementation and monitoring of a strategic plan for the Company and
participation in the deliberations of the Board relating to the strategic plan.
b. Consultation and advice with respect to strategic
transactions and analysis with respect there.
[NOTE: FINANCIAL ADVISORY, STRUCTURING, ANALYTICAL AND NEGOTIATING SERVICES AND
RELATED FEES (IF ANY) WITH RESPECT TO SPECIFIC STRATEGIC TRANSACTIONS WILL BE
SEPARATELY NEGOTIATED AND AGREED TO OUTSIDE OF THIS AGREEMENT.]
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SCHEDULE 2
COMPENSATION/EXPENSES
COMPENSATION:
A. Consultant shall be entitled to cash compensation at the rate of
$250,000 per annum, payable in equal monthly installments on the last
day of each month.
B. In addition, Consultant shall receive non-qualified options pursuant to
the Company's 1991 Stock Option Plan to purchase 100,000 shares of the
Company's Common Stock, $.01 par value per share, at an exercise price
of $11.4375 per share, exercisable at any time until June 30, 2009.
Such options shall be governed by a mutually agreeable Non-Qualified
Stock Option Agreement.
EXPENSES:
The Company shall reimburse the Consultant, from time to time upon request
accompanied by appropriate documentation, all out-of-pocket expenses (including
an automobile allowance at the IRS rate then in effect) reasonably incurred by
Consultant in providing consulting services.
