EXHIBIT 10.3
EXECUTION COPY
CONSULTANT AGREEMENT
THIS CONSULTANT AGREEMENT (this "Agreement"), dated the 17th day of
November, 2005, by and between Wolverine Tube, Inc., a Delaware corporation (the
"Company") and DH Partners, LLC, a Florida limited liability company (the
"Consultant"), as follows:
RECITALS
WHEREAS, the Company desires to engage the Consultant to provide
certain consulting services to the Company; and
WHEREAS, the Consultant is willing to provide certain consulting
services to the Company; and
WHEREAS, as an inducement to the Company to enter into this Agreement
with the Consultant, Xxxxxx X. Xxxxxxxx ("Xxxxxxxx") agreed to provide the
Company with the Inducement dated the 17th day of November, 2005 as annexed
hereto as Exhibit A; and
WHEREAS, the parties hereto desire to set forth their respective rights
and obligations with respect to the consulting arrangement.
NOW, THEREFORE, the parties hereto, in consideration of the mutual
promises recited herein, agree as follows:
Consulting Arrangement
1. The Consultant shall during the term hereof provide such advisory
consulting services as the Company's then Chief Executive Officer (the "CEO") or
the Board of Directors of the Company (the "Board of Directors") may reasonably
request from time to time on reasonable notice; provided however, that except as
otherwise mutually agreed between the parties, the services requested shall be
limited to (a) 100 business days (including travel time) per year during each of
the first and second contract years, and (b) no more than fifteen (15) days per
month. In the event the term of this Agreement is extended beyond the second
year, the Consultant shall provide such advisory and consulting services to the
Company for such number of business days as mutually agreed upon by the Company
and the Consultant.
2. The Consultant's duties shall include the following specific
matters: (a) advice and assistance with regard to the Company's credit
facilities, (b) assistance in effecting the transition of responsibilities to
the new CEO, and the search, hiring, and transition of other executive officers
as may be required, and (c) continuing and developing relationships with
domestic and international suppliers and domestic and international customer
development.
3. The consulting and advisory services described in this Agreement
shall only be provided on behalf of the Consultant by Xxxxxxxx and no other
person or entity, including but not limited to, any other member, officer,
employee, agent or independent contractor of the Consultant may provide the
consulting and advisory services to the Company pursuant to this Agreement. The
consulting and advisory services shall be of a type and level commensurate with
the consulting and advisory services customarily provided by senior level
executives to public companies.
Compensation and Benefits
4. As full and total compensation for services rendered under this
Agreement, the Company shall: (a) pay the Consultant a fee at an annual rate of
$225,000, payable in equal bimonthly installments; provided that if the
Consultant and the CEO mutually agree that the Consultant's services are to be
provided in excess of 100 business days in any contract year as set forth in
Paragraph 1(a) hereinabove, Consultant shall be paid $2,250 or such other amount
as agreed between the parties for each day in excess of 100 business days that
the Consultant provides services to the Company pursuant to this Agreement in
such contract year, and (b) in the event the term of this Agreement is extended
beyond the second year, pay the Consultant a fee as agreed between the parties
for each day in which the Consultant provides services to the Company pursuant
to this Agreement.
5. During the term of this Agreement, the Company shall reimburse the
Consultant for Xxxxxxxx'x reasonable travel and lodging expenses when at the
Company's headquarters or such other travel locations where the Consultant is
requested to perform services. The Consultant shall submit an application for
such reimbursement in a form acceptable to the Company and shall provide all
backup and supporting documentation. The Company shall also reimburse the
Consultant for reasonable client entertainment and other reasonable business
expenses in accordance with the Company's policies.
6. Company shall make available secretarial and administrative support
to Xxxxxxxx in connection with the Consultant's performance of duties during the
term of this Agreement; provided, however, that such secretarial and
administrative support shall only be provided from the Company's headquarters.
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7. No additional compensation or fee shall be payable by the Company to
the Consultant by reason of any benefit gained by the Company directly or
indirectly through the Consultant's efforts on the Company's behalf, nor shall
the Company be liable in any way for any additional compensation, fee, expense
reimbursement, or any other amounts unless the parties have expressly agreed
thereto in writing.
Term and Termination
8. The term of this Agreement shall be for a period of two years
commencing on December 9, 2005 (the "Effective Date") and the services provided
by the Consultant hereunder shall terminate on the second anniversary of the
Effective Date (the "Termination Date"), unless the term is extended by mutual
agreement of the parties or terminated earlier as provided herein.
Notwithstanding the foregoing, either party may terminate the Consultant's
services under this Agreement for any reason whatsoever prior to the Termination
Date in which case the Company shall have no further obligation to pay the
Consultant any consultant fees or reimburse the Consultant for any expenses
incurred thereafter; except that, in the event such termination by the Company
is not for Cause (as hereinafter defined) or is by the Consultant for Good
Reason (as hereinafter defined), the Company shall promptly pay to the
Consultant a lump sum equal to the consultant fees that the Consultant would
have received through the Termination Date. Such amount will be paid without any
obligation to mitigate or offset other amounts earned. Paragraph 14 shall
survive and not be affected by any termination or expiration of this Agreement
or any termination of the Consultant's status as a consultant or advisor to the
Company.
For purposes of this Agreement, termination for "Cause" shall mean
termination of the Consultant's services hereunder because of or in the event
(a) the Consultant's or Xxxxxxxx'x conviction for, or guilty plea to, a felony
or a crime involving moral turpitude, (b) the Consultant's or Xxxxxxxx'x
commission of an intentional act of personal dishonesty in connection with their
relationship with the Company as a consultant and/or director (as the case may
be), (c) an intentional breach of fiduciary duty by the Consultant or Xxxxxxxx
in connection with the Consultant's or Xxxxxxxx'x relationship with the Company
as a consultant and/or director (as the case may be); (d) the Consultant's or
Xxxxxxxx'x failure to execute or follow the written policies of the Company but
only to the extent it would be reasonable for the Company to apply such written
policies to the Consultant and/or Xxxxxxxx; (e) the Consultant's refusal to
perform its duties and obligations to the Company as set forth in this
Agreement; (f) any material breach of this Agreement by the Consultant; (g) the
Consultant or Xxxxxxxx provides consulting or advisory services to another
entity or person with respect to projects, ventures or other undertakings which
are in direct competition with the then activities of the Company; (h) the death
or Disability (as hereinafter defined) of Xxxxxxxx; (i) Xxxxxxxx breaches any of
the covenants set forth in Paragraph 5(d) of the Retirement Agreement entered
into by the Company and Xxxxxxxx on November 17, 2005; or (j) the Board of
Directors becomes aware of information, which was not known by the full Board of
Directors as of the Effective Date, that would have permitted a for "Cause"
termination of Xxxxxxxx'x employment by the Company pursuant to the terms of the
2002 Change in Control, Severance and Non-Competition
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Agreement entered into by and between Xxxxxxxx and the Company on July 12, 2002;
provided that the events described in (d), (e), (f), (g), and (i) above shall
not constitute for "Cause" unless the Company provides the Consultant with
written notice of the circumstances giving rise to such "Cause" and the
Consultant does not cure such circumstances within 10 days of its receipt of
such notice. Any determination made by the Company with respect to whether this
Agreement may be terminated by the Company for "Cause" shall be done so in good
faith.
For the purposes of this Agreement "Good Reason" shall mean the
Consultant's termination of this Agreement because of (a) a material breach by
the Company of any provisions of this Agreement, or (b) the failure of the
Company to obtain and deliver to the Consultant a satisfactory written agreement
from any successor to the Company to assume and agree to perform this Agreement;
provided that none of the above shall constitute "Good Reason" unless the
Consultant provides written notice to the Company of the circumstances giving
rise to such "Good Reason" and the Company does not cure such circumstances
within 10 days of its receipt of such notice.
For purposes of this Agreement "Disability" shall mean Xxxxxxxx'x
becoming physically or mentally disabled, whether totally or partially, such
that he is unable to perform the consultant and advisory services on the
Consultant's behalf for a period of one hundred and eighty (180) consecutive
days.
Independent Contractor Status
9. The Consultant is an independent contractor and is not an agent of
the Company nor are any of its officers, employees, agents or independent
contractors employees or agents of the Company. Neither the Consultant nor any
of its officers, employees, agents or independent contractors shall represent
itself as an agent of the Company and may not commit or obligate the Company in
any way to other parties.
10. The Consultant, its officer's, employees, agents, and independent
contractors shall have no authority, nor shall they represent themselves as
having any authority, to bind the Company in any manner whatsoever.
11. Federal, state and local income tax, occupational tax and/or
payroll tax of any kind shall not be withheld or paid by the Company on the
Consultant's behalf. Xxxxxxxx shall not be treated as an employee with respect
to the services performed hereunder for federal, state and/or local tax
purposes. The Company will report the amounts paid to the Consultant pursuant to
this Agreement on IRS Form 1099 to the extent required under the Internal
Revenue Code of 1986, as amended. The Consultant agrees to pay any applicable
federal, state and/or local taxes required by law due on account of the fees
paid to the Consultant pursuant to this Agreement.
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Notices
12. All notices, requests, consents and other communications required
or permitted to be given hereunder shall be in writing and shall be deemed to
have been duly given if delivered personally, sent by overnight courier (notices
sent by overnight courier shall be deemed to have been given on the scheduled
delivery date), on the date of transmission if delivered by confirmed facsimile
or mailed first class, postage prepaid, by registered or certified mail (notices
mailed shall be deemed to have been given on the third business day after
mailing), as follows (or to such other address as either party shall designate
by notice in writing to the other in accordance herewith:
If to the Company, to:
Address: Wolverine Tube, Inc.
000 Xxxxxxx Xxxxxx X.
Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attention: Chief Executive Officer
Fax No.: (000) 000-0000
If to the Consultant, at the address last shown on the
Company's records.
Either party at any time may give notice of another address in
accordance with the provisions of this Paragraph 12.
Indemnification
13. The Company hereby agrees to indemnify the Consultant and each of
its members, officers, and employees (collectively, the "Consultant Indemnified
Parties") and hold the Consultant Indemnified Parties harmless to the fullest
extent permitted by applicable law against and in respect to any and all
actions, suits, proceedings, claims, demands, judgments, costs, expenses
(including reasonable attorney's fees), losses, and damages resulting from and
the Consultant Indemnified Parties good faith performance of their duties and
obligations to the Company hereunder. This provision is in addition to any other
rights of indemnification the Consultant Indemnified Parties may have.
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Confidentiality
14. The Consultant acknowledges that Consultant will have access to
Confidential Information (as hereinafter defined) of the Company. The Consultant
agrees not to disclose, communicate or divulge to, or use for the direct or
indirect benefit of any person (including the Consultant), firm, association or
any other entity (other than the Company or its affiliates) any Confidential
Information other than in the good faith performance of its duties or in
response to a legal process. "Confidential Information" includes, but is not
limited to, and regardless of whether such information has been reduced to
writing or designated as confidential, but only to the extent not generally
known in the industry, customer and vendor lists (including any prospective
customers and vendors), database, computer programs, frameworks, models,
products, facilities and methods, marketing programs, sales, financial
information, marketing, training and technical information, business methods,
business policies, procedures, techniques, research or development projects or
results, trade secrets (which includes the Company's customer, vendor and
prospective customer and vendor lists), systems, procedures, manuals,
confidential reports, pricing policies, business plans, computer software,
intellectual property, information concerning how the Company creates, develops,
acquires or maintains its products and marketing plans, targets its potential
customers, and operates its businesses, and any other information not otherwise
available to the general public. If any person (including any government agency
and/or employee) requests in writing the disclosure or release of Confidential
Information, the Consultant shall, to the extent legally permissible,
immediately (a) notify the Company of such request so that the Company may
pursue any available remedies to prevent the disclosure or release of such
Confidential Information and (ii) furnish the Company a copy of all written
materials pertaining to such request for Confidential Information as the Company
shall deem appropriate.
General Provisions
15. This Agreement shall be binding upon and inure to the benefit of
the parties and their successors and permitted assigns. The Consultant's rights
and obligations under this Agreement may not be assigned without prior written
consent of the Company. The Company may not assign its rights and obligations
hereunder without the prior written consent of the Consultant, except to a
successor to all or substantially all of the assets of the Company and then only
if such assignee promptly delivers to the Consultant a written assumption of the
obligations hereunder.
16. This Agreement shall be governed by and construed in accordance
with the laws of the State of Alabama.
17. This Agreement shall constitute the sole agreement between the
parties hereto with respect to the subject matter hereof and shall supersede any
and all prior agreements or
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understandings relating to the subject matter hereof. No change or amendment to
this Agreement shall be binding unless in writing and signed by both parties.
18. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
19. The headings in this Agreement are for reference only, and shall
not affect the meaning or interpretation of this Agreement.
20. In the event that any provision of this Agreement shall be declared
to be invalid, illegal or unenforceable, such provision shall survive to the
extent it is not so declared, and the validity, legality and enforceability of
the other provisions hereof shall not in any way be affected or impaired
thereby, unless such action would substantially impair the benefits to any party
of the remaining provisions of this Agreement.
(SIGNATURE PAGE FOLLOWS)
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be signed as of the date indicated below.
DH PARTNERS, LLC WOLVERINE TUBE, INC.
Consultant Company
By: /s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxxxx X. Xxxxxxx, Xx.
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Signature Signature
Name: Xxxxxx X. Xxxxxxxx Name: Xxxxxx X. Xxxxxxx, Xx.
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Printed Printed
Title: Managing Member Title: Chief Operating Officer & President
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Date: 11/17/05 Date: 11/17/05
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Exhibit A
INDUCEMENT
As an inducement to Wolverine Tube, Inc. (the "Company") to enter into
the Consultant Agreement with DH Partners, LLC (the "Consultant") dated as of
November 17, 2005 and annexed hereto as Exhibit A (the "Consulting Agreement"),
the undersigned hereby acknowledges and represents that he has carefully read
the Consulting Agreement in its entirety and is fully familiar with all of the
obligations, requirements, representations and warranties contained therein
relating to the Consultant and, in consideration of the Company's execution of
the Consulting Agreement, the undersigned hereby warrants, covenants and agrees
that (i) he will perform the consulting services set forth in the Consulting
Agreement on behalf of the Consultant and (ii) he will be bound by all of the
obligations and requirements set forth in Paragraphs 11 and 14 of the Consulting
Agreement in the same manner as if he had personally entered into the Consulting
Agreement with the Company in the place of the Consultant.
Dated as of November 17, 2005
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Xxxxxx X. Xxxxxxxx
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