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EXHIBIT 10.20
CONSULTING AND NONCOMPETITION AGREEMENT
This Consulting and Noncompetition Agreement (the "Agreement") is
entered into as of August 2, 1995, by and between TCC Industries, Inc., a Texas
corporation (the "Company"), and J. Xxxxxxx Xxxxx ("Kaine").
W I T N E S S E T H:
WHEREAS, Kaine was elected on August 2, 1995 to serve as a member of
the Company's board of directors (the "Board of Directors"), and receives
monthly retainers and certain other compensation in consideration of his
services rendered to the Company as such; and
WHEREAS, the Company desires to continue to have access to Kaine's
business knowledge and experience after Kaine's resignation or removal from the
Board of Directors by retaining Kaine's services as a consultant to the
Company, and Kaine is willing to provide such consulting services; and
WHEREAS, Kaine, through his association with the Company as a member
of the Board of Directors, possesses confidential and proprietary information
regarding the Company's businesses and operations; and
WHEREAS, the value of the Company's assets may be substantially
undermined by the disclosure of confidential and proprietary information or the
establishment of competing enterprises by Kaine; and the Company desires to
protect the value of its assets against any such occurrence;
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
covenants and agreements herein contained, and other good and valuable
consideration, the receipt and adequacy of which are expressly acknowledged by
the parties by their execution and delivery hereof, the undersigned hereby
agree as follows:
1. Consulting Term.
(a) The Company hereby agrees to retain Kaine, and Kaine
hereby agrees to provide consulting services hereunder, for a period beginning
on the effective date of Kaine's voluntary resignation or Kaine's removal from
the Board of Directors (the "Resignation Date") and terminating on the earlier
to occur (in either event, the "Termination Date") of (i) the date which is
three years from the Resignation Date or (ii) the date of the death of Kaine;
provided, however, that the Company may terminate the obligation of Kaine to
provide services hereunder (subject to Section 1(b) hereof) prior to expiration
of the Consulting Term (as defined below) (1) because of a breach of this
Agreement by Kaine or (2) because of any conduct of Kaine (even if not a breach
of this Agreement) determined in good faith by the Board of Directors of the
Company to be contrary to the best interests of the Company.
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The term "Consulting Term" shall mean that period of time commencing on the
Resignation Date and ending on the Termination Date.
(b) If Kaine's consulting relationship hereunder is
terminated prior to the expiration of the Consulting Term for any reason
whatsoever other than a breach of this Agreement by Kaine, the Company shall
remain obligated to pay to Kaine the full Consulting Fee due to Kaine by the
Company, as provided in Section 3 hereof, through the expiration of the
Consulting Term. If, because of the determination of the Board of Directors of
the Company (as contemplated by Section 1(a)(2) hereof), Kaine shall be
relieved of his obligation to render the consulting services described in
Section 2 hereof, Kaine's failure to render consulting services hereunder shall
not be deemed a breach of this Agreement by Kaine. If Kaine's consulting
relationship hereunder is terminated prior to the expiration of the Consulting
Term by reason of Kaine's breach of this Agreement, the Company shall not
thereafter be obligated to pay Kaine the Consulting Fee provided in Section 3
hereof. Anything to the contrary in this Agreement notwithstanding, Section 4
hereof shall survive the termination of such consulting relationship for any
reason whatsoever.
2. Kaine's Duties.
(a) Upon Kaine's voluntary resignation or Kaine's removal
from the Board of Directors, Kaine agrees to be available from time to time
during the Consulting Term, as reasonably requested by the Board of Directors,
for the provision of consulting services to the Board of Directors pertaining
to the business interests of the Company, such services to be of a nature
substantially similar to those currently provided by Kaine to the Company as a
member of the Board of Directors (but in no event shall Kaine be required to
provide services in excess of five hours per month).
(b) Kaine shall devote his best efforts, skills, and
abilities to the performance of his consulting services to the furtherance of
the business of the Company as stated herein in a professional and
business-like manner and in a manner that will not harm the business reputation
of the Company. Kaine shall also use his best efforts to enhance and preserve
the business the Company conducts and the goodwill of all clients, suppliers,
service providers, and other persons and entities having business relations
with the Company and its subsidiaries.
(c) Kaine shall render services hereunder only in
compliance with all applicable laws and regulations and shall not take any
action, by commission or omission, which would constitute or result in, or be
deemed to constitute or result in, any violation of law or regulation on the
part of Kaine or on the part of the Company.
(d) The consulting services rendered by Kaine hereunder
shall be provided by Kaine as an independent contractor, and
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nothing in this Agreement shall create or be deemed to create the relationship
of co-partners, joint venturers, employer-employee, or principal-agent between
the Company and Kaine, nor shall Kaine have any authority to assume or create
any obligation or responsibility whatsoever, express or implied, on behalf of
or in the name of the Company or to bind the Company or its subsidiaries in any
manner whatsoever, nor shall Kaine make any representation, warranty, covenant,
agreement, or commitment on behalf of the Company or its subsidiaries, without
the prior written consent of an officer of the Company.
3. Consulting Fee. In consideration of the consulting services
to be provided hereunder and Kaine's nondisclosure and noncompetition covenants
set forth in Section 4 hereof, Kaine shall be paid by the Company during the
Consulting Term an annual consulting fee (the "Consulting Fee") pursuant to
this Agreement, in an amount equal to (i) one-third of the monthly retainer
paid by the Company to members of the Board of Directors on the Resignation
Date (or, in the event of a change in the voting control of the Company's
common stock, the monthly retainer paid by the Company immediately prior to
such change in control if the monthly retainer paid by the Company prior to
such change in control was greater than the monthly retainer paid by the
Company after such change in control; in the event the retainer is an annual
retainer, such annual retainer will be divided by 12 to determine the monthly
retainer) multiplied by 12, and such product shall be multiplied by (ii) (A)
the number of calendar months (not to exceed 36 months) during which Kaine has
served as a member of the Board of Directors, divided by (B) twelve. The
annual Consulting Fee shall be payable in four quarterly installments, by cash
or the Company's check, on the last business day of each calendar quarter
during the Consulting Term (prorated for any partial calendar quarter during
the Consulting Term).
4. Nondisclosure and Noncompetition.
(a) Kaine shall not, at any time during the Consulting
Term, use for his own account or for the benefit of any other person, firm,
corporation or entity, directly or indirectly, any of the trade secrets or
goodwill owned or used by the Company or its subsidiaries in their businesses
or, directly or indirectly, disclose or furnish to any other person or entity,
the methods by which the Company's or its subsidiaries' businesses are or have
been conducted, any of the methods by which the businesses of the Company or
its subsidiaries are or have been obtained, or any confidential or proprietary
information whatsoever of the Company or its subsidiaries.
(b) During the Consulting Term, Kaine will not directly
or indirectly own, manage, operate, control, be employed by, advise or be
connected in any manner (including, without limitation, as an employee,
director, agent, partner, officer, stockholder, creditor, consultant or
otherwise) with any person or entity which directly or indirectly is
competitive with the Company's or its subsidiaries' businesses, including,
without limitation, any
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business in which the Company or one of its subsidiaries has been engaged at
any time during the three-year period prior to the Resignation Date.
(c) The Company shall pay Kaine the Consulting Fee
pursuant to Section 3 above in consideration of Kaine's agreement to enter into
and perform the noncompetition and nondisclosure obligations set forth in
Section 4 hereof.
(d) Notwithstanding Section 4(b) hereof, nothing in this
Agreement will prohibit Kaine from owning less than five percent (5%) of the
capital stock of a corporation or a limited partnership, the common stock or
partnership units of which are publicly traded on a national securities
exchange or through NASDAQ, notwithstanding that such corporation or limited
partnership may compete with the Company.
(e) During the Consulting Term, neither Kaine nor any
entity or business owned or controlled by him, will, directly or indirectly for
their own benefit or the benefit of any third party, without the written
consent of the Company, hire or solicit the employment of any employee of the
Company or one of its subsidiaries or influence or induce any employee to leave
or decline employment by the Company or one of its subsidiaries.
5. Severability. Each provision of this Agreement shall be
treated as a separate and independent clause, and the unenforceability of any
one clause shall in no way impair the enforceability of any of the other
clauses herein. If one or more of the provisions contained in this Agreement
shall, for any reason, be held to be excessively restrictive by reason of the
geographic or business scope or duration thereof so as to be unenforceable,
such provision or provisions shall be construed by an appropriate judicial body
by limiting and reducing it or them, so that this Agreement shall be
enforceable to the maximum extent compatible with the applicable law as it
shall then appear.
6. Remedies. Kaine acknowledges that the restrictions
contained herein are reasonably necessary to protect the goodwill and other
business interests of the Company. Kaine recognizes that a breach of this
Agreement may cause irreparable damage to the Company, the exact amount of
which would be or may be difficult or impossible to ascertain, and that
remedies at law for any such breach would be inadequate. Accordingly, under
such circumstances, the Company shall also be entitled, in addition to any
other rights or remedies existing in its favor, to obtain specific performance
or injunctive relief in order to enforce this Agreement or prevent a breach or
further breach of any provision hereof. Such right to specific performance or
injunction shall be in addition to the Company's right to bring an action for
damages actually sustained by the Company or one of its subsidiaries as a
result of any breach hereunder.
7. Expenses. In the event of any dispute, litigation or
other proceeding regarding this Agreement, including, without
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limitation, the performance of any obligation of any party hereunder, the
prevailing party in such dispute, litigation or proceeding shall be entitled to
recover its or his own costs and expenses, including, without limitation,
attorneys' fees, in connection therewith in addition to any other relief to
which it or he may be entitled.
8. Waiver. One or more waivers or breach of any covenant, term
or provision of this Agreement by any party shall not be construed as a waiver
of a subsequent breach of the same covenant, term or provision, nor shall it be
considered a waiver of any other then existing or subsequent breach of a
different covenant, term or provision.
9. Assignment. The rights and obligations of the Company
under this Agreement shall inure to the benefit of and be binding upon its
successors and assigns. The rights and obligations of Kaine under this
Agreement may not be assigned, and any attempt at assignment thereof shall be
void.
10. Notice. All notices and other communications hereunder shall
be in writing and shall be delivered or transmitted in person, by courier, by
telecopy or facsimile, or by certified or registered mail, return receipt
requested and postage prepaid, and shall be addressed as follows:
If to the Company: TCC Industries, Inc.
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxxxx X. Xxxxxxxx
With a copy to: Xxxxx Xxxxxxxxx Xxxxxxx & Xxxxxxxx
A Professional Corporation
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xxx Xxxxx, Xx.
If to Kaine: J. Xxxxxxx Xxxxx
#5 Hedgebrook Cove
Xxxxxx, Xxxxx 00000
With a copy to: ________________________________
________________________________
________________________________
Such notices and other communications shall be deemed given on the day
on which delivered or received or, if sent by mail as described above, on the
day on which delivered or at 10:00 a.m. the third business day after deposit in
the United States mail (as evidenced by a post office receipt furnished to the
sender), whichever is earlier. Any party may change his or its address for
receipt of notices and requests hereunder by notice duly given to the other
party in accordance with the provisions of this Section 10.
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11. Governing Law. The laws of the State of Texas shall govern
all questions relative to the validity, interpretation and construction of this
Agreement and to the performance thereof without reference to the conflicts of
law provisions of the State of Texas.
12. Entire Agreement. This Agreement contains the entire
agreement of the parties with respect to the subject matter hereof and
supersede all prior understandings, whether oral or written, with respect to
such subject matter. This Agreement may not be changed orally, but only by an
agreement in writing, signed by the parties against whom enforcement of any
waiver, change, modification, extension or discharge is sought.
13. Counterparts. This Agreement may be executed in one or more
counterparts, which taken together shall constitute a single instrument.
14. This Agreement supersedes and replaces the Consulting
Agreement ("1994 Consulting Agreement") entered into as of August 2, 1994 by
and between TCC Industries, Inc. and J. Xxxxxxx Xxxxx and the parties agree
that the 1994 Consulting Agreement is terminated effective as of the date first
above written.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound,
have duly executed this Agreement of the date first above written.
THE COMPANY
TCC Industries, Inc.
By:____________________________
Its:___________________________
KAINE
_______________________________
J. Xxxxxxx Xxxxx
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