Exhibit 10.8
CONSULTING AGREEMENT
This CONSULTING AGREEMENT (the "AGREEMENT") is made and entered into as of
this 19th day of July, 2004, by and between ALTAMA DELTA CORPORATION, a Georgia
corporation (the "COMPANY"), and W. XXXXXXX XXXXX, who resides at 0000
Xxxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxx 00000 ("CONSULTANT").
R E C I T A L S :
A. Consultant, as seller, and Phoenix Footwear Group, Inc., as buyer (the
"BUYER") have entered into a Stock Purchase Agreement dated June 15, 2004 (such
agreement, together with any and all agreements and instruments to be executed
and delivered pursuant thereto and all schedules and exhibits thereto, all as
the same may be amended, supplemented or modified from time to time, the "STOCK
PURCHASE AGREEMENT") pursuant to which the Seller has agreed to sell to Buyer
and Buyer has agreed to purchase from Seller all of the issued and outstanding
shares of capital stock of the Company.
B. Immediately following the closing of the transactions (the "CLOSING")
contemplated by the Stock Purchase Agreement, the Company will be a wholly-owned
subsidiary of Buyer.
C. The Consultant has served as the Chief Executive Officer and President
of the Company. The knowledge of Consultant will be beneficial in maintaining
and improving the performance of the Company following the Closing and the
Consultant has business expertise that will be beneficial to the Company.
Accordingly, it is a condition precedent to Buyer fulfilling its obligations at
the Closing that Company and Consultant enter into this Agreement, pursuant to
which the Company shall retain Consultant to provide consulting services to the
Company. It is also a condition precedent to Buyer fulfilling its obligations at
the Closing that Company and Consultant enter into a Non-Competition and
Confidentiality Agreement in the form annexed to the Stock Purchase Agreement as
an exhibit (the "NON-COMPETITION AGREEMENT").
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. CONSULTING. During the term of this Agreement, Consultant will, upon
the request of the Company's executive officers, provide consulting services
consisting of (a) advice regarding the operations of the Company; (b)
introductions and assistance with the Company's relationships (including
relationships with employees, customers, third party manufacturers, purchasing
agents, vendors and suppliers), products, markets, pricing and submitting bids;
(c) assistance in implementing the transition following the Closing; and (d)
such other duties consistent with the foregoing as the Company's President and
Chief Executive Officer may reasonably request from time to time.
Notwithstanding the foregoing sentence, the Company agrees that Consultant shall
not be required to devote more than thirty-five (35) hours per month to the
provision of such services and that Consultant shall provide such services at
times and
dates requested by the Company and places reasonably requested by the Company
provided the Consultant shall not be required to travel outside the United
States to perform any of the requested services. The Company shall provide the
Consultant with ten (10) days advance notice of any services which would require
Consultant to travel and, if reasonably possible, two (2) days advance notice of
any other services.
2. CONSIDERATION.
(a) Subject to the terms and conditions hereof, as consideration for
Consultant's services and other obligations hereunder, during the term of this
Agreement, the Company agrees to pay Consultant a fee at the rate of $100,000
per annum. Except as otherwise provided, the fee shall be payable $25,000 upon
the execution hereof and each remaining payment shall be due on the last day of
each successive ninety (90) day period thereafter. The consideration set forth
in this Section 2 will be the sole compensation payable to Consultant for
consulting services and no additional compensation or fee will be payable by the
Company to Consultant by reason of any benefit gained by the Company directly or
indirectly through Consultant's consulting efforts hereunder, nor shall the
Company be liable in any way for any additional compensation or fee for
consulting services unless the Company shall have expressly agreed thereto in
writing.
(b) Notwithstanding the foregoing, if Buyer engages in a transaction
with a third party (a "THIRD PARTY") who is not controlled directly or
indirectly by the Buyer (an "AFFILIATE") which results in the Third Party
becoming majority owner of the outstanding capital stock of the Company (whether
by sale of the stock of the Company or by merger or consolidation with or into
another entity) or sells to a Third Party all or substantially all of the
Company's assets, and the Third Party fails to reaffirm or in the case of an
asset sale assume the obligations of the Company under this Agreement, then the
Company shall be obligated to promptly pay to Consultant in one lump sum cash
payment all payments provided for in Section 2(a) which have not been previously
paid to Consultant and following receipt of such amount, Consultant shall
continue to be bound hereby. In such event, no other payments of any kind shall
be due or payable under this Agreement and the Consultant shall continue to be
bound by the terms of this Agreement for the then remaining term of this
Agreement.
(c) If Consultant's consulting services are terminated by the
Company without Cause, then as Consultant's sole and exclusive remedy, any and
all payments provided for in Section 2(a) above from the Company to Consultant
which have not been previously paid to the Consultant shall become immediately
due and payable in one lump-sum cash payment, provided that Consultant has not
breached the Stock Purchase Agreement or the Non-Competition Agreement. If
Consultant's consulting services with the Company are terminated by the Company
for Cause or due to the Consultant's death or disability or the Consultant
voluntarily terminates his consulting services with the Company, then Consultant
shall only be entitled to receive payment of the consulting fees described in
Section 2(a) on a pro rata basis through and including the date of termination
based on the number of days that have elapsed in the year that the termination
is effective and all remaining amounts scheduled for payment hereunder after
such termination date shall cease and no longer be due or payable. In such
event,
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other than the payments due through the termination date no further payments of
any kind shall be due or payable hereunder.
(d) If for any reason other than pursuant to Consultant's material
breach of this Agreement, the Company fails to make a timely payment due
hereunder, the Company shall not be in breach of this Agreement unless the
Consultant has first given written notice thereof to the Company and the Company
has failed to pay such amount within thirty (30) days after being given such
notice in accordance with the terms hereof (such failure to pay after notice and
expiration of the thirty (30) day cure period shall be referred to as a
"DEFAULT"). At any time during the first thirty (30) days after a Default, if
the Consultant is not in breach of the Stock Purchase Agreement or the
Non-Competition Agreement, Consultant may as his sole and exclusive remedy elect
to (i) require the Company to promptly pay all remaining payments provided for
in this Agreement which have not previously been paid to the Consultant, or (ii)
terminate this Agreement immediately on written notice to the Company and in
such event no further payment of any kind shall be due hereunder. If Consultant
elects Section 2(c)(i), then, upon payment in full of such amounts, Consultant
shall continue to be obligated to perform his duties and obligations hereunder
for the remaining term.
3. TERM AND TERMINATION.
(a) The term of this Agreement shall commence on the Closing and
shall terminate on the earlier of (A) the second anniversary of the Closing (B)
pursuant to Section 2(c)(ii), or (B) the occurrence of any of the following
events:
(i) The termination of Consultant's consulting services by the
Company for Cause (as defined below);
(ii) The termination of Consultant's consulting services by
the Company without Cause;
(iii) The death of Consultant; or
(iv) The disability of Consultant.
(b) For purposes of this Agreement, the following definitions shall
apply:
"CAUSE" for Consultant's termination will exist at any time
after the happening of one or more of the following events, in each case as
determined by the Company:
(i) After fifteen (15) days advance written notice is
given to Consultant of any of the following circumstances unless the Consultant
shall have remedied such circumstances prior to the end of such fifteen (15) day
period:
(A) Consultant's failure to perform his duties
under Section 1;
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(B) Consultant's breach of any of his other
material covenants herein;
(C) Consultant's willful misconduct in the
performance of Consultant's duties to the Company where such willful misconduct
has damaged the Company;
(D) Consultant's material breach of the Stock
Purchase Agreement; or
(E) Consultant's material breach of the
Non-Competition Agreement.
(ii) Consultant's commission of any act of fraud with
respect to Buyer, the Company or any of their respective subsidiaries;
(iii) Consultant's conviction or plea of guilty or nolo
contendre in respect of a felony crime or other crime involving a high degree of
moral turpitude; or
(iv) Consultant's misappropriation or embezzlement of
funds from the Company or fraud against the Buyer, Company or any of their
respective subsidiaries.
"DISABILITY" means the inability of Consultant to perform the
essential functions of his duties hereunder for a period of ninety (90) days in
any three hundred sixty (360) day period, as determined by an independent
medical professional selected by the Company. The Consultant shall be deemed to
have a disability if he fails for thirty (30) or more days to submit to an
examination by such a medical professional upon the good faith request of the
Company.
5. SUPPORT. During the term of this Agreement, the Company will provide
Consultant with such support services at the Company's principal executive
offices, including facilities, space, communications networks and equipment as
may be required in the Company's reasonable judgment to enable Consultant to
properly perform the services requested of him hereunder.
6. GROUP HEALTH INSURANCE AND EXPENSES. During the term of this Agreement,
the Company shall:
(a) Permit Consultant to participate, at Consultant's sole cost and
expense, in its group health policy to the extent that such policy permits
Consultant to participate therein in his capacity as a consultant to the Company
on the terms and conditions herein.
(b) Reimburse the Consultant for reasonable travel and other
out-of-pocket expenses incurred by him in connection with Consultant's services
required under this Agreement, provided that Consultant complies with the
Buyer's expense reimbursement policy
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in a timely manner. Such reimbursements will be paid in accordance with Buyer's
reimbursement policy.
7. INDEPENDENT CONTRACTOR. Consultant's relationship with the Company will
be that of an independent contractor and not that of an employee. Except as
specified in Section 6, Consultant will not be eligible for any employee
benefits, nor will the Company make deductions from payments made to Consultant
for taxes, which will be Consultant's responsibility.
8. INDEMNIFICATION. Consultant shall defend, indemnify and hold harmless
the Company and its directors, officers, employees, agents and stockholders
harmless from and against the following claims of loss, (including without
limitation, attorneys' fees) arising out of or resulting from (a) any breach or
violation by Consultant of any of the provisions of this Agreement; (b) any
intentional misrepresentations by Consultant with respect to the Company or its
business or products; (c) any claim by a third party, that such third party is
entitled to any compensation for any services provided to Consultant during the
term of this Agreement; and (iv) any alleged negligent, or intentionally
tortious or malicious action, errors or omissions by Consultant. Notwithstanding
the foregoing, the aggregate cumulative liability of Consultant under this
Section 8 shall not exceed the amount paid to Consultant pursuant to this
Agreement except in the case of fraud, an intentional breach of this Agreement
or intentional misconduct.
9. CONFIDENTIALITY. In addition to his obligation under the
Non-Competition Agreement, but subject to the exceptions set forth therein
(including, but not limited to, duration), Consultant shall keep in confidence
and shall not disclose or make available to third parties or make any use of any
information or documents relating to Consultant's services under this Agreement,
including, but not limited to, the Company's business, financial condition,
customer lists, marketing strategy, employee names, compensation amounts and
formulas, billing amounts, research and development activities, products,
methods of manufacture, trade secrets, processes, business or affairs or any
other confidential or proprietary information concerning the Company (other than
information in the public domain through no fault of Consultant), except with
the prior written consent of the Company or to the extent necessary in
performing tasks assigned to Consultant by the Company. Within five (5) business
days of termination of this Agreement, Consultant will return to the Company all
documents and other materials related to the services provided hereunder or
furnished to Consultant by the Company at any time. Consultant's obligations
under this Paragraph 9 will survive termination of this Agreement but shall
expire at the time of the expiration of Consultant's obligations under Section 3
of the Non-Competition Agreement.
10. MISCELLANEOUS.
(a) Notices. All notices and other communications required or
permitted under this Agreement shall be in writing and shall be either hand
delivered in person, sent by facsimile, sent by certified or registered
first-class mail, postage pre-paid, or sent by nationally recognized express
courier service. Such notices and other communications shall be effective upon
receipt if hand delivered or sent by facsimile, five days after mailing if sent
by mail, and
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one day after dispatch if sent by express courier, to the following addresses,
or such other addresses as any party may notify the other parties in accordance
with this Section 6(a):
If to Company: Altama Delta Corporation
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxx, CEO and President
Facsimile No. (000) 000-0000
with a copy to: Phoenix Footwear Group, Inc.
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Chairman
Facsimile No. (000) 000-0000
Xxxxx Xxxxxx Xxxxxx LLP
Xxxxxx X. Forth, Esq.
000 Xxxxxxxxxx Xxxxxxxx
0 Xxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Facsimile No. (000) 000-0000
If to Consultant: W. Xxxxxxx Xxxxx
0000 Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Facsimile No. (000) 000-0000
with a copy to: Xxxxxx, Xxxxxxx & Xxxxxx, LLP
1600 Atlanta Financial Center
0000 Xxxxxxxxx Xxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: X. X. "Xxxxx" Xxxxx, Esq.
Facsimile No. (000) 000-0000
(b) Amendments. This Agreement may not be changed or modified in
whole or in part except by a writing signed by the party against whom
enforcement of the change or modification is sought.
(c) Successors and Assigns. This Agreement will be binding upon
Consultant and Consultant's representatives, executors, administrators, estate,
heirs, successors and assigns, and will inure to the benefit of Company and its
successors and assigns.
(d) Governing Law. This Agreement will be governed by and
interpreted according to the substantive laws of the State of Delaware without
regard to such state's conflicts laws.
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(e) No Waiver. No failure on the part of the Company or Consultant
to exercise any power, right, privilege or remedy under this Agreement, and no
delay on the part of Company or Consultant in exercising any power, right,
privilege or remedy under this Agreement, shall operate as a waiver of such
power, right, privilege or remedy; and no single or partial exercise of any such
power, right, privilege or remedy shall preclude any other or further exercise
thereof or of any other power, right, privilege or remedy. Neither the Company
nor Consultant shall be deemed to have waived any claim arising out of this
Agreement, or any power, right, privilege or remedy under this Agreement, unless
the waiver of such claim, power, right, privilege or remedy is expressly set
forth in a written instrument duly executed and delivered on behalf of such
party; and any such waiver shall not be applicable or have any effect except in
the specific instance in which it is given.
(f) Counterparts. This Agreement may be executed in counterparts
which when taken together will constitute one instrument. Any copy of this
Agreement with the original signatures of all parties appended will constitute
an original.
(g) Captions. The captions contained in this Agreement are for
convenience of reference only, shall not be deemed to be a part of this
Agreement and shall not be referred to in connection with the construction or
interpretation of this Agreement.
(h) Entire Agreement. This Agreement constitutes the entire
understanding and agreement of the parties hereto with respect to the subject
matter hereof and supersedes all prior and contemporaneous agreements or
understandings, inducements or conditions, express or implied, written or oral,
between the parties with respect to the subject matter hereof. The express terms
hereof control and supersede any course of performance or usage of trade
inconsistent with any of the terms hereof.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
ALTAMA DELTA CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
--------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer
/s/ W. Xxxxxxx Xxxxx
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W. Xxxxxxx Xxxxx
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