AMENDED AND RESTATED CONSULTING AGREEMENT
This Consulting Agreement (this "Agreement"), entered into as of the
15th day of October, 1998, by and between Classic Trends International,
Inc., a Texas corporation ("Company"), and Xxxxxx X. Xxxxxxx ("Consultant").
W I T N E S S E T H:
WHEREAS, Company and Consultant are parties to a consulting agreement
entered in October 1995;
WHEREAS, Company and Consultant desire to amend and restate such
consulting agreement; and
WHEREAS, Company and Consultant agree that the consulting agreement
entered in October 1995 is superceded by this amended and restated consulting
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 agree as follows:
1. CONSULTING SERVICES. Company hereby retains Consultant and
Consultant hereby accepts this arrangement with Company upon the terms and
conditions hereinafter set forth.
2. DUTIES. Consultant will provide service to the Company and will
faithfully and diligently perform the services and functions, provided that
all such services and functions will be reasonable and within Consultant's
area of expertise. Consultant will, during the term of this Agreement (or
any extension thereof), devote his attention and skills as deemed necessary
to the promotion of the business of Company. The foregoing will not be
construed as preventing Consultant from making investments in other
businesses or enterprises provided that (a) Consultant agrees not to become
engaged in any other business activity that interferes with his ability to
discharge his duties and responsibilities to Company and (b) Consultant does
not violate any other provision of this Agreement.
3. TERM. The term of this Agreement will commence as of the date
hereof and will end on October 15, 2008, unless earlier terminated by either
party pursuant to the terms hereof. The term of this Agreement is referred
to herein as the "Term." The Term of this agreement is to be extended
automatically for additional successive periods of one year ("Additional
Term"), unless the employment of Consultant is terminated as provided herein.
4. COMPENSATION. As compensation for the services rendered under this
Agreement, Consultant will be entitled to receive the following:
(a) MONTHLY FEE. Commencing the date hereof, Consultant will be
paid a minimum monthly fee of $7,000.
(b) INCENTIVE COMPENSATION. The Company agrees during the term of
this Agreement that the Company, as is applicable, will pay to Consultant a
sales commission equal to a
percentage, as specified on Schedule 1 attached hereto, of the then wholesale
price of each product or service sold (including sales in foreign markets) by
Company, an affiliate of Company or pursuant to any arrangement between
Company, an affiliate of Consultant and a third party. Each sales commission
to be paid to Consultant from the sale of products and/or services will be
due and payable by the 10th day of each month from receipts of actual paid
invoices from the preceding months. Consultant shall receive a computer
print-out of all sales of products and services from the Company and shall
have the right to examine all financial and accounting records at his
discretion during normal business hours. In addition, Consultant shall be
entitled to receive an additional sales commission, based on the formula set
forth in Schedule 1 attached hereto, of the wholesale price of each
additional product or service sold by the Company, an affiliate of Company or
pursuant to any arrangement between Company, an affiliate of Consultant and a
third party. This sales commission shall be paid by the Company, or other
third party, as is appropriate, by the 10th day of each month from receipt of
the actual paid invoice from the proceeding months. Consultant shall receive
a computer print-out of all sales from the Company and shall have the right
to examine all financial and accounting records at his discretion during
normal business hours. This additional compensation shall be deemed
"Incentive Compensation." All calculations of the Incentive Compensation
shall be made in accordance with the accounting methods then employed by the
Company. In the event Consultant is terminated by, or voluntarily terminates
his arrangement with, the Company, Consultant shall be entitled to Incentive
Compensation for such period from the date of this Agreement until
termination, to be calculated by Company's independent auditor based upon
unaudited financial statements, payable within 30 days of termination.
(c) EXPENSES. Upon submission of a detailed statement and
reasonable documentation, Company will reimburse Consultant for all
reasonable and necessary or appropriate out-of-pocket travel and other
expenses incurred by Consultant in rendering services required under this
Agreement.
(d) AUTOMOBILE. Company will supply Consultant with an automobile
and be responsible for all expenses related thereto throughout this
Agreement. Company shall furnish Consultant a gasoline allowance calculated
as the actual miles driven by Consultant for Company's business purposes,
multiplied by the maximum allowable reimbursement amount as set by the
Internal Revenue Service.
5. TERMINATION. This Agreement will terminate upon the occurrence of
any of the following events:
(a) The death of Consultant;
(b) Written notice to Consultant from Company of termination for
"Just Cause" (as hereinafter defined);
(c) The voluntary termination by Consultant; or
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(d) The expiration of the Term or any Additional Term, provided
notice is given by Company to Consultant prior to six months from expiration
of the Term or Additional Term.
For purposes of Section 5(b), "Just Cause" means (i)
Consultant has willfully and intentionally failed to substantially perform
his duties as specified under this Agreement; or (ii) Consultant's criminal
conviction by any state or federal court of any illegal act (other than minor
traffic violations or minor misdemeanors) in connection with his employment
with the Company that could reasonably be expected to materially adversely
affect the Company.
6. OBLIGATIONS OF COMPANY UPON TERMINATION.
(a) In the event of the termination of Consultant's employment
pursuant to Section 5(a), (b), or (c), Consultant will be entitled only to
the compensation and Incentive Compensation earned by him hereunder as of
the date of such termination.
7. WAIVER OF BREACH. The waiver by any party hereto of a breach of
any provision of this Agreement will not operate or be construed as a waiver
of any subsequent breach by any party.
8. COSTS. If any action at law or in equity is necessary to enforce
or interpret the terms of this Agreement, the prevailing party will be
entitled to reasonable attorney's fees, costs and necessary disbursements in
addition to any other relief to which he or it may be entitled.
9. NOTICES. Any notices, consents, demands, requests, approvals and
other communications to be given under this Agreement by either party to the
other will be deemed to have been duly given if given in writing and
personally delivered or within two days if sent by mail, registered or
certified, postage prepaid with return receipt requested, as follows:
If to Company: Classic Trends International, Inc.
00000 Xxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: President
If to Consultant: Xxxxxx X. Xxxxxxx
0000 Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxx 00000
Notices delivered personally will be deemed communicated as of actual receipt.
10. ENTIRE AGREEMENT. This Agreement and the agreements contemplated
hereby constitute the entire agreement of the parties regarding the subject
matter hereof, and supersede all prior agreements and understandings, both
written and oral, among the parties, or any of them, with respect to the
subject matter hereof.
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11. SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws effective
during this Agreement, such provision will be fully severable and this
Agreement will be construed and enforced as if such illegal, invalid or
unenforceable provision never comprised a part hereof; and the remaining
provisions hereof will remain in full force and effect and will not be
affected by the illegal, invalid or unenforceable provision or by its
severance herefrom. Furthermore, in lieu of such illegal, invalid or
unenforceable provision there will be added automatically as part of this
Agreement a provision as similar in its terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and
enforceable.
12. GOVERNING LAW. This Agreement and the rights and obligations of
the parties will be governed by and construed and enforced in accordance with
the substantive laws (but not the rules governing conflicts of laws) of the
state of Texas. The parties agree that this agreement will performable in
Xxxxxx County, Texas.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
COMPANY:
CLASSIC TRENDS INTERNATIONAL, INC.
By /s/ XXXXXXXX X. XXXXXX
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XXXXXXXX X. XXXXXX, President
CONSULTANT:
/s/ XXXXXX X. XXXXXXX
--------------------------------------------
XXXXXX X. XXXXXXX
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SCHEDULE 1
SALES COMMISSIONS FOR INCENTIVE COMPENSATION
COMBINED MONTHLY SALES(1)
0 - 10,000 bottles(2) 5.00% of wholesale price
10,001 - 20,000 bottles 4.50% of wholesale price
20,001 - 30,000 bottles 4.00% of wholesale price
30,001 - 40,000 bottles 3.50% of wholesale price
40,001 - 100,000 bottles 3.25% of wholesale price
Over 100,000 bottles 3.00% of wholesale price
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(1) In the event additional products are not distributed in containers, or if
this formula is not readily applicable to revenue sources, the parties to
this Agreement will negotiate a reasonable incentive compensation package
of not less than 5% of the wholesale price of the product sold or 2% of
the gross revenues, whichever is greater.
(2) In the event that products are distributed in containers other than
bottles, the term bottles will be replaced by the appropriate container.
