EXHIBIT 10.20
CONSULTING AGREEMENT
AGREEMENT made as of June 2, 1996 by and between Little Switzerland,
Inc., a Delaware corporation (the "Company"), and Mr. C. Xxxxxxx Xxxxx (the
"Consultant").
WITNESSETH
In consideration of the Consultant's past experience with and advice to
the Company, this engagement by the Company of the Consultant and of other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Consultant represents and warrants to, and agrees with, the
Company as follows:
1. ENGAGEMENT. The Company hereby agrees to engage the Consultant and
the Consultant hereby agrees to accept such engagement by the Company on the
terms and conditions set forth herein.
2. CONSULTATION AND TERM. For a period of three (3) years commencing on
June 2, 1996, the Consultant shall make himself available to the Company to
provide consulting services to the Company, which shall include, but shall not
be limited to, providing advice with respect to the operations, business and
strategic development of the Company. The Consultant agrees to serve the Company
faithfully and to the best of his ability and to use his best efforts in the
promotion and advancement of the Company and its welfare. The Consultant's
consultation hereunder shall be performed at such locations and during such time
periods as shall be mutually agreed to by the parties from time to time.
3. CONSULTING FEES AND FRINGE BENEFITS.
(a) Salary and Consulting Fee. The Company agrees to pay the
Consultant for the services to be rendered by him hereunder a consulting fee at
the annual rate of $150,000.00, payable in monthly installments of $12,500 (the
"Consulting Fee"). The Consulting Fee shall be pro-rated for any period of
service which is less than one (1) month.
(b) Expenses. During the term of his engagement hereunder, the
Consultant shall be entitled to receive reimbursement for all reasonable
expenses incurred by him on behalf of the Company in connection with the
performance of his obligations hereunder in accordance with the usual practice
of the Company; provided, however, that the Consultant shall comply with such
reasonable policies and procedures relating to expenses as may be established
from time by time by the Company.
4. TERMINATION. Notwithstanding the provisions of Sections 1, 2 and 3
hereof, and except as set forth in Section 5 hereof, the Consultant's engagement
hereunder shall terminate without any further liability on the part of the
Company, including, without limitation, any further liability for payments of
the Consulting Fee and benefits provided in Section 3 hereof, under the
following circumstances:
(a) Death. The Consultant's engagement hereunder shall terminate
upon his death.
(b) Termination by the Consultant. The Consultant may terminate
this Agreement upon ninety (90) days' prior written notice to the Company.
(c) Termination by the Company. The Company may terminate the
Consultant's engagement hereunder with or without cause upon ninety (90) days'
prior written notice to the Consultant.
5. CHANGE IN CONTROL.
(a) Notwithstanding anything to the contrary contained herein, in
the event of a Terminating Event (as defined below) within twelve (12) months
from the date of a Change in Control (as defined below) of the Company, as of
the date of such Terminating Event (i) the Consultant shall be entitled to
received a lump sum payment in the amount of one hundred fifty thousand dollars
($150,000.00); provided, however, that if less than one (1) year remains under
the term of this Agreement as set forth in Section 2 hereof, the Consultant
shall only be entitled to receive a lump sum payment in an amount equal to the
remaining portion of the Consulting Fee that
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would be paid to the Consultant pursuant to Section 3(a) hereof if this
Agreement were not terminated prior to expiration of its term; and (ii) the
Consultant shall be reimbursed for any and all expenses incurred by him on
behalf of the Company in connection with the performance of his obligations
under this Agreement.
(b) For purposes of this Agreement, a "Terminating Event" shall
mean (i) termination of this Agreement by the Company or its successor entity
for any reason other than death pursuant to section 5(a) above or (ii)
termination of this Agreement by the Consultant upon (a) the occurrence of a
significant change in the nature or scope of the Consultant's responsibilities,
authorities, powers, functions or duties from the responsibilities, authorities,
powers, functions or duties exercised by the Consultant immediately prior to the
Change in Control; (b) a reasonable determination by the Consultant in good
faith that there has been a significant change in the nature or scope of the
Consultant's responsibilities, authorities, powers, functions or duties from the
responsibilities, authorities, powers, functions or duties exercised by the
Consultant immediately prior to a Change in Control; (c) a reasonable
determination by the Consultant in good faith that, as a result of a Significant
Event, the Consultant is unable to exercise the responsibilities, authorities,
powers, functions or duties exercised by the Consultant immediately prior to
such Change in Control; or (d) a material reduction in the compensation paid to
the Consultant.
(c) For purposes of this Agreement, a "Change in Control" shall
be deemed to have occurred in the following instances: (i) if there has occurred
a change in control which the Company would be required to report in response to
Item 1 of Form 8-K promulgated under the Securities Exchange Act of 1934, as
amended (the "1934 Act"), or, if such regulation is no longer in effect, any
regulations promulgated by the Securities and Exchange Commission pursuant to
the 1934 Act which are intended to serve similar purposes; (ii) if there has
occurred a change in control which the Company would be required to report in
response to Item 6(e) of Schedule 14A promulgated under the 1934 Act, or, if
such regulation is no longer in effect, any regulations promulgated by the
Securities and Exchange Commission pursuant to the 1934 Act which are intended
to serve similar purposes; (iii) when any "person" (as such term is used in
Sections 13(d) and 14(d)(2) of the 0000 Xxx) becomes a "beneficial owner" (as
such term is defined in Rule 13d-3 promulgated under the 1934 Act), directly or
indirectly, of securities of the Company representing fifty percent (50%) or
more of the total number of votes that may be cast for the election of Directors
of the Company; (iv) the sale, transfer or other disposition of all or
substantially all of the assets of the Company to another person or entity; (v)
the election of Directors of the Company equal to one-third or more of the total
number of Directors then in office who have not been nominated by the Company's
Board of Directors or a committee thereof as constituted on the date hereof; or
(vi) the signing of an agreement, contract or other arrangement providing for
any of the transactions described above in this definition of Change in Control;
provided, however, that a "Change in Control" shall not be deemed to have
occurred as a result of the beneficial ownership of the Company's common stock
by any person who is a "Grandfathered Person" under the Company's Shareholder
Rights Agreement dated July 17, 1991, as amended (the "Rights Agreement"), so
long as such Grandfathered Person's beneficial ownership of the Company's common
stock does not exceed such Grandfathered Person's "Grandfathered Percentage" (as
defined in the Rights Agreement).
6. GENERAL RELATIONSHIP. The Consultant shall, in all matters relating
to this Agreement, act as an independent contractor. In all such matters, the
Consultant shall not act as an employee of the Company.
7. CONFLICTING AGREEMENTS. The Consultant hereby represents and warrants
that the execution of this Agreement and the performance of his duties and
obligations hereunder will not breach or be in conflict with any other agreement
to which he is a party or is bound, and that he is not now subject to any
covenants against competition or similar covenants which would affect the
performance of his obligations hereunder.
8. BINDING AGREEMENT. This Agreement and all rights of the Consultant
hereunder shall inure to the benefit of and be enforceable by the Consultant's
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devises and legatees. If the Consultant should die while any
amounts would still be payable to him hereunder all amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
the Consultant's devisee, legatee or other designee of whom the Consultant has
notified the Company in writing prior to his death or, if there be no designee,
to the Consultant's estate.
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9. NOTICES. For purposes of this Agreement, notices and all other
communications to either party hereunder shall be in writing and shall be deemed
to have been duly given when delivered or mailed by United States certified or
registered mail, return receipt requested, postage prepaid, to the respective
addresses of the Company and the Consultant set forth below, or to such other
address as either party shall designate by giving written notice of such change
to the other party.
In the case of the Company, to: Little Switzerland, Inc.
000-X Xxxxx Xxx Xxxxxx Xxxx Xxxx
Xx. Xxxxxx, U.S.V.I. 00804
Attention: Xxxx Xxxxx, Chief Executive
Officer, or Xxxxxx Xxxxxxxx,
Chief Financial Officer
In the case of the Consultant, to: C. Xxxxxxx Xxxxx
c/o Town & Country Corporation
00 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
10. WITHHOLDING. All payments made by the Company under this Agreement
shall be net of any tax or other amounts required to be withheld by the Company
under applicable law.
11. AMENDMENTS. This Agreement shall not be modified or discharged in
whole or in part except by an agreement in writing signed by the parties hereto.
12. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
among the parties with respect to the subject matter hereof and supersedes all
prior agreements and understandings between them as to such subject matter.
13. WAIVERS AND FURTHER AGREEMENTS. The failure of the Company to
require the performance of any term or obligation provided for hereunder, or the
waiver by the Company of a breach of any provision of this Agreement shall not
prevent enforcement of such term or obligation or operate or be construed as a
waiver of any subsequent breach of that provision or of any other provision
hereof. Each of the parties hereto agrees to execute all such further
instruments and documents and to take all such further action as the other party
may reasonably require in order to effectuate the terms and purposes of this
Agreement.
14. COUNTERPARTS. 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.
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15. SECTION HEADINGS. The headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
16. GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the state of Delaware.
17. VALIDITY. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement, which shall remain in full force and
effect.
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IN WITNESS WHEREOF, this Agreement has been executed as a sealed
instrument by the Company, by its duly authorized officer, and by the Consultant
as of the date and year first above written.
COMPANY:
LITTLE SWITZERLAND, INC.
By: /s/ Xxxx X. Xxxxx, Xx.
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Name: Xxxx X. Xxxxx, Xx.
Title: President and Chief Executive Officer
CONSULTANT:
/s/ C. Xxxxxxx Xxxxx
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C. Xxxxxxx Xxxxx
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