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EXHIBIT 10.154
CONSULTING AGREEMENT
This Consulting Agreement ("Agreement") between Insurance Auto Auctions,
Inc., an Illinois corporation (the "Company"), and Xxxxxx X. X'Xxxxx
("Consultant") is entered into and effective as of December 1, 1998.
WHEREAS, Consultant is currently serving as Chairman of the Board of
Directors of the Company ("Chairman"); and
WHEREAS, the Company desires that Consultant provide and perform extensive
services on behalf of the Company, including but not limited to assisting the
Company in recruiting a new Chief Executive Officer of the Company, exploring
strategic planning alternatives for the Company and assisting with investor
relations, which services are in addition to duties normally associated with
the position of Chairman; and
WHEREAS, Consultant desires to perform such additional services on behalf
of the Company;
NOW, THEREFORE, in consideration of the covenants and agreements set
forth herein and of the mutual benefits accruing to the Company and to
Consultant from the consulting relationship to be established between the
parties by the terms of this Agreement, the Company and Consultant agree as
follows:
1. CONSULTING RELATIONSHIP. The Company hereby retains Consultant, and
Consultant hereby agrees to be retained by the Company, as an independent
consultant, and not as an employee.
2. TERM. The term of this Agreement will begin on the effective date set
forth above and will continue until terminated in accordance with the
provisions set forth below.
(a) This Agreement may be terminated by either party by not less
than 24 hour's prior written notice.
(b) The Company may terminate this Agreement at any time without
notice if (i) Consultant breaches any provision of this Agreement or (ii)
Consultant engages in conduct which, in the judgment of the Board of
Directors of the Company, is injurious to the Company.
(c) In the event of Consultant's death or total disability this
Agreement will terminate as of the date of death or disability.
(d) This Agreement will automatically terminate at the time
Consultant no longer serves as Chairman.
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3. CONSULTING SERVICES. Consultant agrees that during the term of
this Agreement:
(a) Consultant will devote his best efforts to perform services and
execute the policies of the Company as determined by its Board of
Directors, including upon such request, the services described above.
(b) Consultant will exercise a reasonable degree of skill and care
in performing the services referred to in subsection (a) above.
(c) Consultant will be available for service hereunder upon
execution of this Agreement by both parties.
4. COMPENSATION.
(a) Cash Compensation.
(i) For the first year of the term of this Agreement, the
Company will pay Consultant for his services performed under this
Agreement at the rate of $75,000 per year, payable quarterly, in equal
installments at the end of each quarter.
(ii) For each succeding year of the term of this Agreement, the
Company will pay Consultant for his services performed under this
Agreement at the rate of $50,000 per year, payable quarterly, in equal
installments at the end of each quarter.
(iii) Consultant will be entitled to reimbursement for necessary
and reasonable business expenses incurred by Consultant in the
performance of his duties hereunder.
(iv) The cash compensation described in (i) and (ii) above will
be in lieu of any and all other fees otherwise payable to Consultant
during the term of this Agreement for services as a director of the
Company (including annual retainer fees, fees for Board meeting
attendance, fees for committee meeting attendance and fees for serving
as Chairperson of a Board Committee).
(v) Upon termination of the Agreement, Consultant will be paid
a pro rata portion of the cash compensation earned by him during the
quarter in which termination occurs.
(b) Stock Options.
(i) The Company will grant options to Consultant as follows:
(A) On December 15, 1998, the Company will grant Consultant
an option to purchase 40,000 shares of the Company's Common
Stock.
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(B) On each succeeding year of the term of this Agreement,
the Company will grant Consultant an option to purchase 10,000
shares of the Company's Common Stock.
(ii) The options granted in accordance with (i) above will
become vested and exercisable in four quarterly installments
beginning three months after the date of the grant of each such
option; provided however, that (A) if Consultant's service as Chairman
is terminated by the Company prior to the end of the first year of the
term of this Agreement, then the option described in (i)(A) will
become fully vested and exercisable as of the date of such termination
of service; and (B) if Consultant's service as Chairman is terminated
by the Company prior to the end of any succeeding year of the term of
this Agreement, then the option described in (i)(B) that was granted
for such year will become fully vested and exercisable as of the date
of such termination of service. If Consultant terminates his service
as Chairman, then the portion of any option described in (i)(A) or (B)
that is not yet vested and exercisable as of such date will expire.
Once vested, such options will continue to be exercisable until the
earlier of the expiration of the term of the options or the 90th day
following the last day of the calendar year in which Consultant's
service as a director of the Company terminates.
(iii) The options granted in accordance with (i) above will be
granted under the Company's 1991 Stock Option Plan at an exercise
price equal to 100% of the fair market value of the Company's Common
Stock on the close of business on the day preceding the grant date.
(iv) The options granted in accordance with (i) above will be
in lieu of any automatic grants of options that would otherwise be
made to Consultant pursuant to Section VI of the Company's 1991 Stock
Option Plan. Such options will be subject to the usual terms and
conditions of options granted to consultants and employees pursuant to
and in accordance with the Company's 1991 Stock Option Plan.
(c) Other Benefit Plans. Consultant will not be entitled to
participate in or receive benefits under any Company programs maintained
for its employees, including, without limitation, life, medical and
disability benefits, pension, profit sharing or other retirement plans or
other fringe benefits.
5. THE COMPLETE AGREEMENT. This Agreement represents the complete
Agreement between the Company and Consultant concerning the subject matter
hereof and supersedes all prior agreements or understandings, written or oral.
No attempted modification or waiver of any of the provisions hereof will be
binding on either party unless in writing and signed by both Consultant and the
Company.
6. NOTICES. Any notice required or permitted to be given hereunder will
be in writing and will be effective three business days after it is received
via registered or certified mail, overnight delivery or by confirmed facsimile
transmission. Notices will be directed to the following addresses:
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To the Company:
Insurance Auto Auctions, Inc.
000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: General Counsel
Telephone: (000) 000-0000 Facsimile: (000) 000-0000
To Consultant:
Xxxxxx X. X'Xxxxx
00000 Xxxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000 Facsimile: (000) 000-0000
7. ASSIGNABILITY. This Agreement may not be assigned by either party
without the prior written consent of the other party, except that no consent is
necessary for the Company to assign this Agreement to a corporation succeeding
to substantially all the assets or business of the Company whether by merger,
consolidation, acquisition or otherwise. This Agreement will be binding upon
Consultant, his heirs and permitted assigns and the Company, its successors and
permitted assigns.
8. SEVERABILITY. Each of the sections contained in this Agreement shall
be enforceable independently of every other section in this Agreement, and the
invalidity or nonenforceability of any section shall not invalidate or render
nonenforceable any other section contained herein. If any section or provision
in a section is found invalid or unenforceable, it is the intent of the parties
that a court of competent jurisdiction will reform the section or provisions to
produce its nearest enforceable economic equivalent.
9. APPLICABLE LAW. It is the intention of the parties hereto that all
questions with respect to the construction and performance of this Agreement
and the rights and liabilities of the parties hereto will be determined in
accordance with the laws of the State of Illinois. The parties hereto submit to
the jurisdiction of the courts of Illinois in respect of any matter or thing
arising out of this Agreement or pursuant thereto.
10. IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and the year first above written.
INSURANCE AUTO AUCTIONS, INC.
By: /s/ Xxxxxxxxxxx X. Xxxxxxx
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Title: Chief Executive Officer
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CONSULTANT
/s/ Xxxxxx X. X'Xxxxx
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