EXHIBIT (C)(8)
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT, dated as of August 1, 1997, by and between
NPF Acquisition Corporation, a Delaware corporation (the "Company"), and Xxxxx
X. Xxxxxx ("Consultant") recites and provides as follows.
WHEREAS, Consultant has substantial experience in and knowledge of the
business of the Company to which the Company desires to have access;
WHEREAS, Consultant has been employed as the Chief Executive Officer
and President of National Picture & Frame Company, a Delaware corporation ("Old
NPF"), which is being acquired by the Company in a merger (the "Merger")
pursuant to a merger agreement dated; and
WHEREAS, Consultant desires to make available to the Company such
experience and knowledge following such acquisition during the term of this
Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and intending to be legally bound hereby, the parties hereto
agree as follows:
1. Duties of Consultant.
Consultant shall provide services and advice to the officers and
directors of the Company on an as needed basis relating to the transition of
customer accounts from Old NPF to the Company, the development of new business
for the Company, and general advisory services in connection with the operations
of the Company and its subsidiaries, but shall not be required to maintain
regular office hours at the Company. Consultant shall provide such services and
advice to the Company as requested for a minimum of 120 business days per year
during the term of this Agreement, which shall consist of a minimum of 15
business days per month for the first three calendar months immediately
following the effective time of the Merger and a minimum of 12 days per month
for the next three calendar months immediately thereafter. In the event that
Consultant works less than 120 days in any year, then he shall work such
additional business days during the first three months of the next year as shall
equal the difference between 120 days and the number of days actually worked by
Consultant during such prior year. Consultant shall not be entitled to
additional compensation pursuant to this Agreement if he provides advice and
services for more than 120 business days during any year. Consultant agrees to
submit a proposed calendar at the beginning of each year setting forth
Consultant's proposed services for the Company for such year, which calendar
shall be approved by the Vice President of Sales of the Company. The Consultant
shall maintain a log of his time spent in providing services under this
Agreement. At the end of each calendar month, Consultant shall submit to the
Company a log detailing the services rendered by Consultant for the Company
during such month. For purposes of this paragraph 1, any day during which the
Consultant provides eight hours or more of services hereunder shall constitute
one full day. During any day in which the Consultant performs less than eight
hours of services hereunder, such time shall be accumulated. Accumulated time
shall constitute one full day of services hereunder at such time as such
accumulated time equals eight full hours.
2. Compensation.
In return for the services to be provided hereunder, Consultant shall
receive a consulting fee of $150,000 per year, payable monthly in arrears, and
shall be reimbursed against receipts for all expenses reasonably incurred by him
in connection with the performance of such services pursuant to paragraph 7
below. Notwithstanding anything to the contrary in the Consultant's existing
employment agreement with Old NPF, as amended (the "Existing Employment
Agreement"), the Company agrees that payments made to the Consultant hereunder
shall not result in any offset of amounts payable to the Consultant under the
Existing Employment Agreement.
3. Reporting.
Consultant will report to an appropriate executive officer of the
Company as determined by the Board of Directors of the Company and will perform
his duties and responsibilities to the best of his abilities. Consultant will
make himself reasonably available to the Company and will undertake his efforts
in good faith on behalf of the best interests of the Company.
4. Other Business of Consultant.
Consultant shall not be required to devote full time to his duties and
responsibilities as set forth herein and may alone, or through any business,
partnership, corporation, affiliate or other related party, engage independently
or with others in other businesses and activities of any nature or description
so long as such activity does not violate paragraphs 1 or 9 hereof.
5. Independent Contractor.
Consultant at all times will act as an independent contractor and will
not act or hold himself out to third parties as an employee or agent of the
Company. Nothing in this Agreement or to be done pursuant to its terms and
conditions is intended to, or shall, create a partnership, joint venture,
principal-agent or employer-employee relationship between the Company and
Consultant. Consultant shall be responsible for all taxes and recordkeeping in
connection with amounts paid to him hereunder and shall have no right to
participate in any of the Company's employee benefit or welfare plans, except to
the extent set forth in paragraph 7 below.
6. Term.
This term of this Agreement will commence as of the effective time of
the Merger and will continue for one year from such date, subject to renewal
thereafter for additional one year periods upon mutual agreement of the Company
and Consultant. The Company may terminate this Agreement at any time, but shall
be obligated to pay Consultant the remaining payments required pursuant to
paragraph 2 through the date that this Agreement would have terminated pursuant
to the preceding sentence; provided that the Company shall have no obligation to
make such payments if such termination of Consultant is a result of a material
breach by Consultant of the terms of this Agreement or Consultant's willful
misconduct or gross negligence in the performance of his services hereunder.
7. Benefits; Investment.
During the term of this Agreement, the Company shall provide Consultant
reasonable access to one administrative person employed at the Company's
principal executive offices and the use of one laptop personal computer and
related Company software. Consultant acknowledges and agrees that the software
is proprietary to and the property of the Company and agrees to promptly return
all such software and the copies thereof upon termination of this Agreement. The
Company shall pay or reimburse Consultant for all reasonable expenses (including
travel) actually paid or incurred by Consultant during the term of this
Agreement in the performance of Consultant's duties under this Agreement in
accordance with the Company's employee business expense reimbursement policies
in effect from time to time. The Company shall make a one time payment to
Consultant of up to $2,500 to cover the costs incurred by Consultant in
establishing an office in his home. The Consultant will have the option of
participating in the Company's health care plans provided to its executive
employees, provided that such health care plans permit participation by
Consultant, and Consultant represents and warrants to the Company that
Consultant is insurable under such plans. The expense of such participation
shall be borne by Consultant. Following the term of this Agreement, Consultant
shall be entitled to such additional benefits as may be available under COBRA.
Consultant shall have the option to invest $100,000 in the Company and
such additional amounts in increments of $10,000 as is approved by the Board of
Directors of the Company. Any such purchase by Consultant shall be consummated
on the date of or prior to the Merger.
8. Confidential Information.
Consultant understands and acknowledges that during the term of this
Agreement, he will be exposed to Confidential Information (as defined below)
which is proprietary and which rightfully belongs to the Company. Consultant
agrees that he will not use or cause to be used for his own benefit, either
directly or indirectly, or disclose any of such Confidential Information at any
time, either during or after termination of this Agreement, without the
Company's prior written consent. Consultant shall take all reasonable steps to
safeguard such Confidential Information that is within his possession or control
and to protect such information against disclosure, misuse, loss or theft.
Consultant's obligations under this paragraph with respect to any specific
Confidential Information shall cease when that specific Confidential Information
becomes publicly known or when it is disclosed by any person, firm, corporation
or business entity which is not bound by the terms of a confidentiality
agreement with the Company. The term "Confidential Information" shall mean any
information not generally known in the relevant trade or industry, which was
obtained from the Company, or which was learned as a result of the performance
of any services by Consultant on behalf of the Company, and which falls within
the following general categories:
(i) information concerning trade secrets of the
Company;
(ii) information concerning existing or
contemplated products, services, technology, designs,
processes and research or product developments of the Company;
(iii) information concerning business plans, sales or
marketing methods, methods of doing business, customer lists,
customer usages and/or requirements, or supplier information
of the Company; and
(iv) any other confidential information which the
Company may reasonably have the right to protect by patent,
copyright or by keeping it secret and confidential (including
the software described in paragraph 7 above).
9. Non-Compete, Non-Solicitation, Non-Interference.
(a) Consultant acknowledges that in the course of providing services
pursuant to this Agreement he will become familiar, and during his employment
with Old NPF prior to the date of this Agreement he has become familiar, with
the Company's and its subsidiaries' trade secrets and with other Confidential
Information and that his services have been and will be of special, unique and
extraordinary value to the Company and its subsidiaries. Therefore, Consultant
agrees that, during the term of this Agreement and for two years from the
effective time of the Merger or one year following termination or expiration of
this Agreement, whichever is later (the "Non-Compete Period"), he will not
directly or indirectly, either for himself or any other person, own, manage,
control, participate in, consult with, render services for, permit his name to
be used by or in any manner engage in any business competing with the businesses
of the Company or its subsidiaries as such businesses exist or are in process on
the date of the termination of Consultant's employment, within any geographical
area in which the Company or its subsidiaries engage or plan to engage in such
businesses. Nothing herein will prohibit Consultant from being a passive owner
of not more than 2% of the outstanding stock of any class of a corporation which
is publicly traded, so long as Consultant has no active participation in the
business of such corporation.
(b) During the Non-Compete Period, Consultant will not directly or
indirectly through another person (i) induce or attempt to induce any employee
of the Company or any subsidiary to leave the employ of the Company or such
subsidiary, or in any way interfere with the relationship between the Company or
any subsidiary and any employee thereof, (ii) hire any person who was an
employee of the Company or any subsidiary at any time during the term of this
Agreement, or (iii) induce or attempt to induce any customer, supplier, licensee
or other business relation of the Company or any subsidiary to cease doing
business with the Company or such subsidiary, or in any way interfere with the
relationship between any such customer, supplier, licensee or business relation
and the Company or any subsidiary.
(c) During the Non-Compete Period, Consultant agrees not to take any
action that might interfere with or disrupt the Company's business or its
relationships with its customers, suppliers or employees.
10. Notices.
Any notice provided for in this Agreement will be in writing and will
be either personally delivered, sent by reliable overnight courier, telecopied
or mailed by first class mail, return receipt requested, to the recipient at the
address below indicated:
Notices to Consultant:
Xxxxx X. Xxxxxx
000 Xxxxxxx 00 Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Telephone Number: (000) 000-0000
Telecopy Number: (000) 000-0000
With a copy (which will not constitute Notice to Consultant) to:
Altheimer & Xxxx
00 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx, Esq.
Telephone Number: (000) 000-0000
Telecopy Number: (000) 000-0000
Notices to the Company:
NPF Acquisition Corporation
x/x Xxxxxxxxx Xxxxxxx, X.X.X.
Xxxxxxxxxx Xxxxx, Xxxx Xxxxx
000 Xxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxx, III
Xx. Xxxx X. Xxxxxx
Telephone Number: (000) 000-0000
Telecopy Number: (000) 000-0000
With a copy (which will not constitute Notice to the Company) to:
Hunton & Xxxxxxxx
Riverfront Plaza, East Tower
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxx Xxxxxxxx, Esq.
Telephone Number: (000) 000-0000
Telecopy Number: (000) 000-0000
or such other address or to the attention of such other person as the recipient
party will have specified by prior written notice to the sending party. Any
notice under this Agreement will be deemed to have been given when so delivered,
sent, telecopied or mailed.
11. Severability.
Whenever possible, each provision of this Agreement will be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or any other jurisdiction, but this Agreement will be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision had never been contained herein.
12. Complete Agreement.
This Agreement, whose documents expressly referred to herein and other
documents of even date herein embody the complete agreement and understanding
among the parties and supersede and preempt any prior understandings, agreements
or representations by or among the parties, written or oral, which may have
related to the subject matter hereof in any way.
13. Counterparts.
This Agreement may be executed in separate counterparts, each of which
is deemed to be an original and all of which taken together constitute one and
the same agreement.
14. Successors and Assigns.
This Agreement is intended to bind and inure to the benefit of and be
enforceable by Consultant, the Company and their respective heirs, successors
and assigns, except that Consultant may not assign his rights or delegate his
obligations hereunder without the prior written consent of the Company.
15. Choice of Law.
All questions concerning the construction, validity and interpretation
of this Agreement will be governed by and construed in accordance with the
domestic laws of the Commonwealth of Virginia, without giving effect to any
choice of law provision or rule (whether of the Commonwealth of Virginia or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the Commonwealth of Virginia.
16. Amendment and Waiver.
The provisions of this Agreement may be amended or waived only with the
prior written consent of the Company and Consultant, and no course of conduct or
failure or delay in enforcing the provisions of this Agreement will affect the
validity, binding effect or enforceability of this Agreement.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized corporate officers, and Consultant has duly
executed this Agreement as of the day and year first written above.
NPF ACQUISITION CORPORATION
By: Colonnade Capital, L.L.C., on behalf of
NPF Acquisition Corporation
By: _____________________________
Xxxxx X. Xxxxx, III
Managing Partner
_______________________________________
Xxxxx X. Xxxxxx
