Exhibit 10.10
CONSULTING AND SEVERANCE AGREEMENT
CONSULTING AND SEVERANCE AGREEMENT, dated December 29, 1998, between GP
Strategies Corporation, a Delaware corporation with an address at 0 Xxxx 00xx
Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000 (the "Company"), and Xxxxxx X.
Xxxxxx with an address at 00 Xxxxxxxxxx Xxxx, Xxxxxxx, Xxx Xxxx 00000
("Xxxxxx").
WHEREAS, Xxxxxx is a founder, and since 1959 has been Executive Vice
President, Treasurer, and a Director, of the Company; and
WHEREAS, Xxxxxx is employed by the Company pursuant to an Employment
Agreement, dated May 19, 1995, as amended, between the Company and Xxxxxx (the
"Employment Agreement"); and
WHEREAS, Xxxxxx wishes to retire from the Company and, in connection
therewith, the Company desires to provide certain severance to Xxxxxx and,
following the expiration of the term of the Employment Agreement, to engage
Xxxxxx to perform services for the Company, and Xxxxxx desires to perform such
services, on the terms and conditions hereinafter set forth;
NOW, THEREFORE, it is hereby agreed as follows:
1. Term. The Company agrees to engage Xxxxxx, and Xxxxxx agrees to serve,
on the terms and conditions of this Agreement for a period commencing on June 1,
1999, and ending May 31, 2004. The period during which Xxxxxx is employed
hereunder is hereinafter referred to as the "Consulting Period."
2. Duties and Services. During the Consulting Period, Xxxxxx shall consult
with the officers and directors of the Company with respect to the business and
finance of the Company, as may be reasonably requested by the Company from time
to time. In performance of his duties, Xxxxxx shall be subject to the direction
of the Board of Directors and the chief executive officer of the Company. Xxxxxx
agrees to his engagement as described in this Section 2 and agrees to devote
such of his time and efforts to the performance of his duties under this
Agreement as shall be reasonably necessary for the performance thereof.
3. Consulting Fee. As compensation for his services hereunder, the Company
shall pay Xxxxxx, during the Consulting Period, a consulting fee payable every
two weeks in equal installments at the annual rate of $200,000. Xxxxxx will be
an independent contractor and, as such, his consulting fee will not be subject
to withholding.
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4. Stock Grant. As severance and in consideration of services rendered to
the Company, the Company shall, on the Exchange Date (as defined in the
Agreement, dated the date hereof, among Xxxxxx, the Company, and Xxxxxx X.
Xxxxxxx (the "Triparty Agreement")), or such later date that such shares are
approved for listing on the New York Stock Exchange, Inc., issue to Xxxxxx a
number of shares of the common stock, par value $.01 per share, of the Company
(rounded to the nearest lesser whole share) having a market value (based on the
Average Closing Price (as defined in the Triparty Agreement) on the Exchange
Date) equal to $700,000. The Company shall use its reasonable best efforts to
obtain as soon as possible the approval of the listing of such shares on the New
York Stock Exchange, Inc. The Company shall issue or cause to be issued a stock
certificate for such shares as promptly as practicable after the date of
issuance. Xxxxxx shall be entitled to certain registration rights with respect
to such shares as provided in the Triparty Agreement.
5. Benefits. (a)(i) As of the date on which the Consulting Period
commences, the Company shall assign to Xxxxxx the life insurance policy
currently maintained by the Company with respect to Xxxxxx in the face amount of
$2,000,000 (the "Assigned Policy"). On the date of such assignment, all premiums
owing on the Assigned Policy shall be paid, there shall be no outstanding loans
against the Assigned Policy, and the Company shall have no claims against Xxxxxx
for premiums paid on the Assigned Policy with respect to the period prior to the
Consulting Period. The Company shall take such actions and execute such
documents as are necessary to effect such assignment.
(ii) During the Consulting Period, the Company shall pay all premiums on
the Assigned Policy. Upon Xxxxxx'x death, Xxxxxx'x estate or beneficiary shall
repay the Company the amount the Company has paid in premiums on the Assigned
Policy with respect to the Consulting Period (unless Xxxxxx has previously
assigned the Assigned Policy back to the Company in accordance with Section
5(a)(iii)) but not the amount the Company has paid in premiums on the Assigned
Policy with respect to the period prior to the Consulting Period.
(iii) During the Consulting Period, Xxxxxx shall not terminate, surrender,
take a loan against, or take any other action that affects the Assigned Policy.
Xxxxxx shall not assign ownership of the Assigned Policy to any person other
than the Company, whether during or after the Consulting Period. After the end
of the Consulting Period, Xxxxxx shall not terminate, surrender, take a loan
against, or take any other action that affects the Assigned Policy, or fail to
pay the premiums thereon (any such event being a "Surrender"), without providing
the Company 30 days advance notice of intention to Surrender. If Xxxxxx
determines to Surrender the Assigned Policy, the Company may, by notice to
Xxxxxx within such 30-day period, elect to pay the premiums thereafter due on
the Assigned Policy, in which event Xxxxxx shall not Surrender the Assigned
Policy, Xxxxxx'x interest in the Assigned Policy shall cease, and Xxxxxx shall
promptly assign ownership of the Assigned Policy back to the Company. If the
Company does not elect to pay such premiums and Xxxxxx Surrenders the Assigned
Policy, Xxxxxx shall repay the Company any amount received by Xxxxxx upon such
Surrender up to the amount the Company has paid in premiums on the Assigned
Policy with respect to the Consulting Period but not the amount the Company has
paid in premiums on the Assigned Policy with respect to the period prior to the
Consulting Period.
(b) As of the date on which the Consulting Period commences, the Company
will assign to Xxxxxx the life insurance policy currently maintained by the
Company with respect to Xxxxxx in the face amount of $1.435 million if Xxxxxx
pays the Company the then cash surrender value of the policy. If Xxxxxx makes
such payment, the Company shall take such actions and execute such documents as
are necessary to effect such assignment and will have no further interest in
such policy. If Xxxxxx does not make such payment, Xxxxxx will have no further
interest in such policy and the Company will not be required to pay any premiums
on such policy after the commencement of the Consulting Period.
(c) During the Consulting Period, Xxxxxx will be entitled to participate
in the Company's medical, dental, and hospitalization insurance plans or to
receive equivalent coverage at the same expense to him, it being understood that
wherever Xxxxxx determines that it is possible Medicare will be Xxxxxx'x primary
coverage.
(d) During the Consulting Period, Xxxxxx shall be entitled to retain the
use of the automobile currently leased by the Company for his use until the end
of the current lease term. After such lease term expires and until the end of
the Consulting Period, the Company shall lease an automobile for Xxxxxx'x use,
provided that the new lease costs shall not exceed the costs under the current
lease. The Company shall pay the insurance and operating expenses with respect
to any such automobile on a consistent basis with how such insurance and
operating expenses were paid by the Company pursuant to the Employment
Agreement.
(e) The Company shall provide Xxxxxx the use of his current office and
with secretarial support until the earlier of the end of the Consulting Period
and such date, if any, as the Company shall vacate its current office space.
6. Expenses. Xxxxxx shall be entitled to reimbursement for reasonable
travel and other out-of-pocket expenses necessarily incurred in the performance
of his duties hereunder, upon submission and approval of written statements and
bills in accordance with the then regular procedures of the Company.
7. Representations and Warranties of Xxxxxx. Xxxxxx represents and
warrants to the Company that (a) Xxxxxx is under no contractual or other
restriction or obligation which is inconsistent with the execution of this
Agreement, the performance of his duties hereunder, or the other rights of the
Company hereunder and (b) Xxxxxx is under no physical or mental disability that
would hinder his performance of duties under this Agreement.
8. Confidential Information. All confidential information which Xxxxxx may
now possess, may obtain during or after the Consulting Period, or may create
prior to the end of the period he is engaged by the Company under this Agreement
or otherwise relating to the business of the Company or any of its subsidiaries
or of any customer or supplier of any of them shall not be published, disclosed,
or made accessible by him to any other person, firm, or corporation either
during or after the termination of his engagement or used by him except during
the Consulting Period in the business and for the benefit of the Company, in
each case without prior written permission of the Company. If requested by the
Company, Xxxxxx shall return all tangible evidence of such confidential
information to the Company prior to or at the termination of his engagement.
9. Termination. (a) Notwithstanding anything herein contained, if on or
after the date hereof and prior to the end of the Consulting Period, Xxxxxx
shall be convicted of a crime involving moral turpitude, shall commit any act
involving dishonesty, disloyalty, or fraud with respect to the Company, or shall
be grossly negligent or engage in willful misconduct with respect to the
Company, then, and in each such case, the Company shall have the right to give
notice of termination of Xxxxxx'x services hereunder as of a date (not earlier
than 10 days from such notice) to be specified in such notice, and this
Agreement shall terminate on the date so specified. In such event, Xxxxxx shall
be entitled to receive only his consulting fees at the rate provided in Section
3 to the date on which termination shall take effect, and the Consulting Period
shall then end.
(b) If Xxxxxx shall die during the Consulting Period, his estate or
beneficiary shall be entitled to receive the consulting fees at the rate
provided in Section 3 to May 31, 2004. If Xxxxxx shall die prior to the
commencement of the Consulting Period, his estate or beneficiary shall be
entitled to receive the consulting fees at the rate provided in Section 3 to the
date which is the fifth anniversary of the date of his death.
10. Modification. This Agreement sets forth the entire understanding of
the parties with respect to the subject matter hereof and supersedes all
existing agreements between them concerning such subject matter, in each case
except as provided in the Triparty Agreement. This Agreement may be modified
only by a written instrument duly executed by each party.
11. Notices. Any notice or other communication required or permitted to be
given hereunder shall be in writing and shall be delivered by Federal Express,
Express Mail, or similar overnight delivery or courier service, or delivered
against receipt to the party to whom it is to be given at the address of such
party set forth in the preamble to this Agreement (or to such other address as
the party shall have furnished in writing in accordance with the provisions of
this Section 11). Notice to the estate of Xxxxxx shall be sufficient if
addressed to Xxxxxx as provided in this Section 11. Any notice shall be deemed
given at the time of receipt thereof.
12. Waiver. Any waiver by either party of a breach of any provision of
this Agreement shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term of
this Agreement on one or more occasions shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. Any waiver must be in writing.
13. Binding Effect. Xxxxxx'x rights and obligations under this Agreement
shall not be transferable by assignment or otherwise, such rights shall not be
subject to commutation, encumbrance, or the claims of Xxxxxx'x creditors, and
any attempt to do any of the foregoing shall be void. The provisions of this
Agreement shall be binding upon and inure to the benefit of Xxxxxx and his heirs
and personal representatives, and shall be binding upon and inure to the benefit
of the Company and its successors and assigns.
14. No Third Party Beneficiaries. This Agreement does not create, and
shall not be construed as creating, any rights enforceable by any person not a
party to this Agreement (except as provided in Section 13).
15. Headings. The headings in this Agreement are solely for the
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
16. Legal Fees. In the event Xxxxxx prevails in any legal action
(including arbitration) relating to this Agreement or any breach or alleged
breach hereof, Xxxxxx shall be entitled to recover from the Company all
reasonable legal fees and expenses incurred by him in connection with such
action.
17. Counterparts; Governing Law. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. It shall be
governed by and construed in accordance with the laws of the State of New York,
without giving effect to conflict of laws.
18. Arbitration. Any dispute or controversy arising out of or relating to
this Agreement or any breach of this Agreement shall be settled by arbitration
to be held in the City of New York in accordance with the rules then in effect
of the American Arbitration Association or any successor thereto. The arbitrator
may grant injunctions or other relief in such dispute or controversy. The
decision of the arbitrator shall be final, conclusive, and binding on the
parties to the arbitration. Judgment may be entered on the arbitrator's decision
in any court having jurisdiction, and the parties irrevocably consent to the
jurisdiction of the federal and state courts located in the State of New York
courts for this purpose.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
GP STRATEGIES CORPORATION
By
Xxxxxx X. Xxxxxx
