EXHIBIT 10.6.1
CONSULTING AGREEMENT
This Consulting Agreement (this "Agreement") is entered into this 23rd
day of April, 1999 between Bridgeport Machines, Inc., Inc., a Delaware
corporation (the "Company"), and Xxx X. Xxxxxxxx (the "Consultant").
WHEREAS, the Company employed the Consultant as President and Chief
Executive Officer pursuant to an Employment Agreement, dated as of September 7,
1995 (the "Employment Agreement");
WHEREAS, upon the consummation of the merger (the "Merger") of a
wholly-owned subsidiary of Xxxxxxx Industrial Group, Inc. with and into the
Company, the Company shall terminate the Consultant's employment by the Company
under the Employment Agreement and retain the Consultant as a consultant
pursuant to the terms of this Agreement;
WHEREAS, upon such termination of the Consultant's employment by the
Company and subject to the limitations and other applicable provisions contained
in the Employment Agreement, the Consultant shall be entitled to receive certain
"Severance Benefits" (as defined in Section 4(b) of the Employment Agreement)
upon the date of the closing (the "Closing Date") of the Merger;
NOW, THEREFORE, in consideration of the promises and the mutual
covenants herein contained, the parties hereto agree as follows:
1. Introduction: The Company manufactures and distributes metal
cutting machine tools and accessories. In the course of rendering consulting
services hereunder, the Consultant may become aware of certain Proprietary
Information (as defined in paragraph 9(a)) and may become acquainted with
persons affiliated with the Company and banks and other entities with which the
Company does business. The Consultant acknowledges Consultant's obligation to
keep the Company's information confidential and to abide by the confidentiality
and noncompetition agreements contained in this Agreement.
2. Retainer: The Company desires to retain the Consultant as a
consultant to ensure a smooth transition following the Merger and to render
consulting and advisory services, including, but not limited to, (a) consulting
and advisory services relating to the Merger, (b) management and financial
consulting and advisory services relating to the operation of the Company, (c)
consulting and advisory services with respect to acquisitions by the Company,
(d) management and financial consulting and advisory services relating to any
other business enterprises which the Company may from time to time acquire, and
(e) such additional consulting and advisory services related to the foregoing as
the Company's Board of Directors (the "Board") may from time to time
reasonably request. The Consultant is willing to act as a consultant to the
Company upon the terms and conditions contained herein.
3. Term: This Agreement shall be effective as of the Closing Date
and shall terminate on the date six months thereafter, unless sooner terminated
in accordance with the terms hereof (the "Term").
4. Performance: During the Term, the Consultant shall remain
available to devote full business time, attention, skill and efforts to the
advancement of the Company's best interests in the faithful performance of the
Consultant's services hereunder. The Consultant shall use best efforts in the
performance of his services hereunder and agrees to comply in good faith with
requests of the Board. The Consultant shall actively render services upon the
request of and during such periods which may include, with the consent of the
Consultant, days other than Business Days ("Performance Periods"), designated by
the Company and shall remain available to so render services during all Business
Days ("Stand-by Periods") during the Term. The Consultant shall not engage in
any other business activity during the Term, whether such other business
activity is pursued for gain, profit or any other pecuniary advantage or as a
consultant, employee, owner, part owner or in any other capacity, except as may
be approved by the Board. As used herein, "Business Day" means any day other
than a Saturday, Sunday or legal holiday in the United States or the State of
Connecticut.
5. Compensation: As compensation for the Consultant's services to
the Company, the Company shall pay to the Consultant a fee of $1,000 per day
during any Performance Period and $500 per day ("Stand-by Compensation") during
any Stand-by Period, payable every two weeks in arrears. The Consultant will
additionally receive a lump sum payment on the Closing Date of $72,500 and,
unless this Agreement has been sooner terminated, an additional payment on the
date six months after the Closing Date of the amount by which $72,500 exceeds
the aggregate amount of Stand-by Compensation accrued during the Term. The
Consultant may elect to be unavailable to render services to the Company for not
more than one week per month, provided, that the Consultant shall not be
compensated during any such period. The Consultant shall be entitled to the use
of a 1997 Ford Explorer sport utility vehicle (the "Vehicle") and a Sony-Vaio
computer (the "Computer") during the Term, subject to and in accordance with the
policies of the Company currently in effect.
6. Expenses: The Consultant shall be reimbursed for all
reasonable, ordinary and necessary out-of-pocket expenses incurred by him in
connection with rendering his services hereunder. The Consultant shall furnish
the Company with the appropriate documentation required by the applicable tax
laws and the Company's policies. The Company shall have no obligation to
reimburse the Consultant for any expenses incurred by the Consultant should the
Consultant fail to adhere to these procedures and requirements.
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7. Termination.
(a) The Company may terminate this Agreement for "cause"
upon written notice thereof. "Cause" shall mean:
(i) the Consultant's conviction of, or the entry
of a plea of guilty or nolo contendere to,
any felony or crime under any Federal, state
or local law;
(ii) fraud, embezzlement or similar act of
dishonesty;
(iii) the Consultant's failure or refusal to
perform the services from time to time
requested by the Company, or, after receipt
of five day's written notice thereof,
failing to otherwise to comply with a lawful
directive or policy of the Company;
(iv) after receipt of five day's written notice
thereof, incompetent performance or
substantial or continuing inattention to or
neglect of services to be rendered under
this Agreement;
(v) engaging in illegal or unethical conduct,
whether or not in relation to the business
of the Company, which reflects adversely
upon the Consultant's honesty or integrity
in the performance of the services to be
rendered under this Agreement, or which
otherwise is clearly detrimental to the
interests of the Company; or
(vi) a material breach of this Agreement by the
Consultant.
(b) It is expressly agreed that if the Company terminates
this Agreement as provided herein, or in the event of the death or long
term disability of the Consultant, or if the Consultant terminates this
Agreement, the Company's obligation to make any payments set forth
herein shall immediately end on the date of such termination.
8. Protection of Proprietary Information.
(a) The Consultant acknowledges that while performing his
services hereunder, the Consultant shall acquire confidential and
proprietary information and trade secrets (as defined below) relating
to the Company's business. The Consultant agrees not to disclose any
such Proprietary Information to any other person for any reason
whatsoever, unless authorized in writing by the Company, nor will the
Consultant use it for the Consultant's own benefit or the benefit of
anyone else. Confidential and proprietary information and trade secrets
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(collectively referred to as "Proprietary Information") shall include,
but not be limited to, the following types of information: corporate
information, including meeting minutes, contractual arrangements,
leases, plans, strategies, business opportunities, tactics, policies,
resolutions and any litigation or negotiations; marketing information,
including strategies, tactics, methods, customers, market research
data; financial information, including reports, records, cost and
performance data, debt arrangements, holdings, income statements,
annual and/or quarterly statements, and accounting records and/or tax
returns; operational information, including operating procedures,
products, methods, systems, techniques, machinery tooling, designs,
specifications, processes, plans, trade secrets, methods and suppliers;
technical information, including computer software programs; and
personnel information, including personnel lists, resumes, personal
data, compensation information, organizational structure and
performance evaluations.
(b) Upon termination of this Agreement for any reason,
the Consultant will immediately deliver to the Company all property,
documents and data of any nature pertaining to the business of the
Company or belonging to the Company or any of its customers, clients,
product providers or others, and the Consultant will not take or retain
copies in any form of any Company's information or of any of its
customers', clients' product providers' or others' information,
including without limitation, Proprietary Information, provided, that,
unless the Company has terminated this Agreement pursuant to Section
7(a) and notwithstanding any provision to the contrary in the
Employment Agreement, the Consultant may retain possession of the
Vehicle and the Computer and the Company shall take all necessary and
appropriate actions to cause the transfer of ownership in the Vehicle
and Computer to Consultant free and clear of any security interests.
The Consultant understands and agrees that upon termination of this
Agreement pursuant to Section 7(a) hereof, the Consultant shall be
entitled to the use of the Vehicle solely for the duration of the
payment of Severance Benefits under the Employment Agreement.
(c) Proprietary Information shall not include information
and data that at the time of disclosure to the Consultant is generally
available to the public on an unrestricted basis or subsequently
becomes available by reason other than the Consultant's breach of this
Agreement.
9. Noncompetition. During the term of this Agreement and upon any
termination hereof, regardless of which party elected such termination and
regardless of the reason therefore, the Consultant shall abide by the following
covenants:
(a) During the term of employment, and for two years
thereafter (the "Noncompetition Period") the Consultant will not,
directly or indirectly, whether as owner, partner, shareholder,
director, consultant, agent, employee, guarantor, surety or otherwise,
or through any person, consult with or in any way aid or
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assist any competitor of the Company's, or any affiliates or successor
entity thereof, or engage or attempt to engage in any employment,
consulting or other activities which directly or indirectly competes
with the business of the Company. For purposes of this Agreement, the
term "employment" shall include the employment of the Consultant as an
employee, consultant, agent, independent contractor or otherwise. The
Consultant acknowledges that the participation in the conduct of any
such business described above, alone or with any person other than the
Company, will materially impair the business and prospects of the
Company.
(b) In addition to and without limiting the foregoing,
during the Noncompetition Period, the Consultant shall not attempt to
or assist any other person in attempting to do any of the following:
(i) hire any director, officer, employee, or agent of the Company or
encourage any such person to terminate such relationship with the
Company, as the case may be; (ii) encourage any customer, client,
supplier or other business relationship of the Company to terminate or
alter such relationship, whether contractual or otherwise, to the
disadvantage of the Company, as the case may be; (iii) encourage any
prospective customer or supplier not to enter into a business
relationship with the Company; (iv) impair or attempt to impair any
relationship, contractual or otherwise, written or oral, between the
Company and any customer, supplier or other business relationship of
the Company or; (v) sell or offer to sell or assist in or in connection
with the sale to any customer or prospective customer of the Company
any products of the type sold or rendered by the Company.
(c) In addition to and without limiting the foregoing,
during the term of the Noncompetition Period, the Consultant will not
either, directly or indirectly solicit, pursue or call upon to take
away, either for himself or herself or for the benefit of any other
person or entity, any of the customers of the Company upon whom
Consultant called or with whom the Consultant became acquainted during
his employment with the Company.
(d) The Consultant acknowledges that these provisions are
reasonable and necessary to protect the Company's good will and
Proprietary Information. If any such provision is found to be too broad
in time, geographic area or any other respect, the Company and the
Consultant desire that the provision be enforced by a court to the
maximum extent that is reasonable. If the noncompetition provisions set
forth above are deemed to be unenforceable, then any further obligation
to make payments pursuant to this Agreement shall cease.
(e) Nothing in this Agreement shall preclude the
Consultant from making passive investments of not more than 2% of a
class securities of any business enterprise registered under the
Securities Exchange Act of 1934, as amended.
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10. Conflicting Agreements. The Consultant represents that his
engagement as a consultant of the Company and the performance of the
Consultant's services hereunder will not violate any other agreement or
obligation of the Consultant, including any restrictions on competition or
obligations with regard to proprietary information.
11. Notices. Any notice or other communication in connection with
this Agreement shall be deemed to be delivered if in writing and if (a) actually
delivered (electronically or physically) at said address or directly to the
Company or the Consultant, or (b) in the case of a letter, three business days
after deposit in the United States mail, postage prepaid and registered or
certified, return receipt requested:
If to the Consultant, to:
Xxx X. Xxxxxxxx
00 Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
If to the Company to:
Bridgeport Machines, Inc.
Attention: President
000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Notice of changes in address shall comply with the notice provisions.
12. Entire Agreement. This Agreement constitutes the entire
agreement between the Company and the Consultant and supersedes and replaces any
prior agreements between the Company and the Consultant, including, without
limitation, Section 5(b) of the Employment Agreement, provided, that, the
parties expressly agree that all other the provisions of the Employment
Agreement that are stated therein to survive termination of the Consultant's
employment shall remain in full force and effect. Amendments to this Agreement
shall be valid only if in writing and signed by the Companies and the
Consultant.
13. Assignability. The Consultant may not assign this Agreement.
The Company has the right to assign this Agreement upon notice to the
Consultant.
14. Arbitration. Any controversies, disputes or claims arising out
of or relating to this Agreement, or breach thereof, shall be settled by binding
arbitration in accordance with the laws of Connecticut, and the then applicable
rules of the American Arbitration Association, and the judgment on the award
rendered may be entered into any court having jurisdiction thereof. Such
arbitration shall be held in Bridgeport, Connecticut at the American Arbitration
Association before a single arbitrator. Notwithstanding the foregoing, the
Company at all times shall have the right to bring an action to enforce the
covenants and seek the remedies set forth herein through the courts
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as it deems necessary or desirable in order to protect its Proprietary
Information or to prevent occurrence of any event which the Company believes
will cause it to suffer immediate or irreparable harm or damage.
15. Governing Law and Remedies.
(a) This Agreement shall be governed by Connecticut
substantive and procedural law. The Consultant consents to the jurisdiction of
the Connecticut courts and agrees that for purposes of any action initiated
against the Consultant hereunder, service of process may be effected by
certified mail, return receipt requested, or overnight receipted courier.
(b) The Consultant acknowledges and agrees that because
of the substantial potential of inadvertently divulging confidential information
and Proprietary Information, particularly in the context of talking to, meeting
or interviewing with or working for a Competitor, any such talking, meeting or
working with competitors is a breach of both the noncompetition and
confidentiality provisions herein, and will cause the Company irreparable harm.
The Consultant further acknowledges and agrees that the noncompetition and
confidentiality provisions set forth herein in paragraphs 9 and 10 are
reasonable to protect the Company's legitimate business interest. The Consultant
also acknowledges that in the event of a violation of any provision of this
Agreement relating to noncompetition, nonhiring of employees or Proprietary
Information, the Company has no adequate remedy at law and will suffer
irreparable damages. The Consultant therefore agrees that the Company is
entitled to an injunction or restraining order or other equitable relief in the
event the Consultant breaches or threatens to breach any of the provisions of
paragraphs 9, 10 or this paragraph 16. The Company will also be entitled to
damages, costs and attorneys' fees in such event.
16. Severability. If any provision of this Agreement shall to any
extent be invalid or unenforceable, the remainder of this Agreement shall not be
affected thereby and each provision of this Agreement shall be valid and
enforceable to the fullest extent permitted by law. If any provision contained
in this Agreement shall be held to be excessively broad as to scope, activity or
subject so as to be unenforceable at law, such provision shall be construed by
limiting and reducing it so as to be enforceable to the extent compatible with
the applicable law as it shall then appear.
17. Waiver. The failure of any party, in any one or more
instances, to insist upon performance of any terms or conditions of this
Agreement shall not be construed as a waiver of future performance of any such
term, covenant or condition, but the obligations of a party with respect thereto
shall continue in full force and effect.
18. Counterparts. This Agreement may be executed in multiple
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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19. Effect of Headings. Headings are for convenience o reference
only, and shall not affect the meaning of construction of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as an
instrument under seal as of the date first written above.
BRIDGEPORT MACHINES, INC. CONSULTANT
By: /s/Xxxxxx X. Xxxxxxxxxx /s/Xxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxxxx Xxx X. Xxxxxxxx
Vice-President
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