Exhibit 10.1
CONSULTING AGREEMENT
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THIS CONSULTING AGREEMENT ("Agreement") is made and entered into as
of the 1st day of June, 2005, by and between ENGINEERED SUPPORT SYSTEMS,
INC., a Missouri corporation (hereinafter called "ESSI"), and XXXXXX X.
XXXXX (hereinafter called "Consultant").
WHEREAS, immediately prior to the effectiveness of this Agreement,
Consultant was employed by ESSI as its President, Business Development
pursuant to an Employment Agreement, dated November 1, 2004, and in the past
has held various other senior officer positions with ESSI;
WHEREAS, Consultant has gained invaluable experience and knowledge
of ESSI's business as a result of Consultant's association with ESSI;
WHEREAS, Consultant wishes to retire from active employment with ESSI;
WHEREAS, upon the execution of this Agreement, Consultant is
terminating his employment with ESSI effective May 31, 2005; and
WHEREAS, ESSI is desirous of retaining the services of Consultant
as a consultant and Consultant is willing to provide consulting services to
ESSI, upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing and the promises
and agreements herein contained, the parties agree as follows:
1. Duties of Consultant. ESSI hereby engages Consultant to provide
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consulting and advisory services pertaining to the business and operations
of ESSI. The parties agree that, during the Term (as hereinafter defined) of
this Agreement, Consultant shall assist with the transition of the successor
President, Business Development and shall perform such other duties and
responsibilities as may from time to time be reasonably requested by ESSI's
Chief Executive Officer and ESSI's Board of Directors.
2. Term. The initial term of this Agreement shall be for the period
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commencing June 1, 2005 and ending on May 31, 2006 (the "Initial Term").
This Agreement shall be automatically renewed for successive one (1) year
periods on the last day of the Initial Term and any renewal term thereafter
upon the same terms and conditions provided for herein unless terminated by
either party upon the giving of written notice of termination to the other
party at least thirty (30) days prior to the expiration of the Initial Term
or any renewal term, as the case may be. The Initial Term of this Agreement
as extended through any renewal term is hereinafter referred to as the
"Term." This Agreement may be terminated prior to the expiration of the
Initial Term or any renewal term of this Agreement upon the occurrence of
any of the following events:
(a) Upon the death of Consultant during any period that this
Agreement is in effect.
(b) By Consultant, upon not less than thirty (30) days nor more than
one hundred twenty (120) days written notice to ESSI.
(c) In the event of Consultant's "disability," which for purposes
hereof shall mean Consultant's failure substantially to discharge
Consultant's duties under this Agreement for ninety (90) consecutive days or
one hundred twenty (120) days in any calendar year, whether or not
consecutive, as a result of an injury, disease, sickness or other physical
or mental incapacity. A determination of Consultant's disability shall be
made by a qualified licensed physician chosen by ESSI subject to
Consultant's approval, which approval shall not be unreasonably withheld. In
the event ESSI and Consultant cannot agree on the choice of a physician,
then such physician shall be chosen by the xxxx of the St. Louis University
School of Medicine, St. Louis, Missouri, or if said xxxx is unwilling or
unable to do so, by the xxxx of another medical school of recognized
national repute. The cost of such determination shall be borne by ESSI, and
in the absence of fraud or bad faith, shall be binding on all parties
hereto.
(d) By ESSI, for "cause," immediately upon written notice to
Consultant. For purposes of this Agreement, "cause" shall mean (i)
Consultant's breach or violation of or failure to perform any of the
material terms and conditions of this Agreement or such other conduct or
action by Consultant which materially and adversely affects the business or
reputation of ESSI as determined by ESSI's Board of Directors, which shall
include specifically, but not by way of limitation, intentional or negligent
conduct or activity inconsistent with or proscribed by federal or state
criminal statute or regulation or express ESSI policy pertaining to a
contract with the United States Government or the violation of any other
ethics or other corporate policy of ESSI, or (ii) any act of dishonesty or
disloyalty or breach of trust against ESSI.
(e) By ESSI, without cause, by written notice to Consultant at any
time.
Upon termination of this Agreement by ESSI without cause,
Consultant shall be entitled to receive (i) all compensation and benefits
hereunder through the effective date of the termination, and (ii) such other
consideration as is expressly provided in this Agreement. Upon termination
of this Agreement for any of the reasons specified in subparagraphs (a)
through (d), above, Consultant shall be entitled to receive all compensation
and benefits hereunder through the effective date of the termination,
provided that after such termination of this Agreement, Consultant and his
spouse shall be entitled to participate in ESSI's health insurance programs
in accordance with the terms of Paragraph 11 hereof.
3. Independent Contractor. In furnishing the consulting services
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described herein, Consultant shall not be an employee or agent of ESSI for
any purpose, but shall act in the capacity of an independent contractor.
Accordingly, ESSI shall not exercise any control over the performance of the
consulting duties provided by Consultant, nor shall ESSI be liable for any
acts or omissions of Consultant. The hours Consultant is to work shall be
entirely within Consultant's control and ESSI shall rely upon Consultant to
work that number of hours which Consultant deems reasonably necessary to
perform Consultant's duties hereunder. It is contemplated by the parties
that Consultant's duties shall be performed on a part-time basis
(approximately sixteen (16) hours per week). All final decisions with
respect to the business
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operations of ESSI shall be the responsibility of and shall be made by ESSI.
ESSI shall report all payments made to Consultant hereunder on such
statements and forms as are required in regard to non-employee compensation.
4. Consulting Fee. In consideration of the services rendered by
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Consultant hereunder, ESSI agrees to pay Consultant a consulting fee of Two
Hundred Ten Dollars ($210.00) per hour or One Thousand Six Hundred Eighty
Dollars ($1,680.00) per day, when Consultant performs services hereunder for
eight (8) or more hours on a given day. The consulting fees owing to
Consultant hereunder shall be payable monthly within fifteen (15) days after
Consultant submits to ESSI a reasonably itemized invoice stating the
hours/days Consultant provided services to ESSI hereunder during the
preceding calendar month together with a description of the duties and tasks
performed during such periods.
5. Other Compensation. In the event this Agreement is terminated by
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ESSI without cause, then in such event, ESSI agrees to pay to Consultant
twelve (12) consecutive equal monthly installments of Fourteen Thousand
Three Hundred Thirty-three Dollars and 33/100 ($14,333.33) each, commencing
on the first day of the first month following the effective date of the
termination of this Agreement and on the first day of each month thereafter
for eleven (11) successive months.
6. Securities Compliance. Consultant agrees to comply fully and
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faithfully with regulations of the Securities and Exchange Commission
pertaining to transactions by him in ESSI's securities and specifically, to
report to ESSI all intended, contemplated and consumated transactions
involving ESSI's securities in accordance with the ESSI's policies and such
regulations as from time to time in effect.
7. Covenants of Consultant.
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(a) So long as this Agreement shall remain in effect and at all
times after the termination of this Agreement, for whatever reason,
Consultant covenants, warrants and agrees that Consultant will not (except
as required in Consultant's duties to ESSI hereunder), in any manner,
directly or indirectly, actually or attempt to:
Disclose or divulge to any person, entity, firm or company
whatsoever, or use for Consultant's own benefit or for the benefit
of any third person or concern, or for any reason inconsistent with
the purpose of this Agreement or inconsistent with Consultant's
confidential and fiduciary relationship with ESSI, any trade
secrets, formulae, devices, know-how, management and business
methods, techniques, opportunities, customer information, supplier
information, business or financial plans or other information or
data of ESSI, without regard to whether all of the foregoing
matters will otherwise be deemed confidential, material or
important, the parties hereto stipulating that as between them, the
same are important, material and confidential and greatly affect
the effective and successful conduct of the business and the
goodwill of ESSI, and the parties further stipulate that any breach
or evasion of the terms of this subparagraph (a) shall be a
material breach of this Agreement, provided that the foregoing
restrictions shall not apply
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(x) with respect to matters that are or become generally known to
the public without breach of this Agreement or any other agreement
or instrument by which Consultant is bound, or (y) where
Consultant is required by law, governmental regulation, or court
order to disclose such matters.
(b) During the Term of this Agreement and for a period of two (2)
years after the termination of this Agreement, for whatever reason,
Consultant covenants, warrants, and agrees that Consultant will not (except
as required in Consultant's duties hereunder), in any manner, directly or
indirectly, actually or attempt to:
(i) Solicit, divert, take away or interfere with any of
the customers, trade, business, patronage, consultants or agents of ESSI, or
in any manner engage in any conduct or activity, including but not limited
to, verbal representations or declarations that would or could be construed
or intended as a disparagement of ESSI's interests;
(ii) Engage within the United States or anywhere outside
of the United States where the Employer conducts business, directly or
indirectly, either personally or as an owner, consultant, partner,
associate, officer, manager, agent, advisor, consultant or otherwise, or by
means of any corporate or other entity or device, in any business which is
"competitive" (as hereinafter defined) with the business of ESSI.
(c) For purposes hereof, a business will be deemed competitive if
it involves the manufacture or sale of high-tech integrated military
electronics, support equipment for government or commercial use, logistics
services for all branches of the United States armed forces and foreign
militaries that do business with ESSI, homeland security forces and other
governmental and intelligence agencies, or any other business which is in
any manner competitive, during or as of the date of cessation of
Consultant's engagement hereunder, with any business then being conducted by
ESSI or as to which ESSI has then formulated definitive plans to enter.
Notwithstanding the foregoing, Consultant may own up to one percent (1%) of
the outstanding securities of a corporation or other business entity that is
"competitive" with the business of ESSI if such entity's securities are
traded on a national securities exchange or on the over-the-counter market.
Consultant agrees that during the Term of this Agreement, and for the term
of the restrictive covenants set forth herein, he will promptly communicate
to ESSI the identity of all companies, persons or concerns with whom
Consultant is considering employment, association or other relationship
along with other information as to the products and services of such
company, person or concern sufficient in detail to permit ESSI to make a
determination as to whether or not competition exists. In order to preserve
its rights under this Agreement, ESSI may advise any third party with whom
Consultant may consider, establish or contract a relationship of the
existence of the terms of this Agreement, and Consultant authorizes and
consents to such disclosure, and ESSI shall have no liability for so acting.
(d) All of the covenants on behalf of Consultant contained in this
Paragraph 7 shall be construed as agreements independent of any other
provision of this Agreement, and the existence of any claim or cause of
action against ESSI, whether predicted on this Agreement or otherwise, shall
not constitute a defense to the enforcement by ESSI of these covenants.
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(e) It is the intention of the parties to restrict the activities
of Consultant under this Paragraph 7 to the extent necessary for the
protection of the legitimate business interests of ESSI, and the parties
specifically covenant and agree that should any of the clauses or provisions
set forth herein, under any set of circumstances not now foreseen by the
parties, be held by a court of competent jurisdiction to be illegal, invalid
or unenforceable under present or future laws effective during the Term of
this Agreement, then and in that event, it is the intention of the parties
hereto that, in lieu of each such clause or provision there shall be
substituted or added, and there is hereby substituted or added, as a part of
this Agreement a clause or provision as similar in terms to such illegal,
invalid or unenforceable clause or provision as may be legal, valid and
enforceable.
8. Expenses. During the Term of this Agreement, ESSI will pay
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directly, or reimburse Consultant, for reasonable and necessary expenses
incurred by Consultant in the interest of the business of ESSI. All such
expenses paid by Consultant, will be reimbursed by ESSI upon presentation by
Consultant, from time to time, of an itemized account of such expenditures,
to the extent necessary to permit the deductibility thereof for Federal
income tax purposes in accordance with the from time to time policy(ies) of
ESSI.
9. Automobile. During the Term of this Agreement, ESSI shall pay to
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or on behalf of Consultant a car allowance as from time to time determined
by ESSI, but in no event less than One Thousand Dollars ($1,000.00) per
month.
10. Documents. Consultant agrees that all documents, instruments,
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drawings, plans, contracts, proposals, records, notebooks, invoices,
statements and correspondence, whether in print or electronic form or
otherwise and including all copies thereof, relating to the business of ESSI
shall be the property of ESSI, and upon the termination of this Agreement,
for whatever reason, all of the same then in Consultant's possession,
whether prepared by Consultant of others, will be left with or immediately
delivered to ESSI.
11. Additional Benefits. For the duration of the Consultant's life
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and the life of the Consultant's spouse, Consultant (or his spouse, as the
case may be) shall be entitled to participate, in accordance with the
eligibility requirements thereof, in ESSI's medical and dental insurance
benefits programs which now exist or may hereafter be established by ESSI.
Participation by Consultant in the foregoing benefits programs shall be on
the same basis as executives of ESSI who are entitled to participate in
same.
12. Administrative Support and Equipment. So long as this Agreement
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shall be in effect, ESSI will make available part-time administrative
support in order to assist Consultant with the performance of his duties
hereunder. Further, so long as this Agreement is in effect, ESSI will
provide or make available to Consultant, at ESSI's cost, a VPN line,
cellular phone, Blackberry, facsimile machine and other related devices for
electronic communications.
13. Remedies. It is agreed that any breach or violation of any of
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the terms of Paragraphs 6 and 7 of this Agreement by Consultant will result
in immediate and irreparable injury to ESSI and will authorize recourse to
injunction and/or specific performance as well as to all other legal or
equitable remedies to which ESSI may be entitled. Consultant represents and
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acknowledges that the enforcement of a remedy by way of injunction will not
prevent Consultant from earning a livelihood. No remedy conferred by any of
the specific provisions of this Agreement is intended to be exclusive of any
other remedy, and each and every remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing
at law or in equity. The election of any one or more remedies by ESSI shall
not constitute a waiver of the right to pursue other available remedies at
any time or cumulatively from time to time.
14. Severability. All agreements and covenants herein contained are
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severable, and in the event any of them shall be held to be invalid or
unenforceable by any court of competent jurisdiction, this Agreement shall
continue in full force and effect and shall be interpreted as if such
invalid agreement or covenant were not contained herein.
15. Waiver or Modification. No amendment, waiver or modification of
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this Agreement or of any covenant, condition or limitation herein contained
shall be valid unless in writing and duly executed by the party to be
charged therewith, and no evidence of any amendment, waiver or modification
shall be offered or received in evidence in any proceeding, arbitration or
litigation between the parties hereto arising out of or affecting this
Agreement, or the rights or obligations of the parties hereunder, unless
such amendment, waiver or modification is in writing, duly executed as
aforesaid, and the parties further agree that the provisions of this
paragraph may not be waived or modified except as herein set forth. Failure
of Consultant or ESSI to exercise or otherwise act with respect to any
rights granted hereunder in the event of a breach of any of the terms or
conditions hereof by the other party, shall not be construed as a waiver of
such breach, nor prevent Consultant or ESSI from thereafter enforcing strict
compliance with any and all of the terms and conditions hereof.
16. Notices. All notices, requests, demands or other communication
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hereunder ("Notice") shall be in writing and shall be deemed given if
personally delivered or mailed by registered or certified mail, return
receipt requested, as follows:
If to ESSI, to:
Engineered Support Systems, Inc.
Attention: Xxxxxx X. Xxxxxxxx, CEO
000 Xxxxx Xxxx
Xx. Xxxxx, Xxxxxxxx 00000
If to Consultant, to:
Xxxxxx X. Xxxxx
000 Xxxxxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000
or to such other addresses as to which the parties hereto give Notice in
accordance with this Paragraph 16.
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17. Construction. This Agreement shall be governed by and construed
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and interpreted according to the laws of the State of Missouri,
notwithstanding the place of execution hereof, nor the performance of any
acts in connection herewith or hereunder in any other jurisdiction. For all
purposes hereof, reference to ESSI shall include each and every direct or
indirect subsidiary and affiliated entity of ESSI and shall further include
the surviving or continuing entity as a result of any merger, combination,
consolidation or reorganization to which ESSI is a party.
18. Assignability. The services to be performed by Consultant
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hereunder are personal in nature and Consultant shall not assign his rights
or delegate his obligations under this Agreement without the prior written
consent of ESSI (which consent shall not be unreasonably withheld), and any
attempted or purported assignment or delegation not herein permitted shall
be null and void.
19. Successors. Subject to the provisions of Paragraph 18, this
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Agreement shall be binding upon and shall inure to the benefit of ESSI and
Consultant and their respective heirs, executors, administrators, legal
representatives, successors and assigns.
20. Attorney's Fees and Costs. If any action at law or in equity is
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brought to enforce or interpret any of the terms of this Agreement, the
prevailing party in such action shall be entitled to recover from the other
party the reasonable attorneys' fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
21. Entire Agreement. This Agreement constitutes the sole and
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entire agreement between the parties as to its subject matter and supercedes
and terminates any and all other agreements, understandings and
representations as to its subject matter (including, without limitation,
that certain Employment Agreement dated November 1, 2004 by and between ESSI
and Consultant), and the parties acknowledge and agree there are no other
agreements, understandings and/or representations of any kind whatsoever
remaining between them except as set forth herein.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
"CONSULTANT" "ESSI"
ENGINEERED SUPPORT SYSTEMS, INC.
/s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxx Name: Xxxxxx X. Xxxxxxxx
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Title: CEO
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