Document:

exv10w2

 

EXHIBIT 10.2

NONQUALIFIED STOCK OPTION AGREEMENT

     This AGREEMENT (this “Agreement”) is made as of July 1, 2006 (the “Grant Date”) by and between
HealthMarkets, Inc., a Delaware corporation (the “Company”), and Allen F. Wise (“Optionee”). As a
condition precedent to the Company’s grant of the Option (as defined in Section 2 of this
Agreement) to Optionee, Optionee is executing and delivering a counterpart of the Stockholders’
Agreement and thereby agrees to be bound by the terms thereof.

     1. Certain Definitions. Capitalized terms used, but not otherwise defined, in this
Agreement will have the meanings given to such terms in the Company’s 2006 Management Option Plan
(the “Plan”). As used in this Agreement:

	 	(b)	 	“Call Right” has the meaning specified in Section 8 of this Agreement.
	 
	 	(c)	 	“Company” has the meaning specified in the introductory paragraph of this
Agreement.
	 
	 	(d)	 	“Compensation Committee” means the Executive Compensation Committee of the
Board.
	 
	 	(e)	 	“Disability” shall mean the Optionee’s incapacity due to physical or mental
illness to substantially perform his duties on a full-time basis for at least 26
consecutive weeks or an aggregate period in excess of 26 weeks in any one fiscal year,
and within 30 days after a notice of termination is thereafter given by the Company,
the Optionee shall not have returned to the full-time performance of the Optionee’s
duties; provided, however, if the Optionee shall not agree with a determination to
terminate his employment because of Disability, the question of the Optionee’s
Disability shall be subject to the certification of a qualified medical doctor selected
by the Company or its insurers and acceptable to the Optionee or, in the event of the
Optionee’s incapacity to accept a doctor, the Optionee’s legal representative.
	 
	 	(f)	 	“Fair Market Value” shall have the meaning specified in the Stockholders
Agreement.
	 
	 	(g)	 	“First Tranche” has the meaning specified in Section 2 of this Agreement.
	 
	 	(h)	 	“Grant Date” has the meaning specified in the introductory paragraph of this
Agreement.
	 
	 	(i)	 	“Option” has the meaning specified in Section 2 of this Agreement.
	 
	 	(j)	 	“Optionee” has the meaning specified in the introductory paragraph of this
Agreement.
	 
	 	(k)	 	“Option Price” has the meaning specified in Section 2 of this Agreement.
	 
	 	(l)	 	“Option Shares” has the meaning specified in Section 2 of this Agreement.
	 
	 	(m)	 	“Plan” has the meaning specified in Section 1 of this Agreement.
	 
	 	(n)	 	“Second Tranche” has the meaning specified in Section 2 of this Agreement.
	 
	 	(o)	 	“Term Sheet” means the Stock Option Plan/Grant Term Sheet marked as “Exhibit B”
to the Term Sheet by and between the Company and Optionee dated as of May 11, 2006.

 

 

	 	(p)	 	“Termination for Cause” means the termination by the Company or any Subsidiary
of Optionee’s service with the Company or any Subsidiary as a result of (i) the
commission by Optionee of an act of gross negligence, willful misconduct, fraud,
embezzlement, misappropriation or breach of fiduciary duty against the Company or any
of its affiliates or Subsidiaries, or the conviction of Optionee by a court of
competent jurisdiction of, or a plea of guilty or nolo contendere to, any felony or any
crime involving moral turpitude or any crime which reasonably could affect the
reputation of the Company or the Optionee’s ability to perform the duties with the
Company or any Subsidiary, (ii) the commission by Optionee of a material breach of any
of his duties to the Company or any Subsidiary or his covenants in the Stockholders
Agreement, which breach has not been remedied within 30 days of the delivery to the
Optionee by the Board of written notice of the facts constituting the breach, and which
breach if not cured, would have a material adverse effect on the Company, or (iii) the
habitual and willful neglect by Optionee of his obligations or duties as a Director of
the Company or any Subsidiary.

     2. Grant of Stock Option. Subject to and upon the terms, conditions, and restrictions
set forth in this Agreement and in the Plan, the Company hereby grants to Optionee an option (the
“Option”) to purchase 74,323 shares of the Company’s Class A-1 Common Stock (the “Option Shares”),
subject to adjustment as set forth herein. The Option may be exercised from time to time in
accordance with the terms of this Agreement. Subject to adjustment as hereinafter provided, (a)
67,567 of the Option Shares may be purchased pursuant to this Option at a price (the “Option
Price”) of $37.00 per share (the “First Tranche”) and (b) 6,756 of the Option Shares may be
purchased pursuant to this Option at an Option Price of $74.00 per share (the “Second Tranche”).
The Option is intended to be a nonqualified stock option and shall not be treated as an “incentive
stock option” within the meaning of that term under Section 422 of the Code, or any successor
provision thereto.

     3. Term of Option. The term of the Option shall commence on the Grant Date and,
unless earlier terminated in accordance with Section 7 hereof, shall expire ten (10) years from the
Grant Date.

     4. Right to Exercise. Unless terminated as hereinafter provided, the Option shall
become exercisable only as follows:

The Option shall become exercisable with respect to 20% of each of the First Tranche and the Second
Tranche on each of the first five anniversaries of the Grant Date if Optionee remains in the
continuous service as a Director of the Company or any Subsidiary as of each such date.
Notwithstanding the foregoing, (i) the Option granted hereby shall become immediately exercisable
with respect to all of the Option Shares upon the occurrence of a Change of Control if Optionee
remains in the continuous service as a Director of the Company or any Subsidiary until the date of
the consummation of such Change of Control.

Optionee shall be entitled to the privileges of ownership with respect to Option Shares purchased
and delivered to Optionee upon the exercise of all or part of this Option.

 

 

     5. Option Nontransferable. Optionee may not transfer or assign all or any part of the
Option other than by will or by the laws of descent and distribution. This Option may be
exercised, during the lifetime of Optionee, only by Optionee, or in the event of Optionee’s legal
incapacity, by Optionee’s guardian or legal representative acting on behalf of Optionee in a
fiduciary capacity under state law and court supervision.

	 	6.	 	Notice of Exercise; Payment.

	 	(a)	 	To the extent then exercisable, the Option may be exercised in whole or in part
by written notice to the Company stating the number of Option Shares for which the
Option is being exercised and the intended manner of payment. The date of such notice
shall be the exercise date. Payment equal to the aggregate Option Price of the Option
Shares being purchased pursuant to an exercise of the Option must be tendered in full
with the notice of exercise to the Company in one or a combination of the following
methods as specified by Optionee in the notice of exercise: (i) cash in the form of
currency or check or by wire transfer as directed by the Company, (ii) solely following
an IPO or shares of the Company’s Class A-1 Common Stock otherwise being traded on an
established securities market, through the surrender to the Company of shares of Class
A-1 Common Stock owned by Optionee for at least six months as valued at their Fair
Market Value on the date of exercise or (iii) through such other form of consideration
as is deemed acceptable by the Board.
	 
	 	(b)	 	As soon as practicable upon the Company’s receipt of Optionee’s notice of
exercise and payment, the Company shall direct the due issuance of the Option Shares so
purchased.
	 
	 	(c)	 	As a further condition precedent to the exercise of this Option in whole or in
part, Optionee shall comply with all regulations and the requirements of any regulatory
authority having control of, or supervision over, the issuance of the shares of Class
A-1 Common Stock and in connection therewith shall execute any documents which the
Board shall in its sole discretion deem necessary or advisable.

     7. Termination of Agreement. The Agreement and the Option granted hereby shall
terminate automatically and without further notice on the earliest of the following dates:

	 	(a)	 	after Optionee’s termination of service as a Director of the Company and its
Subsidiaries, the lesser of (i) ninety (90) calendar days following the Optionee’s date
of termination or (ii) the remaining term of the Option;

	 	(b)	 	The date of Optionee’s termination of service as a Director of the Company and
its subsidiaries for Cause; or

	 	(c)	 	Ten (10) years from the Grant Date.

In the event that Optionee’s employment is terminated in the circumstances described in Section
7(b) hereof, this Agreement shall terminate at the time of such termination notwithstanding any
other provision of this Agreement and Optionee’s option will cease to be exercisable to the extent
exercisable as of such termination and will not be or become exercisable after such termination.
Upon the Optionee’s termination of service as Director of the Company, and, if applicable, its
Subsidiaries, all Options which are not then exercisable shall immediately terminate.

 

 

     8. Call Right. Upon termination of Optionee’s service as a Director for any reason
prior to an IPO, the Company will have the right to purchase (the “Call Right”) any Option Shares
that Optionee received pursuant to the terms and conditions set forth in Article VI Call Rights of
the Stockholders Agreement.

     9. Initial Public Offering. Option Shares acquired on exercise of any Option will be
subject to the terms and conditions of the Stockholders’ Agreement. The Company and Optionee
acknowledge that they will agree to provide the Company with the right to require Optionee and
other executives of the Company or any Subsidiary to waive any registration rights with regard to
such Option Shares upon an IPO, in which case the Company will implement an IPO bonus plan in cash,
stock or additional options to compensate for Optionee’s and the other executives’ loss of
liquidity.

     10. No Contract. Nothing contained in this Agreement shall (a) confer upon Optionee
any right to continue in service as a Director of the Company or any Subsidiary, or (b) limit or
affect in any manner the right of the Company’s stockholders to elect or remove Directors.

     11. Compliance with Law. The Company shall make reasonable efforts to comply with all
applicable federal and state securities laws; provided, however, that notwithstanding any other
provision of this Agreement, the Option shall not be exercisable if the exercise thereof would
result in a violation of any such law.

     12. Adjustments. The Board may make or provide for such substitution or adjustments
in the number of Option Shares covered by this Option, in the Option Price applicable to such
Option, and in the kind of shares covered thereby and/or such other equitable substitution or
adjustments as the Board may determine to prevent dilution or enlargement of Optionee’s rights that
otherwise would result from (a) any stock dividend, extraordinary cash-dividend, stock split,
combination of shares, recapitalization, or other change in the capital structure of the Company,
(b) any merger, consolidation, spin-off, split-off, spin-out, split-up, reclassification,
reorganization, partial or complete liquidation, or other distribution of assets or issuance of
rights or warrants to purchase securities, or (c) any other corporate transaction or event having
an effect similar to any of the foregoing. Such substitutions and adjustments may include, without
limitation, canceling any and all Options in exchange for cash payments equal to the excess, if
any, of the value of the consideration paid to a shareholder of an Option Share over the Option
Price per share subject to such Option in connection with such an adjustment event.

     13. Relation to Other Benefits. Any economic or other benefit to Optionee under this
Agreement shall not be taken into account in determining any benefits to which Optionee may be
entitled under any plan maintained by the Company or any Subsidiary and shall not affect the amount
of any life insurance coverage available to any beneficiary under any life insurance plan, if any,
covering Optionee.

     14. Amendments. Any amendment to the Plan shall be deemed to be an amendment to this
Agreement to the extent that the amendment is applicable hereto; provided, however, that no
amendment shall adversely affect the rights of Optionee under this Agreement without Optionee’s
written consent.

     15. Severability. If one or more of the provisions of this Agreement is invalidated
for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed
to be separable from the other provisions hereof, and the remaining provisions hereof shall
continue to be valid and fully enforceable.

     16. Relation to Plan. This Agreement is subject to the terms and conditions of the
Plan. In the event of any inconsistent provisions between this Agreement and the Plan, the Plan
shall govern. The Board acting pursuant to the Plan, as constituted from time to time, shall,
except as expressly provided

 

 

otherwise herein, have the right to determine any questions which arise in connection with the
Option or its exercise.

     17. Successors and Assigns. The provisions of this Agreement shall inure to the
benefit of, and be binding upon, the successors, administrators, heirs, legal representatives and
assigns of Optionee, and the successors and assigns of the Company.

     18. Governing Law. The interpretation, performance, and enforcement of this Agreement
shall be governed by the laws of the State of Delaware, without giving effect to the principles of
conflict of laws thereof and all parties, including their successors and assigns, consent to the
jurisdiction of the state and federal courts of Delaware.

     19. Prior Agreement. As of the Grant Date, this Agreement supersedes any and all
prior and/or contemporaneous agreements, either oral or in writing, between the parties hereto, or
between either or both of the parties hereto and the Company, with respect to the stock option
granted, including, without limitation, the stock option provisions of the Term Sheet. Each party
to this Agreement acknowledges that no representations, inducements, promises, or other agreements,
orally or otherwise, have been made by any party, or anyone acting on behalf of any party,
pertaining to the subject matter hereof, which are not embodied herein, and that no prior and/or
contemporaneous agreement, statement or promise pertaining to the subject matter hereof that is not
contained in this Agreement shall be valid or binding on either party.

     20. Notices. For all purposes of this Agreement, all communications, including
without limitation notices, consents, requests or approvals, required or permitted to be given
hereunder will be in writing and will be deemed to have been duly given when hand delivered or
dispatched by electronic facsimile transmission (with receipt thereof confirmed), or five business
days after having been mailed by United States registered or certified mail, return receipt
requested, postage prepaid, or three business days after having been sent by a nationally
recognized overnight courier service such as Federal Express, UPS, or Purolator, addressed to the
Company (to the attention of the Secretary of the Company) at its principal executive offices and
to Optionee at his principal residence, or to such other address as any party may have furnished to
the other in writing and in accordance herewith, except that notices of changes of address shall be
effective only upon receipt.

     21. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together will constitute one and the same
agreement.

     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by its
duly authorized officer and Optionee has executed this Agreement, as of the day and year first
above written.

HealthMarkets, Inc.

	 	 	 	 	 
	 

	 	 	 	 
	By:

	 	     /S/ Glenn W. Reed	 	 
	 
	 	 
	Name:

	 	     Glenn W. Reed	 	 
	Title:

	 	     Executive Vice President and General Counsel	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	     /S/ Allen F. Wise	 	 
	 	 	 
	 

	 	     Allen F. Wiseexv10w1

 

Exhibit 10.1

CONSULTING AGREEMENT

     This Agreement (the “Agreement”) is made and entered into as of June 29, 2006 by and among
Peerless Mfg. Co., a Texas corporation, its parents, subsidiaries and affiliates (collectively,
“Peerless”), and Sherrill Stone, a resident of the State of Texas (“Stone”) (collectively the
“Parties”).

RECITALS

     WHEREAS, pursuant to a certain Employment Agreement between Stone and Peerless dated July 20,
2001 (the “Employment Agreement”), Stone has been employed by Peerless as its President and Chief
Executive Officer (“CEO”) and currently serves as Chairman of the Board of Directors. Stone is
retiring from his position as President and Chief Executive Officer of Peerless effective as of
June 30, 2006;

     WHEREAS, Stone has given notice of his retirement to Peerless and will be retiring from normal
full time business life, and that all notices of retirement required by the Employment Agreement
have been given or are waived;

     WHEREAS, following his retirement, Peerless desires to retain Stone as a Consultant on an
independent contractor basis for a one-year period and desires his continued service on the Board
of Directors;

     WHEREAS, Stone possesses unique information and experience which is beneficial to Peerless in
its ongoing business, and Peerless wishes to avoid the loss of such information and experience
during the transition period;

     WHEREAS, Stone is willing to provide the consulting services described in this Agreement in
consideration of affirmative covenants made by Peerless;

     WHEREAS, Stone agrees and acknowledges that the nondisclosure of confidential information is
essential to the continued growth and stability of Peerless’ businesses and to the continuing
viability of such businesses as expressly permitted under the terms and limitations of this
Agreement.

     NOW, THEREFORE, in consideration of the mutual acts, payments and promises described and
agreed to be performed herein, Stone and Peerless agree as follows:

     1. Consulting and Other Payments to Stone. In consideration of the services rendered
pursuant to the Agreement (including, without limitation, the services provided pursuant to
Section 2 as a consultant and Director and the covenants and agreements made in
Sections 3, 4 and 5), Peerless agrees to pay Stone the annual sum of $150,000.00, payable
in equal installments on Peerless’ regularly scheduled payroll dates, beginning on the Effective
Date. All cash consideration paid to Stone under the Agreement shall be made without any
withholdings or deductions, including without limitation, deductions or withholdings for social
security, Medicare or income taxes, unless otherwise required by law. Stone and Peerless agree
that the services provided by Stone under this agreement are provided as an independent contractor
and not as an employee of Peerless.

CONSULTING
AGREEMENT—Page 1 of 6

 

 

     2. Consulting Agreement. For a one-year term following the Effective Date of this
Agreement, Stone shall serve as a consultant to Peerless. Provided, however, Stone shall in no
case be deemed to be an employee of Peerless but instead shall serve as an independent contractor
for all purposes. Subject to being available for consultation as set forth below, Stone shall have
sole discretion over his working hours and locations. He shall use his own equipment and his home
office in providing his services, and except as needed for special projects and at its discretion,
Peerless shall not provide Stone with any office space or equipment for use in providing services
under this Agreement. Stone agrees to hold himself available for consulting upon the reasonable
request of the Peerless by telephone and/or in person, during normal business hours and, if by
mutual agreement at times other than during normal business hours. In connection with the services
to be rendered by Stone to Peerless under this Section 2 (the “Services”), Stone will not,
without the consent or direction of Peerless, act or attempt to act or represent himself, directly
or by implication, as an agent of Peerless or in any manner assume or create, or attempt to create,
any obligation on behalf of, or in the name of Peerless. In the event Peerless requests Stone to
incur any expenses in connection with the Services and pre-approves such expenses, Peerless agrees
to pay, in accordance with the Peerless’ normal documentation and reimbursement policies, all
reasonable expenses actually incurred by Stone in connection with providing the Services, including
without limitation, travel, meals and lodging expenses.

     Stone further agrees to cooperate with and assist Peerless in the prosecution or defense of
any litigation, including providing truthful testimony as a witness upon reasonable request.

     3. Confidentiality. In the course of his employment with Peerless, Stone has received
and may receive or have access in the future to commercially valuable, confidential or proprietary
information. As used in this Section 3, “Confidential Information” means all information,
whether oral or written, previously or hereafter developed, acquired, or used by Peerless and
relating to the business of Peerless that is not generally known to others in Peerless’ area of
business, including without limitation (i) any trade secrets, work product, processes, analysis or
know-how of Peerless; (ii) Peerless’ advertising, product development, strategic and business plans
and information, including customer and prospect lists; (iii) the prices at which Peerless has sold
or offered to sell its products or services; and (iv) Peerless’ financial statements and other
financial information.

     Stone acknowledges and agrees that the Confidential Information is and shall be the sole and
exclusive property of Peerless. Stone shall not use any Confidential Information for his own
benefit and disclose any confidential information to any third party (except in the course of
performing his authorized duties for Peerless under this Agreement), either during or subsequent to
his employment with Peerless.

     Specifically, Stone agrees that, except as expressly authorized in writing by Peerless, or as
may be required by law or court order, Stone (i) shall not disclose Confidential Information to any
third party, (ii) shall not copy Confidential Information for any reason, (iii) shall not remove
Confidential Information from Peerless’ premises. Upon termination of his employment with
Peerless, Stone shall promptly deliver to Peerless all Confidential Information, including
documents, computer disks and other computer storage devices and other papers and materials
(including all copies thereof in whatever form) containing or incorporating any Confidential

CONSULTING
AGREEMENT—Page 2 of 6

 

 

Information or otherwise relating in any way to Peerless’ business that are in his possession
or under his control.

     Stone acknowledges that his violation or attempted violation of this Section will cause
irreparable damage to Peerless or its affiliates, and Stone therefore agrees that Peerless shall be
entitled as a matter of right to an injunction, out of any court of competent jurisdiction,
restraining any violation or further violation of such agreements by Stone or others acting on his
behalf. Peerless’ right to injunctive relief will be cumulative and in addition to any other
remedies provided by law or equity.

     4. Inventions; Developments. All discoveries, inventions, innovations, or
improvements which are related to the Business (collectively called “Developments”) conceived or
developed by Stone relating to his consulting services under this Agreement, including but not
limited to all written documents pertaining thereto, shall be the exclusive property of Peerless,
as the case may be, and shall be considered Confidential Information subject to the terms of this
Agreement. Stone agrees that within seven days of any request from Peerless, he shall execute all
requested assignments and conveyances necessary to vest in Peerless all discoveries, inventions,
innovations, patents, marks, copyrights, patent applications and any other intellectual property of
whatever kind and character, any right, title or interest that he may hold in such property. Stone
agrees that when appropriate, and upon written request of Peerless, as the case may be, Stone will
acknowledge that Developments are “works for hire” and will file at Peerless’ expense for trade
names, trademarks, patents or copyrights with regard to any or all Developments and will sign
documentation reasonably necessary to evidence ownership of Developments in Peerless, as the case
may be. Stone further agrees to cooperate fully, and at the expense of Peerless, with Peerless in
connection with the filing, prosecution or obtaining of any patent, copyright, or trademark
registration or application in any country, existing as of the date of this Agreement. Stone
further agrees to cooperate with and assist Peerless at its expense in the prosecution or defense
of any litigation involving any intellectual property claimed by Peerless, including providing
truthful testimony as a witness upon reasonable request.

     5. Conflict of Interest. Stone agrees that during the one-year term of this Agreement,
without prior approval of the Board of Directors of Peerless, Stone shall not engage, either
directly or indirectly, in any activity which may involve a conflict of interest with Peerless or
its affiliates (a “Conflict of Interest”), including ownership in any supplier, contractor,
subcontractor, customer or other entity with which Peerless does business (other than as a
shareholder of less than one percent of a publicly traded class of securities) or accept any
material payment, service, loan, gift, trip, entertainment or other favor from a supplier,
contractor, subcontractor, customer or other entity with which Peerless does business and that
Stone shall promptly inform the Board of Directors of Peerless as to each offer received by Stone
to engage in any such activity. Stone further agrees to disclose to Peerless any other facts of
which Stone becomes aware which might involve or give rise to a Conflict of Interest or potential
Conflict of Interest.

     6. Non-competition. Stone and Peerless agree that nothing in this Agreement modifies
or supersedes the terms of Section 2 of the Employment Agreement executed between Stone and
Peerless on July 20, 2001 which governs non-competition. Stone and Peerless agree that the terms
and conditions of the Employment Agreement with respect to confidential

CONSULTING
AGREEMENT—Page 3 of 6

 

 

information, inventions and developments, conflict of interest and restrictions on Stone’s
competition shall remain in full force and effect.

     7. Remedies for Breach. Each of Peerless and Stone hereby acknowledges that a
violation or attempted violation of any of the covenants contained in Sections 3, 4 and 5
of this Agreement will cause irreparable damage to the other parties, and accordingly each party
agrees that the other parties shall be entitled as a matter of right to an injunction, out of any
court of competent jurisdiction, restraining any violation or further violation of such agreements
by the violating party or any employees, partners or agents of the violating party; such right to
an injunction, however, shall be cumulative and in addition to whatever other remedies the injured
party may have. The prevailing Party (whether as a plaintiff or defendant) in any legal action
arising out of this Agreement shall be entitled to recover its or his reasonable and necessary
attorneys’ fees, costs, and out of pocket expenses from the non-prevailing Party.

     8. Nature of the Agreement. This Agreement and all its provisions are contractual,
not mere recitals, and shall continue in permanent force and effect, unless revoked as provided
herein. In the event that any portion of this Agreement is found to be unenforceable for any
reason whatsoever, the unenforceable provision shall be severed and the remainder of the Agreement
shall continue in full force and effect.

     9. Attorneys Fees. Each party shall be responsible for his or its own expenses,
including attorney’s fees incurred in connection with the negotiation, preparation and execution of
this Agreement.

     10. Notices. Any notice, demand or request required or permitted to be given or made
under this Agreement shall be in writing and shall be deemed given or made when delivered in
person, when sent by United States registered or certified mail, or postage prepaid, or when faxed
to a party at its address or facsimile number specified below:

	 	 	 	 	 	 	 
	 

	 	If to Peerless:
	 	Peerless Mfg. Co.
	 	 
	 

	 	 	 	2819 Walnut Hill Lane	 	 
	 

	 	 	 	Dallas, Texas 75229	 	 
	 

	 	 	 	Attention: Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 

	 	with a copy to:
	 	Jim Hunter Birch	 	 
	 

	 	 	 	Hughes & Luce, L.L.P.	 	 
	 

	 	 	 	1717 Main Street, Suite 2800	 	 
	 

	 	 	 	Dallas, Texas 75201	 	 
	 

	 	 	 	(fax) (214)939-6100	 	 
	 

	 	 	 	(phone) (214) 939-5500	 	 
	 
	 	 	 	 	 	 
	 

	 	If to Stone:
	 	Sherrill Stone	 	 
	 

	 	 	 	4625 Royal Lane	 	 
	 

	 	 	 	Dallas, Texas 75229	 	 

CONSULTING
AGREEMENT—Page 4 of 6

 

 

	 	 	 	 	 	 	 
	 

	 	with a copy to:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	 

	 	 

     The parties to this Agreement may change their addresses for notice in the manner provided
above.

     11. Counterparts and Photocopies. This Agreement may be executed in counterparts and
each executed counterpart shall be as effective as a signed original. Photographic copies of such
signed counterparts may be used in lieu of the originals for any purpose.

     12. Paragraph Titles Not Binding. The use of section titles in this Agreement is for
ease of reference only. Such titles are not to be considered terms of this Agreement.

     13. Governing Law. This Agreement shall be construed in accordance with and governed
by the laws of the State of Texas, without regard to the principles of conflicts of law.

     14. Termination Upon Death or Disability. In the event Stone should die during the
term of this Agreement or if he is unable to perform his duties under this Agreement for a period
of ninety (90) days or more due to a mental or physical impairment, the Agreement shall terminate
and Peerless shall have no further obligations to make payments under this Agreement following the
date of such termination.

     15. Assignment. The obligations and duties of the Parties set forth in this Agreement
may not be assigned or delegated; provided, however, that nothing in this Agreement shall preclude
Peerless from consolidating or merging with, or transferring all or substantially all of its assets
to, another corporation, person or entity (“Entity”). Upon such a consolidation, merger or
transfer of assets, the term the “Peerless” shall mean such other Entity or Entities that Peerless
consolidates or merges into or with, or transfer all or substantially all of the assets of Peerless
to, and in any such event, the Entity or Entities shall be bound and automatically assume, without
any specific action on the part of the Entity or Entities, this Agreement and all obligations and
undertakings of Peerless set forth in this Agreement, and this Agreement shall continue in full
force and effect, including but not limited to the obligation of Peerless to make the payments set
forth in Section 1. The obligations and duties of Stone hereunder shall be personal and
not assignable or delegable by the Stone in any manner whatsoever. Notwithstanding the foregoing,
Peerless shall have the right to assign its rights under Sections 2, 3, 4 and 5 of this
Agreement to any Entity or Entities which may purchase any part or all of Peerless’ business
(whether by asset purchase, stock sale, merger or otherwise).

     16. Entire Agreement. This Agreement constitutes the entire statement of the
agreement between the Parties with respect to its subject matter and there are no oral or written
representations, understandings or agreements relating to this Agreement which are not fully
expressed herein. The Parties agree that any other terms or conditions included in written or
verbal exchanges or representations made by the Parties shall not be incorporated herein or be
binding unless expressly agreed upon in writing by authorized representatives of the Parties
subsequent to the date hereof.

CONSULTING
AGREEMENT—Page 5 of 6

 

 

     17. Authorization. Peerless represents and warrants to Stone that the persons
executing this Agreement on behalf of the Peerless are duly authorized to act for and on behalf of
Peerless to execute and deliver this Agreement and that this Agreement is a valid, binding and
enforceable agreement of Peerless.

     This Consulting Agreement is executed at Dallas, Texas by Stone, acting in his individual
capacity and by an authorized representative of Peerless as of the date first stated above.

	 	 	 	 	 	 	 
	 	 	PEERLESS MFG. CO.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Peter Burlage	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Peter Burlage	 	 
	 

	 	Title:
	 	Executive Vice President &	 	 
	 

	 	 	 	Chief Operating Officer	 	 
	 	 	 	 	 	 	 
	 

	 	SHERRILL STONE
	 	 
	 
	 	 	 	 
	 

	 	/s/ Sherrill Stone	 	 
	 

	 	 
	 

	 	Sherrill Stone	 	 

CONSULTING
AGREEMENT—Page 6 of 6

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00106-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00106-of-00352.parquet"}]]