EXHIBIT 10.41
INDEPENDENT CONTRACTOR CONSULTANCY AGREEMENT
This Independent Contractor Consultancy Agreement (the "Consultancy
Agreement") is made and entered into, effective as of February 1, 2000
("Effective Date"), by and between Xxxx Stores, Inc., having a principal
place of business at 0000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxx 00000-0000
("Company") and Xxxxxx X. Xxxxxx, an individual, having a principal place of
business at 000 Xxxxxxxx Xxxxxx, Xxxx Xxxx, Xxxxxxxxxx 00000 ("Contractor").
1. ENGAGEMENT OF SERVICES. Company hereby retains Contractor to
provide consulting services in connection with the management and operation
of Company's business.
2. COMPENSATION.
2.1 FEES. Company will pay Contractor an annual fee, upon
receipt of invoice for services rendered, in the amount of $1,100,000,
payable in equal monthly installments.
2.2 EXPENSES. Contractor will be reimbursed only for
reasonable expenses incurred in connection with Contractor's performance of
services to Company under this Agreement, provided that Contractor promptly
provides documentation for expenses as Company may reasonably request.
3. INDEPENDENT CONTRACTOR RELATIONSHIP. Contractor's relationship
with Company is that of an independent contractor, and nothing in this
Consultancy Agreement is intended to, or should be construed to, create a
partnership, agency, joint venture or employment relationship. Contractor is
not authorized to make any representation, contract or commitment on behalf
of Company unless specifically requested or authorized in writing to do so by
Company's Chief Executive Officer ("CEO"). Contractor will be solely
responsible for obtaining any business or similar licenses required by any
federal, state or local authority. Contractor is solely responsible for, and
will file, all tax returns and payments required to be filed with, or made
to, any federal, state or local tax authority with respect to the performance
of services and receipt of fees under this Consultancy Agreement. Contractor
is solely responsible for expenses incurred in the course of performing
services under this Consultancy Agreement, except as otherwise provided
herein. No part of Contractor's compensation will be subject to withholding
by Company for the payment of any social security, federal, state or any
other employee payroll taxes. Company will regularly report amounts paid to
Contractor by filing Form 1099-MISC with the Internal Revenue Service as
required by law.
3.1 METHOD OF PERFORMING SERVICES; RESULTS. In accordance
with Company's objectives, Contractor will determine the method, details and
means of performing the services required by this Consultancy Agreement.
Company shall have no right to, and shall not, control the manner or
determine the method of performing Contractor's services. Contractor shall
perform such consulting services as shall be reasonably requested by
Company's CEO.
3.2 WORKPLACE, HOURS AND INSTRUMENTALITIES. Contractor may
perform the services required by this Consultancy Agreement at any place or
location and at such times as
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Contractor shall determine. Both Contractor and Company agree that Contractor
will provide consulting services no more than 2-3 days per week and it is
further understood that Contractor will not be available for consulting
services during extended vacation periods. Contractor agrees to provide all
tools and instrumentalities, if any, required to perform the services under
this Consultancy Agreement.
4. CONSULTING SERVICES IN CONNECTION WITH BUSINESS TRANSACTION.
In addition to the fees set forth in subsection 2.1 above, upon the
consummation of a Business Transaction (defined below) and provided that
Ross' Board of Directors has requested that Xxxxxx provide consulting
services in connection with any such Business Transaction, Ross shall pay to
Xxxxxx an additional lump sum consulting fee in the amount of $1,500,000 (the
"Lump Sum Fee"). Xxxxxx shall be entitled to payment of the Lump Sum Fee with
respect to any Business Transaction for which Xxxxxx provided consulting
services, notwithstanding that the consummation thereof occurred after the
expiration or termination of this Consultancy Agreement, payable within a
reasonable time of the close of such transaction. If the Lump Sum Fee is
subject to the tax imposed by Section 4999 of the Internal Revenue Code (the
"Excise Tax"), Ross shall reimburse Xxxxxx in an amount such that, after
deduction of any Excise Tax payments paid by Ferber, and any federal, state
or local income tax and Excise Taxes paid as a result of such reimbursement,
the net funds retained by Xxxxxx shall be equal to the Lump Sum Fee. For
purposes of this Consultancy Agreement, a Business Transaction shall be
deemed to have occurred if:
(a) Any person or group (within the meaning of Rule
13d-3 of the rules and regulations promulgated under the Securities Exchange
Act of 1934, as amended), shall acquire, in or a series of transactions,
whether through sale of stock or merger, ownership of stock of Ross that
possesses more than 30% of the total fair market value or total voting power
of the stock of Ross or any successor to Ross; or
(b) A merger in which Ross is a party, after which
merger the stockholders of Ross do not retain, directly or indirectly, at
least a majority of the beneficial interest in the voting stock of the
surviving company; or
(c) The sale, exchange, or transfer of all or
substantially all of Ross' assets (other than a sale, exchange, or transfer
to one or more corporations where the stockholders of Ross before and after
such sale, exchange, or transfer, directly or indirectly, are the beneficial
owners of at least a majority of the voting stock of the corporation(s) to
which the assets were transferred).
5. CONFIDENTIALITY.
5.1 CONFIDENTIAL INFORMATION.
(a) DEFINITION OF CONFIDENTIAL INFORMATION.
"Confidential Information" as used in this Consultancy Agreement shall mean
any and all technical and non-technical information including patent,
copyright, trade secret, and proprietary information, techniques, sketches,
drawings, models, inventions, know-how, processes, apparatus, equipment,
algorithms, software programs, software source documents, and formulae
related to the current,
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future and proposed products and services of Company, Company's suppliers and
customers, and includes, without limitation, Company innovations, Company
property, and Company's information concerning research, experimental work,
development, design details and specifications, engineering, financial
information, procurement requirements, purchasing manufacturing, customer
lists, business forecasts, sales and merchandising and marketing plans and
information.
(b) NONDISCLOSURE AND NONUSE OBLIGATIONS. Except as
permitted in this section, Contractor shall neither use nor disclose the
Confidential Information. Contractor may use the Confidential Information
solely to perform services for the benefit of Company. Contractor agrees that
Contractor shall treat all Confidential Information of Company with the same
degree of care as Contractor accords to Contractor's own Confidential
Information, but in no case less than reasonable care. Contractor agrees not
to communicate any information to Company in violation of the proprietary
rights of any third party. Contractor will immediately give notice to Company
of any unauthorized use or disclosure of the Confidential Information and
agrees to assist Company in remedying any such unauthorized use or disclosure.
(c) EXCLUSIONS FROM NONDISCLOSURE AND NONUSE
OBLIGATIONS. Contractor's obligations under Section 4.1(b) ("Nondisclosure
and Nonuse Obligations") with respect to any portion of the Confidential
Information shall not apply to any such portion which Contractor can
demonstrate, (a) was in the public domain at or subsequent to the time such
portion was communicated to Contractor by Company through no fault of
Contractor; (b) was rightfully in Contractor's possession free of any
obligation of confidence at or subsequent to the time such portion was
communicated to Contractor by Company; or (c) was developed by Contractor
independently of and without reference to any information communicated to
Contractor by Company. A disclosure of Confidential Information by
Contractor, either (a) in response to a valid order by a court or other
governmental body, (b) otherwise required by law, or (c) necessary to
establish the rights of either party under this Consultancy Agreement, shall
not be considered to be a breach of this Consultancy Agreement or a waiver of
confidentiality for other purposes; provided, however, that Contractor shall
provide prompt prior written notice thereof to Company to enable Company to
seek a protective order or otherwise prevent such disclosure.
5.2 OWNERSHIP AND RETURN OF COMPANY PROPERTY. All materials
(including, without limitation, documents, drawings, models, apparatus,
sketches, designs, blueprints, studies, memoranda, specifications, lists, and
all other tangible media of expression) furnished to Contractor by Company,
whether delivered to Contractor by Company or made by Contractor in the
performance of services under this Consultancy Agreement (collectively, the
"Company Property") are the sole and exclusive property of Company or
Company's suppliers or customers, and Contractor hereby does and will assign
to Company all rights, title and interest Contractor may have or acquire in
the Company Property. Contractor agrees to keep all Company Property at
Contractor's premises unless otherwise permitted in writing by Company. At
Company's request and no later than five (5) days after such request,
Contractor shall destroy or deliver to Company, at Company's option, (a) all
Company Property, (b) all tangible media of expression in Contractor's
possession or control which incorporate or in which are fixed any
Confidential Information, and (c) written certification of Contractor's
compliance with Contractor's obligations under this sentence.
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6. OBSERVANCE OF COMPANY RULES. At all times while on Company's
premises, Contractor will observe Company's rules and regulations with
respect to conduct, health and safety and protection of persons and property.
7. NO CONFLICT OF INTEREST. Contractor may perform services for
any other person or entity so long as Contractor's performance of such
services does not interfere, or become incompatible or inconsistent with
Contractor's obligations to, or the scope of services rendered for, Company
under this Consultancy Agreement. Contractor warrants that, to the best of
Contractor's knowledge, there is no other contract or duty on Contractor's
part that conflicts with or is inconsistent with this Consultancy Agreement.
Contractor agrees that during the term of this Consultancy Agreement,
Contractor shall not provide any labor, work, services or assistance to
(whether as an officer, director, employee, partner, agent, owner,
independent contractor or otherwise) Burlington Coat Factory Warehouse
Corporation, Xxxxxxx Department Stores, Inc., The Federated Stores, Filene's
Basement Corp., The TJX Companies, Inc., The May Department Stores Company,
and/or Value City Department Stores, Inc., as well as all subsidiaries,
divisions and/or the surviving entity of any of the above that do business in
the retail industry in the event of a merger or acquisition.
8. TERM AND TERMINATION.
8.1 TERM. This Consultancy Agreement is effective as of the
Effective Date set forth above and will continue until January 31, 2001
("Consultancy Termination Date"). This Consultancy Agreement is renewable
upon the mutual consent of both parties. The terms of such renewal must be in
writing and signed by both Company and Contractor.
8.2 TERMINATION OF AGREEMENT PRIOR TO THE CONSULTANCY
TERMINATION DATE. Contractor shall receive the full annual fee specified in
subsection 2.1, regardless of whether this Agreement terminates prior to the
Consultancy Termination Date, unless the Agreement is terminated by Company
for Cause or by Contractor without Good Reason. For purposes of this
Agreement, "Cause" shall mean Contractor's breach of sections 5
("Confidentiality") and 7 ("No Conflict of Interest") and "Good Reason" shall
mean Company's material breach of this Agreement.
8.3 SURVIVAL. The rights and obligations contained in
Sections 4 ("Consulting Services In Connection With Business Transaction"), 5
("Confidential Information"), 8.2 ("Survival"), and 9 ("General Provisions")
will survive any termination or expiration of this Consultancy Agreement.
9. GENERAL PROVISIONS.
9.1 SUCCESSORS AND ASSIGNS. The rights and obligations of
Company under this Consultancy shall inure to the benefit of and shall be
binding upon the successors and assigns of Company. Contractor may not assign
Contractor's rights, subcontract or otherwise delegate its obligations under
this Agreement without Company's prior written consent. This shall not,
however, prevent Contractor from employing employees to assist in
Contractor's rendering of services to Company under Contractor's supervision,
as deemed necessary by Contractor.
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9.2 GOVERNING LAW. This Consultancy Agreement shall be
governed in all respects by the laws of the United States of America and by
the laws of the State of California, as such laws are applied to agreements
entered into and to be performed entirely within California between
California residents. Each of the parties irrevocably consents to the
exclusive personal jurisdiction of the federal and state courts located in
California, as applicable, for any matter arising out of or relating to this
Consultancy Agreement, except that in actions seeking to enforce any order or
any judgment of such federal or state courts located in California, such
personal jurisdiction shall be nonexclusive.
9.3 SEVERABILITY. If any provision of this Consultancy
Agreement is held by a court of law to be illegal, invalid or unenforceable,
(i) that provision shall be deemed amended to achieve as nearly as possible
the same economic effect as the original provision, and (ii) the legality,
validity and enforceability of the remaining provisions of this Consultancy
Agreement shall not be affected or impaired thereby.
9.4 WAIVER; AMENDMENT; MODIFICATION. No term or provision
hereof will be considered waived by the parties, and no breach excused by the
parties, unless such waiver or consent is in writing signed by that party.
The waiver by the parties of, or consent by the parties to, a breach of any
provision of this Consultancy Agreement by the other party, shall not operate
or be construed as a waiver of, consent to, or excuse of any other or
subsequent breach by that party. This Consultancy Agreement may be amended or
modified only by mutual agreement of authorized representatives of the
parties in writing.
9.5 ENTIRE AGREEMENT. This Consultancy Agreement constitutes
the entire agreement between the parties relating to this subject matter and
supersedes all prior or contemporaneous oral or written agreements concerning
such subject matter, including the relevant terms from the parties' prior
Amended and Restated Employment Agreement and its subsequent amendments. The
terms of this Consultancy Agreement will govern all services undertaken by
Contractor for Company.
9.6 NOTICE. For the purposes of this Consultancy Agreement,
notices, demands and all other communications provided for in the Consultancy
Agreement shall be in writing and shall be deemed to have been duly given
when delivered or (unless otherwise specified) mailed by United States
registered mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive: Xxxxxx X. Xxxxxx
000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
If to the Company: Xxxx Stores, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Attention: Corporate Secretary
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or to such other address as any party may have furnished to the other in
writing in accordance herewith, except that notices of change of address
shall be effective only upon receipt.
9.7 ARBITRATION. In the event of any dispute or claim
relating to or arising out of this Consultancy Agreement, all such disputes
shall be fully, finally and exclusively resolved by binding arbitration
conducted by the American Arbitration Association in Alameda County,
California; provided, however, that this arbitration provision shall not
apply to any disputes or claims relating to or arising out of the misuse or
misappropriation of the Company's trade secrets or proprietary information.
IN WITNESS WHEREOF, the parties have executed this Consultancy
Agreement on the dates shown below.
Company: Contractor:
XXXX STORES, INC. XXXXXX X. XXXXXX
By: /s/ Xxxxxxx Xxxxxxx By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxxx Xxxxxxx Title: Chairman of the Board
Title: Vice Chairman & CEO Date: 6/5/00
Date: 6/5/00
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