EXHIBIT 10.2
CONSULTING SERVICES AGREEMENT
This Consulting Services Agreement ("Agreement") entered into as of the
26th day of May, 2004 between Xxxx, Inc. (the "Company") and Xxxx X. Xxxx
("JMB"),
W I T N E S S E T H:
WHEREAS, JMB has been employed by the Company or one or more of its
predecessors for more than 60 years and has served as Chief Executive Officer
for more than 50 years;
WHEREAS, JMB will retire from his position as Chairman and Chief
Executive Officer of the Company upon the expiration of his current term as a
director of the Company on May 26, 2004 (the "Retirement Date"); and
WHEREAS, the Company desires to retain JMB's services as an independent
consultant following the Retirement Date;
NOW, THEREFORE, in consideration of the covenants and agreements set
forth herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and JMB agree as
follows:
1. Consulting Services
JMB shall be on retainer and agrees to make himself reasonably
available from the Retirement Date until May 26, 2009 (the "Consulting Period")
to provide consulting services (the "Services") to the Company. In performing
the Services, JMB shall be an independent contractor and shall comply with all
applicable federal, state, and local laws and regulations and ethical standards
of the Company. The manner, means, details or methods by which JMB performs his
obligations under this Agreement shall be solely at his discretion. The Company
agrees to reimburse JMB for all reasonable travel and business expenses incurred
in his performance of the Services, up to a maximum amount of $25,000 per year,
with any excess to be authorized in advance by an authorized representative the
Company.
2. Consulting Fee
In consideration for JMB being on retainer and providing the Services,
the Company shall make the following annual payments (based on the Company's
fiscal year) to JMB during the Consulting Period, payable in installments in
accordance with the Company's normal payroll practices and procedures, as they
exist from time to time:
Fiscal Year 2005 (beginning on May 26, 2004): $400,000
Fiscal Year 2006 $500,000
Fiscal Year 2007 $500,000
Fiscal Year 2008 $500,000
Fiscal Year 2008 $500,000
Fiscal Year 2010 (ending on May 26, 2009) $200,000
3. Life Insurance
During the Consulting Period, the Company shall make additional annual
payments to JMB in the amount of $257,000, which represents the after tax cost
of premiums payable on life insurance on JMB previously funded by the Company
under a split dollar insurance agreement.
4. Health and Welfare Insurance
The Company agrees to use its best efforts to allow JMB and his spouse
to participate in its group health and welfare insurance programs, as amended
from time to time, during their respective lifetimes. If insurance for JMB or
his spouse cannot be maintained under the Company's group health and welfare
insurance program, the Company shall reimburse JMB for: (1) amounts actually
incurred to maintain insurance under the Company's group health and welfare
benefit plans pursuant to COBRA and (2) amounts actually incurred for JMB to
purchase
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similar insurance for himself and/or his spouse if or when COBRA coverage
expires. JMB shall provide the Company with all documentation needed by the
Company to comply with this Paragraph 4.
5. Title to Automobile
The parties acknowledge and agree that JMB currently has use of one
automobile which is owned by the Company. On the Retirement Date, or as soon
thereafter as reasonably practicable, the Company shall transfer title to such
automobile to JMB, and pay all fees necessary to complete the transfer of title.
6. Office Space
During the Consulting Period, JMB shall have the use of his current
office and access to a secretary to be provided by the Company. Following the
Consulting Period, JMB will be provided with office space and secretarial
services upon request at the Company's headquarters as is reasonably available.
7. Agreement to Cooperate
JMB covenants and agrees that he shall cooperate with the Company in
any pending or future matters, including without limitation any litigation,
investigation, or other dispute, in which JMB, by virtue of JMB's prior
employment with the Company, has relevant knowledge or information.
8. Confidentiality
JMB acknowledges that during the Consulting Period, he may be privy to
confidential information of the Company and its affiliates which includes, but
is not limited to, sales and marketing information, financial or statistical
data, acquisition or merger information, strategic plans or plans for future
business development, plans regarding sales of assets and other
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information made available to JMB not known to the public, which, if misused or
disclosed, could adversely affect the business or standing of the Company and
its affiliates and members. JMB agrees that for so long as such information
remains confidential to the Company and/or its affiliates, including after the
term of this Agreement, JMB will not disclose any such confidential information
to any person, agency, institution, company or other entity, and he will not use
any Confidential Information in any way except as required by his duties to the
Company or by law, without having first obtained the written consent of the
Company's Chairman or designee. JMB further agrees that on or before the
conclusion of the Consulting Period, JMB will return to the Company, upon
request, all property belonging to the Company and any other property or
documents which may contain or record any information confidential to the
Company. JMB acknowledges that the Company would be irreparably harmed if JMB
were to breach his obligations under this paragraph and that the Company shall
be entitled to injunctive relief for the purpose of enforcing this provision.
9. Non-Competition
During the Consulting Period, JMB agrees to refrain from "competing"
with the Company or any of its affiliates. For the purposes of this paragraph,
"competing" shall mean accepting employment from or acting as a consultant or
advisor to any person or entity which operates retail department stores in any
state in which the Company does business.
10. Successors and Assigns
JMB acknowledges and agrees that this Agreement is a contract for
personal services, and he is not entitled to assign, subcontract or transfer any
of the obligations imposed or benefits provided under this Agreement. This
Agreement will inure to the benefit of and be binding on any successor or
assigns of the Company.
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8. Applicable Law
This Agreement has been entered into in and shall be governed by and
construed under the laws of the State of North Carolina without reference to the
choice of law principles thereof.
9. Severability
The provisions of this Agreement shall be deemed to be severable. If
any court or agency with authority to do so should determine that any part of
this Agreement is legally invalid, the remainder of this Agreement shall remain
in effect to the full extent permitted by law.
10. Entire Agreement; Miscellaneous
JMB and the Company acknowledge and agree that they are not relying on
any representations, oral or written, other than those expressly contained in
this Agreement. This Agreement supersedes all prior agreements, proposals,
negotiations, conversations, discussions and course of dealing between the
parties with respect to the subject matter hereof. Section headings are for
convenience of reference only and are not intended to create substantive rights
or obligations.
/s/ May 26, 2004
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Xxxx X. Xxxx Date
XXXX, INC.
By: /s/ Xxxxxx X. Xxxx, Xx. May 26, 2004
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Date
Title: Chairman
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