CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement"), dated the _26_ day of November,
1996, is by and between Xxxxx X. Xxxxxx ("Fields") of Summit County, Utah and
Xxx. Xxxxxx' Original Cookies, Inc. ("the Company") of 000 Xxxx Xxxxxxx Xxxxx,
Xxxx Xxxx Xxxx, Xxxx 00000.
RECITALS
A. The Company is engaged in the marketing, manufacture, and
production of cookies and other bakery goods for retail sale.
B. The Company wants to retain Fields as a consultant to perform certain
consulting services for the Company.
X. Xxxxxx desires to act as a consultant and not as an employee and perform
certain consulting services for the Company.
X. Xxxxxx and the Company desire and have agreed to enter into this
Agreement.
NOW, THEREFORE, in consideration of the foregoing Recitals,
which by this reference are incorporated herein, Fields and the Company agree to
the following terms, conditions and covenants.
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AGREEMENT
1. Term, The initial term of this Agreement shall commence as
of the date hereof, and shall continue on the terms and conditions provided
herein until December 31, 1999.
2. Consulting Duties, During the term of this Agreement,
Fields agrees to perform consulting work for the Company (a) on the days listed
on Exhibit A with respect to 1996, and (b) at a minimum rate of 50 days per
calendar year thereafter, and Fields shall also have the option to designate
that she perform services for up to 20 additional days during the term of this
Agreement (the "Extra Days"), such work to be performed at the direction of and
the discretion of the Company's CEO. This consulting work shall consist of the
performance of one or more of the following types of activities:
(a) Public Relations
i. National
aa. Spokesperson (public)
bb. Charity Events
cc. Special Events
dd. Board Meetings
ee. Store visits
ff. Company meetings
gg. Franchise/licensee presentations
hh. Grand openings
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ii. Lending - participate in
presentations jj. Landlord meetings
ii. International
aa. Spokesperson (public)
bb. Charity events
cc. Special Events
dd. Country Visits
ee. Interviews
ff. Store visits
gg. Franchise relations
(b) Advertising
i. Print
ii. Radio
iii. Television
(c) Travel related to the foregoing.
All duties requested of Fields shall be consistent in type and
character with duties performed by senior officers of the Company, and will not
be inconsistent with her status as founder of the predecessor of the Company.
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3. Fields will report to the Company's CEO, who shall have
sole direction over Fields relationship with the Company and the duties to be
performed by Fields under this Agreement,
4. Fields will have no authority over any Company employees or
resources except as agreed to by the Company's CEO. The Company will provide
Fields with appropriate administrative support (which shall not require a
full-time or dedicated employee) sufficient to enable her to perform her duties
hereunder.
5. Scheduling of Work Days. The timing and scheduling of
Fields' work days during each calendar year commencing on or after January 1,
1997 during the term of this Agreement shall be determined as follows:
(a) The CEO and Fields shall discuss during the first
month of each calendar year a general schedule for the coming
year and the timing of work days for Fields and will attempt
to schedule for such year most if not all of Fields work days.
While mutual agreement as to the scheduling of each work day
will be sought by both parties, the CEO will make the final
determination in the best interests of the Company acting
reasonably. Once work days are scheduled in writing, the
Company and Fields agree not to change those days without
mutual agreement.
(b) The Company agrees to use its best efforts not to
schedule any work days on holidays or weekends, unless
mutually agreed, except
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that such scheduling of work on weekends or holidays may occur
in limited circumstances (not to exceed two, and not to
include Thanksgiving, Christmas and New Year's holidays) where
travel may be required to or from an event on a weekend or
holiday.
(c) For 1996 per attached exhibit
(d) One work day will be considered utilized under
this Agreement if any portion of a day is utilized hereunder.
Even if duties performed in one calendar day extend beyond
eight hours still only one day will be considered to be
utilized hereunder. Fields will use reasonable efforts to
accommodate travel on the same days other duties are
performed.
(e) A minimum of three work days per month will be
guaranteed by the Company unless otherwise agreed to. The
maximum number of workdays in any given month will not exceed
fourteen days unless mutually agreed.
(f) The Company will make a good faith effort to
schedule the majority of work
days in the year during the third week of each month.
6. Compensation for Consulting Services. In exchange for providing the
consulting services outlined herein, the Company will pay Fields $250,000.00 per
year with a 10% increase over the amount payable with respect to the previous
year, beginning on January 1, 1999. At the Company's request and Fields
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agreement and in addition to the Extra Days, Fields may work up to an additional
50 days per year (the "Optional Days") for payment of an additional $5,000.00
per day.
7. In the event that Fields fails to work on those days
previously scheduled, and such days are not rescheduled by mutual agreement,
$5,000.00 per day missed will be deducted at the end of the month. Fields
acknowledges that any missed scheduled days will cause the company to incur
certain costs and expenses not contemplated under this Agreement, the exact
amount of which costs are extremely difficult or impracticable to fix.
Therefore, if Fields fails to work any scheduled days without giving the Company
at least 72 hours notice (unless such failure is due to illness, canceled
airline flights or other acts of God), Fields shall agree to have $5,000.00 per
missed day deducted from the amount the Company pays to Fields. Fields and the
Company agree that this charge represents a reasonable estimate of such costs
and expenses and is fair compensation to the Company for its loss caused by
Fields failure to work any scheduled days.
8. To assist Fields, the $250,000.00 per year payable under
this Agreement as of January 1, 1997 will be made in twelve equal monthly
installments on the last day of each month, and additional compensation at the
rate of $5,000 per day shall be paid as of the last day of each month for each
Extra Day and Optional Day and for each day during 1996 where services are
performed during such month. A general accounting and reconciliation of moneys
owed and days worked each calendar year will be done every quarter, commencing
with the quarter ending March 31, 1997.
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9. Fields may hold a seat on the Board of Directors of the
Company but will not be compensated separately. It will not be a condition of
performance under this Agreement that the Company offers nor that Fields accepts
a seat on the Board.
10. The Company agrees to pay Fields pursuant to written
travel and other company polices (copies of which shall be provided to Fields)
for expenses reasonably related to her consulting duties. Such expenses shall
include cookies at no cost where the use of Xxx. Xxxxxx cookies are in the
furtherance of the performance of Fields duties and to the benefit of the
Company. In the event Fields desires to provide cookies at events which are not
in the furtherance of her duties under this Agreement, but will inure to the
benefit of the Company, prior approval must be obtained from the CEO and the
Company will reimburse Fields at 65% of retail. Any cookies to be provided by
Fields for events which are not in furtherance of her duties under this
Agreement nor to the benefit of the Company will be provided at retail to Fields
11. Fields may co-invest in the new company at the same basis
as Capricorn Investors 11, L.P. at closing.
COVENANT NOT TO DISCLOSE
12. Fields acknowledges and agrees that during her
relationship with the Company Fields has had or may have access to and become
familiar with various trade secrets and other confidential information,
consisting of, but not limited to recipes, formulas, patents, copyrights,
devices, secret inventions, processes, and compilations of information, records,
methodology and specifications ("confidential information"), which are owned by
the Company and which are regularly used in the operation of the
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Company's business. Fields agrees that the Company has all right, title, and
interest in to any of this confidential information, and acknowledges that it is
the sole and exclusive property of the Company.
13. Fields shall not disclose any of the confidential
information, directly, or indirectly, or use it in any way, either during Fields
employment or at any time thereafter, except as required and authorized in the
course of acting as a consultant for the Company. All recipes, files, records,
documents, drawings, specification, equipment, computer records, and similar
items relating to the business of the Company, whether prepared by Fields or
otherwise coming into Fields' possession, shall remain the exclusive property of
the Company. Such items and all duplicates shall be returned to the Company upon
the termination of Fields' consulting services under this Agreement with the
Company.
14. Fields further agrees that, unless such confidential
information is or becomes a matter of general public knowledge other than by
reason of a breach of this Agreement, or information which Fields lawfully
receives from any third party under circumstances which she has reason to
believe rightfully permits the disclosure thereof to others, or unless required
to disclose such information by governmental process, Fields will hold the
information referred to above, solely for the benefit and use of the Company and
shall not directly or indirectly disclose it to any person or entity without the
prior, written permission of the Company.
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15. Fields agrees that if she violates any of the provision
of paragraph 14 of this Agreement for any reason during the term
of this Agreement, the Company
shall be entitled to the entry of a permanent injunction against
Fields in order to prevent the continuation of irreparable harm
and loss of good will to the Company. Nothing in this Agreement,
however shall be construed to prohibit the Company from also
pursuing any other remedies, the parties having agreed that all
remedies shall be cumulative.
COVENANT NOT TO COMPETE
16. Fields and the Company agree that the consulting services
to be provided by Fields under the terms of this consulting agreement are unique
and extraordinary. The company is in the business of manufacturing, distributing
and marketing at retail and at wholesale, cookies, baked goods, specialty
coffees and drinks, cookbooks, and other promotional items bearing the Company's
trademark, for sale by franchisees, licensees and at Company owned outlets.
Fields acknowledges that the Company's products are identified with Fields and
the consulting services she will perform hereunder. Fields acknowledges and
agrees that a substantial amount of the good will generated for the Company will
result from and be created by Fields consulting services as provided hereunder.
17. Company and Fields agree, and Fields understands, that the
Company encourages Fields to pursue outside activities. During the period of
this Agreement which ends with the termination of Fields consulting services,
Fields will give ten business days prior written notice, with reasonable detail,
to the Company's CEO of any non-company venture, project, undertaking, business
association, etc. that Fields will become associated with before entering into
such venture.
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18. In consideration for the payments made to Fields under
this Agreement, the opportunity the Company provides to Fields to act as a
consultant and to participate in the public relations, advertising, national and
international visits, and other Company business, and in view of other
consideration as specified below, Fields covenants and agrees as part of and
ancillary to this Agreement, that during the term of this Agreement, or portion
thereof, when Fields is receiving payment for consulting services, Fields shall
not for any reason, without the prior written consent of the Company, directly
or indirectly, or by any means or device whatsoever, for herself or on behalf
of, or in conjunction with any person, partnership, corporation, or other entity
engaged in the Company's areas of marketing, research, development, production
or manufacturing, compete with the Company, directly or indirectly, or be the
spokesperson for any company that sells food based products, or solicit any
subscribers or customers of the Company for the type of products provided by the
Company, or through direct employment or a consulting relationship with a
competitor of the Company in any country where the Company is actively selling
its products.
19. Fields agrees that if she violates any of the provisions
of paragraphs 17 & 18 of this Agreement for any reason during the term of this
Agreement, the Company shall be entitled to the entry of permanent injunction
against Fields in order to prevent the continuation of irreparable harm and loss
of good will to the Company. Nothing in this Agreement, however, shall be
construed to prohibit the Company from also pursuing any other remedies, the
parties having agreed that all remedies shall be cumulative.
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20. Fields and the Company have attempted to limit Fields'
right to compete only to the extent necessary to protect the Company from unfair
competition and to protect the good will of the Company. Fields and the Company
recognize, however, that reasonable people may differ in making such a
determination. Consequently, Fields and the Company hereby agree that if the
scope of enforceability of the restrictive covenant in paragraph 18 above is in
anyway disputed at any time, then after a 30 day cooling-off period, Fields and
the Company agree to submit the dispute to the Company's Board of Directors for
their determination.
TERMINATION OF CONSULTING AGREEMENT
21. During the term of this Agreement, the Company may terminate
Field's consulting services for cause under this Agreement by giving Fields
written notice specifying the grounds therefor. For purposes of this paragraph,
"cause" shall include the following:
(a) fraud or dishonesty with regard to any aspect of consulting with the
Company;
(b) deliberate and significant violation of the Company's rules, regulations,
standards and/or policies;
(c) accepting other employment that makes it impossible for Fields to perform
consulting services on behalf of the Company; and
(d) violation of the non-compete provision.
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In the event that Fields is terminated for cause as specified hereunder, all
payments for consulting services as provided hereunder will terminate
22.Fields may refuse to continue performing consulting services hereunder
and terminate this Agreement at any time for any reason at which time all
payments for consulting services will cease.
GENERAL
23. Fields agrees that she has been fully advised on and
understands the meaning in effect of each and every provision contained in this
Agreement, in particular the Covenant Not to Disclose and the Covenant Not to
Compete.
24. If, in one or more instances, either Fields or the Company
fails to insist that the other party perform any of the terms of this Agreement,
such failure shall not be construed as a waiver by such party of any past,
present or future right granted under this Agreement; the obligations of both
Fields and the company under this Agreement shall continue in full force and
effect.
25. If any provision, paragraph, or subparagraph is adjudged by
any court to be void or unenforceable in whole or in part, this adjudication
shall not affect the validity of the remainder of the Agreement, including any
other provision, paragraph, or subparagraph. Each provision, paragraph and
subparagraph of this Agreement is separable from every other provision,
paragraph and subparagraph, and constitutes a separate and distinct covenant.
26. If any party to this Agreement breaches any of the terms of
the Agreement, then the breaching party shall pay to the non-breaching party all
of the non-
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breaching party's costs and expenses, including reasonable attorneys' fees
incurred by the non-breaching party in enforcing the terms of this Agreement.
27. This Agreement shall supersede all other written or oral
agreements made by Fields and the Company as to her consulting duties and the
covenant not to compete for the period specified herein, but shall not supersede
or modify any other written agreement, unless specifically referred to herein
The parties hereto acknowledge and agree that except for the proposed execution
of the License Agreement and the Mutual Release, this Agreement (a) shall not
affect any rights of the parties with respect to trademarks, trade names, trade
secrets or other intellectual property including, but not limited to, the rights
of the MF Entities and the Lenders pursuant to the Xxx. Xxxxxx Inc.
Organizational Agreement dated May 5, 1986 among Xxxxxxx X. Xxxxxx and Xxxxx X.
Xxxxxx, MF holdings Inc., MFI, Riverview Financial Corp., and Fenwick, Davis &
West, and pursuant to The Fields Grant and Assignment of Rights dated May 12,
1986 executed by Xxxxxxx X. Xxxxxx and Xxxxx X. Xxxxxx, and (b) shall not serve
as a reaffirmation or acknowledgment of the existence, enforceability or
validity of any of the foregoing.
28. Any modification of this Agreement and any waiver of any
provision, right, or remedy hereof shall be effective only if the same is in
writing signed by Fields or the Company.
29. Any notices pertaining to the Agreement shall be writing and
shall be transmitted by personal hand-delivery to an officer or director of the
Company or to Fields, or through the facilities of the US post office, certified
mail, return receipt
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requested. The addresses set forth below for the respective parties shall be the
paces where notice shall be sent, unless a written notice of a change of address
is given.
Xxxxx X. Xxxxxx The Company
0000 Xxxx Xxxxx Xxxxx Xxxx c/o Xxxxx Xxxxxx, CEO
Xxxxxxxx, XX 00000 000 Xxxx Xxxxxxx Xxxxx
Xxxx Xxxx Xxxx, XX 00000
30. This Agreement shall be governed by the laws of the State
of Utah. The terms of this Agreement as set forth are
contractual and not a mere recital. Fields and
the Company agree that they have carefully read the entire foregoing Agreement
and know the contents of it, in particular the Agreement, and that they sign the
same of their own free act and will.
IN WITNESS WHEREOF, this Agreement is executed as of the day
and year first above written.
XXX. XXXXXX' ORIGINAL COOKIES, INC.
By: /s/ Xxxxx X. Xxxxxx
Its: President C.E.O.
/s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
