AGREEMENT
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This agreement made and entered into on October 29, 1999, by and
between Ace Hardware Corporation, a Delaware corporation, with its principal
office located at 0000 Xxxxxxxxxx Xxxxx, Xxx Xxxxx, Xxxxxxxx 00000-0000 (the
"Company"), and Xxxxxxx X. Xxxxxx residing at 00X000 Xxxxxxxxx, Xxxxxxxx,
Xxxxxxxx 00000 ("Xxxxxx").
W I T N E S S E T H :
WHEREAS Xxxxxx has served the Company continuously during the past
twenty three years and currently holds the position of Executive Vice
President, Retail with the Company; and
WHEREAS Xxxxxx desires to voluntarily retire as an employee of the
Company as of December 31, 1999 and, in order to continue to benefit from
Xxxxxx'x experience and expertise as an executive in the hardlines wholesale
industry the Company desires to enter into this Agreement providing for the
retention by the Company from such retirement date of the services of Xxxxxx
is an advisory and consulting capacity until December 31, 2000, renewable upon
mutual written consent, (the "Advisory Period"); and
WHEREAS the Company further desires to prevent any other competitive
business from utilizing the experience and know-how of Xxxxxx with regard to
the Company's business;
NOW, THEREFORE, in consideration of the foregoing and of the past
services rendered by Xxxxxx to the Company and his undertakings hereinafter
referred to, IT IS HEREBY AGREED by and between the Company and Xxxxxx as
follows:
1. Xxxxxx shall continue in the employ of the Company until and
including December 31, 1999 and will voluntarily retire from the employment of
the Company as of January 1, 2000. During the remaining period of his
employment, the compensation and all of the terms and conditions of Xxxxxx'x
employment shall be the same as are applicable in his separate employment
contract, which shall terminate on December 31, 1999 at the time Xxxxxx
commences retirement.
2. During the Advisory Period Xxxxxx shall furnish to the Company such
advisory and consulting services as the President or his designee shall
reasonably require from time to time. The scheduling of such services shall be
arranged in such a manner as not to conflict with any prior commitments which
Xxxxxx may have made which make him unavailable to perform services for the
Company at certain intervals of reasonable duration's. Such services are
anticipated to involve new business opportunities (including conversions, joint
ventures, and key NHS accounts) and not to exceed one week per month. In
addition to the above provision, Xxxxxx shall attend the Spring and Fall Shows
in 2000. It is expected that he will be in attendance for not less than 4 days
at each Show.
3. The Company agrees, subject to the conditions herein set forth, to
pay to Xxxxxx (in addition to all pension and other similar payments and other
benefits to which he may be entitled on account of his service to the Company
prior to his retirement) the aggregate sum of Ninety Six Thousand Dollars
($96,000). Such sum shall be in monthly installments at month end, commencing
January 31, 2000.
4. During the Advisory Period, Xxxxxx shall perform his services
hereunder for the Company as an independent contractor and will be permitted to
engage in any business and perform services for his own account except as
prohibited in Paragraph 6 herein. Any services performed by Xxxxxx for his
own account shall be scheduled by him in such a manner as not to interfere with
his availability upon reasonable notice to perform such services as the Company
shall reasonably require of him hereunder. In the event that Xxxxxx shall be
requested to perform services in excess of one (1) week per month plus
attendance at two (2) Ace conventions within the year during the Advisory
Period, he shall be paid an additional sum for such services performed based
upon the value of the services as determined by the parties prior to
performance. Any such additional payments shall not reduce the aggregate
amount to be paid to Xxxxxx as set forth in Paragraph 3.
5. For the purposes of this Agreement, the term "Confidential
Information" shall mean, but shall not be limited to, any technical or
non-technical data, programs, procedures, models, manuals, financial data,
lists of actual or potential customers, dealers or suppliers of the Company,
and any information regarding the Company's marketing, sales or dealer network
or plans, which is not generally known to the public through legitimate
origins. The Company and Xxxxxx acknowledge and agree that such Confidential
Information is extremely valuable to the Company and shall be deemed to be a
"Trade Secret" pursuant to the Illinois Trade Secrets Act.
Xxxxxx will not during, or after termination of, this Agreement, in any
form or manner, directly or indirectly, divulge, disclose or communicate to any
person, entity, firm, corporation or any other third party, or utilize for
Xxxxxx'x personal benefit or for the benefit of any competitor of the Company,
any Confidential Information.
Upon termination of this Agreement with the Company for any reason,
Xxxxxx will promptly deliver to the Company all documents concerning the
Company's customers, dealers, dealer network, marketing strategies, plans,
products or processes and/or which contain Confidential Information.
Xxxxxx agrees that during the Advisory Period and during any further
period for which monthly payments to Xxxxxx are provided for hereunder, he
shall not, directly or indirectly, render any services of an advisory nature to
or otherwise become employed by or participate or engage in any competing
business, without the prior written consent of the Company.
Any notice to be given by Xxxxxx under this Agreement shall be sent by
certified mail to the Company at its office at 0000 Xxxxxxxxxx Xxxxx,
Xxx Xxxxx, Xxxxxxxx, marked to the attention of the Company's President, and
any notice from Company to Xxxxxx shall be sent by registered mail to Xxxxxx
at 00X000 Xxxxxxxxx, Xxxxxxxx, Xxxxxxxx. Either party may change the address
to which notices are to be addressed by notice in writing given to the other in
accordance with the above terms.
In the event that Xxxxxx breaches any of the terms of Paragraph 5 of
this Agreement, Xxxxxx stipulates that said breach will result in immediate and
irreparable harm to the business and goodwill of the Company and that damages,
if any, and remedies at law for such breach would be inadequate. The Company
shall therefore be entitled to apply for and receive from any court of
competent jurisdiction an injunction to retrain any violation of Paragraph 5 of
this Agreement and for such further relief as the court may deem just and
proper.
6. In the event of any violation by Xxxxxx of any of the provisions of
Paragraph 5 which could or does result in material detriment to the Company,
the Company's obligation to pay to Xxxxxx the then-remaining unpaid portion of
the aggregate sum set forth in Paragraph 3, if any, shall thereupon cease, and
all payment theretofore made by the Company to Xxxxxx under this Agreement
shall constitute payment in full for all services performed by him during the
Advisory Period.
7. In the event that, during any month within the Advisory Period,
Xxxxxx refuses to perform, or refrains from performing, any service which the
Company feels has been reasonably requested of him and he persists and
continues in such course of action for more than three (3) days from the date
of mailing of written notice to him of the Company's determination that such
refusal to perform or such act of refraining from performing constitutes an
unreasonable breach of his obligations to the Company hereunder, a portion of
the aggregate sum set forth in Paragraph 3 equal to the monthly installment
next payable shall be deemed to have been forfeited by Xxxxxx, and the Company
shall have no obligation to make payment of such amount at any time to Xxxxxx
or his surviving heirs, distributees or personal representative.
8. In the event that, during any month within the Advisory Period,
Xxxxxx is unable to perform due to death or disability, this Agreement shall
terminate; and the Company shall pay to Xxxxxx or his surviving heirs,
distributees or legal representative a pro-rata share of the monthly
installment from the beginning of the month to death or disability, and the
Company shall; have no further obligation to make payments.
9. It is recognized that during the Advisory Period, Xxxxxx may have
to incur certain reasonable out-of-pocket expenses incident to his performance
of advisory and consulting services hereunder. The Company agrees to reimburse
Xxxxxx for all such expenses which are incurred by him pursuant to directions
given to him by the Company or which are approved by the Company in advance of
their incurrence. This would include, but would not be limited to travel,
lodging and meal expense to the Spring and Fall Shows as would be appropriate
for a high level executive.
10. This Agreement is not intended to and shall not be deemed to be in
lieu of any rights, benefits and privileges to which Xxxxxx may be entitled as
an employee of the Company by reason of his employment through December 31,
1999.
11. Xxxxxx shall not have the right to assign, transfer or encumber any
of the rights or interests under or pursuant to this Agreement.
12. This Agreement shall be binding upon and inure to the benefit of
the Company and its successors and assigns (including, without limitation, any
entity which may acquire substantially all of the Company's assets or business
or merge or combine with it), and shall also be binding upon and inure to the
benefit of Xxxxxx, his heirs, distributees and personal representatives.
13. The failure of either party hereto to insist in any one or more
instances upon performance of any terms or conditions of this Agreement shall
not be construed as a waiver of future performance of any such term or
condition, but the obligations of either party with respect thereto shall
continue in full force and effect.
14. This Agreement and the construction, interpretation and enforcement
of each of the provisions hereof shall be governed in all respects by the laws
of the state of Illinois. IN WITNESS HEREOF, all on the day and year first
above written, Ace Hardware Corporation, a Delaware corporation, has caused
this Agreement to be executed by its President and CEO, and attested by its
Secretary, with its corporate seal affixed, and Xxxxxx has hereunto affixed his
hand and seal.
ACE HARDWARE CORPORATION
a Delaware corporation
ATTEST:
____________________________ By: ________________________________
Secretary President and CEO
_______________________________(Seal)
Xxxxxxx X. Xxxxxx