CONSULTING AGREEMENT
This
CONSULTING AGREEMENT
is made
and entered into this 17th day of July, 2008, by and between Collective Brands,
Inc., 0000 XX Xxxxx Xxxxxx, Xxxxxx, XX 00000, a Delaware corporation, and its
parent, subsidiaries and affiliated companies (“Collective”), and Xxx X. Xxxxx
(“Consultant”), a resident of Lake Lotawana, Missouri.
In
consideration of the mutual covenants and promises set forth herein, the parties
agree:
1. Term.
This
Agreement shall commence on August 3, 2008, and shall terminate on August 2,
2009 (the “Term”). Notwithstanding the foregoing, this Agreement may be
terminated by either party, at any time, upon 30 days written notice. Collective
shall remain obligated to pay Consultant for consulting services performed
under
this Agreement prior to the effective date of termination.
2. Services.
(a)
Consultant agrees that he will, when and as requested by the Chief Executive
Officer of Collective, from time to time during the term of this Agreement,
and
at such place or places as Collective may reasonably request, provide
non-employee human resource-related consulting services to Collective as
directed by the Chief Executive Officer of Collective (the “Services”).
(b)
Consultant is responsible for securing his own office space, office equipment,
and clerical support services, but visiting office space and appropriate office
equipment will be provided if Consultant is meeting with individuals at
Collective Brands/Collective Licensing/Stride Rite offices. Consultant may
arrange the time and manner of performance of the consulting services and will
not be expected to maintain a schedule of duties or assignments except as needed
to meet deadlines established by Collective. Collective shall specify
milestones, meeting and conference schedules, and due date for deliverables
as
necessary.
3. Fee.
(a)
Collective agrees to pay Consultant (i) a monthly retainer of $6,000.00 for
Services rendered of up to two days per month for the first six months of the
Agreement; and (ii) a monthly retainer of $3,000.00 for Services rendered of
up
to one day per month for the last six months of the Agreement, payable on the
15th
of each
month. If Consultant has received pre-approval from the Chief Executive Officer
of Collective to perform Services in excess of the monthly maximum requirements,
Collective will pay Consultant at the daily rate of $3,000 for such Services.
Provided, however, the scope and deliverables for any special projects will
be
negotiated by Consultant and the Chief Executive Officer of Collective. These
payments will not be subject to any payroll taxes or deductions, income
withholding taxes, social security taxes, or any other taxes that are
customarily deducted from wages. Consultant will be provided an IRS Form 1099
reflecting such payments.
(b)
Each
payment hereunder shall be considered a separate payment for purposes of Code
Section 409A. It is anticipated that, effective August 2, 2008, the level of
Services performed by Consultant will not exceed 20% of the average level of
services performed by Consultant for Collective over the 36-month period ending
August 2, 2008. Accordingly, Consultant will experience a separation from
service on August 2, 2008, under the provisions of Section 409A of the Internal
Revenue Code of 1986, as amended.
4. Invoices.
Consultant shall furnish Collective with invoices on a monthly basis for any
Services performed in the preceding month in excess of the retainer. Collective
will also reimburse Consultant for all reasonable and necessary travel related
expenses incurred during the course of providing the Services, including
mileage, overnight travel, lodging, meals, long distance telephone calls, or
other related expenses in accordance with Collective’ reimbursement policies in
effect during the Term of this Agreement. Consultant shall furnish Collective
with an itemized invoice for Services performed during each month of this
Agreement in excess of the retainer, and for any expenses incurred, which will
be paid no later than 30 days after receipt of the invoice by Collective. Each
invoice will set forth in reasonable detail the Services performed and days
on
which such Services were performed and the related expenses. Collective may,
without breach of this Agreement, withhold payment of any particular invoice
item that it disputes reasonably and in good faith, conditional upon Collective
providing to Consultant, by the due date of the invoice or promptly thereafter,
written notification of the amount in dispute including sufficient detail to
describe the nature and particulars of the dispute. The parties shall diligently
and in good faith attempt to resolve the dispute.
5. Relationship
Between the Parties.
(a)
Consultant is engaged by Collective only for the purpose and to the extent
set
forth in this Agreement and his relationship shall at all times be a consultant
rather than a co-venturer, partner, agent, or employee of Collective. Consultant
is responsible for the payment of all federal, state and local income/earnings
taxes on all sums paid to him by Collective and understands that Collective
is
not obligated to provide workers’ compensation insurance coverage nor make
social security or unemployment compensation contributions on his behalf.
Further, Consultant is not entitled to participate in any plan, arrangement
or
distribution of any stock, bonus, profit sharing, group medical coverage, group
life insurance coverage, long or short term disability arrangements, or any
other benefits provided to employees of Collective as a result of this
Agreement. Consultant shall have the sole responsibility for reporting and
remitting all taxes due to any authority as a result of any fee or other related
cost paid by Consultant under this Agreement and shall indemnify and hold
Collective harmless from any breach of his obligation under this
sentence.
(b)
It is
agreed and understood that nothing in this Paragraph 5 or elsewhere in this
Agreement shall be deemed or construed to create or continue an
employer-employee relationship between Consultant and Collective, it being
agreed that such relationship between Xxx X. Xxxxx and Collective terminated
on
August 2, 2008.
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6. Confidential
Information.
Collective will communicate information to Consultant of a highly privileged,
confidential and/or proprietary nature, including information obtained by
Collective from third parties. This includes, but is not limited to, documents
and information regarding Collective’s methods of operation; suppliers and
agents; pricing; costs; sales and expenses; profit margins; financial statements
or other financial information; marketing plans and strategies; seasonal plans,
goals, objectives and projections; product lines; information regarding past,
present, or future business or prospects; salary, staffing, training and
employment information (including information about the performance of
executives of Collective); or any technical information not of a published
nature relating to how Collective does business. Consultant agrees not to use,
directly or indirectly, any such confidential information to the detriment
of
Collective, or for his benefit (or the benefit of any third party), and will
not
make any oral or written disclosure thereof, except as specifically authorized
in writing by Collective. Upon termination of this Agreement, Consultant shall
return all Collective documents, records, and confidential information, in
whatever form, to Collective and shall not retain copies or other records
thereof. Consultant shall also obtain Collective’s consent to use its names,
trademarks, tradenames, and other intellectual property identified with
Collective.
7. Collective
as Exclusive Owner of Work Product.
Consultant agrees that Collective will be the exclusive owner of all works
conceived or produced by Consultant pursuant to this Agreement, including that
Collective will be the exclusive owner of all copyrights and other intellectual
property rights in or based upon such works. With regard to such copyrightable
works, Consultant agrees that Collective will be the “person for whom the work
is prepared” and that Collective will be the exclusive work-for-hire author
under the copyright laws of the United States. In addition, Consultant agrees
to
and hereby assigns exclusively to Collective such works, copyrights, and other
intellectual property rights. This provision will survive the termination,
cancellation, or expiration of this Agreement.
8. Agency
Relationship.
Consultant acknowledges that no agency relationship is created by this Agreement
and that he shall have no authority to act on behalf of Collective or to bind
Collective, or its parent, subsidiaries or affiliates, to any agreement,
contract, or cause of action. Consultant shall not represent directly or
indirectly that he is an agent or legal representative of Collective or incur
any liabilities or obligations in the name of or on its behalf, except as
specifically authorized in writing by Collective.
9. Indemnification.
Consultant agrees to indemnify, defend, and hold Collective harmless from and
against any and all claims, demands, suits, losses, damages, judgments, costs,
and attorney fees in connection with defending against any claim arising out
of
Consultant’s acts or omissions which occur in the course of Consultant’s
performance under this Agreement.
10. Amendment,
Breach and Waiver.
This
Agreement may not be changed, amended, or modified in any manner except by
an
instrument in writing signed by both of the parties hereto. The failure of
either party to enforce at any time any of the provisions of this Agreement
shall not be construed as a waiver of any such provision, or of the right to
such party thereafter to enforce each and every such provision in the event
of a
subsequent breach.
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11. Remedies.
Consultant acknowledges and agrees that the restrictions in this Agreement
on
Consultant are reasonable in order to protect Collective’s expectations and
rights under this Agreement and to provide Collective with the protections
that
Collective needs to, among other things, safeguard its confidential information.
Consultant agrees that any breach of this Agreement by Consultant will cause
immediate irreparable injury to Collective, for which an award of damages alone
may be inadequate. Therefore, Collective shall be entitled, in addition to
any
other right or remedy it may have, to an injunction restraining Consultant
from
any violation or other threatened violation of this Agreement. In the event
that
Collective is successful in any action related to enforcement of this Agreement,
Consultant agrees to pay the reasonable attorneys fees and costs as calculated
by the Court.
12. Employer
I.D. Number.
Consultant shall provide Collective with his Employer Identification Number
to
allow Collective to provide an IRS Form 1099 at the end of each calendar year
during the Term of this Agreement which sets forth all the payments made to
Consultant pursuant to this Agreement.
13. Entire
Agreement.
This
Agreement contains the entire understanding of the parties respecting the
consulting services contemplated herein. However, this Agreement does not
supercede the post-termination obligations under Paragraphs 4 through 6 of
the
Employment Agreement dated July 16, 2007, the terms and obligations of which
remain in full force and effect.
14. Severability.
The
invalidity or unenforceability of any provision, or portion of this Agreement
shall not affect the remainder of that provision or any other provision thereof.
15. Successors
and Assigns.
This
Agreement and the rights hereunder shall be freely assignable by Collective.
This Agreement shall inure to the benefit of, and be binding upon, any entity
which shall succeed to Collective’s business. Being a contract for personal
services, neither this Agreement nor any rights hereunder shall be assigned
by
Consultant. Provided, however, this Agreement may be assigned by Consultant
to a
limited liability company or similar entity owned solely by
Consultant.
16. Choice
of Law; Venue.
This
Agreement and any questions regarding the validity, interpretation, or
performance shall be governed by, and construed in accordance with, the laws
of
the State of Kansas. Collective and Consultant agree that any action to enforce
any provision of this Agreement shall be filed and litigated exclusively in
any
state or federal court located in the City of Topeka, Kansas, or in Shawnee
County, Kansas.
IN
WITNESS WHEREOF,
the
parties have executed this Agreement as of the date first above
written.
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By:
|
/s/
Xxxxxxx X. Xxxxx
|
|
Title:
|
Chairman,
Chief Executive Officer and President
|
|
Consultant
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