EXHIBIT 10-P
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Agreement") is made between TruServ
Corporation (the "Company"), and Xxxxxx X. Xxxxxxxx ("Executive") as of November
2, 2004 ("Effective Date").
The parties acknowledge that the Company wishes to engage the Executive as
interim Chief Executive Officer and President, and the Executive wishes to be so
engaged, on the terms and conditions set forth in this Agreement.
ACCORDINGLY, on the basis of the representations, warranties, and
covenants contained in this Agreement, the parties agree as follows:
ARTICLE I - ENGAGEMENT AND TERM
1.1 Engagement. The Company shall engage the Executive as its interim
Chief Executive Officer, and the Executive accepts such engagement, on the terms
and conditions set forth in this Agreement. Executive shall commence work as of
the Effective Date.
1.2 Term. The term of Executive's engagement under this Agreement shall
commence on the Effective Date and shall continue until termination by either
party, for any or no reason, by written notice of such termination to the other
party (the "Term").
1.3 Location of Employment. During the term of this Agreement Executive
will maintain his principal office in the Company's Chicago headquarters.
ARTICLE II - DUTIES OF THE EXECUTIVE
2.1 Duties. During the Term, Executive shall perform such services as are
commensurate with Executive's position as interim Chief Executive Officer of the
Company, as well as such other duties as may from time to time be assigned to
Executive by the Board of Directors of the Company. Executive shall faithfully,
diligently and competently perform such services and devote Executive's full
business time and attention to the affairs of the Company. Executive shall, at
all times during the Term, adhere to and obey any and all written internal rules
and regulations governing the conduct of, and to the same extent as, the
Company's employees, as established or modified from time to time; provided,
however, that, in the event of any conflict between the provisions of this
Agreement and any such rules or regulations, the provisions of this Agreement
shall control.
2.2 Exclusive Services. During the Term, Executive will not, without the
prior written approval of the Board of Directors, engage, directly or
indirectly, in any other business activity which interferes with the performance
of his duties, services and responsibilities hereunder or interferes with the
conduct of Company's business, and will not serve on any boards of directors
other than the Company's.
2.3 Subpoenas; Cooperation in Defense of the Company. If Executive, during
the Term or thereafter, is served with any subpoena or other compulsory judicial
or administrative process calling for production of Confidential Information (as
described in Article 4 below), or if Executive is otherwise required by law or
regulations to disclose Confidential Information, Executive will promptly,
before making any such production or disclosure, notify the Company and provide
it with such information as the Company may reasonably request to take such
action as the Company deems necessary to protect its interests. Executive agrees
to cooperate reasonably with the Company, whether during the Term or thereafter,
in the prosecution or defense of all threatened claims or actual litigation in
which the Company is or may become a party, whether now pending or hereafter
brought, in which Executive has knowledge of relevant facts or issues. Executive
shall be promptly reimbursed for documented out-of-pocket expenses incurred or
paid in connection with the prosecution or defense of any litigation for the
Company after the closing of the transaction.
ARTICLE III - COMPENSATION
3.1 Consulting Fee. The Company shall pay to Executive a fee of $14,000
per week.
3.2 Company Executive Benefits. Executive is serving as an independent
consultant and shall not be entitled to participate in or receive benefits under
any employee benefit plans, including, but not limited to, paid vacation,
severance, Medical, Dental, Life, Long-term and Short-term Disability coverage,
401(k) Plans, SERP, Long-Term Incentive or any other employee benefit plan now
available or in the future available to employees generally or senior executives
of the Company.
3.3 Housing. The Company shall provide housing to Executive, at the
Company's expense, in the Chicago metropolitan area reasonably convenient to the
Company's headquarters, but not in any event to exceed a cost to the Company of
$3,500 per month.
3.4 Reimbursement for Expenses. The Company shall promptly reimburse the
Executive for any and all reasonable and documented actual business expenses
that the Executive incurs from time to time in the performance of his duties
under this Agreement in accordance with the policies and practices that the
Company has adopted or adopts hereafter.
3.5 Travel. The Company shall reimburse Executive for reasonable coach
class travel expenses for himself or his wife between Chicago and their
residence in Memphis, Tennessee, but not for more than one roundtrip per week.
3.6 Company Car. The Company will provide to Executive, at Company's
expense, with a Company car for his use during the Term. Executive will,
however, indemnify and hold the Company harmless from any damages or losses
incurred by Company due to Executive's negligent operation of the automobile.
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ARTICLE IV - CONFIDENTIALITY AND NON-SOLICITATION
4.1 Return of Property; Confidential Information; Inventions.
(a) Executive acknowledges that all records, documents, and tangible
embodiments containing information relating to the Company prepared by Executive
or coming into his possession by virtue of this engagement by the Company are
and will remain the property of the Company.
(b) Through the Term and thereafter, Executive shall keep secret and
retain in strictest confidence, and shall not, without the prior written consent
of the Company, furnish, make available or disclose to any third party or use
for the benefit of himself or any third party, any Confidential Information. As
used in this Agreement, "Confidential Information" shall mean any information
relating to (a) any financial, business, planning, operations, services,
potential services, products, potential products, technical information and/or
know-how, formulas, production, purchasing, marketing, sales, personnel, member,
customer, broker, supplier or other information of the Company; (b) any papers,
data, records, processes, methods, techniques, systems, models, samples,
devices, equipment, compilations, invoices, customer lists or documents of the
Company; (c) any matters relating to the legal affairs of the Company or matters
relating to the deliberations, discussions, meetings or activities of the
Company's Board of Directors; (d) any confidential information or trade secrets
of any third party provided to the Company in confidence or subject to other use
or disclosure restrictions or limitations; and (e) any other information,
written, oral or electronic, which pertains to the Company's affairs or
interests or with whom or how the Company does business; provided, however, that
Confidential Information shall not include any information which is in the
public domain or becomes known in the industry through no wrongful act on the
part of Executive.
(c) Executive will make prompt and full disclosure to the Company,
will hold in trust for the sole benefit of the Company, and will assign
exclusively to the Company all Executive's right, title, and interest in and to
any and all inventions, discoveries, designs, developments, improvements,
copyrightable material, and trade secrets (collectively herein "Inventions")
that Executive, solely or jointly, may conceive, develop, or reduce to practice
and disclose to the Company and is used in its business. Executive hereby waives
and quitclaims to the Company any and all claims of any nature whatsoever that
Executive now or hereafter may have or for infringement of any patent resulting
from any patent applications for any Inventions so assigned to the Company.
Executive's obligation to assign shall not apply to any Invention which
Executive can prove that:
(a) it was developed entirely on Executive's own time;
(b) no equipment, supplies, facility, services, or trade secret
information of the Company was used in its development; and
(c) it does not relate (i) directly to the business of the Company or
(ii) to the actual or demonstrably anticipated research or
development of the Company; and
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(d) it does not result from any work performed by Executive for the
Company.
4.2 Non-Solicitation; Non-Compete.
(a) Through the Term and for one year thereafter Executive shall
not, directly or indirectly, as employee, agent, consultant, stockholder,
director, co-partner or in any other individual or representative capacity
employ or engage, recruit or solicit for employment or engagement, any person
who is or becomes employed or engaged by the Company during the Term or during
the three months following the Term, or otherwise seek to influence or alter any
such person's relationship with the Company.
(b) During the Term and for one year thereafter Executive will not,
directly or indirectly, become associated with any business, whether as an
investor (excluding investments representing less than one percent (1%) of the
common stock of a public company), lender, owner, stockholder, officer,
director, employee, agent or in any other capacity, in any business activities
of any franchise, cooperative, retail or wholesale company with a core business
in the hardware industry or any other business conducted by the Company or its
affiliates at the Effective Date.
(c) It is agreed that breach of this Article IV will result in
irreparable harm and continuing damages to the Company and its business and that
the Company's remedy at law for any such breach or threatened breach, will be
inadequate and, accordingly, in addition to such other remedies as may be
available to the Company at law or in equity in such event, any court of
competent jurisdiction may issue a temporary and permanent injunction, without
the necessity of the Company posting bond and without proving special damages or
irreparable injury, enjoining and restricting the breach, or threatened breach,
of Article IV, including, but not limited to, any injunction restraining the
breaching party from disclosing, in whole or part, any Confidential Information.
Executive will pay all of the Company's costs and expenses, including reasonable
attorneys' and accountant's fees, incurred in enforcing this Article IV.
ARTICLE V - MISCELLANEOUS
5.1 Consultant Obligations. The Company shall not provide workers'
compensation, disability insurance, Social Security or unemployment compensation
coverage nor any other statutory benefit to the Executive. The Executive shall
comply at his expense with all applicable provisions of workers' compensation
laws, unemployment compensation laws, Federal Social Security law, Federal,
state and local income tax laws and all other applicable Federal, state and
local laws, regulations and codes relating to terms and conditions of employment
required to be fulfilled by employers or independent contractors.
5.2 Income Tax Treatment. Executive and the Company acknowledge that it is
the intention of the Company to deduct the fees ("Fees") payable to Executive as
an ordinary and necessary business expense for income tax purposes. Executive
agrees and represents that, except as otherwise required in writing by the
Internal Revenue Service (the "IRS"), (i) it will treat the Fees as ordinary
income for income tax purposes, pay all taxes due on the receipt of the Fees
including, but not limited to, income taxes and self-employment taxes (the
"Executive's Taxes"), and (ii) except as otherwise required by the IRS, if it
reports the receipt of the
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Executive's Fees as other than ordinary income and/or fails to pay the
Executive's Taxes, the Executive will indemnify and hold the Company harmless
form any and all taxes, penalties, interest, costs and expenses actually
incurred, including reasonable attorneys' fees and accounting fees, which are
incurred by the Company as the result thereof.
5.3 Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the Company, its successors and assigns, and upon the
Executive and his heirs, executors, administrators and legal representatives. No
party to this Agreement may delegate its or his duties hereunder without the
prior written consent of the other parties to this Agreement.
5.4 Headings. Section and subsection headings do not constitute part of
this Agreement. They are included solely for convenience and reference, and they
in no way define, limit, or describe the scope of this Agreement or the intent
of any of its provisions.
5.5 Entire Agreement. This Agreement contains the entire agreement and
understanding between Executive and the Company concerning the matters described
herein. It supersedes all prior agreements, discussions, negotiations,
understandings and proposals of the parties. The terms of this Agreement cannot
be changed except in a subsequent writing signed by both parties. This Agreement
does not modify any agreements between the Company and Executive regarding
Executive's service as a Director of the Company.
5.6 Severability. The provisions of this Agreement shall be severable and
the invalidity of any provision shall not affect the validity of the other
provisions. In the event any provision hereof becomes or is declared by a court
of competent jurisdiction to be illegal, unenforceable or void, the Parties
shall negotiate in good faith to substitute a legal, enforceable, or valid
provision that, as nearly as possible, provides the benefit of the illegal,
unenforceable, or void provision. If any court refuses to enforce any part of
this Agreement as written, the court shall modify that part to the minimum
extent necessary to make it enforceable under applicable law, and shall enforce
it as so sequent document signed by all parties to this Agreement.
5.7 Joint Participation. The parties hereto participated jointly in the
negotiation and preparation of this Agreement, and each party has had the
opportunity to obtain the advice of legal counsel and to review and comment upon
the Agreement. Accordingly, it is agreed that no rule of construction shall
apply against any party or in favor of any party. This Agreement shall be
construed as if the parties jointly prepared this Agreement, and any uncertainty
or ambiguity shall not be interpreted against one party and in favor of the
other.
5.8 Governing Law. This Agreement shall be governed by and interpreted in
accordance with Illinois law, without regard to its conflict of law principles.
Furthermore Executive agrees and consents to submit to personal jurisdiction in
the State of Illinois in any state or federal court of competent subject matter
jurisdiction situated in Xxxx County, Illinois. Executive further agrees that
the sole and exclusive venue for any suit arising out of, or seeking to enforce,
the terms of this Agreement shall be in a state or federal court of competent
subject matter jurisdiction situated in Xxxx County, Illinois. In addition,
Executive waives any right to challenge in another court any judgment entered by
such Xxxx County court or to assert that any action instituted by the Company in
any such court is in the improper venue or should be transferred to a more
convenient forum.
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5.9 Notice. All notices, requests, demands, claims and other
communications hereunder shall be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given (i) three (3)
business days after it is sent by registered or certified mail, return receipt
requested, postage prepaid, (ii) when receipt is electronically confirmed, if
sent by fax (provided that a hard copy shall be promptly sent by first class
mail), or (iii) one (1) business day following deposit with a recognized
national overnight courier service for next day delivery, charges prepaid, and,
in each case, addressed to the intended recipient, as set forth below:
To the Company: TruServ Corporation
0000 Xxxx Xxxx Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx Xxxxxxxx, General Counsel
To the Executive: Xxxxxx X. Xxxxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
IN WITNESS WHEREOF, the parties hereto have executed this Consulting
Agreement on this _____ day of November, 2004, to be effective and binding as of
the Effective Date.
TruServ Corporation
By: /s/Xxx Xxxxx /s/Xxxxxx X. Xxxxxxxx
---------------------------- ------------------------------------
Xxxxxx X. Xxxxxxxx
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