CONSULTING AGREEMENT
This Consulting Agreement (this "Agreement") is made and entered into as of
the 1st day of October, 1996, by and between Michaels Stores, Inc., a Delaware
corporation (the "Company"), and Xxxxxxx X. Xxxxxx, an individual (the
"Consultant").
RECITALS:
A. The company has obtained and is desirous of continuing to obtain
certain legal, financial and other strategic consulting services from the
Consultant, and the Consultant has provided and wishes to provide such services
to the Company, all upon the terms and conditions set forth in this Agreement.
B. Therefore, in consideration of the mutual covenants and agreements
herein set forth, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Consultant
hereby agree as follows:
AGREEMENT:
Section 1. CONSULTING SERVICES. The Consultant shall provide such
legal, financial and other strategic consulting services for the Company as the
Chairman of the Board of Directors or the Chief Executive Officer of the Company
may from time to time reasonably request. The Consultant acknowledges and agrees
that he also may be asked to provide such services to certain subsidiaries and
affiliates of the Company and that he shall do so on the same basis as he is to
provide services to the Company. All references to the Company in this
Agreement shall also include any such subsidiary or affiliate, unless otherwise
clearly required by the context. In providing services to the Company under this
Agreement, the Consultant shall be at all times under and subject to the
direction and supervision of the Chairman of the Board of Directors and the
Chief Executive Officer of the Company.
Section 2. CONSULTING FEES: EXPENSES. As consideration for providing
services to the Company under this Agreement, the Consultant shall be entitled
to a fee, payable by the Company on a monthly basis (or on any other periodic
basis hereafter agreed to by the Company and the Consultant), of $15,000 per
month. In addition to the fees provided for above, the Consultant shall be
entitled to reimbursement from the Company of any direct, out-of-packet expenses
incurred by the Consultant during the course of providing services to the
Company under this Agreement.
Section 3. TERMINATION. This agreement shall continue from and after
the date hereof until terminated in accordance with the following subsections:
(a) Either party may terminate this Agreement for any reason by giving the
other party 30 days prior written notice of such termination. If the Consultant
terminates this Agreement pursuant to this Section 3(a) or if the Company
terminates this Agreement because of gross
misconduct on the part of the Consultant (which finding of gross misconduct must
be made by a majority of the Company's directors and memorialized in a
resolution duly adopted thereby), the Company shall be obligated to pay the
Consultant the monthly consulting fee specified above for the month in which
such termination occurs, but thereafter shall have no obligation to pay any
consulting fees hereunder. If the Company terminates this Agreement for any
other reason (other than the death or Total Disability (as defined below) of the
Consultant, which circumstances are governed by subsections (b) and (c) below),
the Consultant shall be entitled to receive from the Company the monthly
consulting fee specified above for a period of 36 months from and after the
month in which such termination occurs, provided that the Consultant executes
and delivers to the Company a release and confidentiality agreement reasonably
satisfactory to the Company.
(b) This Agreement shall terminate automatically upon the death of the
Consultant. In such event, the Company shall be obligated to pay the estate of
the Consultant the monthly consulting fee specified above for a period of 36
months from and after the month in which such death occurs.
(c) This Agreement may be terminated by the Company upon the Total
Disability of the Executive. As used herein, the term 'Total Disability" shall
mean the Executive's inability to render any services under this Agreement for a
period of six consecutive calendar months. In order to terminate this Agreement
as a result of the Consultant's Total Disability, the Company shall notify the
Executive (or an appropriate representative thereof) of such termination in
writing. If the Company terminates this Agreement pursuant to this Section 3(c),
the Consultant shall be entitled to receive from the Company the monthly
consulting fee specified above for a period of 36 months from and after the
month in which such termination occurs, provided that the Consultant (or an
appropriate representative thereof) executes and delivers to the Company a
release and confidentiality agreement reasonably satisfactory to the Company.
Section 4. CONFIDENTIALITY: RELATED MATTERS. The Consultant shall not
use, for his personal gain or benefit or the personal gain or benefit of any
member of his family, any confidential or proprietary information of the Company
which is obtained by or provided to the Consultant consistent with the purposes
and intent of this Agreement. During the term of this Agreement and for so long
as he receives consulting fees hereunder, the Consultant shall not act as a
legal or financial consultant or advisor to any other person or entity in the
arts and crafts industry without the prior written consent of the Company's
Chief Executive Officer or the Chairman of its Board of Directors. During the
term of this Agreement and for so long as he receives consulting fees hereunder,
the Consultant shall not, on his own behalf or on behalf of others, solicit,
divert or hire away, or attempt to solicit, divert or hire away, any person
employed by the Company.
Section 5. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the Company (and its subsidiaries) and the Consultant with
respect to the subject matter hereof and supersedes all prior agreements and
understandings, both written and oral, between the Company (and its
subsidiaries) and the Consultant with respect to such subject matter.
Section 6. BINDING EFFECT: ASSIGNMENT. This Agreement shall be binding
upon the inure to the benefit of only the Company (and its subsidiaries) and the
Consultant and their respective successors and permitted assigns. Neither this
Agreement nor any of the rights, interest or obligations hereunder shall be
assigned by either of the parties hereto without the prior written consent of
the other party. Nothing in this Agreement, express or implied, is intended to
or shall confer upon any person other than the Company (and its subsidiaries)
and the Consultant, and their respective successors and permitted assigns, any
rights, benefits or remedies of any nature whatsoever.
Section 7. GOVERNING LAW. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Texas.
Section 8. DESCRIPTIVE HEADINGS. The descriptive headings herein are
inserted for convenience of reference only, do not constitute a part of this
Agreement and shall not affect in any manner the meaning or interpretation of
this Agreement.
IN WITNESS WHEREOF, the Company and the Consultant have executed and
delivered this Agreement as of the date first above written.
MICHAELS STORES, INC.
By: /s/ R. Xxx Xxxxxx
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R. Xxx Xxxxxx, Executive Vice President and
Chief Financial Officer
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
