EXHIBIT 99.2
CONSULTING AGREEMENT
This Consulting Agreement (this "Agreement") is entered into by and
between XXXXX SUPERMARKETS, INC. (the "Company") and XXXXXXX X. XXXXXXXXX
("Consultant").
RECITALS
A. Consultant is a former employee and officer of the Company and
possesses extensive knowledge and experience concerning the Company's business.
B. The Company desires to retain Consultant to render certain
consulting services under the terms and conditions of this Agreement.
C. Consultant agrees to perform certain consulting services for the
Company under the terms and conditions of this Agreement.
AGREEMENT
In consideration of the covenants and promises herein provided, the
actions taken pursuant thereto, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and
Consultant agree as follows:
1. TERM OF AGREEMENT. The term of this Agreement shall be for a
period of twenty-four (24) months commencing effective as of June 1, 2005 and
ending May 31, 2007, subject, however, to prior termination as provided in
Section 2 of this Agreement.
2. TERMINATION. Notwithstanding any other provision of this
Agreement, either party shall have the right to terminate this Agreement
immediately in the event the other party materially breaches any of its
obligations under this Agreement, provided such breach, if curable, is not cured
within ten (10) business days after the non-breaching party provides written
notice of such breach to the breaching party. Notwithstanding any other
provision of this Agreement, this Agreement shall terminate immediately upon the
death of Consultant.
3. SERVICES. Consultant will provide financial analysis and general
business consulting services as requested by the Company's CEO or his designee
during the term of this Agreement which may include, without limitation,
assisting on the transition of certain work responsibilities that Consultant
previously managed as an employee and officer of the Company, performing
financial and other strategic projects, and analyzing new business
opportunities. As approved by the Company's CEO or his designee and as
appropriate in light of the requested services, the Company shall make certain
of its employees available to assist Consultant in performing such services.
Consultant will perform the consulting services for the Company on an "as
needed" basis during the term of this Agreement, and Consultant will make
himself reasonably available during the term of this Agreement to meet with
authorized representatives of the Company at mutually convenient times as
requested by the Company's CEO or his designee for the purposes of, among other
things, providing information and assistance on
transition issues and reporting on the status of Consultant's consulting
activities for the Company; provided, however, Consultant will not be obligated
to spend more than forty (40) hours rendering consulting services to the Company
in any given month during the term of this Agreement. Nothing in this Agreement
shall preclude Consultant from performing services for others, either as an
employee or an independent contractor, so long as those other services do not
interfere with his performance of requested services under this Agreement or
violate Section 12 or other provisions of this Agreement.
4. BEST EFFORTS; DISCRETION. Consultant agrees to use Consultant's
best efforts in providing services under this Agreement. Except as provided in
this Agreement, Consultant will have sole discretion and responsibility for the
selection of procedures, processes, materials, working hours, locations, and
other incidents of performance of services under this Agreement.
5. COMPLIANCE WITH LAWS. Consultant agrees, and will ensure, that
Consultant's performance of services under this Agreement will comply with all
legal requirements of any kind, including, but not limited to, compliance with
all applicable laws and regulations.
6. NON-EXCLUSIVE. Except for the obligations and restrictions
expressly contained in this Agreement, nothing contained herein shall prohibit
Consultant from performing consulting services or services as an employee for
other persons or entities during the term of this Agreement.
7. COMPENSATION. The Company will compensate Consultant on a monthly
fee basis at the rate of Fifteen Thousand Nine Hundred Twenty Dollars ($15,920)
per month (the "Monthly Fee"). The Monthly Fee for each month during the
consulting engagement shall be payable within five (5) days after the end of
that month. Consultant, however, hereby waives his right to the first six
Monthly Fee payments in exchange for payment of the same monthly amount on the
15th day of each month from June through November, 2005. If this Agreement is
terminated during the course of a month, Consultant will be compensated for such
month on a prorated basis calculated by multiplying the Monthly Fee times a
fraction the numerator of which is the number of days elapsed in the month at
the time of termination and the denominator of which is the total number of days
in the month of termination.
8. EXPENSES. The Company will reimburse Consultant for all necessary
and reasonable direct business and travel expenses incurred by Consultant in
rendering consulting services to the Company, provided such business and travel
expenses are approved in advance by the Company's CEO or his designee. Prior to
such reimbursement, Consultant shall provide the Company with sufficient
documentation of such expenditures to satisfy the Company's expense
reimbursement guidelines and any requirements of the Internal Revenue Code and
related regulations.
9. RELATIONSHIP OF PARTIES. The parties acknowledge and agree that
all of the services to be provided by Consultant under this Agreement will be
performed by Consultant as an independent contractor, and not as an employee,
agent, partner, or joint venturer of Company. Consultant does not have, nor will
Consultant hold himself out as having, any right,
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power or authority to create any contract or obligation, expressed or implied,
on behalf of, in the name of, or binding on the Company unless the Company's CEO
or his designee shall consent thereto in writing. Consultant acknowledges and
agrees that Consultant is not eligible to participate in any employee benefit
plans or programs of the Company by virtue of this Agreement or the provision of
the services contemplated by this Agreement.
10. TAXES. The parties acknowledge and agree that Consultant will be
solely and completely responsible for any and all taxes due and owing to any
governmental entity or agency (federal, state and/or local) on any monies or
compensation received by Consultant from the Company under this Agreement.
Consultant agrees to timely pay all taxes arising from Consultant's receipt of
compensation under this Agreement, including, but not limited to, any
self-employment taxes.
11. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION. Consultant
acknowledges that during the course of this Agreement Consultant will be
creating, making use of, acquiring, and/or adding to "Confidential Information"
relating to the business and affairs of the Company, its subsidiaries and its
affiliates. For purposes of this Agreement, the term "Confidential Information"
means any and all of the Company's or its subsidiaries' or affiliates' trade
secrets, confidential and proprietary information and all other non-public
information and data of the Company or its subsidiaries or affiliates,
including, without limitation, confidential business methods and procedures,
marketing data, research and development information, pricing data, cost data,
marketing plans, sales information, business plans, financial data, contractual
information, personnel information, and information about prospective business
ventures, whether or not reduced to writing or other tangible medium of
expression, including work product created by Consultant in rendering consulting
services for the Company. Consultant agrees that the Confidential Information
will be received by him in confidence and that he will take all reasonable
precautions to protect the secrecy of the Confidential Information. During the
term of this Agreement and thereafter, Consultant will not use or disclose to
any person or entity any of the Confidential Information, except as authorized
in writing by the Company. Consultant agrees that the Company owns the
Confidential Information and Consultant has no rights, title or interest in or
to any of the Confidential Information. At the Company's request or upon
termination of this Agreement, Consultant will immediately deliver to the
Company any and all materials (including copies and electronically stored data)
containing any Confidential Information in Consultant's possession, custody or
control, and, at the Company's request, Consultant shall certify, under oath and
in writing, to the Company that he has delivered all such Confidential
Information to the Company. Consultant acknowledges and agrees that his
non-disclosure obligations shall survive the termination of this Agreement for
any reason. Consultant's non-disclosure obligations shall continue as long as
the Confidential Information remains confidential and shall not apply to any
information which becomes generally publicly available through no fault or
action of Consultant.
12. RESTRICTIVE COVENANTS. The Company and Consultant acknowledge
and agree that Consultant, by virtue of his past employment with the Company,
possesses knowledge of substantial trade secrets and Confidential Information of
the Company and that in the course of Consultant's rendering consulting services
for the Company, Consultant will have access to and will become knowledgeable of
the continuing affairs of the Company, its trade secrets and its Confidential
Information. In recognition of the foregoing, and as an inducement for the
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Company to engage Consultant pursuant to this Agreement, Consultant agrees and
covenants that he will comply with the following covenants:
a. During the term of this Agreement, Consultant will not (whether
as an employee, officer, director, consultant, owner, partner, principal
or advisor) engage in, or provide services or assistance to, any
Competitive Business; provided, however, that nothing in this Section 12
shall preclude the Consultant from selling digital signage to a
Competitive Business, providing consulting service related to digital
signage to a Competitive Business, or providing services to a business
that produces, distributes, or delivers products to a Competitive
Business. For purposes of this Agreement, the term "Competitive Business"
means any business that operates, or is developing and/or implementing
plans to open and operate, one or more grocery stores and/or convenience
stores and/or floral stores anywhere within the Restricted Geographic
Area. For purposes of this Agreement, the term "Restricted Geographic
Area" means the following states: Indiana; Illinois; Kentucky; and Ohio.
The foregoing restriction shall not prohibit Consultant from owning
passive investments in any entity whose shares are publicly traded.
b. During the term of this Agreement, Consultant will not solicit,
recruit, hire, employ, attempt to hire or employ, or assist any person or
entity in the recruitment or hiring of, any person who is an employee of
the Company or its subsidiaries or affiliates, or urge, influence, induce
or seek to induce any employee of the Company or its subsidiaries or
affiliates to terminate his or her relationship with the Company or its
subsidiaries or affiliates, respectively.
c. During the term of this Agreement, Consultant will not urge,
induce or attempt to induce any of the Company's or its subsidiaries' or
affiliates' independent contractors, subcontractors, distributors,
consultants, vendors or suppliers to terminate their relationship with, or
representation of, the Company or its subsidiaries or affiliates,
respectively, or to cancel, withdraw, reduce, limit or in any manner
modify any such person's or entity's business with, or representation of,
the Company or its subsidiaries or affiliates.
d. Consultant acknowledges and agrees that the covenants contained
in this Section 13 prohibit Consultant from engaging in certain activities
on Consultant's own behalf or on behalf of or in conjunction with any
other person or entity, regardless of the capacity in which Consultant is
acting and regardless whether the Consultant is acting directly or
indirectly.
e. Although Consultant and the Company consider the restrictions
contained in this Section 13 of this Agreement to be reasonable,
Consultant and the Company agree and acknowledge that: (i) if any
covenant, subsection, provision or portion of Section 13 is determined to
be unenforceable or invalid for any reason, such unenforceability or
invalidity shall not affect the enforceability or validity of the
remainder of the Agreement; and (ii) if any particular covenant,
subsection provision or portion of this Section 13 is determined to be
unreasonable or unenforceable for any reason, including, without
limitation the time period, geographic area and/or scope of activity
covered by
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any restrictive covenant, such covenant, subsection, provision or portion
shall automatically be deemed reformed such that the contested covenant,
subsection, provision or portion shall have the closest effect permitted
by applicable law to the original form and shall be given effect and
enforced as so reformed to whatever extent would be reasonable and
enforceable under applicable law.
13. WORKS OF AUTHORSHIP. As used in this Agreement, "Works" means
all works of authorship fixed in a tangible medium of expression by Consultant
which are made during the term of this Agreement and which are made by
Consultant in the course of rendering services to the Company or which result
from Consultant's rendering services to the Company, including, but not limited
to, flow charts, computer programs, computer source codes and object codes,
notes, drawings, memoranda, correspondence, documents, records and notebooks.
All Works created by Consultant are and will remain exclusively the property of
the Company. Each such Work is a "work made for hire," and the Company may file
applications to register copyright as author thereof. To the extent such Work
cannot be a "work made for hire" under the U.S. Copyright Act, all right, title
and interest in any such Work shall be and hereby is assigned and transferred to
the Company. Consultant will do whatever reasonable acts the Company requests to
secure or aid in securing copyright protection and will assist the Company or
its nominees in filing applications to register claims or copyright in such
Works, at the Company's expense. Except in connection with rendering services to
the Company, Consultant will not reproduce, distribute, display publicly or
perform publicly, alone or in connection with any data processing system, any
Works of the Company without written permission from the Company's CEO or his
designee to do so. Upon the Company's request or upon termination of this
Agreement, Consultant will immediately deliver to the Company all Works and
copies thereof then in Consultant's possession or under Consultant's control.
14. REMEDIES. Consultant recognizes that a breach or threatened
breach by Consultant of Sections 12, 13 or 14 of this Agreement will give rise
to irreparable injury to the Company and that money damages will not be adequate
relief for such injury, and, accordingly, agrees that the Company shall be
entitled to obtain injunctive relief, including, but not limited to, temporary
restraining orders, preliminary injunctions and/or permanent injunctions,
without having to post any bond or other security, to restrain or prohibit such
breach or threatened breach of Sections 12, 13 or 14, in addition to any other
legal remedies which may be available, including the recovery of monetary
damages from Consultant.
15. ENTIRE AGREEMENT AND AMENDMENTS. This Agreement constitutes the
entire agreement of the parties and supersedes and cancels all previous written
or oral agreements, understandings or representations relating to the Company's
engagement of Consultant to render consulting services. This Agreement may not
be amended, supplemented, or modified except by a written document signed by
Consultant and the Company's CEO or his duly authorized designee.
16. SUCCESSORS. This Agreement shall inure to the benefit of and may
be enforced by the Company, its successors and assigns, and shall be binding on
Consultant, Consultant's heirs, executors, administrators and other successors
in interest. Consultant's rights and obligations under this Agreement are not
assignable.
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17. NOTICES. Any notices provided for under this Agreement shall be
in writing and either delivered personally or sent by nationally recognized
overnight courier (such as Federal Express), U.S. Express Mail, or registered or
certified U.S. mail, return receipt requested, with postage prepaid, at the
following respective address (or to such other or further address as a party may
hereafter designate by like notice):
If to Consultant:
Xxxxxxx X. Xxxxxxxxx
0000 Xxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
If to the Company:
Xxxxx Supermarkets, Inc.
0000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000-0000
Attention: Chief Executive Officer
A notice delivered personally shall be deemed delivered and effective as of the
date of delivery. A notice sent by overnight courier or Express Mail shall be
deemed delivered and effective one (1) business day after it is deposited with
the overnight courier or postal authority. A notice sent by certified or
registered mail shall be deemed delivered and effective two (2) business days
after it is deposited with the postal authority.
18. NON-WAIVER. The failure of any party to insist in any one or
more instances upon such performance of any of the provisions of this Agreement
or to pursue its rights hereunder shall not be construed as a waiver of any such
provisions or the relinquishment of any such rights.
19. GOVERNING LAW; CHOICE OF FORUM. This Agreement and the
performance of the parties under this Agreement shall be construed and governed
in accordance with the laws of the State of Indiana, United States, to the
exclusion of the law of any other forum and notwithstanding any jurisdiction's
choice-of-law rules to the contrary. Any legal action relating to this Agreement
shall be commenced and maintained exclusively before any appropriate state court
of record in Xxxxxxxx County, Indiana, or in the United States District Court
for the Southern District of Indiana, Indianapolis Division, and the parties
hereby submit to the jurisdiction and venue of such courts and waive any rights
to challenge or otherwise object to personal jurisdiction or venue in any action
commenced or maintained in such courts.
20. NEGOTIATED AGREEMENT; CONSTRUCTION. This Agreement is the result
of negotiations between the parties and no party shall be deemed to be the
drafter of this Agreement. The language of all parts of this Agreement shall in
all cases be construed as a whole, according to its fair meaning, and not
strictly for or against either party.
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21. COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall constitute an original, but both of which when taken
together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement
effective as of May 20, 2005.
XXXXX SUPERMARKETS, INC. CONSULTANT
By: /s/ Xxxx X. Xxxxxx /s/ Xxxxxxx X. Xxxxxxxxx
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Xxxx X. Xxxxxx Xxxxxxx X. Xxxxxxxxx
Acting Chief Financial Officer
Attest:
/s/ X. Xxxxxxxx Butt
--------------------------------------
X. Xxxxxxxx Butt
Secretary
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