Exhibit 10.21
Consulting Agreement
This Consulting Agreement (this "Agreement") is entered into and effective
as of October 28, 1999 (the "Effective Date"), by and between Designs, Inc., a
Delaware corporation (the "Corporation"), with its principal executive offices
located at 00 X Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx 00000, and Xxxx X. Xxxxxxx, an
individual residing at 000 Xxxxxx Xxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxxx 00000 (the
"Independent Contractor").
Recitals
WHEREAS, the Corporation desires to retain the Independent Contractor to
perform the services described in Schedule A attached hereto and incorporated
herein by reference (the "Services"); and
WHEREAS, the Independent Contractor agrees to perform the Services for the
Corporation under the terms and conditions set forth in this Agreement, it being
expressly understood that the Independent Contractor shall perform Services as
an independent contractor and nothing contained herein shall be construed to be
inconsistent with this relationship or status.
NOW, THEREFORE, for and in consideration of the mutual promises and
covenants set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Corporation and the Independent Contractor hereby agree as follows:
Section One
Representations and Warranties of the Independent Contractor
The Independent Contractor represents, warrants, covenants and agrees
that:
(a) this Agreement has been duly and validly authorized, executed and
delivered by the Independent Contractor, and constitutes the valid
and binding obligation of the Independent Contractor, and is
enforceable against the Independent Contractor in accordance with
its terms; and
(b) the execution, delivery and performance by the Independent
Contractor of this Agreement does and will not (1) violate, conflict
with, or result in a breach or termination of (or require any
consent or approval under) any agreement, license, arrangement or
understanding, whether written or oral, to which the Independent
Contractor is a party; or (2) violate any law, judgment, decree,
order, rule or regulation applicable to the Independent Contractor.
Section Two
Representations and Warranties of the Corporation
The Corporation represents, warrants, covenants and agrees that:
(a) the Corporation is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware;
(b) the Corporation has all necessary power and authority to execute and
deliver this Agreement and to perform all of its obligations under
this Agreement;
(c) this Agreement has been duly and validly authorized, executed and
delivered by the Corporation, and constitutes the valid and binding
obligation of the Corporation, and is enforceable against the
Corporation in accordance with its terms; and
(d) the execution, delivery and performance by the Corporation of this
Agreement does and will not (1) violate or conflict with any
provision of the Corporation's Certificate of Incorporation or
by-laws; (2) violate, conflict with, or result in a breach or
termination of (or require any consent or approval under) any
agreement, license, arrangement or understanding, whether written or
oral, to which the Corporation is a party; or (3) violate any law,
judgment, decree, order, rule or regulation applicable to the
Corporation.
Section Three
Nature of the Services
In accordance with the terms and conditions of this Agreement, the
Independent Contractor shall, to the extent requested from time to time by the
Corporation, perform consulting Services for the benefit of the Corporation with
respect to all matters relating to or affecting all items contained in Schedule
A attached hereto. The Independent Contractor shall perform such additional
Services as may be agreed to by both parties from time to time in writing which,
when so agreed, shall be deemed incorporated into this Agreement. The
Independent Contractor shall perform Services at the direction, and subject to
the supervision, of the Board of Directors of the Corporation. As a part of the
Independent Contractor's consulting Services, the Independent Contractor shall
review, analyze, and make suggestions to the Corporation on all matters included
in Schedule A attached hereto. The Independent Contractor agrees and stipulates
that this Agreement is a personal service contract under which Services shall be
performed by the Independent Contractor. The Independent Contractor shall
furnish the Corporation with a properly completed Request for Taxpayer
Identification Number and Certification on Form W-9. The Corporation shall
forward the appropriate Form W-9 to the Independent Contractor.
Section Four
Compensation
4.1 As consideration for the Services to be rendered by the Independent
Contractor under this Agreement, the Corporation shall:
(a) Pay the Independent Contractor the sum of Two Thousand Dollars
($2,000.00), in cash, for each day (consisting of at least eight hours of work
which may be spread among one or more days) during which the Independent
Contractor performs meaningful Services beyond work performed to fulfill the
Independent Contractor's duties as a member of the Corporation's Board of
Directors and its committees, such amount payable in arrears monthly following
the Corporation's receipt of an invoice that describes in reasonable detail the
Services performed daily during the month.
(b) As of the Effective Date and on January 3, 2000 deliver to the
Independent Contractor a non-qualified stock option, each exercisable for up to
15,000 shares of the Corporation's Common Stock, $0.01 par value per share
("Common Stock"), at a purchase per share equal to the closing price of shares
of Common Stock as reported by the NASDAQ Stock Market, Inc. on the Effective
Date and on January 3, 2000, respectively. Each such stock option
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shall be become immediately exercisable on their respective dates of grant. Each
such stock option shall expire ten (10) years following the date of grant. Each
such stock option shall be evidenced by a Non-Qualified Stock Option Agreement
substantially in the form of the form of option agreement attached as Schedule B
hereto.
4.2 Subject to Section 15 hereof, the Corporation shall reimburse the
Independent Contractor within thirty (30) days following receipt of
documentation that satisfies the Corporation's travel and expense reimbursement
policies, an amount equal to the actual and direct cost of all reasonable
out-of-pocket expenses incurred by the Independent Contractor in the rendering
of Services under this Agreement. The Independent Contractor hereby acknowledges
that it has received in writing, read and understands the Corporation's travel
and expense reimbursement policies in effect as of the Effective Date.
Section Five
Duration
The term of this Agreement shall commence on the Effective Date and shall
continue in full force and effect until February 3, 2001, unless and until
terminated earlier by the Corporation or the Independent Contractor, with or
without cause, by giving the other party thirty (30) days advance written
notice. The provisions of Sections 5, 11, 12, 13 and 14 hereof shall survive any
such expiration or early termination of this Agreement.
Section Six
Place of Work
It is understood that the Services shall be rendered primarily from the
Corporation's principal executive offices in Needham, Massachusetts, but that
the Independent Contractor shall from time to time travel to such other places
as may be necessary to perform Services for the benefit of the Corporation.
Section Seven
Time Devoted To Work
In performing the Services, the hours that the Independent Contractor
works on any given day shall be entirely within the Independent Contractor's
control and the Corporation shall rely upon the Independent Contractor to
determine the number of hours reasonably necessary to fulfill the spirit and
purpose of this Agreement.
Section Eight
Status of Independent Contractor
The Independent Contractor and the Corporation acknowledge and agree that
the Independent Contractor shall perform the Services hereunder as an
"independent contractor" and not as an employee of the Corporation, and nothing
herein shall be construed to be inconsistent with this relationship or status.
Accordingly, it is expressly understood and agreed between the parties hereto
that the Independent Contractor is solely responsible for all labor and expenses
in connection with the performance of every obligation of the Independent
Contractor hereunder. The Independent Contractor assumes the responsibility for
furnishing the Services hereunder and shall withhold and pay when due all
employment taxes required by federal, state and local laws,
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including, without limitation, all social security and withholding taxes, and
contributions for unemployment compensation funds. The Independent Contractor
acknowledges and understands that the Corporation will not maintain worker's
compensation, health or liability insurance on behalf of the Independent
Contractor.
Section Nine
Materials and Equipment
Except as provided herein, the Independent Contractor shall furnish, at
his own expense, all materials and equipment, if any, necessary to carry out the
terms of this Agreement.
Section Ten
Work Standards
The Independent Contractor shall adhere to professional standards and
shall perform all Services required under this Agreement in manner consistent
with generally accepted procedural standards.
Section Eleven
Copyrights and Patents
The Corporation shall own all copyrights and/or patents developed by the
Independent Contractor while performing the Services provided under this
Agreement. All improvements, discoveries, ideas, inventions, concepts, trade
names, trademarks, service marks, logos, processes, products, computer programs
or software, subroutines, source codes, object codes, algorithms, machines,
apparatuses, items of manufacture or composition of matter, or any new uses
therefore or improvements thereon, or any new designs or modifications or
configurations of any kind, or work of authorship of any kind, including,
without limitation, compilations and derivative works, and techniques (whether
or not copyrightable or patentable) conceived, developed, reduced to practice or
otherwise made by the Independent Contractor and in any way related to the
rendering of Services under this Agreement shall become property of the
Corporation. The Independent Contractor agrees to assign, and hereby does
assign, to the Corporation any and all copyrights, patents and propriety rights
in any such invention to the Corporation, together with the right to file and/or
own wholly without restrictions applications for United States and foreign
patents, trademark registration and copyright registration and any patent, or
trademark or copyright registration issuing thereon.
Section Twelve
Privileged and Confidential Information
12.1 The Corporation and the Independent Contractor acknowledge that the
Corporation has acquired and developed, and will continue to acquire and
develop, information related to its business and its industry which is secret
and confidential in character and is and will continue to be of great and unique
value to the Corporation and its subsidiaries and affiliates. The term
"confidential information" as used in this Agreement shall mean all trade
secrets, propriety information and other data or information (and any tangible
evidence, record or representation thereof), whether prepared, conceived or
developed by an employee of the Corporation or received by the Corporation from
an outside source (including the Independent Contractor), which is in the
possession of the Corporation, which is maintained in confidence by
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the Corporation or any subsidiary or affiliate of the Corporation or which might
permit the Corporation or any subsidiary or affiliate of the Corporation or any
of their respective customers to obtain a competitive advantage over competitors
who do not have access to such trade secrets, proprietary information, or other
data or information, including, without limitation, information concerning the
Corporation's seasonal and product line plans, store and brand image and trade
dress developments and strategies, business plans, real estate leasing terms,
conditions and plans, occupancy costs, customers, suppliers, designs,
advertising plans, marketing plans, merchandising plans, market studies and
forecasts, competitive analyses, pricing policies, employee lists, and the
substance of agreements with landlords, tenants, subtenants, customers,
suppliers and others. The term "confidential information" also includes
information that the Corporation has in its possession from third parties, that
such third parties claim to be confidential or proprietary, and which the
Corporation has agreed to keep confidential. However, the term "confidential
information" as used in this Agreement shall not include information that is
generally known to the public or in the trade as a result of having been
disclosed by the Corporation in a press release or in a filing by the
Corporation with the U.S. Securities and Exchange Commission. The Independent
Contractor shall keep and maintain all confidential information in complete
secrecy, and shall not use for himself or others, or divulge to others, any
knowledge, data or other information relating to any matter which is
confidential information relating to the Corporation obtained by the Independent
Contractor as a result of his Services, unless such use or disclosure is
required by law or is authorized in writing by the Corporation in advance of
such use or disclosure. All written information made available to the
Independent Contractor by the Corporation, which concerns the business
activities of the Corporation, shall be the Corporation's property and shall, if
requested in writing by the Corporation, be delivered to it on the termination
or expiration of this Agreement.
12.2 The Independent Contractor acknowledges that money alone will not
adequately compensate the Corporation for breach of any confidentiality
agreement herein and, therefore, agrees that in the event of the breach or
threatened breach of such agreement, in addition to other rights and remedies
available to the Corporation, at law, in equity or otherwise, the Corporation
shall be entitled to injunctive relief compelling specific performance of, or
other compliance with, the terms hereof, and such rights and remedies shall be
cumulative.
Section Thirteen
Indemnification
13.1 The Independent Contractor shall defend, indemnify and hold harmless
the Corporation (including, without limitation, the Corporation's successors,
assigns, subsidiaries, affiliates and contractors and their respective officers,
directors, employees, agents and other representatives) from and against all
liabilities, losses, claims, actions, damages, expenses (including but not
limited to attorneys' fees), suits and assessments (whether proven or not) based
upon or arising out of damage or injury (including death) to persons or property
caused by Independent Contractor in connection with the performance of Services,
or based upon any violation of any applicable statute, law, ordinance, code or
regulation. The Independent Contractor shall also defend, indemnify and hold
harmless the Corporation against all liability and loss in connection with, and
shall assume full responsibility for, payment of all federal, state, or local
income taxes imposed or required under applicable laws with respect to Services
performed and compensation paid the Independent Contractor under this Agreement.
13.2 Notwithstanding anything contained in the preceding paragraph, the
Corporation shall defend, indemnify and hold harmless the Independent Contractor
(including, without
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limitation, the Independent Contractor's heirs and survivors, and his other
successors, assigns, affiliates and contractors) from and against all
liabilities, losses, claims, actions, damages, expenses (including but not
limited to attorneys' fees), suits and assessments (whether proven or not) based
upon or arising out of damage or injury (including death) to persons or property
caused by the Corporation in connection with the Corporation's performance of
its obligations under this Agreement (including, but not limited to, claims
based upon the material supplied to the Independent Contractor by the
Corporation and utilized by the Independent Contractor in performing the
Services), or based upon any violation of any applicable statute, law,
ordinance, code or regulation.
Section Fourteen
Compliance with Laws
The parties agree that all obligations to be performed by the parties
under this Agreement shall be performed in compliance with all then applicable
federal, state and local laws and regulations.
Section Fifteen
Approvals
15.1 In addition to approvals required by other Sections of this
Agreement, the Independent Contractor shall seek to obtain the Corporation's
written approval in advance of all expenditures in excess of two thousand
dollars ($2,000.00) incurred in connection with the rendering of Services and
for which the Independent Contractor seeks reimbursement from the Corporation.
In addition, all estimates presented to the Corporation by the Independent
Contractor for the Corporation's consideration and/or approval shall be
carefully prepared and shall be based upon reasonable assumptions using the
Independent Contractor's best judgment.
15.2 All approvals by the Corporation must be in writing and shall be
sought from the Chief Financial Officer of the Corporation, or such other person
that the Board of Directors may designate in writing from time to time. If the
Corporation fails to approve in writing any matter submitted for approval within
fifteen (15) days from the date of its submission, then the matter submitted for
approval shall be deemed to be disapproved.
Section Sixteen
Notices
All notices and other communications required or permitted to be given
under this Agreement by one party to another shall be in writing and the same
shall be deemed effective when delivered (i) in person, (ii) by United States
certified or registered first class or priority mail, return receipt requested,
(iii) by nationally-recognized overnight delivery or courier service, or (iv) by
facsimile transmission (781.449.8666 for the Corporation, and 203.438.3852 for
the Independent Contractor), and addressed to the party's principal offices set
forth on page one of this Agreement, or at such other address or facsimile
telephone number for a party as may be designated in writing by such party to
the other in accordance with the requirements of this Section 16.
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Section Seventeen
Governing Law
The place of this Agreement, its status, or forum is at all times in the
County of Norfolk, Commonwealth of Massachusetts, in which County and
Commonwealth all matters, whether sounding in contract or in tort, relating to
the validity, construction, interpretation, and enforcement of this Agreement,
shall be determined. This Agreement shall be construed and enforced according to
the laws of Massachusetts without regard to its principles of conflicts of laws.
Any action on the Agreement or arising out of its terms and conditions shall be
instituted and litigated in the courts of the Commonwealth of Massachusetts. In
accordance, the parties submit to the jurisdiction of the courts of the
Commonwealth of Massachusetts. The prevailing party in any such litigation shall
be entitled to recover reasonable attorneys' fees in addition to any damages
that may result from a breach of this Agreement.
Section Eighteen
Miscellaneous
This Agreement may not be modified, amended, or waived, except by a
writing executed by both parties hereto. This Agreement, and all attached or
referenced schedules, exhibits and attachments, constitutes the full and entire
understanding and agreement between the two parties with regard to the subject
matter hereof and supersedes all prior agreements and understandings, whether
written or oral, relating to the subject matter. The section headings herein are
for convenience of reference only, are not part of this Agreement and shall have
no effect on the interpretation of this Agreement or the provisions hereof.
Neither this Agreement nor any interest therein, or claim thereunder, shall be
assigned or transferred by the Independent Contractor to any party or parties.
If any provision of this Agreement shall to any extent be invalid or
unenforceable, such invalid or unenforceable provision shall be reformed to the
extent required to make it valid and enforceable to the maximum extent possible
under law, and the remainder of this Agreement shall not be affected thereby,
with each provision hereof being valid and enforceable to the fullest extent
permitted by law. This Agreement shall be binding upon, and inure to the benefit
of, the parties and their respective successors and permitted assigns. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original and all of which together shall constitute one and the same
Agreement.
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IN WITNESS WHEREOF, the parties have signed, sealed and delivered this
Consulting Agreement in duplicate, each of which is deemed an original, as of
the Effective Date.
ATTEST: DESIGNS, INC.
/s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxx, Xx.
(Signature)
Print Name: Xxxxxxx X. Xxxxxx, Xx.
Print Title: Sr. VP & CFO
WITNESS:
___________________________ /s/ Xxxx X. Xxxxxxx
(Signature)
Print Name: Xxxx X. Xxxxxxx
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SCHEDULE A
Consulting Agreement
Between
XXXX X. XXXXXXX.
And
DESIGNS, INC.
Dated as of
October 28, 1999
SERVICES
The Services to be performed by the Independent Contractor, for so long as
the Independent Contractor holds the offices of President and Chief Executive
Officer of the Corporation, are:
A. to carry out the duties as are commonly incident to a President and
Chief Executive Officer of a corporation that operates retail stores
located in and outside of the United States and that has securities
that are publicly traded on a national securities exchange or quoted
in an automated interdealer quotation system; and
B. to carry out such other duties as the Board of Directors of the
Corporation may from time to time designate.
The Services to be performed by the Independent Contractor, in the event
that the Independent Contractor shall not hold the offices of President and
Chief Executive Officer of the Corporation and this Agreement remains in effect,
shall be to carry out those duties as the Board of Directors of the Corporation
may designate.
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SCHEDULE B
Form of Non-Qualified Stock Option Agreement
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DESIGNS, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
15,000 October 28, 1999
------ ----------------
No. of Shares Date
Designs, Inc., Delaware corporation (the "Company"), hereby grants to
Xxxx X. Xxxxxxx
(the "Optionee") an Option to purchase on or prior to October 28, 2009 (the
"Expiration Date") all or any part of 15,000 shares (the "Option Shares") of the
Company's Common Stock, $0.01 par value per share ("Common Stock"), at a price
of $1.15625 per share, subject to the terms and conditions set forth herein.
This Option shall be governed by the laws of Massachusetts, without regard to
its principles of conflicts of laws.
1. Vesting. This Option is immediately and fully vested and is exercisable
with respect to all of the Option Shares.
2. Manner of Exercise. The Optionee may exercise this Option only in the
following manner: from time to time on or prior to the Expiration Date of this
Option, the Optionee may give written notice to the Company of his election to
purchase some or all of the vested Option Shares purchasable at the time of such
notice. Said notice shall specify the number of shares to be purchased.
Payment of the purchase price for the Option Shares may be made by one or
more of the following methods: (1) in cash, by certified or bank check or other
instrument acceptable to the Board of Directors of the Company; or (2) in the
form of shares of Common Stock that are not then subject to any restrictions
(subject to the discretion of the Board of Directors of the Company); or (3) by
the Optionee delivering to the Company a properly executed exercise notice
together with irrevocable instructions to a broker to promptly deliver to the
Company cash or a check payable and acceptable to the Company to pay the option
purchase price; provided that in the event the Optionee chooses to pay the
option purchase price as so provided, the Optionee and the broker shall comply
with such procedures and enter into such agreements of indemnity and other
agreements as the Board of Directors of the Company shall prescribe, if any, as
a condition of such payment procedure. Payment instruments will be received
subject to collection.
The delivery of certificates representing the Option Shares will be
contingent upon the Company's receipt from the Optionee of full payment
therefor, as set forth above, and any agreement, statement or other evidence as
the Company may require to satisfy to itself that the issuance of Option Shares
to be pursuant to the exercise of Options and any subsequent resale of the
shares will be in compliance with applicable laws and regulations.
If requested upon the exercise of this Option, certificates for shares may
be issued in the name of the Optionee jointly with another person, or in the
name of the executor or administrator of the Optionee's estate.
Notwithstanding any other provision hereof, no portion of this Stock
Option shall be exercisable after the Expiration Date hereof.
3. Non-transferability of Option. This Option shall not be transferable by
the Optionee otherwise than by will or by the laws of descent and distribution
and this Option shall be exercisable, during the Optionee's lifetime, only by
the Optionee.
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4. Option Shares. The Option Shares are shares of the Common Stock of the
Company as constituted on the date of grant of this Option. In the event that
the Company effects a stock dividend, stock split or similar change in
capitalization affecting Common Stock, the Board of Directors of the Company
shall make appropriate adjustments in (i) the number of Option Shares remaining
subject to this Option, and (ii) the purchase price per share at which the
Optionee may purchase Option Shares hereunder. In the event of any merger,
consolidation, dissolution or liquidation of the Company, the Board of
Directors, in its sole discretion may make such substitution or adjustment in
the number of Option Shares purchasable pursuant to this Option and in the
purchase price per share at which the Optionee may purchase Option Shares
hereunder at it may determine and as may be permitted by the terms of such
transaction, or accelerate, amend or terminate this Option upon such terms and
conditions as it shall provide (which, in the case of the termination of the
vested portion of the Option Shares hereunder, shall require payment or other
consideration which the Board of Directors deems equitable in the
circumstances).
5. No Special Rights. This Option will not confer upon the Optionee any
additional rights other than those described herein.
6. Rights as a Shareholder. The Optionee shall have no rights as a
shareholder with respect to any shares of Common Stock which may be purchased by
exercise of this Option unless and until a certificate or certificates
representing such shares are duly issued and delivered to the Optionee. No
adjustment shall be made for dividends or other rights for which the record date
is prior to the date such stock certificate is issued.
7. Qualification under Section 422. It is understood and intended that the
Option granted hereunder shall not qualify as an "incentive stock option" as
defined in Section 422 of the Code.
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8. Miscellaneous. Notices hereunder shall be mailed or delivered to the
Company at its principal place of business and shall be mailed or delivered to
Optionee at the address set forth below or, in either case, at such other
address for a party as such party may subsequently furnish to the other party in
writing.
DESIGNS, INC.
By: /s/ Xxxxxxx X. Xxxxxx, Xx.
(Signature)
Print Name: Xxxxxxx X. Xxxxxx, Xx.
Print Title: Sr. VP &CFO
Receipt of the foregoing Option is acknowledged and its terms and
conditions are hereby agreed to:
Date: _________________ /s/ Xxxx X. Xxxxxxx
(Signature)
Print Name: Xxxx X. Xxxxxxx
Address: ____________________________
____________________________
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