EXHIBIT 10.37
CONSULTING AGREEMENT
--------------------
This Consulting Agreement (the "Agreement") is made and entered into as of
April ___, 1998 by and between ▇▇▇▇▇▇▇ Shoe Company Inc., a Delaware
corporation (the "Company"), and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ (the "Consultant").
1. Recitals.
--------
1.1 The Company is engaged in the business of designing, developing
and marketing casual and dress footwear for women and children under multiple
brand names.
1.2 Until the date hereof, the Consultant was a substantial
stockholder of the Company and was engaged in the active management of the
Company. The Consultant has accumulated substantial knowledge in the businesses
in which the Company is engaged, in the management of companies engaged in such
businesses and in particular in the management of the Company.
1.3 The Company desires to engage Consultant as an independent
contractor to provide advice in connection with the business of the Company and
related strategic planning, customer relations and marketing issues of the
Company and the Consultant desires to provide such services on the terms and
conditions hereinafter set forth.
2. Term. This Agreement shall commence on the date hereof and shall
----
continue for one (1) year, through the day prior to the first anniversary hereof
("Term"). On the first anniversary of the date hereof, and on each subsequent
annual anniversary of the date hereof thereafter, this Agreement shall be
automatically extended for an additional year unless either party notifies the
other in writing more than thirty days prior to the relevant anniversary date
that this Agreement is no longer to be extended.
3. General Terms.
-------------
3.1 Nature of Agreement. The parties acknowledge and agree that the
-------------------
Consultant will be retained by the Company as an independent contractor, and not
as an employee, and that, as an independent contractor of the Company, the
Consultant will be under the control, supervision and direction of the Company
only as to the results of the services provided to the Company under the terms
of this Agreement, and not as to the means by which such services are provided.
3.2 Duties and Services. During the term of this Agreement, the
-------------------
Consultant agrees to perform such consulting services as may be assigned to the
Consultant by the Chief Executive Officer of the Company consistent with the
knowledge and expertise of the Consultant for up to 240 hours per year (with any
additional hours which are requested by the Chief Executive Officer of the
Company to be provided at a fee of $2,000 per day). Except as specifically
directed by the Company, it is agreed that the Consultant shall have no
authority to act on behalf of the Company.
4. Compensation.
------------
4.1 Basic Compensation. In consideration of the consulting services
------------------
to be rendered by the Consultant hereunder, the Company shall provide to the
Consultant an office, a secretary, an automobile allowance of up to $20,000 per
year and such health insurance benefits under the Company's medical plans as the
Company provides to its executive officers.
4.2 Expenses. The Company shall from time to time pay or reimburse
--------
the Consultant for the reasonable and necessary expenses (including travel
expenses) incurred by the Consultant in connection with the performance of his
duties hereunder if such expenses have been previously approved by the Company
or if reimbursement is otherwise appropriate in accordance with the Company's
established policies and if the Company receives such verification thereof as
the Company may require in order to qualify such expenses as deductible business
expenses.
4.3 No Withholding. Because the Consultant is retained as an
--------------
independent contractor and not as an employee, the Company and the Consultant
acknowledge and agree that no federal and state taxes or social security
contributions shall be made by the Company from the payments made to the
Consultant pursuant to this Article 4, and that the Consultant will remain
solely liable for the payment of all such taxes. The Consultant further
acknowledges that the Company will report compensation paid pursuant to this
Agreement on a Form 1099 at the end of the year in which the Consultant's
services were provided. The Consultant hereby expressly covenants to make such
tax payments as may be required by applicable law and to indemnify and hold the
Company harmless for any liability the Company may incur as a consequence of the
Consultant's failure to make such payments.
5. Termination, Death, Disability.
------------------------------
5.1 Termination of Agreement With Cause. In addition to any other
-----------------------------------
remedies available to the Company at law, in equity or as set forth in this
Agreement, the Company shall have the right, upon written notice to the
Consultant, to immediately terminate this Agreement if the Consultant: (a)
breaches any material provision of this Agreement and, if such breach is
curable, in the sole judgment of the Company, such breach is not cured within
ten (10) days after written notice thereof from the Company; or (b) has
committed an act of gross misconduct in connection with the performance of his
duties hereunder as determined by the Board of Directors; or (c) demonstrates
incompetence or habitual negligence in the performance of his duties as
determined by the Board of Directors; or (d) is convicted of or pleads nolo
contendere to any misdemeanor involving moral turpitude or to any felony; or (e)
has committed any act of fraud, misappropriation of funds or embezzlement in
connection with is services hereunder.
5.2 Death; Disability. In the event that the Consultant dies or
-----------------
becomes Disabled (as defined herein), this Agreement shall terminate when such
death occurs or, upon written notice by the Company, at any time after
Disability occurs.
For purposes of this Agreement the Consultant shall be deemed to be
"Disabled" or have a "Disability" if, because of his physical or mental
disability, he has been substantially unable to perform his duties hereunder for
twelve (12) work weeks in any twelve (12)-month period.
5.3 Obligations. The Consultant acknowledges that, if this Agreement
-----------
is terminated under this Section 5, the Company shall have no further obligation
to the Consultant
2
except to reimburse Consultant for any expenses incurred in accordance with
Section 4.2 but unreimbursed as of the date of termination.
6. Ownership of Proceeds; Non-Disclosure.
-------------------------------------
6.1 Results and Proceeds of Employment. The Company shall be the
----------------------------------
sole and exclusive owner throughout the universe in perpetuity of all of the
results and proceeds of the Consultant's services, work and labor during the
Term in connection with the Consultant's services rendered to the Company, free
and clear of any and all claims, liens or encumbrances. All results and
proceeds of such services, work and labor during the Term shall be deemed to be
works-made-for-hire for the Company within the meaning of the copyright laws of
the United States and the Company shall be deemed to be the sole author thereof
in all territories and for all purposes.
6.2 Non-Disclosure of Confidential Information. As used herein,
------------------------------------------
"Confidential Information" means any and all information affecting or relating
to the business of the Company and its affiliates, including without limitation,
financial data, customer lists and data, licensing arrangements, business
strategies, pricing information, product development, intellectual, artistic
rights, works, or other materials of any kind or nature (whether or not entitled
to protection under applicable copyright laws, or reduced to or embodied in any
medium or tangible form), including without limitation, all copyrights, patents,
trademarks, service marks, trade secrets, contract rights, titles, themes,
treatments, ideas, concepts, technologies, art work, logos, hardware, software,
and may be embodied in any and all computer programs, tapes, diskettes, disks,
mailing lists, lists of actual or prospective customers and/or suppliers,
notebooks, documents, memoranda, reports, files, correspondence, charts, lists
and all other written, printed or otherwise recorded material of any kind
whatsoever and any other information, whether or not reduced to writing,
including "know-how," ideas, concepts, research, processes and plans.
"Confidential Information" does not include information that is in the public
domain, information that is generally known in the trade, or information that
the Consultant can prove he acquired wholly independently of his services for
the Company. The Consultant shall not, at any time during the Term or
thereafter, directly or indirectly, disclose or furnish to any other person,
firm or corporation any Confidential Information, except in the course of the
proper performance of his duties hereunder or as required by law (in which event
the Consultant shall give prior written notice to the Company and shall
cooperate with the Company and the Company's counsel in complying with such
legal requirements). Promptly upon the expiration or termination of the
Consultant's services hereunder for any reason or whenever the Company so
requests, the Consultant shall surrender to the Company all documents, drawings,
work papers, lists, memoranda, records and other data (including all copies)
constituting or pertaining in any way to any of the Confidential Information.
6.3 Non-Competition. The Consultant shall not, for so long as he is
---------------
entitled to compensation under or pursuant to this Agreement, directly or
indirectly: (a) compete with the Company; or (b) be interested in, employed by,
engaged in or participate in the ownership, management, operation or control of,
or act in any advisory or other capacity for, any Competing Entity (as defined
below) which conducts its business within the Territory (as such terms are
hereinafter defined); provided, however, that notwithstanding the foregoing, the
Consultant may make solely passive investments in any Competing Entity the
common stock of which is "publicly held," and of which the Consultant shall not
own or control, directly or indirectly, in the aggregate securities which
constitute more than two (2%) percent of the voting rights or equity ownership
3
of such Competing Entity; or (c) solicit or divert any business or any customer
from the Company or assist any person, firm or corporation in doing so or
attempting to do so; or (d) cause or seek to cause any person, firm or
corporation to refrain from dealing or doing business with the Company or assist
any person, firm or corporation in doing so or attempting to do so.
For purposes of this Section 6.3, (i) the term "Competing Entity"
shall mean any entity which presently or during the period referred to above
engages in any business activity the Company is then engaged in or proposes to
be engaged in, and (ii) the term "Territory" shall mean any geographic area in
which the Company conducts business during such period.
6.4 Non-Solicitation. The Consultant shall not, for a period of two
----------------
(2) years from the date of any termination or expiration of his services
hereunder, directly or indirectly: (a) solicit or hire, or attempt to solicit or
hire, any employee of the Company, or assist any person, firm or corporation in
doing so or attempting to do so; or (b) plan for, acquire any financial interest
in or perform any services for himself or any other entity in connection with a
business in which the Consultant's interest, duties or activities would
inherently require the Consultant to reveal any Confidential Information; or (c)
solicit or cause to be solicited the disclosure of or disclose any Confidential
Information for any purpose whatsoever or for any other party.
6.5 Breach of Provisions. In the event that the Consultant shall
--------------------
breach any of the provisions of this Article 6, or in the event that any such
breach is threatened by the Consultant, in addition to and without limiting or
waiving any other remedies available to the Company at law or in equity, the
Company shall be entitled to immediate injunctive relief in any court, domestic
or foreign, having the capacity to grant such relief, without the necessity of
posting a bond, to restrain any such breach or threatened breach and to enforce
the provisions of this Article 6. The Consultant acknowledges and agrees that
there is no adequate remedy at law for any such breach or threatened breach and,
in the event that any action or proceeding is brought seeking injunctive relief,
the Consultant shall not use as a defense thereto that there is an adequate
remedy at law.
6.6 Reasonable Restrictions. The parties acknowledge that the
-----------------------
foregoing restrictions, the duration and the territorial scope thereof as set
forth in this Article 6, are under all of the circumstances reasonable and
necessary for the protection of the Company and its business.
6.7 Definition. For purposes of this Article 6, the term "the
----------
Company" shall be deemed to include any subsidiary of, affiliate of, predecessor
to or successor of the Company.
7. Miscellaneous.
-------------
7.1 Binding Effect. This Agreement shall be binding upon and inure
--------------
to the benefit of the parties hereto and their respective legal representatives,
heirs, distributees, successors and assigns; provided that the rights and
obligations of the Consultant hereunder shall not be assignable by him.
7.2 Notices. Any notice provided for herein shall be in writing and
-------
shall be deemed to have been given or made when personally delivered or three
(3) days following deposit for mailing by first class registered or certified
mail, return receipt requested, or if delivered by facsimile transmission, upon
confirmation of receipt of the transmission, to the address of the other party
set forth below or to such other address as may be specified by notice given in
accordance with this Section 7.2:
4
If to the Company: ▇▇▇▇▇▇▇ Shoe Company Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇
Readville (Boston), MA 02137
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Consultant: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
7.3 Severability. If any provision of this Agreement, or portion
------------
thereof, shall be held invalid or unenforceable by a court of competent
jurisdiction, such invalidity or unenforceability shall attach only to such
provision or portion thereof, and shall not in any manner affect or render
invalid or unenforceable any other provision of this Agreement or portion
thereof, and this Agreement shall be carried out as if any such invalid or
unenforceable provision or portion thereof were not contained herein. In
addition, any such invalid or unenforceable provision or portion thereof shall
be deemed, without further action on the part of the parties hereto, modified,
amended or limited to the extent necessary to render the same valid and
enforceable.
7.4 Arbitration. Any controversy, claim or dispute arising out of or
-----------
in any way relating to this Agreement, the alleged breach thereof, and/or the
Consultant's relationship with the Company or termination therefrom shall be
determined by binding arbitration administered by the American Arbitration
Association applicable rules ("Rules") which are in effect at the time of the
arbitration or the demand therefor. The Rules are hereby incorporated by
reference. In reaching a decision, the arbitrator shall have no authority to
change, extend, modify or suspend any of the terms of this Agreement. The
arbitration shall be commenced and heard in Boston, Massachusetts. The
arbitrator(s) shall apply the substantive law (and the law of remedies, if
applicable) of The Commonwealth of Massachusetts or federal law, or both, as
applicable to the claim(s) asserted. Judgment on the award may be entered in any
court of competent jurisdiction, even if a party who received notice under the
Rules fails to appear at the arbitration hearing(s). The parties may seek, from
a court of competent jurisdiction, provisional remedies or injunctive relief in
support of their respective rights and remedies hereunder without waiving any
right to arbitration. However, the merits of any action that involves such
provisional remedies or injunctive relief, including, without limitation, the
terms of any permanent injunction, shall be determined by arbitration under this
paragraph.
7.5 Waiver. No waiver by a party hereto of a breach or default
------
hereunder by the other party shall be considered valid unless in writing signed
by such first party, and no such waiver shall be deemed a waiver of any
subsequent breach or default of the same or any other nature.
5
7.6 Entire Agreement. This Agreement sets forth the entire agreement
----------------
between the parties with respect to the subject matter hereof, and supersedes
any and all prior agreements or understanding between the Company and the
Consultant, whether written or oral, fully or partially performed relating to
any or all matters covered by and contained or otherwise dealt with in this
Agreement.
7.7 Amendment. No modification, change or amendment of this
---------
Agreement or any of its provisions shall be valid unless in writing and signed
by the party against whom such claimed modification, change or amendment is
sought to be enforced.
7.8 Authority. The parties each represent and warrant that they have
---------
the power, authority and right to enter into this Agreement and to carry out and
perform the terms, covenants and conditions hereof.
7.9 Applicable Law. This Agreement, and all of the rights and
--------------
obligations of the parties in connection with the employment relationship
established hereby, shall be governed by and construed in accordance with the
substantive laws of The Commonwealth of Massachusetts without giving effect to
principles relating to conflicts of law.
7.10 Counterparts. Thus Agreement may be executed in counterparts,
------------
each of which shall be deemed an original, and all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
"Company"
▇▇▇▇▇▇▇ SHOE COMPANY INC.
By:________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chairman and Chief Executive Officer
"CONSULTANT"
___________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
6