This Consulting
Agreement (“ Agreement ”) is by and between
J.S.B. Jenkins, an individual (“ Jenkins ” or
the “ Consultant ”), and Tandy Brands
Accessories, Inc. (“ Company ”), both of whom
are sometimes referred to herein as the “ Parties
”, as of May 1, 2009.
WHEREAS, Jenkins
served as President and Chief Executive Officer of the Company from
1990 until October 1, 2008 and has provided valuable service
to the Company and holds valuable knowledge, experience and
relationships with respect to the Company, its customers, industry
and its business; and
WHEREAS, effective
October 1, 2008, N. Roderick McGeachy, III (“
McGeachy ”) was appointed President and Chief
Executive Officer of the Company; and
WHEREAS, to
facilitate the transition between Jenkins and McGeachy, Jenkins
agreed to continue as an employee of the Company for a reasonable
transition period; and
WHEREAS, Jenkins
and the Company have mutually agreed that, effective as of
June 30, 2009, Jenkins will retire as an employee of the
Company and as a member of the Company’s Board of Directors;
and
WHEREAS, the
Company has determined it would be advisable and in the best
interests of the Company and its stockholders to engage Jenkins as
a consultant and provide for certain restrictions on Jenkins’
ability to compete with the Company while receiving consulting fees
from the Company and certain releases; and
WHEREAS, Jenkins
agrees, in exchange for the payments described herein and for other
good and valuable consideration, to waive and release any and all
claims that he may have against the Company as of this signing, and
to waive and release any and all claims that he may have after this
Agreement is signed by signing a Release of Claims in the form
attached hereto as Exhibit “A” no sooner than
June 30, 2009; and
WHEREAS, except as
otherwise provided herein, the Parties desire to keep the terms of
this Agreement confidential.
NOW, THEREFORE, in
consideration of the mutual promises and agreements herein
contained, including the recitals set forth above, the receipt and
sufficiency of which is hereby acknowledged, the Parties agree as
follows:
1.
Services . The Parties hereby agree that, effective as
of the close of business on June 30, 2009, Jenkins will retire
as an employee of the Company and as a member of the
Company’s Board of Directors. Following such retirement,
effective as of July 1, 2009, the Company hereby engages the
Consultant to provide consulting services to the Company (the
“ Services ”) during the Term (as defined
herein) and the Consultant agrees to provide the Services on the
terms and conditions set forth herein. The Services will consist of
mutually agreed tasks and projects as determined by the President
and Chief Executive Officer of the Company which are consistent
with Consultant’s skills and experience with the Company and
will be reflected in written project statements describing the
specific Services to be performed and the scope of the particular
project.
The ultimate
manner in which the Services are to be performed and the specific
hours to be worked by the Consultant shall be determined by the
Consultant.
The Parties agree
Consultant will work independently and exercise his own judgment,
without official hours or a prescribed minimum number of hours. The
Company shall have no control over the means or methods of
Consultant’s work, except that Consultant shall provide the
Services in a professional and workmanlike manner consistent with
the standards of the trade and the particular project statement,
and shall comply with all applicable local, state and federal laws,
rules and regulations.
2.
Term . The term of this Agreement shall run from
July 1, 2009 through June 30, 2012 (the “
Term ”). The Company may, by providing Consultant
written notice, terminate this Agreement during the Term in the
event Consultant (a) materially fails to perform the Services,
or (b) otherwise materially breaches the terms of this
Agreement.
a.
In consideration for the provision of the Services in accordance
with the terms hereof, the release provided for in Section 4,
the covenants contained in Sections 5 and 6 of this Agreement,
the Release of Claims in the form attached hereto as Exhibit
“A” and the other covenants contained herein, the
Company shall pay to Consultant an amount equal to $400,000 per
year, payable in equal monthly installments for each year during
the Term commencing August 15, 2009. The Parties acknowledge
and agree that no amounts will be withheld from such payments, and
that Consultant will be solely responsible for payment of all taxes
which may be owed on these payments.
b.
Any reasonable and necessary business expenses which are approved
by the Company in writing prior to their incurrence and incurred by
Consultant in performing the Services shall be paid by the Company
either directly or by reimbursing Consultant, in accordance with
the Company’s regular reimbursement procedures and practices
in effect for independent contractors during the Term (which will
include written documentation of such expenses). Following calendar
year end, the Company shall issue a Form 1099 to Consultant
for all compensation Consultant received as a consultant during the
applicable period.
a.
In consideration of the payments described above, together with
other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, Consultant, together with his
spouse, agents, assigns, representatives, and designees hereby
settles, releases and fully discharges the Company, its
stockholders, parent companies, partners, limited liability
partners, officers, directors, employees, agents, legal
representatives, subsidiaries, divisions, related companies,
businesses, corporations, employee benefit plan fiduciaries and
other related persons or entities, including their predecessors and
successors, together with the officers, directors, partners,
limited liability partners, agents, owners, legal representatives,
servants and employees, and the assigns, heirs, privies,
predecessors, successors and insurers of each such person or entity
(collectively “ Releasees ”) from each and every
grievance, administrative proceeding, dispute, claim, demand,
lawsuit, controversy, action or cause of action, of whatever
nature, including but not limited to those grounded in
discrimination, contract, negligence, strict liability, warranty,
tort or otherwise, under any and all local, state or federal laws,
whether arising out of or
in any manner
related to Consultant’s employment with the Company or
retirement therefrom; or any other conduct by the Releasees up to
Consultant’s execution of this Agreement.
b.
Without limiting the generality of the above paragraph, Consultant
knowingly and voluntarily waives, and agrees to release and
discharge the Releasees from all claims or demands he has based
upon, arising from, or related to his employment by the Company, or
retirement therefrom, including, without limitation, any and all
claims for injunctive relief, attorneys’ fees, or
compensatory and punitive damages for: physical injuries; mental
anguish; physical pain and suffering; wrongful discharge; and any
rights he may have under Title VII of the Civil Rights Act of 1964,
the Americans with Disabilities Act of 1990, the Family and Medical
Leave Act of 1993, the Employee Retirement Income Security Act of
1974, the Age Discrimination in Employment Act; sexual harassment;
sex, race, national origin, religious, and disability
discrimination; incapacity; failure to pay proper wage, minimum
wage and/or overtime wages; unpaid wages or benefits; loss of wages
or benefits, including bonuses; loss of earning capacity; loss of
job security; defamation; libel; slander; humiliation; physical
impairment and/or disfigurement; loss of consortium; harm to
reputation; medical expenses; personal property; negligence; gross
negligence; invasion of privacy; intentional infliction of
emotional distress; negligent infliction of emotional distress;
loss or diminution of career advancement; loss of dignity; breach
of contract; and any and all claims arising under any other
federal, state or local statute, law, ordinance, regulation or
order relating to taxes or prohibiting employment discrimination,
any such claim under tort, wrongful discharge or breach of
contract, breach of agreement, or any other claim or cause of
action whatsoever, whether known or unknown, arising from any
action(s) of the Releasees.
c.
The waiver provisions of this Agreement are acknowledged and
conclusively deemed to be in compliance with the requirements of
the Older Workers Benefit Protection Act, 29 U.S.C.
§§ 626(f)(1)(A)-(G). Consultant has knowingly and
voluntarily agreed, in consideration of the payments described
above, to waive, among other things, any and all rights and claims
he may have against the Company under the Age Discrimination in
Employment Act of 1967, as amended, 29 U.S.C. § 621, et
seq. (“ ADEA ”). Consultant specifically
acknowledges that the waiver of rights under the ADEA has been
written in a manner that he has understood; that the waiver
specifically refers to claims arising under the ADEA; that he has
not waived any rights or claims under the ADEA that arise after the
date this waiver is executed; that the waiver of rights or claims
under the ADEA has been in exchange for consideration in addition
to anything of value to which he is already entitled; that he has
been advised hereby in writing to consult with an attorney before
signing this Agreement; that he has been given at least twenty-one
(21) days within which to consider this Agreement; that this
Agreement provides for a period of at least seven (7) days
following execution by Consultant of this Agreement for Consultant
to revoke the Agreement, in which case none of the payments and/or
consideration referenced in Section 3 above will be made
and/or given; and that this Agreement is not effective until eight
(8) days after execution by all Parties.
5.
Confidential/Proprietary Information .
a.
During his employment with the Company and during the Term, the
Company has disclosed and will disclose to Consultant or place
Consultant in a position to have access to information not
generally known and proprietary to the Company about the business,
services and products of the Company and its subsidiaries and/or
divisions. By way of illustration and not limitation, such
information shall include information relating to products,
processes, know-how, designs, formulas, methods, development or
experimental work, improvements, discoveries,
plans for
research, new products, marketing and selling strategies and plans,
business plans, budgets and unpublished financial information or
statements, licenses, prices, products and components costs and
margins, suppliers and customer identities and contacts (and lists
of same), and information regarding the skills and compensation of
other employees of the Company. All such information described in
the immediately preceding sentences, together with all non-public
information relating to the terms and conditions of
Consultant’ employment with the Company, is collectively
referred to in this Agreement as “ Confidential
Information .” Consultant hereby acknowledges and agrees
that all Confidential Information shall be maintained in strict
confidence by Consultant and shall be used only for the purpose of
performing his duties pursuant to this Agreement, and that no such
Confidential Information shall be otherwise used or disclosed by
Consultant during or after the Term without the prior written
consent of the Company. Upon execution of this Agreement,
Consultant will deliver to the Company all Confidential Information
and other documents, records, notebooks, customer lists, business
proposals, contracts, agreements, and other repositories containing
information concerning the Company and its subsidiaries and/or
divisions, or the business of the Company and its subsidiaries
and/or divisions (including all copies thereof) in
Consultant’s possession, whether prepared by Consultant or
others, unless such Confidential Information is needed to perform
the Services.
b.
Consultant agrees that all rights to discoveries, inventions,
improvements and innovations (including all data and records
pertaining thereto) related to the business of the Company and its
subsidiaries and/or divisions, whether or not patentable,
copyrightable, registrable as a trademark, or reduced to writing,
that Consultant has or may discover, invent, or originate during
the Term, and for a period of twelve (12) months thereafter,
either alone or with others and whether or not during working hours
or by the use of the facilities of the Company and its subsidiaries
and/or divisions (“ Inventions ”), shall be the
exclusive property of the Company. Consultant shall promptly
disclose all Inventions to the Company, shall execute at the
request of the Company any assignments or other documents the
Company may deem necessary to protect or perfect its rights
therein, and shall assist the Company, at the Company’s
expense, in obtaining, defending and enforcing the Company’s
rights therein. Consultant hereby appoints the Company as his
attorney-in-fact to execute on his behalf any assignments or other
documents deemed necessary by the Company to protect or perfect its
rights to any Inventions.
c.
Except to the extent disclosed in the Company’s public
filings with the Securities and Exchange Commission (the “
SEC ”) pursuant to the SEC’s rules and
regulations, Consultant agrees that all terms and conditions
contained in this Agreement are to remain strictly confidential and
cannot be disclosed to anyone other than his spouse, attorneys, and
accountant who shall be advised of this provision and agree to it
before any disclosure to them is made. The confidentiality of the
terms and conditions contained herein is part of the consideration
inducing the Company to enter into this Agreement. In the event
Consultant or his spouse, attorneys, or accountant breach the
promises contained in this Section 5.c., Consultant shall be
liable for any damages, including any attorneys’ fees and
costs incurred as a result of such breach. Any such action
permitted to the Company by the foregoing, however, shall not
affect or impair any of Consultant’s obligations or promises
made pursuant to this Agreement including, without limitation, the
release of claims in Section 4, the Release of Claims in the
form attached hereto as Exhibit “A” and the
covenants contained in Sections 5 and 6.
6.
Non-Competition/Non-Solicitation . In exchange for
receiving the Confidential Information referenced in
Section 5, and the consideration referenced in Section 3
above,
Consultant
agrees that, during th
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