Exhibit 10.1

 

CONSULTING AGREEMENT

 

THIS AGREEMENT (this “Agreement”) is made effective as of September 22, 2014
(the “Effective Date”) by and between ALCO Stores, Inc., a Kansas corporation
(the “Company”) and Michael Moore (“Consultant”).  The Company and Consultant
sometimes are referred to herein individually as a “Party” and together as the
“Parties.”

 

WHEREAS, the Company desires to retain Consultant to provide certain consulting
services relating to the Company’s business; and

 

WHEREAS, Consultant represents that Consultant has sufficient knowledge of the
Company’s business and services, and is ready, willing, and able to perform the
professional services described herein.

 

NOW, THEREFORE, in consideration of the foregoing, and the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, accepted and agreed
to, the Parties hereto, intending to be legally bound, agree to the terms set
forth below:

 

1.                                      Definitions.

 

(a)                                 “Company” shall have the meaning set forth
in the preamble and all references to Company shall include the Company, its
predecessors and its direct or indirect subsidiaries and affiliates.

 

(b)                                 “Company-Related Inventions and
Developments” means all Inventions and Developments which either (i) relate at
the time of conception or development to the actual or demonstrably anticipated
business of the Company or to its actual or demonstrably anticipated research
and development, and result from any work performed for the Company, whether or
not during normal business hours; or (ii) are developed through the use of the
Company’s Proprietary Information, equipment and software, or other facilities
or resources.

 

(c)                                  “Inventions and Developments” means any and
all inventions, developments, creative works and useful ideas of any description
whatsoever, whether or not patentable.  Inventions and Developments include, by
way of example and without limitation, discoveries and improvements which
consist of or relate to any form of Proprietary Information.

 

(d)                                 “Proprietary Information” means information
which the Company possesses or to which the Company has rights.  Proprietary
Information includes, by way of example and without limitation, confidential
information, patents, patent applications (U.S. and foreign), know-how, trade
secrets, product ideas and service offerings, designs, configurations,
inventions, subject matter contained in patent applications, methods, formula,
data, applications, documentation, procedures, processes, techniques, devices,
apparatuses, systems, software, improvements, marketing plans and strategies,
sales and financial reports and forecasts, customer lists, copyrights, ideas,
and concepts, whether or not copyrightable or patentable, in any form or media,
including but not limited

 

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to any computer software program.  Proprietary Information includes all
Company-Related Inventions and Developments and all information developed by
Consultant as a result of the rendering of Services (as defined herein) to the
Company or otherwise relating to Inventions and Developments which belong to the
Company under Section 10 below.

 

2.                                      Consulting Arrangement.  Consultant
shall serve as a consultant to the Company for the period beginning on the
Effective Date and ending one month after the Effective Date unless this
Agreement is otherwise earlier terminated as herein provided (the “Initial
Consulting Period”).  Such Consulting Period shall be renewed automatically for
successive additional one-month terms (each a “Renewal Consulting Period” and
together with the Initial Consulting Period, the “Consulting Period”) unless the
Company provides written notice to Consultant which shall not be less than ten
(10) days prior to termination of the Initial Consulting Period or the
then-current Renewal Consulting Period.  During the Consulting Period,
Consultant shall render such services (“Services”) as the Company may, from time
to time, reasonably request, in order that the Company can benefit from
Consultant’s experience and knowledge of the Company’s business and industry.

 

3.                                      Compensation.  Subject to the
performance by Consultant of his duties and obligations to the Company, as
compensation for Services performed under and during the Consulting Period, the
Company shall pay Consultant consulting fees equal to $40,000 per month (the
“Consulting Fees”).  Consulting Fees shall be payable in accordance with the
Company’s policies as in effect from time to time.  Except as otherwise provided
in this Agreement, the Consulting Fees shall be prorated for any period of
service less than one month.

 

4.                                      Term; Termination.  This Agreement shall
extend through the Consulting Period, subject to earlier termination in
accordance with the following:

 

(a)                                 The Company may terminate this Agreement at
any time by ten (10) days’ prior written notice to Consultant for any or no
reason.  Upon Consultant’s receipt of such notice of termination, Consultant
will immediately discontinue all work with respect to the Services and will
incur no further expenses hereunder without the Company’s prior written
approval.

 

(b)                                 Consultant may terminate this Agreement by
ten (10) days’ prior written notice to the Company.

 

(c)                                  Either party may terminate this Agreement
by written notice to the other party if such other party makes a general
assignment for the benefit of creditors, or files a voluntary petition in
bankruptcy or for reorganization or arrangement under the bankruptcy laws, or if
a petition in bankruptcy is filed against such other party and is not dismissed
within thirty (30) days after the filing, or if a receiver or trustee is
appointed for all or any part of the property or assets of such other party.

 

(d)                                 Upon termination of this Agreement for any
reason, (i) the Company shall be obligated to pay the Consulting Fees earned
under the provisions of this Agreement only for Services performed and
previously approved expenses incurred up to and including the date of
termination, (ii) the rights and obligations of the parties under Sections 8
through 26 hereof shall remain effective and enforceable in accordance with
their terms, (iii) each party shall remain liable

 

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for any breach of this Agreement occurring during the term hereof and (iv) in
all other respects this Agreement shall terminate and be of no further force or
effect.

 

5.                                      Expenses.  In connection with the
performance of the Services hereunder, the Company shall reimburse Consultant
for all reasonable and pre-approved out-of-pocket costs and expenses incurred by
Consultant solely in furtherance of Consultant’s performance of the Services
within thirty (30) days from the end of the month in which Consultant submits
statements detailing such costs and expenses.

 

6.                                      Status of Consultant as Independent
Contractor.  The relationship of Consultant to the Company is that of an
independent contractor, and nothing herein contained shall be construed or
deemed as creating any other relationship.  Without limiting the foregoing, the
relationship between the parties hereto shall not be deemed to be that of an
employer-employee, joint venture, or partnership.  As an independent contractor,
Consultant shall have the sole responsibility for paying taxes, workers
compensation, employee benefits, and all similar obligations with respect to
himself and his employees (if any), and shall perform the Services in such a
manner and at such times as Consultant deems the most appropriate to achieve the
Company’s objectives with respect thereto.

 

7.                                      Taxes.  All taxes, whether local, state,
or federal, imposed upon this Agreement or any sums paid hereunder shall be
borne by Consultant without reimbursement by the Company.

 

8.                                      Confidentiality.  Consultant understands
and agrees that this Agreement creates a relationship of confidence and trust
between Consultant and the Company with respect to (a) all Proprietary
Information and (b) the confidential information of others with which the
Company has a business relationship.  The information referred to in clauses
(a) and (b) of the preceding sentence is referred to in this Agreement,
collectively, as “Confidential Information.”  At all times, both during the
Consulting Period and after its termination or expiration, as the case may be,
Consultant will keep in confidence and trust all such Confidential Information,
and will not use or disclose any such Confidential Information without the
written consent of the Company, except as may be necessary in the ordinary
course of performing Consultant’s duties to the Company.  The restrictions set
forth in this Section 8 will not apply to information which is generally known
to the public, unless such knowledge results from an unauthorized disclosure by
Consultant or a breach of any duty owed to the Company.

 

9.                                      Documents, Records, etc.  All documents,
records, apparatus, equipment and other physical property, whether or not
pertaining to Proprietary Information, which are furnished to Consultant by the
Company or are produced by Consultant as a result of the rendering by Consultant
of Services hereunder will be and remain the sole property of the Company. 
Consultant will return to the Company all such materials and property as and
when requested by the Company.  In any event, Consultant will return all such
materials and property immediately upon the expiration of the Consulting Period,
or earlier, if this Agreement is otherwise terminated for any reason. 
Consultant will not take or remove any such material or property or any copies
thereof upon such termination.

 

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10.                               Ownership of Proprietary Information and
Inventions and Developments.  Consultant agrees that the Company is the sole
owner of all Proprietary Information and all Company-Related Inventions and
Developments.  Consultant further agrees that the Company is the sole owner of
any Inventions and Developments which Consultant may conceive, create, develop
or contribute to during the Consulting Period relating to the actual or
demonstrably anticipated business of the Company or developed through the use of
the Company’s Proprietary Information, equipment and software, or other
facilities or resources, along with all causes of action, known or unknown,
which have accrued or will accrue, from the conception or creation of any or all
of the foregoing, and all such Inventions and Developments shall be deemed to be
Company-Related Inventions and Developments.  Consultant shall have no
publication rights and all of the same shall belong exclusively to the Company. 
Consultant hereby transfers and assigns to the Company any proprietary rights
which Consultant may have or acquire in any such Company-Related Inventions and
Developments and Consultant waives any publication rights, moral rights or other
special rights which Consultant may have or accrue therein.  Consultant agrees
to execute any documents and take any actions that may be required to effect and
confirm such transfer and assignment and waiver.  The provisions of this
Section 10 will apply to all Company-Related Inventions and Developments which
are conceived or developed during the Consulting Period whether or not further
development or reduction to practice may take place after the Consulting
Period.  The provisions of this Section 10 will not apply, however, to any
Inventions and Developments created and/or conceived by Consultant prior to the
Effective Date.

 

11.                               Disclosure of Proprietary Information and
Inventions and Developments.  Consultant agrees promptly to disclose to the
Company, or any persons designated by it, all Proprietary Information and
Company-Related Inventions and Developments which are or may be subject to the
provisions of Section 10.

 

12.                               Obtaining and Enforcing Proprietary Rights. 
Consultant agrees to assist the Company, at the Company’s request from time to
time and at the Company’s expense, to obtain and enforce patents, copyrights or
other proprietary rights with respect to Company-Related Inventions and
Developments in any and all countries.  Consultant will execute all documents
reasonably necessary or appropriate for this purpose.  This obligation will
survive the termination or expiration of the Consulting Period provided that the
Company will compensate Consultant at a reasonable rate after such termination
for time actually spent by Consultant at the Company’s request on such
assistance.  In the event that the Company is unable for any reason whatsoever
to secure Consultant’s signature to any document reasonably necessary or
appropriate for any of the foregoing purposes (including renewals, extensions,
continuations, divisions or continuations in part), Consultant hereby
irrevocably designates and appoints the Company and its duly authorized officers
and agents as Consultant’s agents and attorneys-in-fact to act for Consultant
and on Consultant’s behalf, but only for the purpose of executing and filing any
such document and doing all other lawfully permitted acts to accomplish the
foregoing purposes with the same legal force and effect as if executed by
Consultant.

 

13.                               Competitive Activities.  During the Consulting
Period and for a period of twelve (12) months thereafter, Consultant (i) will
not, directly or indirectly, whether as owner, partner, shareholder, consultant,
agent, employee, co-venturer or otherwise, engage, participate or

 

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invest in any business activity anywhere in the world (a “Competitor”) which
develops, manufactures or markets products or performs services which are
competitive with or similar to the products or services of the Company, or
products or services which the Company has under development or which are the
subject of active planning at any time during the Consulting Period; (ii) will
refrain from directly or indirectly employing, attempting to employ, recruiting
or otherwise soliciting, inducing or influencing any person to leave the
employment of the Company; and (iii) will refrain from soliciting or encouraging
any customer or supplier to terminate or otherwise modify adversely its business
relationship with the Company.  Notwithstanding the foregoing, Consultant
understands that she may hold stock in a Competitor if the stock is publicly
traded and the amount of stock Consultant holds is less than 1% of the
outstanding capital stock of the Competitor.  Company acknowledges that the
products and services of the Company are comprised of numerous components and
the restrictions set forth in this Section 13 are not intended to prevent
Consultant from working for a company that manufactures such components so long
as such company does not develop, manufacture or market finished products or
perform services which are competitive with or similar to the products or
services of the Company, or products or services which the Company has under
development or which are the subject of active planning at any time during the
Consulting Period.  Consultant understands that the restrictions set forth in
this Section 13 are intended to protect the Company’s interest in its
Proprietary Information and established customer relationships and goodwill, and
agrees that such restrictions are reasonable and appropriate for this purpose.

 

14.                               Third-Party Agreements and Rights.  Consultant
hereby confirms that Consultant is not bound by the terms of any agreement with
any current or previous employer or other party which restricts in any way
Consultant’s use or disclosure of information or Consultant’s engagement in any
business, except as may be disclosed in a separate Schedule attached to this
Agreement prior to its acceptance by the Company.  Consultant has delivered to
the Company true and complete copies of any agreements listed on said Schedule. 
Consultant represents to the Company that Consultant’s execution of this
Agreement, Consultant’s engagement with the Company and the performance of
Consultant’s proposed duties for the Company will not violate any obligations
Consultant may have to any such current or previous employer or other party.  In
Consultant’s work for the Company, Consultant will not, in violation of any
agreements with or rights of any such current or previous employer or other
party, disclose or make use of, or bring on the premises of the Company, any
non-public information (including any copies or other tangible embodiments
thereof) belonging to or obtained from any such current or previous employer or
other party.

 

15.                               Extent of Service.  During the Consulting
Period, Consultant agrees to use Consultant’s best efforts in, and shall devote
the necessary amount of Consultant’s working time, attention, skill and energies
to, the advancement of the interests of the Company and its subsidiaries and the
performance of Consultant’s duties and responsibilities in connection with the
rendering by Consultant of Services hereunder.

 

16.                               Injunction.  Consultant agrees that it would
be difficult to measure any damages caused to the Company which might result
from any breach by Consultant of the promises set forth in this Agreement, and
that in any event money damages would be an inadequate remedy for any such
breach.  Accordingly, Consultant agrees that if Consultant breaches, or proposes
to breach,

 

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any portion of this Agreement, the Company shall be entitled, in addition to all
other remedies that it may have, to an injunction or other appropriate equitable
relief to restrain any such breach without showing or proving any actual damage
to the Company or posting of any bonds.

 

17.                               Binding Effect.  This Agreement will be
binding upon Consultant and Consultant’s heirs, executors, administrators and
legal representatives and will inure to the benefit of the Company, any
subsidiary of the Company, and its and their respective successors and assigns.

 

18.                               Enforceability.  If any portion or provision
of this Agreement is to any extent declared illegal or unenforceable by a court
of competent jurisdiction, then the remainder of this Agreement, or the
application of such portion or provision in circumstances other than those as to
which it is so declared illegal or unenforceable, will not be affected thereby,
and each portion and provision of this Agreement shall be valid and enforceable
to the fullest extent permitted by law.  In the event that any provision of this
Agreement is determined by any court of competent jurisdiction to be
unenforceable by reason of excessive scope as to geographic, temporal or
functional coverage, such provision will be deemed to extend only over the
maximum geographic, temporal and functional scope as to which it may be
enforceable.

 

19.                               Entire Agreement.  This Agreement constitutes
the entire agreement between the Company and Consultant with respect to the
subject matter hereof, and supersedes all prior representations and agreements
with respect to such subject matter.  This Agreement may not be amended,
modified or waived except by a written instrument duly executed by the person
against whom enforcement of such amendment, modification or waiver is sought. 
The failure of any party to require the performance of any term or obligation of
this Agreement, or the waiver by any party of any breach of this Agreement, in
any particular case will not prevent any subsequent enforcement of such term or
obligation or to be deemed a waiver of any separate or subsequent breach.

 

20.                               Notices.  Any notice or demand which, by any
provision of this Agreement or any agreement, document or instrument executed
pursuant hereto or thereto, except as otherwise provided therein, is required or
provided to be given shall be deemed to have been sufficiently given or served
and received for all purposes when delivered by hand, telecopy, telex or other
method of facsimile or five (5) days after being sent by certified or registered
mail, postage and charges prepaid, return receipt requested, or two (2) days
after being sent by overnight delivery providing receipt of delivery, to the
following addresses:  if to the Company, at its address as shown on the
signature page hereof, or at any other address designated by the Company to
Consultant in writing; and if to Consultant, at Consultant’s mailing address as
shown on the signature page hereof, or at any other address designated by
Consultant to the Company in writing.

 

21.                               Assignment.  Services of Consultant are
personal in nature and as such, no rights or obligations under this Agreement
may be assigned to any person, by operation of law, or otherwise, without the
express written approval of the Company.  The Company may assign its rights and
obligations hereunder to any party, provided that the assignee shall assume all
of the Company’s obligations hereunder.

 

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22.                               Publicity.  No publicity or advertising shall
be released by Consultant with respect to the activities, duties, and terms of
this Agreement, without the prior written approval of the Company.  Upon
execution of this Agreement by the Company and Consultant, the Company may issue
a press release to announce that Consultant is affiliated with the Company.  The
Company shall also have the right to identify Consultant as a consultant and
advisor of the Company in the Company’s written materials and on the Company’s
websites.

 

23.                               Currency.  Unless otherwise provided for
herein, all monetary amounts referred to herein shall refer to the lawful money
of the United States.

 

24.                               Governing Law.  This Agreement shall be
governed by and construed in accordance with the laws of the State of Kansas.

 

25.                               Counterparts.  This Agreement may be executed
in counterparts, each of which shall be deemed an original and such counterparts
shall be one and the same instrument.

 

26.                               Transmission by Facsimile.  The parties herein
agree that this Agreement may be transmitted by facsimile or such similar device
and that the reproduction of signatures by facsimile or such similar device will
be treated as binding as if originals and each party hereto undertakes to
provide each and every other party hereto with a copy of the Agreement bearing
original signatures forthwith upon demand.

 

[Remainder of Page Intentionally Left Blank; Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the Effective Date.

 

 

CONSULTANT:

COMPANY:

 

 

 

 

 

ALCO STORES, INC.

 

 

By:

/s/ Michael Moore

 

By:

/s/ Stanley B. Latacha

Name:

Michael Moore

Name:

Stanley B. Latacha

Address:

9001 Hemingway Grove Circle

Title:

Chief Executive Officer

 

Knoxville, TN 37922

Address:

751 Freeport Parkway

 

 

Coppell, TX 75019

 

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