Document:

Exhibit 10.39

 

THE USE OF THE FOLLOWING NOTATION IN THIS EXHIBIT INDICATES THAT THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION: [***]

 

AMENDMENT TO

STRATEGIC PURCHASE AGREEMENT

 

This AMENDMENT TO THE STRATEGIC PURCHASE AGREEMENT (“this Amendment”) is made and effective this 3rd day of February, 2013 (“Effective Date”) between Home Depot U.S.A, Inc., (“Home Depot”) and HD Supply Distribution Services, LLC (“Crown Bolt”) with reference to the following:

 

A.  Home Depot and Crown Bolt entered into a STRATEGIC PURCHASE AGREEMENT dated August 30, 2007 (the “AGREEMENT”) which was modified by a letter dated September 30, 2010 (the “LETTER”), and further by another letter dated November 23, 2010, eliminating “Audio-Visual” products from the AGREEMENT.

 

B.  Home Depot and Crown Bolt desire by this Amendment to modify the AGREEMENT to change pricing and payment terms, set other business terms and extend the AGREEMENT.

 

NOW, THEREFORE, in consideration of the mutual promises set below, the Parties agree as follows:

 

Section 1.  Capitalized terms in this Amendment shall have the meanings given to such terms in the AGREEMENT and the LETTER.

 

Section 2.  Current pricing between the Parties will be reduced by $[***] dollars on the Effective Date.  The price reduction will be calculated based upon trailing 12 month volumes as of the Effective Date of this Amendment and the percentage reductions will vary by product category to be determined on a mutually agreed upon basis. The new pricing will be effective for all purchase orders dated February 3, 2013 or later.  In the event that maintenance is not completed in time to have the new prices reflect in the system, Crown Bolt will track a total of the difference between the new price and old price, and will issue a check to refund the difference that Home Depot has overpaid.  In the event that these orders have been invoiced but not paid, Crown Bolt may issue revised invoices with the correct total, or issue a refund check once Home Depot has overpaid, based on the old pricing. Effective for all Purchase Orders dated February 3, 2013 and after, payment terms shall be Net 40 days from the date of each Crown Bolt invoice.

 

Section 3.  Coinciding with the February 3, 2013 price reduction, [***].

 

 

Section 4.  In the event of a significant change in Crown Bolt’s material or transportation costs (either a decrease or increase) driven by factors outside of the Price Index, a price change shall be implemented based upon mutual agreement. If the parties are unable to reach agreement the senior representatives of each party shall promptly resolve the disagreement.

 

Section 5.  The Shortfall Damages will be calculated and paid directly to Crown Bolt for fiscal year 2012 as determined in The AGREEMENT and The LETTER. After receipt of this payment Home Depot will not be obligated to pay Shortfall Damages for fiscal years  2013 or 2014.

 

Section 6.  The Parties’ current reset obligations are replaced as follows:

 

i. Home Depot shall reimburse Crown Bolt $[***] for the cost of Crown Bolt fastener resets (approximately [***] stores remaining to be reset), next generation builders hardware resets (approximately [***] to be reset) during the 2013 to 2015 time period and the cost of merchaids (including freight and taxes), third party reset costs, reset-related markdowns, and product buybacks related to these reset projects.

 

ii. If the above projects cost less than $[***] to complete, Home Depot will use the remaining funds either to reimburse Crown Bolt for Rope & Chain resets, or will use the funds to reimburse Crown Bolt as agreed upon by both Parties.

 

iii. There will be no gross-up of cost and no margin or rebates to Crown Bolt on any of the above expenditures related to the resets, and Crown Bolt will invoice Home Depot for their costs incurred.

 

iv. Home Depot and Crown Bolt will partner to take costs out of the reset projects, through competitive bidding of sub-contractors and fixture suppliers, volume pricing, value engineering and design, and other practical approaches.

 

v. Crown Bolt shall use 3rd party labor teams approved by Home Depot to complete Fastener/Builder Hardware resets for all stores that require the new set to be installed or existing set to be updated (stores to be signed off on by Merchant). Crown Bolt also agrees to follow Home Depot reset guidelines and partner with IPM and Visual Merchandising on any changes to the sets to ensure Home Depot Visual and Execution standards are met. Reset schedules will be required for each project and will comply with store inventory process for scheduling resets prior to or after store inventory dates. Crown Bolt will make every reasonable effort to execute resets during reset weeks that are pre-assigned for consolidated resets in an effort to minimize impact to stores requiring overnight associate support. All reset activity will require store lists, schedules, signoff forms, and post-reset pictures to be loaded for each store and project in the current Project Management system that MET uses for all Home Depot resets. Home Depot will provide Crown Bolt with a purchase order consistent with the SPA that will allow Crown Bolt to invoice and collect payment.  Home Depot will pay Crown Bolt based on net 40 payment terms, and Crown Bolt will issue invoices on a monthly basis. Relevant

 

 

transaction communications (purchase order, shipping notice, invoice, and remittance detail) will be sent through standard EDI between Crown Bolt and Home Depot. Final sign off by Home Depot’s Store Manager, or MET, is required for Crown Bolt receipt of payment and for stores to be deemed 100% complete. Home Depot assumes that there is no mark up on the cost of materials, labor, or shipping and reserves the right to audit those costs and upon reasonable request and notice Crown Bolt will provide Home Depot access to information necessary to validate costs (e.g. fixture cost/invoice, labor rates and contracts, etc.). Crown Bolt agrees to provide Home Depot with detailed costs by store including, fixture, transportation, overhead, project management, any merchaids, and labor associated with the project weekly for all stores completed during that period (reference exhibit A). Crown Bolt will defend and indemnify Home Depot from any claims that may arise during or as a result of Crown Bolt’s negligence or alleged negligence during the installation of any  resets set forth above.

 

vi. Exhibit A to this Amendment includes a sample bill of materials for resets.

 

Section 7.  The AGREEMENT and the LETTER terms related to Exclusivity will remain in place, and will be applicable to all products purchased as of the date of this Amendment, except:

 

i. THD may purchase off-shelf special buys, after offering Crown Bolt the right of first refusal to offer a functionally identical product at the same, or better, price. These purchases will not exceed [***]% of total annual purchase volume.

 

Section 8. The Parties’ Return to Vendor (“RTV”) process is replaced as follows:

 

Effective for fiscal year 2013, Crown Bolt will fund Home Depot $[***] per year. This will primarily be used for defective products (including defective packaging). If the total annual RTV costs are less than $[***] in a fiscal year, Home Depot will use the funds to maintain the inventory in other ways, such as lifting overstocks, and offsetting discontinued skus. The processing of the RTV claims will be performed by Home Depot store personnel. Home Depot agrees to provide Crown Bolt with the sku #, store #, reason code, quantity and cost necessary to validate the RTV costs.

 

Section 9.  Crown Bolt will be invited to grow its business in Picture Hanging, Rope & Chain Accessories, Wire Goods, Hollow Wall Anchors, and any other product categories applicable to Crown Bolt’s capabilities, but any new categories won will not be part of the The AGREEMENT, as amended, and will not be guaranteed for the life of The AGREEMENT.

 

Section 10. The expiration date defined in the AGREEMENT is changed to January 31, 2020.   After January 31, 2019, either Party may extend or terminate the AGREEMMENT in whole or part by providing a 12 month notification period.  Any extension of the AGREEMENT must be by mutual agreement of the parties.   All of the other terms of The AGREEMENT as currently amended will be extended through January 31, 2020.

 

 

Section 11. Except as expressly modified by this Amendment, all terms and conditions of the AGREEMENT, including its Exhibits, shall remain in full force and effect.

 

IN WITNESS WHEREOF, the Parties have caused this Amendment to be executed by their duly authorized representatives as of the Effective Date.

 

 

	
HOME DEPOT U.S.A., INC.
    	
HD   Supply Distribution Services, LLC
    
	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Kurt Bruder
    	
 
    	
By:
    	
/s/   Joe Izganics
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
MVP   Hardware
    	
 
    	
Title:
    	
Senior   Vice President
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
February 4,   2013
    	
 
    	
Date:
    	
February 4,   2013Exhibit 4.4

 

Strictly Private & Confidential —

Addressee only

 

Mr P Manduca

 

28 May 2012

 

Dear Paul

 

PRUDENTIAL PLC - LETTER OF APPOINTMENT AS CHAIRMAN

 

I am delighted to confirm that the Board of Prudential plc (the ‘Company’) has agreed to appoint you as Chairman with effect from 2 July 2012.

 

I am now writing to set out the terms of your appointment.  It is agreed that this is a contract for services subject to the Company’s Articles of Association as amended from time to time and does not constitute a contract of employment.

 

1.              Appointment

 

Your appointment as Chairman is for an initial three year term from 2 July 2012.  The Board may invite you to serve for additional period(s). Continuation of your appointment will be contingent on satisfactory performance and re-election at forthcoming AGMs.

 

The appointment may be terminated by and at the discretion of either party upon twelve months written notice.  Upon termination you will not be entitled to any compensation, other than accrued pro-rata fees, and you shall also cease to be a member of any committee of the Board.

 

2.              Fees, Shareholding and Dealing

 

2.1  Fees

 

You will be entitled to a fee for your services as Non-Executive Director and Chairman of £600,000 per annum.  This fee will be fixed for 3 years and will next be reviewed with any changes taking effect from 2 July 2015.

 

All fees are payable monthly in arrears, net of any tax and National Insurance contributions, which the Company is required to deduct, and are reviewed from time to time.

 

As Chairman, you will not be entitled to participate in any of the Group’s executive remuneration programmes or pension arrangements.

 

 

2.2       Shareholding

 

I draw your attention to Article 103 onwards of the Articles of Association of the Company which deal with a number of matters relating to Directors.  Article 110 requires you to be a beneficial owner of 2,500 Prudential shares and to retain them during the tenure of your office.

 

I would also like to make you aware of the Board’s shareholding guidelines.  As Chairman, you will be required to hold shares with a value equivalent to one times your annual base fee and you will be expected to attain this level of share ownership within five years of the date of your appointment as Chairman.

 

2.3       Share Dealing

 

During your term in office you will be subject to Prudential’s Share Dealing Rules, full particulars of which can be found on our Group intranet, as part of the Group Governance Manual.  These are updated as required to reflect changes in legislation and regulations, and will provide you with the necessary guidance on the steps you need to take and other considerations relating to share dealings.

 

If you have any questions on this please consult with Group Secretariat. Details of any share dealings need to be notified to Group Secretariat on the day of dealing so that the announcement to the relevant stock exchanges can be made within the required time limit.

 

3                 Duties, Committees and Time Commitment

 

3.1 Duties

 

Your duties as Chairman will be assigned by the Board and will be consistent with the current Terms of Reference attached at Appendix 1 of this document. These Terms of Reference are regularly reviewed and approved by the Board.

 

3.2 Committees

 

With effect from 2 July 2012, you will be appointed as Chairman of the Nomination Committee.  From 2 July 2012, your membership of the Audit and Remuneration Committees will cease, although you will be invited to attend meetings of the Audit, Risk and Remuneration Committees in your capacity as Chairman.  For the avoidance of doubt, your appointment as Senior Independent Director will also cease on your appointment as Chairman.

 

3.3 Time Commitment

 

We have agreed that Prudential will be your principal focus.  You have agreed that you will stand down from your role as Chairman of Aon Limited and from the Board of KazmunaiGas Exploration & Production plc as soon as possible.  You will devote such time to your duties as the Board reasonably considers necessary.  We would anticipate a time commitment of approximately three to four days per week.  We currently schedule a total of eight Board meetings per year.  The Board usually holds two or three of these meetings overseas in a location where Prudential conducts business, which coincides with a detailed presentation on that Business Unit by its senior management.

 

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4                 Car and Office Facilities

 

The use of a chauffeur driven car of a type in line with current company policy will be made available to you.

 

You will be provided with an office and secretary at the Company’s Head Office at Arthur Street as your principal place of work.

 

Both will be provided on a full-time basis to cover all your commitments including those outside Prudential.

 

5                 Life Assurance

 

The Company will provide life assurance cover of four times your annual fee plus an additional sum of four times your annual fee which would be used to purchase an annuity for your dependants. These benefits are subject to medical underwriting.

 

6                 Medical Cover

 

The Company will arrange appropriate cover under the terms of its medical insurance scheme (subject to the rules of that scheme from time to time) to provide private health care for you, your wife and dependent children under 21 years of age.  The Company reserves the right to request you to undergo a medical examination as a condition of providing cover.

 

7                 Expenses

 

Directors are entitled to claim for all travelling, hotel and other expenses properly incurred by them in connection with their attendance at meetings of the Board or Committees of the Board, general meetings or separate meetings of the holders of any class of shares or of debentures of the Company or otherwise in connection with the discharge of their duties.  Expenses incurred should be submitted to the Chairman of the Remuneration Committee, for approval.

 

8                 Induction, Evaluation and Development

 

Following your appointment as Chairman, the Company will provide you with such further induction to the role as may be appropriate.

 

The performance of individual Directors and the whole Board and its Committees is evaluated annually.  As Chairman you will lead this exercise.  The evaluation of your performance as Chairman will be led by the Senior Independent Director.

 

As a Director you will be invited to appropriate educational and/or professional development programmes.  The Company Secretary will consult each director annually to ascertain their specific professional development needs.

 

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9                 Conflicts of interests and disclosure obligations

 

It is accepted and acknowledged that you have interests other than those of the Company and we have discussed these and agreed that no conflicts of interest currently exist (other than those authorised by the Board).  In the event that you become aware of any future potential conflicts of interest, these should be disclosed to the Company Secretary as soon as apparent and also prior to accepting appointments.  In particular we would not wish our Directors to serve on the Boards of financial services competitors or for the Chairman to take up an executive role or a second chairmanship of another public company.

 

The Company has an obligation to notify details of other directorships held by its directors during the past five years to various regulators on an annual basis, together with non-statutory offices.  Any changes in your external appointments, including non-statutory offices, should be notified to the Company Secretary on an ongoing basis.  In particular, any changes in your directorships of other quoted companies worldwide need to be notified promptly, preferably the next business day, as the Company is required to announce this to various stock exchanges.

 

10          Confidentiality

 

All information acquired during your appointment is confidential to the Company and should not be released, either during your appointment or following termination (by whatever means), to third parties without prior clearance from the Board.  You accept that damages would not be a sufficient remedy for unauthorised disclosure of information.

 

11          Directors’ and officers’ protection

 

The Company has directors’ and officers’ liability insurance and it is intended to maintain such cover for the full term of your appointment.

 

The Company has also resolved to provide you with indemnity cover for directors’ and officers’ liability within the limitations imposed by law.  In addition, the Company will provide you with a limited indemnity for certain personal liabilities you may suffer in the course of your appointment, subject again to applicable statutory and other limitations, pursuant to the Company’s constitutional documents or otherwise.

 

The Board has also resolved to have a discretionary payments policy (subject to regular review), the existence of which Directors (executive and non-executive) and certain employees or members of the Prudential Group may rely on, to protect them from personal liability arising out of the bona fide performance of their duties on behalf of the Group.

 

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12          Independent professional advice

 

Occasions may arise when you consider that you need professional advice in the furtherance of your duties as a Director, and it may be appropriate for you to seek advice from independent advisers at the Company’s expense.  This would normally be arranged through the Company Secretary.  The Company will reimburse the full cost of expenditure incurred in accordance with the policy.  Details of the agreed procedure under which Directors may obtain such independent advice can be found in the Prudential Guidance Notes for Directors.

 

Yours sincerely

 

 

	
/s/ Andrew   Turnbull
    	
 
    	
 
    
	
Lord Turnbull
    	
 
    
	
Acting Chair of   the Nomination Committee
    	
 
    
	
For and on behalf   of Prudential plc
    	
 
    

 

Acknowledgement:

 

I acknowledge that this appointment letter does not constitute a contract of employment.

 

I confirm that by having accepted this appointment, I am able to allocate sufficient time to meet the demands of the role.

 

 

	
Signed:
    	
/s/ Paul Manduca
    	
 
    	
 
    
	
 
    	
Paul Manduca
    	
 
    

 

5

 

Appendix 1

 

Prudential plc Chairman Terms of Reference

 

The Chairman is responsible for:

 

1.              Managing Board business

 

1.1       the protection of shareholders’ interests;

 

1.2       the leadership and the governance of the Board as a whole, the setting of the Board’s agenda, presiding over meetings of the Board to ensure its smooth and effective running in discharging its responsibilities to the Group’s shareholders and organising the management of the Board’s business;

 

1.3       ensuring that information provided to the Board is timely, accurate and clear;

 

1.4       ensuring, in collaboration with the Group Chief Executive, that sufficient time is allowed for consideration by the Board of the strategic and other issues facing the Group and that the Board is presented with sufficient analysis appropriate to the scale and nature of the decisions that it is asked to make;

 

1.5       ensuring, in collaboration with the Group Chief Executive, that the appropriate issues are brought to the Board in accordance with its Terms of Reference, that there is open and honest debate and that there are clear lines of authority, reporting and delegation in force which are effectively implemented;

 

1.6       ensuring the overall effectiveness of the Board and the implementation of its decisions;

 

1.7       developing, in conjunction with the Nomination Committee and the Group Chief Executive, an effective Board as regards its composition, skills and competencies.  This will involve developing procedures and processes for effective corporate governance, and a systematic and regular review of the performance of the Board as a whole, its Committees and the contribution of individual Directors and, further, acting on the outcomes of such regular review;

 

1.8       the establishment of Board Committees such as Audit, Remuneration, Nomination and Risk Committees with the appropriate delegated authorities which are clearly defined by Terms of Reference, and for ensuring the timeliness and completeness of information and essential reports to and from these Committees; and

 

1.9       organising regular meetings of the Non-Executive Directors without Executive Directors present.

 

2.              Membership and Composition of the Board

 

2.1       before recommending an appointment, evaluating the balance of skills, knowledge and experience on the Board to make recommendations to the Nomination Committee relating to the appointment of new Directors;

 

2.2       ensuring that the Directors receive a full formal and tailored induction programme and that they keep their skills and knowledge up-to-date;

 

2.3       ensuring that the development needs of directors are identified and met, supported by the Company Secretary.  Directors should be able to continually update their skills and knowledge required to fulfil their role on the Board and its Committees.

 

2.4       identifying the development needs of the Board as a whole to enhance its overall effectiveness as a team;

 

1

 

2.5       ensuring, in conjunction with the Group Chief Executive, that there is succession planning for all Executive Director positions; and

 

2.6       maintaining an effective and constructive liaison with the Non-Executive Directors, encouraging their engagement so as to maximise their contribution to the work of the Board and also ensuring constructive relations between Executive and Non-Executive Directors.

 

3.              Governance

 

3.1       leading the Board’s determination of appropriate corporate governance and business values and of their dissemination through the Group; and

 

3.2       establishing with the Board as a whole the ethos, values and culture of the Group.

 

4.              Relationship with the Group Chief Executive

 

4.1       providing support and advice to the Group Chief Executive; and

 

4.2       discussing with the Group Chief Executive the broad strategic plans that the Group will follow prior to submission to the Board and ensuring that the Board is aware of the necessary resources to give effect to the components of that strategic plan. The Chairman will also be expected to play a role, together with the Group Chief Executive, on strategic issues.

 

5.              Representing the Group externally to shareholders and other stakeholders

 

5.1       representing the Group externally at a business, political and community level, together with the Group Chief Executive. In particular, it is part of both the Chairman and Group Chief Executive’s roles to represent the Group’s views and position as determined by the Board on key public policy and industry matters and to communicate them effectively to governments, other public organisations and regulatory authorities. The Chairman and Group Chief Executive will decide which of them will lead on any particular matters;

 

5.2       balancing the interests of different categories of stakeholders, (e.g. shareholders, customers, employees, regulators) and preserving an independent view and ensuring effective communication with stakeholders on all matters;

 

5.3       ensuring effective communication with shareholders and that relevant governance and strategy issues are discussed with major shareholders and that their views are communicated to the Board as a whole;

 

5.4       maintaining and enhancing the reputation of the Group; and

 

5.5       supporting the commercial activities of the Group and meeting with internal and external groups as required from time to time.

 

Approved by the Prudential plc Board on 8 December 2011.

 

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