EXHIBIT 99(e)
CONSULTING AGREEMENT
Consulting Agreement dated as of February 6, 1997, between CVS
Corporation, a Delaware corporation (the "Company"), and Xxxxxx Xxxxx (the
"Consultant").
WHEREAS, the Company, Revco D.S., Inc. a Delaware corporation
("Revco"), North Acquisition Corp., a Delaware corporation and wholly owned
subsidiary of the Company ("Merger Subsidiary"), have entered into a merger
agreement (the "Merger Agreement") pursuant to which Merger Subsidiary will be
merged with and into Revco;
WHEREAS, as of the date of this Agreement the Consultant is
employed by Revco as an officer and possesses intimate knowledge of the
business and affairs of Revco;
WHEREAS, the Company and the Consultant recognize that the
continued application of the Consultant's experience, skills, abilities,
knowledge and services to the business of the Company would be extremely
beneficial to the Company, and therefore the Company desires to retain the
services of the Consultant following the termination of his employment with
Revco;
NOW, THEREFORE, in consideration of their mutual promises and
agreements, the Company and the Consultant hereby agree as follows:
1. Term
(a) The Company hereby engages the Consultant and the
Consultant agrees to provide consulting services to the Company as
hereinafter provided for a term (the "Consulting Term") commencing at the
Effective Time (as defined in the Merger Agreement) and terminating on the
earlier of (i) 12 months after the Effective Time (the "Termination Date")
or (ii) the date, as determined by the Company, when the closing of the
corporate headquarters of Revco in Twinsburg, Ohio, is completed (the
"Completion Date"). The Consultant shall for all purposes under this
Consulting Agreement (i) be deemed an independent contractor and not an
agent or employee of the Company or any of its affiliates, (ii) have no
authority to bind the Company or any of its affiliates to any agreement and
(iii) not represent that he is, or holds himself out to be, an employee or
agent of the Company or any of its affiliates.
2. Consulting Duties
(a) From time to time during the Consulting Term, as and
when requested by (i) the Person(s) then serving as Chairman or President
of the Company, (ii) any Person designated by either thereof or (iii) the
Board of Directors of the Company, the Consultant will make himself
available to consult and cooperate with and advise such Persons, the
Company, or any of them to the best of his ability, with respect to such
matters involving the business and affairs of the Company, including, among
other things, with respect to the closing of the corporate headquarters of
Revco in Twinsburg, Ohio. The Consultant will perform such reasonable
services at such times and locations as shall be reasonably agreeable on a
limited time basis as an independent contractor to, and not as an employee
of, the Company.
(b) During the Consulting Term, the Consultant will make
himself reasonably available to answer questions and provide advice to the
Company.
(c) During the Consulting Term, the Consultant will engage
in such travel on behalf of the Company as may be reasonably requested,
subject to reasonable notice and the Consultant's reasonable availability.
3. Compensation
(a) Consultant shall receive compensation (the "Payment
Amount") equal to $750,000.16 ($62,500.01 per month), payable semi-monthly
or otherwise in accordance with the Company's regular payroll practice
irrespective of whether the Consultant has been called upon to perform any
services under this Consulting Agreement during the prior compensation
periods or during the period for which the semi-monthly payment is due.
Notwithstanding anything set forth in this Agreement to the contrary, if
the Completion Date occurs prior to the Termination Date, all semi-monthly
payments (including any in arrears) in respect of the Payment Amount
payable from and including such Completion Date to and including the
Termination Date (the "Acceleration Amount") shall be accelerated and
become immediately, due and payable by the Company. Within 5 days of any
such Completion Date, the Company shall pay the Acceleration Amount in cash
to the Consultant. If the Consultant dies or becomes disabled and is
unable to perform the consulting services provided for herein, the Company
shall be obligated to continue to pay the compensation provided above to
the Consultant or his estate or representative.
(b) Other than as set forth in Section 5.18 of the Merger
Agreement as it applies to existing benefits and benefit plans of Revco at
the Effective Time, as an independent contractor, the Consultant shall not
be eligible to participate in any current or future employee benefit plan
of the Company.
4. Reimbursement of Expenses
(a) The Consultant will be reimbursed, in accordance with
Company policy, for his reasonable and necessary business and traveling
expenses related to his services as a consultant to the Company in
accordance with the Company's policies in effect from time to time.
(b) The Company shall reimburse all reasonable
attorney's fees incurred by the Consultant in connection with any legal action
relating to this Agreement.
5. Termination
The Consultant's consulting arrangement hereunder may be
terminated only under the following circumstances:
(a) Cause. The Company may terminate the Consultant's
arrangement hereunder for Cause (as defined below) effective immediately
upon giving notice of such termination. For these purposes, "Cause" shall
mean:
(i) commission of an act of fraud, embezzlement, theft
or other criminal act constituting a felony, or
(ii) a material breach or default by the Consultant of
any of his agreements or obligations under Section 2 of this Agreement,
which is not cured in all substantial respects within ten business days
after the Company gives notice thereof to the Consultant.
(b) Termination by Consultant. (i) The Consultant may
terminate his arrangement hereunder effective immediately upon giving
notice to the Company of such termination for failure by the Company to
comply with any material provision of this Agreement that has not been
cured within ten business days after notice of such noncompliance has been
given by the Consultant to the Company. Promptly following termination in
such event, the Company shall pay to the Consultant a lump sum payment
equal to the amounts payable, if any, for the remainder of the Consulting
Term.
(ii) The Consultant may terminate his arrangement
hereunder without cause or good reason at any time upon thirty days
written notice to the Company, in which case the Consultant will be
compensated for all accrued and unpaid payments hereunder through the
effective date of such termination.
6. No Prohibition on Competition
Nothing contained in this Agreement shall prohibit the
Consultant from acting as a proprietor, investor, director, officer, employee,
substantial stockholder, consultant or partner in any business engaged to any
extent in the retail drug business or any other business that may be deemed to
compete to any extent with the Company or any of its subsidiaries.
7. Confidential Information
The Consultant agrees that during the Consulting Term and
thereafter he shall not, directly or indirectly, disclose or make known to any
other person any Confidential Information or trade secrets of or relating to
the Company. As used in this Agreement, "Confidential Information" shall mean
all information relating to the Company or any of its affiliates that is not
in the public domain or otherwise published or publicly available and is
treated as confidential by the Company.
8. Conditions Precedent
This Agreement shall become effective only at the Effective
Time.
9. Miscellaneous
This Agreement constitutes the entire agreement between the
parties and supersedes all prior agreements and understandings, whether
written or oral, relating to the subject matter hereof and thereof. This
Agreement may be amended or modified only by a written instrument executed by
both the Company and the Consultant. This Agreement shall be construed,
interpreted and enforced in accordance with the laws of the State of New York.
The invalidity or unenforceability of any provision hereof (or portion
thereof) shall not affect the validity or enforceability of any other
provision hereof, and if any such provision (or portion thereof) is so broad
as to be unenforceable, it shall be interpreted to be only as broad as is
enforceable. This Agreement shall be binding upon, and inure to the benefit
of, both parties and their respective successors and assigns, including any
corporation with which, or into which, the Company may be merged or which may
succeed to its assets or business; provided, however, that the obligations of
the Consultant are personal and shall not be assigned by him. Any notice or
other communication hereunder to either party shall be in writing and shall be
deemed to have been duly given when delivered personally or mailed by
registered mail, return receipt requested, postage prepaid, addressed to the
party as its respective address appears in this Agreement. This Consulting
Agreement may be executed in counterparts, each of which will be deemed to be
an original, but each of which together will constitute one and the same
agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Consulting Agreement as of the day and year set forth above.
CVS CORPORATION,
By: /s/ Xxxxxx X. Xxxx
-----------------------------
Name: Xxxxxx X. Xxxx
Title: Vice Chairman and Chief
Operating Officer
Consultant:
/s/ D. Xxxxxx Xxxxx
-----------------------------
Name: D. Xxxxxx Xxxxx
Title: President and Chief
Executive Officer
Address: 000 Xxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxx 00000
