EXHIBIT 10.18
LIFETIME CONSULTING & NON-COMPETION
AGREEMENT
THIS AGREEMENT is made and entered into this First day of March, 2002 between
Office Depot, Inc., a Delaware corporation (the "COMPANY"), and Xxxxx Xxxxxxx
("Consultant").
a. Consultant has been an employee and director of Viking Office
Products, Inc., a California corporation ("VIKING"), and a Director
of the Company, through and including the date hereof, on which date
Consultant has resigned from his positions as a Board member and/or
employee of Viking.
b. Consultant shall continue to serve as a Director of the Company
through and including April 25, 2002, the date of the Company's
Annual Meeting.
c. Consultant and the Company have agreed to enter into this Lifetime
Consulting Agreement, to ensure that the many years of knowledge and
experience of Consultant shall remain available to the Company
(including Viking) for the natural lifetime of Consultant.
d. Consultant also has previously granted to the Company a lifetime
license to use his name and likeness in advertising, catalogs and
similar commercial communications, which license shall remain in
full force and effect.
e. Consultant and the Company desire by this Agreement to set forth
certain understandings between them regarding such consulting
relationship.
Now therefore, in consideration of the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. CONSULTING RELATIONSHIP. Consultant has on today's date (the "EFFECTIVE
DATE") has resigned from his positions as a director and employee of
Viking and from all positions of any nature whatever with either the
Company or any affiliate of the Company, except for his position as a
Director of the Company, which position he shall continue to occupy
until April 25, 2002, the date of the Company's 2002 Annual Meeting.
From and after the Effective Date, Consultant shall make himself
available to serve as a consultant to the Chairman and CEO of Company
as herein set forth.
2. POSITION AND DUTIES. During the Term of this Agreement (which shall
extend for the natural lifetime of Consultant), Consultant shall make
himself available at reasonable times and places, for reasonable
durations, to serve as a consultant to the Chairman and CEO of Company,
available to consult with such Chairman and CEO and provide such
advisory services as are mutually agreed upon by Consultant and the
Chairman and CEO of Company. Consultant shall be free to serve as (i) a
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director or officer of any non-profit organization including trade,
civic, educational or charitable organizations, or (ii) a director,
owner, employee or consultant of any other corporation which is not
competing with the Company or any of its Subsidiaries in the office
product and office supply industry so long as such duties do not
materially interfere with the performance of Consultant's duties or
responsibilities under this Agreement or reflect badly on the Company.
Consultant shall perform Consultant's duties and responsibilities under
this Agreement to the best of Consultant's abilities in a diligent,
trustworthy, businesslike and efficient manner.
In the event at any time during the Term, the Chairman and CEO of the
Company is anyone other than Xxxxx Xxxxxx, then Consultant shall not be
required to provide more than one day of consulting services per year
in order to keep this Agreement in full force and effect.
For purposes of this Agreement, "SUBSIDIARIES" shall mean any
corporation of which the securities having a majority of the voting
power in electing directors are, at the time of determination, owned by
the Company, directly or through one of more Subsidiaries, including,
without limitation, Viking.
3. CONSIDERATION.
(a) In consideration of his services to be rendered, and the
non-competition provisions hereinbelow set forth, Consultant
is hereby granted by the Company lifetime medical benefits, as
more full set forth on ATTACHMENT A hereto.
(b) Consultant shall have a period of ninety (90) days following
April 25, 2002 in which to exercise any and all of his vested
stock options, which date is July 24, 2002 . There shall be no
further vesting of unvested stock options during such period;
nor shall Consultant be entitled to the grant of any
additional stock options by the Company.
(c) In consideration of the existing lifetime license to use
Consultant's name and likeness as set forth in said license,
the Company agrees to reimburse Consultant for maintaining
electronic security at Consultant's residence, unless and
until the Company elects to discontinue use of Consultant's
name and likeness, in which event the Company shall provide
Consultant ninety (90) days' written notice before
discontinuing reimbursement for such electronic security at
Consultant's residence.
(d) Consultant shall not receive any other salary, bonus or other
remuneration from Company during the Term of this Agreement
other then the lifetime medical benefits referred to in
subsection 3(a) above, and his compensation as a Director of
the Company through and including April 25, 2002.
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(e) Company shall reimburse Consultant for any reasonable and
necessary business expenses incurred by him in the course of
performing his duties under this Agreement, in accordance with
the Company's policies in effect from time to time, subject to
the Company's reasonable requirements with respect to
reporting and documentation of such expenses.
4. TERM.
(a) The Term of this Agreement is for the natural lifetime of
Consultant, unless terminated as set forth here.
(b) The Term shall end (A) upon Consultant's death, (B) upon the
mutual agreement of the Company and Consultant, (C) by the
Company's termination of this Agreement for Cause (as defined
below) or (D) by Consultant's termination of this Agreement
for Good Reason (as defined below).
(c) If the Agreement is terminated by the Company for Cause or by
Consultant without Good Reason, Consultant shall thereupon
lose all further consulting fees and benefits hereunder.
(d) If the Agreement is terminated upon Consultant's death, all
remuneration and/or benefits provided hereunder shall
terminate and cease on the last day of the month in which his
death occurs.
(e) If the Agreement is terminated by Consultant for Good Reason,
then his remuneration and benefits shall continue for his
natural lifetime.
(f) For purposes of this Agreement, "CAUSE" shall mean any action
by Consultant from and after the date hereof, which in the
good faith opinion of the Chairman and CEO of Company or the
Board of Directors ("Board") of the Company violates any
provision of this Agreement.
(g) For purposes of this Agreement, "GOOD REASON" shall mean a
material breach by the Company of a material provision of this
Agreement which has not been cured by the Company within
thirty (30) days after written notice of noncompliance has
been given by Consultant to the Company.
5. CONFIDENTIAL INFORMATION. Consultant acknowledges that the
information, observations and data obtained by Consultant while employed by the
Company and its Subsidiaries concerning the business or affairs of the Company
or any other Subsidiary ("CONFIDENTIAL INFORMATION") are the property of the
Company or such Subsidiary. Therefore, Consultant agrees that Consultant shall
not disclose to any unauthorized person or use for Consultant's own purposes any
Confidential Information without the prior written consent of the CEO, unless
and to the extent that the aforementioned matters become generally known to and
available for use by the public other than as a result of Consultant's acts or
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omissions. Consultant shall deliver to the Company as soon as practicable after
the Effective Date hereof, or at any other time the Company may request, all
memoranda, notes, plans, records, reports, computer tapes, printouts and
software and other documents and data (and copies thereof) in any form or medium
relating to the Confidential Information, Work Product (as defined below) or the
business of the Company or any Subsidiary which Consultant may then possess or
have under Consultant's control. The provisions of this paragraph 5 shall
survive the termination of this Agreement for an unlimited period of time.
6. INVENTIONS AND PATENTS; CONSULTANT'S LIKENESS AND NAME. Consultant
acknowledges that all inventions, innovations, improvements, developments,
methods, designs, analyses, drawings, reports and all similar or related
information (whether or not patentable) that relate to the Company's or any of
its Subsidiaries' actual or anticipated business, research and development or
existing or future products or services and that are conceived, developed or
made by Consultant while employed by the Company and its Subsidiaries ("WORK
PRODUCT") belong to the Company or such Subsidiary. Consultant shall promptly
disclose such Work Product to the CEO and perform all actions reasonably
requested by the CEO to establish and confirm such ownership (including, without
limitation, assignments, consents, powers of attorney and other instruments). In
addition, Consultant acknowledges that the exclusive use of his likeness and
name in business or commerce shall continue to belong exclusively to the Company
for the remainder of Consultant's natural life.
7. NON-COMPETE, NON-SOLICITATION.
(a) Consultant acknowledges that during the course of Consultant's
employment with Viking he has, and in the course of Consultant's employment with
the Company he has become familiar with the trade secrets of Viking and the
Company and with other Confidential Information concerning Viking, the Company
and its other Subsidiaries and that Consultant's services have been and shall
continue to be of special, unique and extraordinary value to Viking, the Company
and its other Subsidiaries. Therefore, in consideration of the payments to
Consultant of the sums set forth in this Agreement, Consultant agrees that
during his lifetime, he shall not directly or indirectly own any interest in,
manage, control, participate in, consult with, render services for, or in any
manner engage in any business on behalf of or in concert with any key competitor
of the Company, including without limitation the following companies (or any
affiliates of any such companies), each of which are considered to be key
competitors of the Company (collectively, the "COMPETITORS"): Staples;
Boise-Cascade; BT Office Products; Office Max; P.P.R. and Lyreco or with any
other company which engages or decides to engage in business competitive with
the Company, including without limitation such companies as Wal-Mart, Target
Stores or any Internet or other direct mail or direct marketing company engaged
as a significant part of its business in the sale of business or office
products. Nothing herein shall prohibit Consultant from being a passive owner of
not more than 2% of the outstanding stock of any class of a corporation which is
publicly traded, including any Competitor, so long as Consultant has no active
participation in the business of such corporation. Except as provided in this
Agreement, there shall be no restrictions upon Consultant's employment or
services.
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(b) During the Term, Consultant shall not directly or indirectly
through another entity (i) induce or attempt to induce any employee of the
Company or any Subsidiary to leave the employ of the Company or such Subsidiary,
or in any way interfere with the relationship between the Company or any
Subsidiary and any employee thereof, (ii) hire any person who was an employee of
the Company or any Subsidiary at any time during the Employment Term or the
Noncompete Period or (iii) on behalf of or for the benefit of any Competitor,
induce or attempt to induce any customer, supplier, licensee, licensor,
franchisee or other business relation of the Company or any Subsidiary to cease
doing business with the Company or such Subsidiary, or in any way interfere with
the relationship between any such customer, supplier, licensee, licensor,
franchisee or business relation and the Company or any Subsidiary (including,
without limitation, making any negative statements or communications about the
Company or its Subsidiaries). The Company agrees to use its best efforts to
cause its Consultant officers and the Consultant officers of Viking not to make
any negative statements or communications about Consultant.
(c) If, at the time of enforcement of this paragraph 7, a court shall
hold that the duration, scope or area restrictions stated herein are
unreasonable under circumstances then existing, the parties agree that the
maximum duration, scope or area reasonable under such circumstances shall be
substituted for the stated duration, scope or area and that the court shall be
allowed to revise the restrictions contained herein to cover the maximum period,
scope and area permitted by law. Consultant acknowledges that he has carefully
read and considered the provisions of this paragraph 7 and, having done so,
agrees that the restrictions set forth herein (including but not limited to the
time periods of restriction and the geographical areas of restriction) are fair
and reasonable and are reasonably required to protect the interests of the
Company, its Subsidiaries and its stockholders.
(d) In the event of the breach or a threatened breach by Consultant of
any of the provisions of this paragraph 7, the Company, in addition and
supplementary to other rights and remedies existing in its favor, may apply to
any court of law or equity of competent jurisdiction for specific performance
and/or injunctive or other relief in order to enforce or prevent any violations
of the provisions hereof (without posting a bond or other security). In
addition, in the event of an alleged breach or violation by Consultant of this
paragraph 7, the Noncompete Period shall be tolled until such breach or
violation has been duly cured.
(e) The parties hereto acknowledge that, except as otherwise agreed to
by Consultant and the Company, any taxes that may be due and owing with respect
to the payments to Consultant hereunder shall be the sole responsibility of
Consultant, and Consultant hereby agrees to indemnify and hold Company harmless
if any such taxes are not paid.
8. CONSULTANT'S REPRESENTATIONS. Consultant hereby represents that upon
the execution and delivery of this Agreement by the Company and by him, this
Agreement shall be the valid and binding obligation of Consultant, enforceable
in accordance with its terms. Consultant hereby acknowledges and represents that
Consultant has had an opportunity to consult with independent legal counsel
regarding Consultant's rights and obligations under this Agreement and that
Consultant fully understands the terms and conditions contained herein.
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9. SURVIVAL. Paragraphs 5, 6 and 7 and paragraphs 9 through 18 shall
survive and continue in full force in accordance with their terms
notwithstanding any termination of the Employment Term.
10. NOTICES. Any notice provided for in this Agreement shall be in
writing and shall be either personally delivered, or mailed by first class mail,
return receipt requested, to the recipient at the address below indicated:
NOTICES TO CONSULTANT:
Xxxxx Xxxxxxx
00 Xxxxx Xxxx Xxxx
Xxxxxxx Xxxxx, XX 00000
NOTICES TO THE COMPANY:
Office Depot, Inc.
0000 Xxx Xxxxxxxxxx Xxxx
Xxxxxx Xxxxx, Xxxxxxx 00000
Attention: Chairman and CEO
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement shall be deemed to have been given when so delivered
or mailed.
11. SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
12. COMPLETE AGREEMENT. This Agreement and those documents expressly
referred to herein and other documents of even date herewith embody the complete
agreement and understanding among the parties and supersede and preempt any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
13. NO STRICT CONSTRUCTION. The language used in this Agreement shall
be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against any
party.
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14. COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement may be executed
in separate counterparts, each of which is deemed to be an original and all of
which taken together constitute one and the same agreement. This Agreement may
be executed by any party by delivery of a facsimile signature, which signature
shall have the same force and effect as an original signature. Any party which
delivers a facsimile signature shall promptly thereafter deliver an originally
executed signature to the other party(ies); provided, however, that the failure
to deliver an original signature page shall not affect the validity of any
signature delivered by facsimile.
15. SUCCESSORS AND ASSIGNS. This Agreement is intended to bind and
inure to the benefit of and be enforceable by Consultant, the Company and their
respective heirs, successors and assigns, except that Consultant may not assign
Consultant's rights or delegate Consultant's obligations hereunder without the
prior written consent of the Company.
16. CHOICE OF LAW. All issues and questions concerning the
construction, validity, enforcement and interpretation of this Agreement and the
exhibits and schedules hereto shall be governed by, and construed in accordance
with, the laws of the State of Florida, without giving effect to any choice of
law or conflict of law rules or provisions (whether of the State of Florida or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Florida.
17. AMENDMENT AND WAIVER. The provisions of this Agreement may be
amended or waived only with the prior written consent of the Company and
Consultant, and no course of conduct or failure or delay in enforcing the
provisions of this Agreement shall affect the validity, binding effect or
enforceability of this Agreement.
18. ARBITRATION. Any controversy which may arise between Consultant
and the Company with respect to the construction, interpretation or application
of any of the terms, provisions or conditions of this agreement or any monetary
claim arising from or relating to this agreement will be submitted to final and
binding arbitration in West Palm Beach, Florida, in accordance with the rules of
the American Arbitration Association then in effect.
19. INCORPORATION OF ATTACHMENTS BY REFERENCE. The attachments to this
Agreement are incorporated by reference and made a part hereof as if set forth
at length herein.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
OFFICE DEPOT, INC. XXXXX XXXXXXX
By: x
------------------------- --------------------------
Name:
----------------------
Its:
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ATTACHMENT A
1. HEALTH INSURANCE. Provided this Agreement has not been terminated by
Consultant without Good Reason or by the Company for Cause, Consultant
and his eligible dependents shall be entitled to health insurance
coverage comparable to the health insurance Consultant and his eligible
dependents have received during the period of his prior employment with
Viking and Office Depot for the Term of this Agreement and ending at
the end of Consultant's natural life and for his spouse on the date of
this agreement for a period ending at the end of her natural life
(provided she survives Consultant). In the event this Agreement should
be terminated by the Company without Cause or by the Consultant for
Good Reason, such benefits shall continue as provided herein as if such
termination had not occurred. Such health insurance may be under the
terms of the existing policy of insurance provided to Consultant or
pursuant to any other insurance plan selected by the Company which
provides comparable coverage and benefits. As and to the extent
Consultant is eligible for coverage under the Medicare system of the
federal government (or any of his dependents is so eligible), this
benefit may take the form of the Company's providing either a policy of
Medigap insurance sufficient to provide to Consultant a comparable
level of medical insurance to that provided during his tenure with the
Company or payments to Consultant to reimburse him for the reasonable
costs of such coverage.
2. NO OTHER BENEFITS. Consultant shall otherwise receive none of the
benefits to which he may formerly have been entitled as an employee of
Viking, including without limitation, automobile allowance, tax and
financial planning, participation in other health and welfare plans, if
any.
