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Exhibit 10.18
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT ("Agreement"), dated December 2, 1997 is
made by and between Xxxxx X. Xxxxxxx ("Consultant") and Drug Emporium, Inc.
("Company").
Recitals
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1. The Company desires to continue to benefit from the Consultant's
business acumen and expertise by retaining the Consultant as a consultant after
his termination of employment as chief executive officer and Chairman of the
Board of the Company due to a change in control as defined in the amendment to
Consultant's Employment Agreement dated December 2, 1997.
2 . The Consultant, in accordance with the terms and provisions set
forth below, desires to be retained as a business consultant to the Company and
to consult with the Company's chief executive officer and certain other senior
officers of the Company regarding the retail deep-discount drugstore industry
and other relevant business matters.
Agreement
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NOW THEREFORE, in consideration of the mutual covenants and the
premises set forth herein, the Company and the Consultant hereby agree as
follows:
1. Term
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The consulting term, ("Term"), shall commence upon the termination of
the Consultant's employment due to a change in control as defined in the first
amendment to the Consultant's Employment Agreement with the Company,
("Commencement Date"), and shall end on the first year anniversary of the
Commencement Date. The consulting Term may be extended or renewed only pursuant
to the mutual written agreement of the Consultant and the Company.
2. Consulting Commitment
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2.1 During each month of the consulting Term, the Consultant (subject
to allowances for illness and reasonable vacation) shall hold himself
available, upon reasonable notice and during normal business hours, for 20
hours of business discussions or consultations with the chief executive officer
of the Company or with other senior officers or directors of the Company as
designated by the chief executive officer with the advice and consent of the
Consultant. In connection with any consulting services rendered, the Consultant
shall report solely and directly to the chief executive officer.
2.2. During the Term all business discussions and consultations shall
occur either (a) by
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telephonic conference call, or (b) in person at the Company's corporate offices
(or at such other locations, as may be mutually agreed upon from time to time
by the Consultant and the chief executive officer). Except as provided in the
immediately preceding sentence, the Consultant shall not be required, without
his consent, to travel to any specified geographic location or to provide any
consulting service from any location other than the Consultant's primary
personal residence.
2.3 During the consulting Term, the Consultant's arrangement with the
Company under this Agreement shall be an exclusive consulting arrangement and
during such period the Consultant shall not, directly or indirectly, provide
consulting services, or offer to provide consulting services, for a fee or any
other remuneration or benefit to any individual or entity engaged in any
business which competes, directly or indirectly, with the business of the
Company or any of its subsidiaries.
3. Consulting Fees
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During the Term, the Consultant shall receive a consulting fee equal
to $150,000 per annum to be evaluated annually commencing in December 1998,
payable by the Company on bi-weekly basis.
4. Expense Reimbursement
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During and in respect of the Term, the Consultant shall, upon
presentation to the Company of reasonable documentation, be entitled to prompt
and frill reimbursement for all reasonable business expenses, including,
without limitation, travel and commutations, hotel, restaurant and
communication costs incurred by or charged to the Consultant in or with respect
to the performance of consulting services under this Agreement and directed by
the chief executive officer.
5. Termination
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5.1 The consulting Term may be terminated, effective upon thirty (30)
days prior written notice given by the Consultant or the Company, at any time
for any reason including, without limitation, prior to the Commencement Date.
If the Consultant should die during the consulting Term, the consulting Term
shall automatically be terminated. Any termination under this Section 5 shall
not be deemed to constitute a breach of this Agreement.
5.2 If the Agreement is terminated voluntarily by the Consultant
during the Term (other than for Good Reason as defined below or due to his
death or disability as defined below), the Consultant must provide thirty (30)
days notice after which the Company will not be obligated to pay the aggregate
amount of the remaining consulting fees that would have been paid to the
Consultant under this Agreement had the Term continued for the term specified
in Section 1 of this Agreement. For purposes of this Agreement, "Good Reason"
shall mean the repeated failure by the Company, after notice from the
Consultant, to pay the Consultant's consulting
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fees. For purposes of this Agreement, "disability" shall have the meaning
provided in the Company's disability insurance plan.
5.3 If the Agreement is terminated by the Company for any reason, by
the Consultant for Good Reason or due to the Consultant's death or his becoming
disabled, the Consultant shall be entitled to receive, within thirty (30) days
after the effective date of such termination, a lump sum payment equal to (a)
any remaining consulting fees earned by the consultant through the effective
date of such termination, but not yet paid by the Company, and (b) the
aggregate amount of the remaining consulting fees that would have been paid to
the Consultant under this Agreement had the Term continued for the term
specified in Section 1 of this Agreement.
5.4 If the consultant dies during the Term, the Consultant's estate
shall be entitled to receive, within thirty (30) days after the Consultant's
death, a lump sum payment in cash equal to the sum of (a) any consulting fees
earned by the Consultant through the date of death, but not yet paid by the
Company, and (b) the aggregate amount of the remaining consulting fees that
would, but for his death, have been paid to the Consultant under this Agreement
through the end of the Term. If the Consultant dies prior to the Commencement
Date, the Consultant's estate shall not be entitled to receive any amounts
hereunder.
5.5 Except as set forth in this Section 6, the Consultant shall not be
entitled to Any other compensation or benefits under this Agreement upon or as
a result of the termination of the Agreement.
6. Legal Fees
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In the event that a claim by the Consultant (or his estate) for
consulting fees under this Agreement is disputed by the Company, the Consultant
(or his estate) shall be promptly reimbursed by the Company for all legal fees
incurred by or charged to the Consultant (or his estate) in prosecuting such
claim, provided that the Consultant (or his estate) is successful as to the
disputed claim by reason of litigation, arbitration or settlement.
7. Miscellaneous
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7.1 The parties hereto agree that the Consultant shall be an
independent contractor of the Company and shall not, among other things, be
subject to the supervision of any employee or director of the Company. The
Company and the Consultant agree that the Company shall not withhold any
amounts from the Consultant's bi-weekly consulting fee., without the prior
express written consent of the Consultant.
7.2 The Company shall, to the fullest extent permitted by law,
indemnify the Consultant from, and hold him harmless against, any and all
liabilities, costs and expenses (including, without limitation, fees and
expenses of legal counsel and/or other experts) incurred by reason of any
claim, suit or action brought against the Consultant as a direct or indirect
result of any act, omission, or failure to act, by or on behalf of the
Consultant while providing
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the services contemplated by this Agreement for the Company or for any
affiliate thereof, except for any act or omission which constitutes willful
gross misconduct by the Consultant. The obligation of the Company under this
Section 7.2 shall be in addition to and not in derogation of any other
indemnification by the Company which the Consultant may be entitled to under
other arrangements with the Company.
7.3 The Company shall require any successor to all or substantially
all of the business and/or assets of the Company, whether direct or indirect,
to assume and perform this Agreement.
7.4 No amendment, modification or waiver of any provision of this
Agreement shall be valid, binding or enforceable, unless it is in writing and
signed by the party against whom it is to be charged.
7.5 This Agreement constitutes a Consulting Agreement between the
Consultant and the Company regarding the subject matter here of and supersedes
any/all previous consulting agreements, promises, proposals, representations,
understanding and negotiations, whether written or oral, between the Consultant
and the Company regarding such subject matters.
7.6 All notices and other communications under this Agreement shall be
in writing and shall be delivered by hand or by certified mail (return receipt
requested), postage prepaid, properly addressed to the respective addresses set
forth below, or to such other address which the sending party has previously
received written notice of. Notice shall be deemed given upon delivery to the
addressee.
7.7 In the event that any disputes of any kind arise under or with
respect to this Agreement, the parties hereto agree to submit any such dispute
to binding arbitration in the State of Ohio in accordance with the rules of the
American Arbitration Association then in effect.
7.8 The validity, interpretation and performance of this Agreement
shall be governed by the laws of the State of Ohio.
IN WITNESS WHEREOF, the Consultant and the Company have executed this Agreement
as of the day and year first above written.
For: DRUG EMPORIUM, INC. Consultant:
By order of the Board of Directors
__________________________________ ______________________________
Its Xxxxx X. Xxxxxxx
Address: Address:
000 Xxxxxx Xxxxxxx Xxxxx 0000 Xxxxxx Xxxxx
Xxxxxx, Xxxx 00000 Xxxx, Xxxx 00000
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