Xx. X. X. Xxxxxx
X.X. Xxx 0000
Xxxx Xxxx Xxxx, XX 00000
Re: Consulting Agreement
Dear Xx. Xxxxxx:
The purpose of this letter is to set forth our agreement with respect to
the consulting and advisory services which you are to render to American
Stores Company (the "Company") commencing on August 1, 1995, subject to
ratification of this agreement by the Company's Board of Directors. Those
services, and the terms and conditions upon which they will be performed, are
as follows:
1. DUTIES/REPORTING. At the request of the Board of Directors (the
"Board") or the Chief Executive Officer of the Company (the "CEO"), you will
provide consulting and advisory services consisting of advice and consultation
to the Board and/or the CEO on strategic planning, acquisitions and
divestitures, organization and marketing, relationships with major
shareholders and financial institutions, and such other similar services as
may reasonably be requested from time to time by the Board or CEO.
The consulting and advisory services to be provided by you hereunder
shall be provided during normal business hours at such times and locations as
are mutually convenient to you and the Company, provided, however, that you
shall not be required to devote in excess of fifty percent (50%) of your time
during normal hours to such services.
2. CONSIDERATION. For your consulting and advisory services you will
be paid $750,000 per year, payable in equal monthly installments. You will be
entitled to receive this compensation regardless of whether requests for your
consulting and advisory services result in devotion of less than fifty percent
(50%) of your time, and regardless of whether you continue to serve as a
member of the Company's Board.
During the term of this Agreement you will not be entitled to any fees,
compensation or benefits in respect of any service by you on the Board or on
any Board Committee, other than reimbursement of expenses and non-monetary
benefits available to non-employee members of the Company's Board to the
extent not otherwise provided for herein.
3. SUPPORT STAFF AND SERVICES. During the term of this Agreement, the
Company will reimburse you for all reasonable costs and expenses incurred by
you in connection with (i) the maintenance and operation of an office,
including fair rental value, utilities, furniture, furnishings and equipment
of a similar standard to those furnished to you by the Company in the past,
telephone, office supplies, salary and benefits for an executive secretary of
your choosing; (ii) travel expenses in connection with your rendering services
hereunder; (iii) a driver; and (iv) any other costs and expenses reasonably
and necessarily incurred by you in connection with the performance of your
duties hereunder. In addition, you shall be entitled to such other
perquisites made available to senior executive officers of the Company in
accordance with the Company's policies and practices prevailing during the
1994 fiscal year and as such policies and practices may be modified in the
future to provide additional or increased benefits. Reimbursement shall be
made by the Company within thirty days of receipt of invoices setting forth a
description of the items for which reimbursement is sought together with the
cost or fair market value of such items and copies of invoices, receipts,
credit card statements and other supporting documentation.
4. TERM. This Agreement shall commence as of August 1, 1995 and shall
continue in effect until the earlier of: (a) July 31, 2000; (b) your death, or
any physical or mental incapacity resulting in your inability to perform the
services contemplated herein for a continuous period of one (1) year; or (c)
the effective date of any written notice of termination from you (which right
of termination may be exercised by you at any time, and which if given in the
event of any failure by the Company to perform any of its obligations
hereunder, shall not prejudice any legal or equitable remedies available to
you). Notwithstanding the termination of this Agreement, the covenants and
agreements provided for in paragraphs 6 and 7 shall survive such termination
in accordance with their terms, and the indemnification and other provisions
of paragraph 8 shall survive such termination.
In the event that this Agreement shall terminate, you or your estate
shall be entitled to receive all amounts due and owing hereunder to the date
of such termination, including unreimbursed expenses; additionally, should
this Agreement terminate because of your death, the Company will reimburse
your estate for actual services used and support staff related to your office
for up to one year following your death for the purpose of winding up your
affairs as they relate to this Agreement.
5. INDEPENDENT CONTRACTOR. Your status, in connection with the
performance of consulting and advisory services hereunder, will be that of an
independent contractor and not, for any purpose, that of an employee or agent
with authority to bind the Company in any respect. Accordingly, among other
things, you will not be entitled to participate in any compensation or benefit
plans, programs or policies maintained by the Company solely for its
employees. All payments and other consideration made or provided to you
hereunder will be made or provided without withholding or deduction of any
kind and you will assume sole responsibility for discharging, and you hereby
agree to indemnify and defend the Company against all tax or other obligations
associated therewith.
As of your retirement as an officer and employee of the Company, you are
entitled to all compensation and benefits accrued, payable or distributable to
you pursuant to the provisions of any Company qualified or non-qualified
retirement, welfare benefits, and other compensation plans or programs, in
each case in accordance with the terms and provisions of such plans and
programs. Moreover, you will be regarded by the Company as a retired employee
for purposes of the Company's benefit plans and programs.
6. CONFIDENTIALITY. Unless you believe in good faith that you are
required by law (including but not limited to the rules and regulations of the
Securities and Exchange Commission), you agree not to disclose the Company's
propriety and confidential information acquired during the term of this
Agreement pursuant to your duties hereunder to any person or entity for any
purpose other than in the ordinary course of the performance of your duties
hereunder, or use the information for your own benefit, unless the information
has been made public or has been made generally available otherwise than by
your breach of your duties under this Agreement or it otherwise ceases to be
confidential or proprietary. The foregoing shall not be construed to limit
any obligation you may have as a present or former officer or director of the
Company concerning disclosure of proprietary and confidential information.
7. NON-COMPETE. During the term of this Agreement, and for a period of
one year following termination of this Agreement, without the consent of the
Board, you will not serve as an employee, officer, director (or in any other
position of comparable function) of, or consultant to any other business or
entity engaged in the retail grocery or drug store business which is in
competition with the Company.
8. INDEMNIFICATION. The Company agrees to indemnify, protect, defend
and hold you and your estate, heirs, and personal representatives, harmless
from and against any actual or threatened action, suit or proceeding, whether
civil, criminal, administrative or investigative (hereinafter a "proceeding"),
and all losses, liabilities, damages and expenses, including reasonable
attorney's fees incurred by counsel reasonably designated or approved by you,
in connection with this Agreement or your performance hereunder, provided that
any consulting services giving rise to such indemnification shall have been
performed by you in good faith and, to the best of your knowledge, in a lawful
manner.
9. MISCELLANEOUS. This Agreement shall be binding on and inure to the
benefit of you, the Company, and you and the Company's respective heirs,
personal representatives, successors and assigns; provided, however, neither
you nor the Company shall assign this Agreement or any rights, duties or
obligations hereunder without the prior written consent of the other party.
Any merger with or into another corporation or consolidation with another
corporation or a sale of all or substantially all of the Company's assets
shall not be construed for purposes of this Agreement to be an assignment. If
any term or provision of this Agreement shall be invalid or unenforceable to
any extent, the remainder of this Agreement shall not be affected by such
invalidity or unenforceability and each remaining provision shall be valid and
enforceable to the fullest extent permitted by law. This Agreement
constitutes the entire agreement between the Company and you concerning the
subject matter hereof and supersedes and cancels any and all other written or
oral agreements or understandings with respect to the subject matter hereof.
Paragraph headings are for convenience only and do not define, limit or
construe their contents. No modification, amendment or waiver of any term or
provision of this Agreement shall be effective unless in writing and signed by
you and on behalf of the Company.
If the above terms and conditions are acceptable to you, please sign the
enclosed copy of this letter where indicated and return it to my attention.
Very truly yours,
AMERICAN STORES COMPANY
By /s/ Xxxxxx X. Xxxx
Xxxxxx X. Xxxx
Chairman and Chief Executive Officer
ACCEPTED AND AGREED TO
this 1st day of August, 1995
By /s/ X. X. Xxxxxx
X. X. Xxxxxx
