1
Exhibit 10.3
SETTLEMENT AGREEMENT AND GENERAL RELEASE
dated as of September 30, 1998
WHEREAS, XXXXX XXXXXX ("Xx. Xxxxxx") and REGAL CINEMAS, INC. (the
"Company") desire to enter into an agreement regarding Xx. Xxxxxx'x termination
of his employment as Chief Financial Officer and all other positions held by Xx.
Xxxxxx at the Company or any of its subsidiaries, the effective date of such
termination being September 30, 1998 (the "Effective Date"); and
WHEREAS, in order to avoid any dispute as to the rights and obligations
of the parties, the parties have agreed to execute and comply fully with the
terms of this Settlement Agreement and General Release (the "Release").
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, Xx. Xxxxxx and the Company agree and covenant as
follows:
1. By entering into this Release, neither of the parties hereto admit,
and each specifically denies, any liability, wrongdoing or violation of any law,
statute, regulations, agreement or policy.
2. The Company and Xx. Xxxxxx agree to treat Xx. Xxxxxx'x resignation
of his employment with the Company on the Effective Date as a termination under
Section 6.4 of the employment agreement between Xx. Xxxxxx and the Company dated
May 27, 1997 (the "Employment Agreement") and, therefore, the obligations of the
Company to make any further payments or provide any benefits under the
Employment Agreement shall hereby cease and terminate .
3. In consideration of the obligations upon Xx. Xxxxxx as set forth in
this Release, and in full settlement and final satisfaction of any and all
claims, contractual or otherwise, which Xx. Xxxxxx had, has or may have against
the Company or the Released Parties (as defined in Section 4 hereof) with
respect to his employment, the termination of his employment with the Company
and its subsidiaries, or otherwise arising on or prior to the date of execution
of this Release, except to the extent that any such claim concerns an allegation
that the Company has failed to comply with any obligations created by this
Release, the Company agrees to cancel Xx. Xxxxxx'x Old Options (as defined in
the Management Stockholder's Agreement dated May 27, 1998 between Xx. Xxxxxx and
the Company (the "Management Stockholder's Agreement")) to purchase 566,463
shares on a post-split basis and all of Xx. Xxxxxx'x New Options (as defined in
the Management Stockholder's Agreement) for aggregate cash consideration of
$2,138,565, less applicable withholding taxes and other deductions required by
law.
4. (a) Except as expressly set forth herein, Xx. Xxxxxx, for and in
consideration of the payments as set forth in this Release and for other good
and valuable
2
2
consideration, hereby releases and forever discharges, and by this Release does
release and forever discharge, the Company, the Company's divisions, merged
entities and affiliates, stockholders (including without limitation all
affiliates of Kohlberg Kravis Xxxxxxx & Co. L.P. and Hicks, Muse, Xxxx & Xxxxx
Incorporated), subsidiaries, parents, branches, predecessors, successors,
assigns, officers, directors, trustees, employees, agents, administrators,
representatives, attorneys, insurers or fiduciaries, past, present or future
(the "Released Parties") of and from all debts, obligations, promises,
covenants, collective bargaining obligations, agreements, contracts,
endorsements, bonds, controversies, disputes, claims, suits or causes of actions
known or unknown, suspected or unsuspected, of every kind and nature whatsoever,
which may heretofore have existed or which may now exist, including but not
limited to those arising under the Age Discrimination in Employment Act of 1967,
as amended, ("ADEA"), Title VII of the Civil Rights Act of 1964, as amended, the
Fair Labor Standards Act, as amended, the Equal Pay Act, as amended, the
Employee Retirement Income Security Act of 1974, as amended, the Americans with
Disabilities Act, as amended, the Reconstruction Era Civil Rights Act, as
amended, the Rehabilitation Act of 1973, as amended, the Family and Medical
Leave Act of 1992, and any and all state or local laws regarding employment
discrimination and/or federal, state or local laws of any type or description
regarding employment or the retention of options to purchase securities retained
by Xx. Xxxxxx pursuant to the Management Stockholder's Agreement, including but
not limited to any and all claims arising from or derivative of Xx. Xxxxxx'x
employment with the Company and its subsidiaries and Xx. Xxxxxx'x termination
from employment with the Company and its subsidiaries or otherwise, as well as
any rights or claims Xx. Xxxxxx or his attorney has or may have for costs,
expenses, attorneys' fees or otherwise, and except with respect to any claims
arising from or derivative of any criminal conduct or fraud, and except with
respect to any claim for indemnification from the Company or its subsidiaries in
connection with Xx. Xxxxxx'x service as director, officer or employee of the
Company or any subsidiary of the Company.
(b) Except as expressly set forth herein, the Company (on behalf of
itself and its subsidiaries), Kohlberg Kravis Xxxxxxx & Co. L.P., KKR 1996 Fund
L.P., KKR Partners II, L.P., Hicks, Muse, Xxxx & Xxxxx Incorporated and Regal
Equity Partners, L.P. for and in consideration of performance of the obligations
as set forth in this Release and for other good and valuable consideration,
hereby release and forever discharge, and by this Release do release and forever
discharge, Xx. Xxxxxx of and from all debts, obligations, promises, covenants,
agreements, contracts, endorsements, bonds, controversies, disputes, claims,
suits or causes of actions known or unknown, suspected or unsuspected, of every
kind and nature whatsoever, which may heretofore have existed or which may now
exist, including but not limited to federal, state or local laws of any type or
description regarding employment or the retention of options to purchase
securities retained by Xx. Xxxxxx pursuant to the Management Stockholder's
Agreement, including but not limited to any and all claims arising from or
derivative of Xx. Xxxxxx'x employment with the Company and Xx. Xxxxxx'x
termination from employment with the Company and its subsidiaries or otherwise,
as well as any rights or claims the Company (on behalf of itself and its
subsidiaries), Kohlberg Kravis Xxxxxxx & Co. L.P., KKR 1996 Fund L.P., KKR
Partners II, L.P., Hicks, Muse, Xxxx & Xxxxx Incorporated or Regal Equity
Partners, L.P. or their attorneys have or may have for costs, expenses,
3
3
attorneys' fees or otherwise, and except with respect to any claims arising from
or derivative of any criminal conduct or fraud.
5. Xx. Xxxxxx covenants and agrees not to xxx, file any grievance,
arbitration or other proceeding, administrative or judicial, against the
Released Parties and the Company, Kohlberg Kravis Xxxxxxx & Co. L.P., KKR 1996
Fund L.P., KKR Partners II, L.P., Hicks, Muse, Xxxx & Xxxxx Incorporated and
Regal Equity Partners, L.P. covenant and agree not to xxx, file any grievance,
arbitration or other proceeding, administrative or judicial, against Xx. Xxxxxx
in any court of law or equity, or before any administrative agency, with respect
to any matter whatsoever released hereby, including but not limited to matters
arising from or derivative of Xx. Xxxxxx'x employment with the Company and Xx.
Xxxxxx'x termination from employment with the Company and its subsidiaries or
otherwise.
6. (a) Xx. Xxxxxx and the Company expressly understand and agree that
the Company's obligations under this Release are in lieu of any and all other
amounts to which Xx. Xxxxxx might be, is now or may become entitled to receive
from any of the Released Parties upon any claim whatsoever and, without limiting
the generality of the foregoing, except as provided in Sections 3 and 6(b)
herein, Xx. Xxxxxx expressly waives any right or claim that he may have or
assert to employment or reinstatement to employment with the Released Parties,
or payment for backpay, front pay, interest, bonuses, damages, vacation, sick
leave, medical, dental, optical or hospitalization benefits, accidental death
and dismemberment coverage, long term disability coverage, stock options,
pensions, education benefits, automobile usage benefits, life insurance
benefits, overtime, severance pay, liquidated damages and/or attorneys' fees or
costs. Xx. Xxxxxx expressly understands and agrees that any Company stock option
in which he has any interest shall be canceled as of the Effective Date.
(b) Nothing herein shall effect Xx. Xxxxxx"s rights with respect to
(i) his account under the Company 401(k) plan and (ii) continuation of health
insurance coverage under COBRA.
7. (a) Xx. Xxxxxx agrees that, without limiting the Released Parties'
remedies, any material violation or breach by him of this Release or the
institution of any grievance, arbitration or other proceeding, administrative or
judicial, by Xx. Xxxxxx against any of the Released Parties in violation of this
Release shall give rise to an action by any such Released Party, including, but
not limited to, the Company, Kohlberg Kravis Xxxxxxx & Co. L.P., KKR 1996 Fund
L.P., KKR Partners II, L.P., Hicks, Muse, Xxxx & Xxxxx Incorporated or Regal
Equity Partners, L.P., for relief including, but not limited to, damages caused
by such breach and shall forever release and discharge the applicable Released
Party from the performance of its obligations arising from this Release but
shall not release Xx. Xxxxxx from the performance of his obligations pursuant to
this Release.
(b) The Company agrees that, without limiting Xx. Xxxxxx'x remedies,
any material violation or breach by the Company, Kohlberg Kravis Xxxxxxx & Co.
L.P., KKR 1996 Fund L.P., KKR Partners II, L.P., Hicks, Muse, Xxxx & Xxxxx
Incorporated or Regal Equity Partners, L.P. of this Release or the institution
of any grievance, arbitration or
4
4
other proceeding, administrative or judicial, by any of the Released Parties
against Xx. Xxxxxx in violation of this Release shall give rise to an action by
Xx. Xxxxxx for relief including, but not limited to, damages caused by such
breach and shall forever release and discharge Xx. Xxxxxx from the performance
of his obligations arising from this Release with respect to the applicable
Released Party but shall not release the Company, Kohlberg Kravis Xxxxxxx & Co.
L.P., KKR 1996 Fund L.P., KKR Partners II, L.P., Hicks, Muse, Xxxx & Xxxxx
Incorporated or Regal Equity Partners, L.P. from the performance of its
obligations pursuant to this Release.
8. The parties each agree not to make any material disparaging
statements about the other, the Released Parties or the Company's personnel
policies and practices to any of the Company's customers, competitors,
suppliers, employees, former employees, or the press or other media in any
country and neither party shall issue any press release, other than in order to
comply with law or in response to press inquiries.
9. Xx. Xxxxxx covenants and agrees that he will return to the Company
any letters, files, documents, equipment, supplies, security access passes,
property or other items in his possession or control which were entrusted or
issued to him during the course of his employment with the Company.
10. Xx. Xxxxxx further covenants and agrees, as a condition of the
Company's performance of its obligations arising from this Release, that Xx.
Xxxxxx will regard and preserve all noncompetition, confidentiality and
nonsolicitation obligations set forth in Section 12 of the Employment Agreement
and Section 26 of the Management Stockholder's Agreement.
11. Should any provision of this Release be found to be in violation of
any law, or ineffective or barred for any reason whatsoever, the remainder of
this Release shall be in full force and effect to the maximum extent permitted
by law.
12. The Company and Xx. Xxxxxx agree to execute such other documents
and to take such other actions as may be reasonably necessary to further the
purposes of this Release.
13. Xx. Xxxxxx acknowledges and agrees that, in deciding to execute
this Release, he has had the opportunity to consult with legal, financial and
other personal advisors of his own choosing as he deems appropriate, in
assessing whether to execute this Release and that he has consulted with legal
counsel. Xx. Xxxxxx represents and acknowledges that no representations,
statement, promise, inducement, threat or suggestion has been made by the
Company or the Released Parties to influence him to sign this Release except
such statements as are expressly set forth herein. Xx. Xxxxxx agrees that he has
been given a minimum of twenty-one (21) days within which to consider the terms
and effects of this Release and to consult with, and to ask any questions that
he may have of anyone, including legal counsel and other personal advisors of
his own choosing, and that he has executed this Release voluntarily and with
full understanding of its terms and effects. Xx. Xxxxxx understands that in
executing
5
5
the Release he is, inter alia, giving up any rights and claims he may have under
the ADEA. The Company and Xx. Xxxxxx agree that Xx. Xxxxxx has a period of seven
(7) days after signing this Release within which to revoke his agreement, and
neither the Company nor any other person is obligated to make any payments or
provide any other benefits to Xx. Xxxxxx hereunder until eight (8) days have
passed since the signing of this Release so long as no revocation has occurred.
Xx. Xxxxxx further agrees that no fact, evidence, event or transaction currently
unknown to him but which hereafter may become known to him shall affect in any
way or manner the final and unconditional nature of this Release.
14. The foregoing represents the entire agreement between Xx. Xxxxxx
and the Company and supersedes all prior agreements or understandings, written
or oral, between them, other than Section 12 of the Employment Agreement and
Section 26 of the Management Stockholder's Agreement. This Release may not be
changed or modified, except by a written instrument signed by Xx. Xxxxxx, the
Company, Kohlberg Kravis Xxxxxxx & Co. L.P. and KKR 1996 Fund L.P., KKR Partners
II, L.P., Hicks, Muse, Xxxx & Xxxxx Incorporated and Regal Equity Partners, L.P.
15. This Release shall be construed, interpreted and governed in
accordance with the laws of the state of Delaware without reference to rules
relating to conflicts of law.
6
6
16. This Release may be executed in two or more counterparts, each of
which will be deemed an original.
-------------------
Xxxxx Xxxxxx
-------------------
-------------------
Address
Dated as of:
STATE OF _______ )
: ss.:
COUNTY OF _____ )
On ____________, 1998, before me personally came Xxxxx Xxxxxx
to me known and known to me to be the individual described in, and who executed,
the foregoing General Release, and duly acknowledged to me that he executed
same.
---------------------------
Notary Public
7
7
REGAL CINEMAS, INC
on behalf of itself and its subsidiaries
By:
-------------------
Name:
Title:
Dated as of: _________, 1998.
KOHLBERG KRAVIS XXXXXXX & CO. L.P.
By: KKR & CO. L.L.C., its general partner
By:
---------------------
Name:
Title:
Dated as of: _________, 1998.
KKR 1996 FUND L.P.
By: KKR Associates 1996 L.P., its general partner
By: KKR 1996 GP L.L.C., its general partner
By:
---------------------
Name:
Title:
Dated as of: __________, 1998.
8
8
KKR 1996 FUND L.P.
By: KKR Associates 1996 L.P., its general partner
By: KKR 1996 GP L.L.C., its general partner
By:
------------
Name:
Title:
Dated as of: __________, 1998.
KKR PARTNERS II, L.P.
By: KKR Associates, L.P., its general partner
By:
----------------
Name:
Title:
Dated as of: __________, 1998.
REGAL EQUITY PARTNERS, L.P.
By: TOH/Ranger, X.XX., its general partner
By:
----------------
Authorized Signatory
Dated as of: __________, 1998.
9
9
HICKS, MUSE, XXXX & XXXXX INCORPORATED
By:
----------------
Name:
Title:
Dated as of: ___________, 1998.
