EXHIBIT 10.8
AGREEMENT AND RELEASE
THIS AGREEMENT AND RELEASE is entered into by and between Xx. Xxxxx X.
Xxxxxx ("Xxxxxx"), a resident of Missouri City, Texas, and Xxxxxxx'x Food
Markets, Inc. ("Xxxxxxx'x"), a Texas corporation, having its principal place of
business in Houston, Texas.
WITNESSETH:
Xxxxxx is presently an employee and officer of Xxxxxxx'x and, at various
times, has been an employee, officer, and director of Xxxxxxx'x, certain of its
affiliated and subsidiary companies, and/or their predecessors or successors in
interest (collectively, with Xxxxxxx'x, the "Xxxxxxx'x Entities" or,
individually, a "Xxxxxxx'x Entity"); and
Xxxxxx is voluntarily resigning from any and all positions he holds with
Xxxxxxx'x or any other Xxxxxxx'x Entity, in the capacity of an employee,
officer, advisor, or any other position or capacity held by virtue of his
employment by or association with Xxxxxxx'x or any other Xxxxxxx'x Entity; and
Xxxxxx desires to release any claims or causes of action he may have
arising from or relating to his employment or service or association with
Xxxxxxx'x or any of the other Xxxxxxx'x Entities; and
Xxxxxx and Xxxxxxx'x desire to establish their respective rights and
obligations for the future and provide for the engagement of Xxxxxx as a
consultant for Xxxxxxx'x; and
Now, therefore, for and in consideration of the mutual covenants and
promises hereinafter set forth, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Xxxxxx and
Xxxxxxx'x hereby agree:
1. Termination. As of the effective date of this Agreement and Release,
Xxxxxx hereby resigns from employment with, and as an officer of, Xxxxxxx'x and
any other Xxxxxxx'x Entity. Except as otherwise provided in paragraphs 17
through 20 herein, Xxxxxx further resigns any other positions, posts, offices,
or assignments respecting his association with Xxxxxxx'x or any other Xxxxxxx'x
Entity. Xxxxxxx'x hereby accepts Xxxxxx' resignation. Except as otherwise
provided in paragraphs 17 through 20 herein, Xxxxxx acknowledges and agrees that
he has no authority to and will not act as an employee, officer, or in any other
capacity for any Xxxxxxx'x Entity from the effective date of this Agreement and
Release forward. Xxxxxxx'x shall pay Xxxxxx his regular salary and benefits to
the date of his resignation. Such amounts shall be paid less customary
withholding for taxes and applicable deductions. Xxxxxx acknowledges that the
payments made pursuant to this paragraph together with the outplacement services
provided pursuant to paragraph 7 are in full satisfaction of all wages,
benefits, and other compensation owed by any of the Xxxxxxx'x Entities to Xxxxxx
for employment or service to the effective date of this Agreement and Release
with any of the Xxxxxxx'x Entities.
2. Severance Payments. Xxxxxxx'x agrees to pay to Xxxxxx the following
severance payments:
(a) From the effective date of this Agreement and Release through the
Severance Payment Date (as defined hereafter), Xxxxxxx'x shall
continue to pay to Xxxxxx, on a bi-weekly basis, his regular salary
(less customary withholding for taxes and applicable deductions);
and
(b) On the Severance Payment Date, Xxxxxxx'x shall pay to Xxxxxx a lump
sum payment which is equal to $625,000 less the gross amount (after
adding back in any withholding and deductions) paid in subparagraph
2(a) above. Such amount shall be further reduced for any customary
withholding for taxes and applicable deductions.
For purposes of this paragraph 2, the term Severance Payment Date shall mean the
earlier of: (i) the date of the closing of the "transactions" which are the
subject of the Subscription Agreement dated as of April 2, 1997, among a
Xxxxxxx'x Entity, an affiliate of Kohlberg Kravis Xxxxxxx & Co., and Xxxxxx X.
Xxxxxxx (hereinafter the "Subscription Agreement") or (ii) September 1, 1997;
provided, however, that the Severance Payment Date shall not be before the
expiration of seven (7) days after the date of execution of this Agreement and
Release. Xxxxxx acknowledges and agrees that these severance payments exceed and
fully satisfy any claim for severance he may have pursuant to any plan for
severance maintained by any Xxxxxxx'x Entity. In the event that Xxxxxx is
entitled to severance payments pursuant to any severance plan or program of any
Xxxxxxx'x Entity that cannot be voluntarily released by Xxxxxx, the severance
payments set forth in this paragraph shall be offset and reduced by any such
payments.
3. Prior Rights and Obligations. Except as otherwise expressly provided
herein, this Agreement and Release extinguishes all rights, if any, which Xxxxxx
may have, and obligations, if any, which any of the Xxxxxxx'x Entities may have,
contractual or otherwise, relating to the employment or resignation or
termination of employment of Xxxxxx with Xxxxxxx'x or any of the other Xxxxxxx'x
Entities. All of Xxxxxx' executive perquisites and benefits, except as otherwise
provided herein, shall cease as of the effective date of this Agreement and
Release.
4. Liability Insurance and Indemnities. With respect to Xxxxxx' services
through the effective date of this Agreement and Release in the scope of his
employment, in his status as a fiduciary, or as an officer or director of any
Xxxxxxx'x Entity, and with respect to Xxxxxx' services as a consultant
hereunder, Xxxxxxx'x agrees to maintain on behalf of Xxxxxx, on a basis no less
favorable than as provided by Xxxxxxx'x on behalf of Xxxxxx on the day prior to
the effective date of this Agreement:
(a) All insurance coverages respecting any liability or potential
liability which Xxxxxx' may incur or may have incurred. Such coverages
shall be maintained during the full term of Xxxxxx' consulting engagement
and for at least such "trailing periods" as are provided by such coverages
on the day prior to the effective date of this Agreement and Release.
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(b) All contractual provisions (whether embodied in articles of
incorporation, bylaws, board resolutions, agreements, or otherwise) which
in any way limit the liability of, or provide advances to or protections
to, or indemnify Xxxxxx.
Notwithstanding anything in the foregoing to the contrary, Xxxxxxx'x shall not
continue to reimburse Xxxxxx for his personal umbrella insurance premiums or any
other insurance premiums after the effective date of this Agreement and Release.
5. Stock Option and Restricted Stock Plan and Repurchase Agreement. This
Agreement and Release shall hereby amend the Restricted Period as set forth in
the Restricted Stock Agreement effective September 30, 1996, between Xxxxxxx'x
and Xxxxxx (the "Restricted Stock Agreement"). The Restricted Period in
paragraph 2 of the Restricted Stock Agreement shall expire as of the effective
date of this Agreement and Release and the shares subject to such Restricted
Stock Agreement shall be delivered to Xxxxxx at the same time the severance
payment pursuant to paragraph 2 is made provided that the conditions precedent
set forth in paragraph 7 of the Restricted Stock Agreement are met. This
Agreement and Release shall extinguish all repurchase obligations and rights of
Xxxxxxx'x Management Corporation, Inc. (and/or any Xxxxxxx'x Entity) and Xxxxxx
under the Repurchase Agreement between Xxxxxxx'x Management Corporation, Inc.
and Xxxxxx dated January 15, 1982 (the "Repurchase Agreement"); provided,
however, that if the closing of the "transactions" which are the subject of the
Subscription Agreement does not occur on or before December 31, 1997, such
repurchase obligations and rights shall be revived effective January 1, 1998,
and shall continue thereafter in full force and effect pursuant to the terms of
the Repurchase Agreement.
6. Continuing Rights in Benefit Plans. Except as otherwise provided
herein, Xxxxxx shall be entitled to receive the benefits to which he is entitled
under any employee pension benefit plans or employee welfare benefit plans
sponsored or maintained by the Xxxxxxx'x Entities according to their terms. In
the event of any change or modification of any such plans after the effective
date of this Agreement and Release, including changes, if any, that may result
in a reduction or termination of benefits, Xxxxxx and any beneficiaries claiming
through him in such plan or plans will be subject to such changes and
modifications on the same terms and conditions as all other participants or
beneficiaries.
7. Outplacement Services. Beginning on the date of Xxxxxx' choice,
Xxxxxxx'x shall provide, through a vendor mutually agreed to by Xxxxxx and
Xxxxxxx'x, outplacement services for Xxxxxx in accordance with its customary
policy of providing outplacement services for officers upon severance of
employment; provided, however, that such outplacement services shall in no event
be provided for a period in excess of one (1) year; and, provided further, that
such outplacement services shall in no event be provided after December 31,
1998. Notwithstanding anything in the foregoing to the contrary, the total cost
to Xxxxxxx'x of such outplacement services shall not exceed $30,000.
8. Expenses. Xxxxxx shall, within thirty (30) days of the effective date
of this Agreement and Release, submit all actual, reasonable, and customary
expenses incurred by him in the course of his employment with proper
documentation, which, upon verification, Xxxxxxx'x shall
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reimburse promptly in accordance with Xxxxxxx'x reimbursement policy. Xxxxxx
acknowledges and agrees that he has not incurred and has no authority to incur
any employment related expenses after the effective date of this Agreement and
Release and further agrees that Xxxxxxx'x shall have no obligation to reimburse
expenses not submitted within the time period set forth above except as provided
in paragraph 19.
9. Company Assets. Xxxxxx hereby represents and warrants that he has no
claim or right, title, or interest in any property designated on the books of
any Xxxxxxx'x Entities as property or assets of any of the Xxxxxxx'x Entities.
On or before the effective date of this Agreement and Release, Xxxxxx shall
deliver to Xxxxxxx'x any such property in his possession or control, including,
without limitation, any credit cards furnished by Xxxxxxx'x for his use.
10. Proprietary and Confidential Information. In accordance with Xxxxxx'
existing and continuing obligations, Xxxxxx agrees and acknowledges that the
various Xxxxxxx'x Entities have developed and own valuable "Proprietary and
Confidential Information" which constitutes valuable and unique property
including, without limitation, concepts, ideas, plans, strategies, analyses,
surveys, and proprietary information related to the past, present, or
anticipated business of various of the Xxxxxxx'x Entities, including, but not
limited to, costs, prices, uses, applications of products and services, results
of investigations or experiments, and all apparatus, products, processes,
compositions, samples, formulas, computer programs, pricing policy, financial
information, policy and/or procedure manuals, training and recruiting
procedures, accounting procedures, the status and content of Xxxxxxx'x Entities'
contracts with suppliers, employees, and customers, the Xxxxxxx'x Entities'
business philosophy, and servicing, retailing, or marketing methods and
techniques at any time used, developed, or investigated by any Xxxxxxx'x Entity
which are not generally available to the public or which are maintained as
confidential by any Xxxxxxx'x Entity. Moreover, Xxxxxx agrees and acknowledges
that the term Proprietary and Confidential Information of the Xxxxxxx'x Entities
includes, without limitation, all analyses, correspondence, data or information,
memoranda, notes, records, or other documents, including charts or drawings, and
all copies thereof, made, composed, or received by Xxxxxx, solely or jointly
with others, and which are in Xxxxxx' possession, custody, or control and which
are related in any manner to the past, present, or anticipated business of any
of the Xxxxxxx'x Entities. Except as may be required by law, Xxxxxx agrees that
he will not at any time, either during or subsequent to the term of this
Agreement and Release, disclose to others, permit to be disclosed, use, permit
to be used, copy, or permit to be copied, except in pursuance of his services on
behalf of any Xxxxxxx'x Entity pursuant to paragraph 17 of this Agreement and
Release, any such Proprietary and Confidential Information (whether or not
developed by Xxxxxx) without Xxxxxxx'x prior written consent. Except as may be
required by law, Xxxxxx further agrees to maintain in confidence any proprietary
and confidential information of third parties received or of which Xxxxxx has
knowledge as a result of his employment, association, or work with any Xxxxxxx'x
Entity. Xxxxxx agrees that Xxxxxxx'x shall be entitled to inform all potential
or new employers of this Agreement and Release. The prohibitions of this
paragraph 10 shall not apply, however, to information in the public domain (but
only if the same becomes part of the public domain through a means other than a
disclosure prohibited hereunder).
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11. Documents. Xxxxxx agrees to leave in his office or deliver to
Xxxxxxx'x at the termination of his employment all correspondence, memoranda,
notes, records, drawings, sketches, plans, supplier lists, employee lists,
customer lists, product compositions, data or information, analysis, or other
documents and all copies thereof (all of which are hereafter referred to as the
"Documents") which are in his possession, custody, or control and which are
related in any manner to the past, present, or anticipated business of any of
the Xxxxxxx'x Entities. In this regard, Xxxxxx hereby grants and conveys to
Xxxxxxx'x all right, title and interest in and to, including, without
limitation, the right to possess, print, copy, and sell or otherwise dispose of,
any reports, records, papers, summaries, photographs, drawings, data,
information, or other documents, and writings, and copies, abstracts or
summaries thereof, which may have been prepared by Xxxxxx or under his direction
or which may have come into Xxxxxx' possession in any way during the term of his
employment with any of the Xxxxxxx'x Entities which relate in any manner to
past, present, or anticipated business of any of the Xxxxxxx'x Entities. Xxxxxx
acknowledges that all work performed, including, but not limited to, all
Documents and other writings authored in whole or in part by him pursuant to his
employment or his consulting engagement shall be deemed "work made for hire"
under the Copyright Act and further agrees to assign, and does hereby assign, to
Xxxxxxx'x all rights therein, including, without limitation, all copyrights
therein, all rights to prepare derivative works therefrom, and all writer's,
consultant's, architect's, engineer's, or other proprietary or "moral" rights
therein for the full term thereof, throughout the world. Xxxxxx shall not use,
sell, or reproduce such work, or any part thereof, without Xxxxxxx'x prior
written permission. Notwithstanding anything in the foregoing to the contrary,
however, Xxxxxxx'x and Xxxxxx agree that Xxxxxx may keep copies of speeches that
Xxxxxx delivered while employed by Xxxxxxx'x and, after the expiration of two
(2) years from the effective date of this Agreement and Release, such speeches
shall be considered to be in the public domain and may be used by Xxxxxx as he
sees fit. In the event of a breach or threatened breach of any of the provisions
of paragraphs 10 and 11, Xxxxxxx'x shall be entitled to an injunction ordering
the return of such Proprietary and Confidential Information and Documents and
any and all copies thereof and restraining Xxxxxx from using or disclosing, for
Xxxxxx' benefit or the benefit of others, in whole or in part, any Proprietary
and Confidential Information, including, but not limited to, the Proprietary and
Confidential Information which such Documents contain, constitute, or embody.
Xxxxxx further agrees that any breach or threatened breach of any of the
provisions of paragraphs 10 and 11 would cause irreparable injury to Xxxxxxx'x
for which it would have no adequate remedy at law. Nothing herein shall be
construed as prohibiting Xxxxxxx'x from pursuing any other remedies available to
it for any such breach or threatened breach, including the recovery of damages.
12. Cooperation. Xxxxxx shall cooperate with the Xxxxxxx'x Entities to the
extent reasonably required in all matters relating to the winding up of his
pending work on behalf of any of the Xxxxxxx'x Entities and the orderly transfer
of any such pending work as designated by Xxxxxxx'x. Xxxxxx shall take such
further action and execute any such further documents as may be reasonably
necessary or appropriate in order to carry out the provisions and purposes of
this Agreement.
13. Xxxxxx' Representation. Xxxxxx represents, warrants, and agrees that
he has not filed any claims, appeals, complaints, charges, or lawsuits against
any of the Xxxxxxx'x Entities or their respective employees, officers,
directors, shareholders, agents, and representatives (collectively,
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including the Xxxxxxx'x Entities, the "Xxxxxxx'x Parties") with any governmental
agency or court and that he will not file or permit to be filed or accept
benefit from any such claim, complaint, or petition filed with any court by him
or on his behalf at any time hereafter; provided, however, this shall not limit
Xxxxxx from benefiting as a class member in Xxxxx X. Xxxx and Xxxxxx X. Xxxxx x.
Xxxxxxxx Food Markets, Inc., et al. and this shall not limit Xxxxxx from filing
an action for the sole purpose of enforcing his rights under this Agreement and
Release; and provided further, this paragraph 13 shall not limit Xxxxxx from
filing an action for the sole purpose of enforcing his rights pursuant to any
plan maintained by Xxxxxxx'x which is subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"). Xxxxxx represents and warrants that
no other person or entity has any interest or assignment of any claims or causes
of action, if any, he may have against any Xxxxxxx'x Party and which, except as
provided herein, he now releases in their entirety.
14. Release. Xxxxxx agrees to release, acquit, and discharge and does
hereby release, acquit, and discharge Xxxxxxx'x, all Xxxxxxx'x Entities, and all
Xxxxxxx'x Parties, collectively and individually, from any and all claims and
from any and all causes of action, of any kind or character, whether now known
or not known, he may have against any of them, including, but not limited to,
any claim for salary, benefits, expenses, costs, damages, compensation,
remuneration, or wages; and all claims or causes of action arising from his
employment, termination of employment, or any alleged discriminatory employment
practices, including, but not limited to, any and all claims or causes of action
arising under Title VII of the Civil Rights Act of 1964, the Americans with
Disabilities Act, the Age Discrimination in Employment Act, the Texas Commission
on Human Rights Act, or any and all claims or causes of action arising under any
other federal, state, or local laws pertaining to discrimination in employment
or equal employment opportunity. This release also applies to any claims brought
by any person or agency or class action under which Xxxxxx may have a right or
benefit; provided, however, this release shall not limit Xxxxxx from benefiting
as a class member in Xxxxx X. Xxxx and Xxxxxx X. Xxxxx x. Xxxxxxxx Food Markets,
Inc., et al.; and provided further, however, this release shall not discharge
Xxxxxx' rights pursuant to any plan maintained by Xxxxxxx'x which is subject to
ERISA. Notwithstanding anything to the contrary in the foregoing, nothing in
this paragraph 14 shall serve to waive or release any rights or claims that may
arise after the date this Agreement and Release is executed and nothing in this
paragraph 14 shall affect any future obligation Xxxxxxx'x may have pursuant to
paragraph 4.
15. No Admissions. Xxxxxx expressly understands and agrees that the terms
of this Agreement and Release are contractual and not merely recitals and that
the agreements herein and consideration paid is to compromise doubtful and
disputed claims, if any, avoid litigation, and buy peace, and that no statement
or consideration given shall be construed as an admission of liability by any
Xxxxxxx'x Party, all such liability being expressly denied.
16. Noncompetition. Xxxxxx and Xxxxxxx'x agree and acknowledge that
Xxxxxxx'x Entities have developed and own valuable Proprietary and Confidential
Information (as defined in paragraph 10 of this Agreement and Release) and that
Xxxxxxx'x Entities have developed substantial goodwill. Xxxxxx and Xxxxxxx'x
further agree and acknowledge that Xxxxxxx'x has a substantial and legitimate
interest in protecting its Proprietary and Confidential Information and
goodwill. Xxxxxxx'x and Xxxxxx further agree and acknowledge that the provisions
of this paragraph are reasonably necessary to protect Xxxxxxx'x legitimate
business interests. During the two (2) year period
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following the effective date of this Agreement and Release, Xxxxxx shall not, as
a shareholder, director, employee, officer, partner, consultant, or otherwise,
at any location in the United States, engage directly or indirectly in any
business or enterprise which is "in competition" with any Xxxxxxx'x Entity. A
business or enterprise "in competition" with any Xxxxxxx'x Entity includes any
business or enterprise that is engaged in any business activity of wholesale or
retail grocery distribution within Texas. However, Xxxxxx shall be allowed to
purchase and hold for investment less than two percent (2%) of the shares of any
corporation in competition with any Xxxxxxx'x Entity whose shares are regularly
traded on a national securities exchange or in the over-the-counter market.
Xxxxxx further agrees that the existence of any claim or cause of action of
Xxxxxx against Xxxxxxx'x, whether predicated on this Agreement and Release or
otherwise, shall not constitute a defense to the enforcement by Xxxxxxx'x of any
or all of this paragraph 16. Xxxxxx agrees that the scope of the restrictions as
to time, geographic area, and scope of activity in this paragraph 16 are
reasonably necessary for the protection of Xxxxxxx'x legitimate business
interests and are not oppressive or injurious to the public interest. As
independent and valuable consideration for Xxxxxx' obligations pursuant to this
paragraph 16, Xxxxxxx'x agrees to pay to Xxxxxx a total of $2OO,OOO over the two
(2) year term of this paragraph 16 in equal bi-weekly installments (less any
applicable withholding for taxes) with the first installment payable as of the
effective date of this Agreement and Release. Xxxxxx agrees that in the event of
a breach or threatened breach of any of the provisions of this paragraph 16,
Xxxxxxx'x shall be entitled to inform all potential or new employers of Xxxxxx
of this paragraph 16, and Xxxxxxx'x shall be entitled to injunctive relief
against Xxxxxx' activities to the extent allowed by law. Xxxxxx further agrees
that any breach or threatened breach of any of the provisions of this paragraph
16 would cause irreparable injury to Xxxxxxx'x for which it would have no
adequate remedy at law. Xxxxxx and Xxxxxxx'x acknowledge that in the event
Xxxxxx breaches any obligation under this paragraph 16, the amount of damages
caused by such breach is impossible or difficult to quantify. Therefore, Xxxxxx
and Xxxxxxx'x agree that, in the event Xxxxxx materially breaches any of his
obligations pursuant to this paragraph 16, as liquidated damages, all payments
pursuant to this paragraph 16 shall cease immediately and no further payments
shall be paid pursuant to this paragraph 16. Xxxxxx and Xxxxxxx'x agree that the
liquidated damages provided herein are a reasonable measure of recovery of
damages in the event of a breach of Xxxxxx' obligations pursuant to this
paragraph 16 and are not provided as a penalty and, further, that such
liquidated damages shall serve as the only measure of damages in the event of
such a breach. Nothing herein shall be construed as prohibiting Xxxxxxx'x from
pursuing any other remedies available to it for any such breach or threatened
breach; provided, however, that any recovery of damages shall be in accordance
with the foregoing liquidated damage provisions. Notwithstanding anything in the
foregoing to the contrary, not more than once in any six (6) month period (or,
if the Board of Directors of Xxxxxxx'x (the "Board") so consents, in its sole
discretion, on a more frequent basis), Xxxxxx may consult with the Board with
respect to any proposed activity or a reasonable number of proposed activities
of Xxxxxx and, if Xxxxxx obtains written permission from the Board to engage in
such activity or activities, such activity or activities shall not constitute a
breach of Xxxxxx' obligations pursuant to this paragraph 16.
17. Consulting Services. From and after the effective date of this
Agreement and Release, Xxxxxx will consult and cooperate with Xxxxxxx'x on
matters involving pending or future litigation in which Xxxxxxx'x is or may be
involved and such other matters and at such times and places as Xxxxxxx'x may
reasonably request. It is contemplated that Xxxxxx' consulting services will
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be rendered on an irregular and part-time basis. Xxxxxx will not be required to
follow any established work schedule or to report to Xxxxxxx'x at any specified
times, either when performing consulting services or during periods when Xxxxxx
is not performing services but is holding himself available to so perform;
provided, however, that Xxxxxx' presence and cooperation at certain conferences,
depositions, and court appearances which relate to matters involving litigation
may be required from time to time. In the performance of consulting services
requested by Randall's, Gowens shall coordinate the furnishing of his services
with representatives of Xxxxxxx'x, but the method and manner of performance of
such services shall be within the control of Xxxxxx; provided, however, that in
matters involving litigation, Xxxxxx shall cooperate fully with Xxxxxxx'x and
Xxxxxxx'x outside counsel. Xxxxxxx'x shall not exercise supervision of Xxxxxx in
the performance of his consulting services.
18. Consulting Fee. Recognizing that Xxxxxx' consulting services will be
rendered on an irregular and part-time basis, and in consideration for Xxxxxx'
covenants and promises in paragraph 17, Xxxxxxx'x shall pay Xxxxxx a consulting
fee of $25,000 per annum payable as one lump sum amount of $75,000 at the same
time that the severance payment pursuant to paragraph 2 is made. As further
payment for Xxxxxx' consulting services, Xxxxxxx'x shall furnish to Xxxxxx
medical and dental insurance for thirty-six (36) months following the effective
date of this Agreement and Release on the same terms and conditions as it is
offered to officers of Xxxxxxx'x who are currently employed and as set forth in
Xxxxxxx'x medical and dental plan(s), subject to Xxxxxxx'x right to amend,
modify, or terminate such plan(s) or program(s) providing such medical and/or
dental insurance; and, further provided, that any employee premium due for such
medical and/or dental insurance shall be paid by Xxxxxx on or before the first
day of each month to which such insurance relates. Notwithstanding the
foregoing, in the event medical and/or dental insurance becomes available to
Xxxxxx through another employer, (a) Xxxxxx agrees to notify Xxxxxxx'x of such
availability within thirty (30) days of the time such insurance becomes
available and (b) irrespective of the time Xxxxxx gives such notice, the medical
and/or dental insurance, as applicable, provided pursuant to this paragraph 18
shall cease immediately upon such availability. The consideration set forth in
this paragraph 18 shall constitute payment in full for Xxxxxx holding himself
available to provide consulting services and for any and all consulting services
actually performed for Xxxxxxx'x by Xxxxxx. Xxxxxx will pay all social security,
federal income taxes, and all other liabilities and taxes incurred by, or on
behalf of, or for the benefit of, Xxxxxx arising out of the performance of
consulting services, and Xxxxxxx'x shall have no liability for any such taxes or
other liabilities.
19. Consulting Expenses. To the extent that Xxxxxx incurs travel and/or
related expenses at the request of Xxxxxxx'x in the performance of Xxxxxx'
consulting services, Xxxxxxx'x agrees to reimburse Xxxxxx for such actual and
reasonable expenses so incurred.
20. Consulting Engagement. Xxxxxx' engagement as a consultant by Xxxxxxx'x
pursuant to this Agreement and Release shall continue until the expiration of
three (3) years from the effective date of this Agreement and Release.
21. Confidential Information. Xxxxxx recognizes and acknowledges that as a
consultant he will have access to Proprietary and Confidential Information (as
defined in paragraph 10) during his engagement as a consultant. Xxxxxx expressly
agrees that the provisions of paragraph 10 of this
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Agreement and Release will at all times apply to any Proprietary and
Confidential Information which he has access to as a consultant.
22. Consulting Documents. Xxxxxx further agrees to deliver to Xxxxxxx'x at
the termination of his consulting engagement all Documents in accordance with
the provisions of paragraph 11; and Xxxxxx further agrees that paragraph 11
shall apply in its entirety to his consulting engagement with Xxxxxxx'x.
23. Covenants Regarding Employees and Suppliers. Xxxxxx agrees that during
the three (3) year period following the effective date of this Agreement and
Release, he will not, at any location in the United States, solicit or induce
any employee of any Xxxxxxx'x Entity to terminate employment, accept employment
with anyone else, or to interfere in a similar manner with the business of any
Xxxxxxx'x Entity. Xxxxxx further agrees that during the three (3) year period
following the effective date of this Agreement and Release, he will not, at any
location in the United States, in connection with or for the benefit of any
business "in competition" (as defined in paragraph 16) with any Xxxxxxx'x
Entity, solicit, contact, canvass, or attempt to solicit, contact, or canvass
any of the suppliers or employees of any Xxxxxxx'x Entity with whom Xxxxxx had
direct or indirect contact while he was performing services for any Xxxxxxx'x
Entity. Notwithstanding anything in the foregoing to the contrary, Xxxxxx may
contact suppliers of Xxxxxxx'x so long as that contact does not involve or
concern the business activity of wholesale or retail grocery distribution in
Texas.
24. Assignability. Xxxxxx' rights and obligations hereunder may not be
sold, transferred, assigned, or otherwise alienated as this Agreement and
Release is personal to Xxxxxx.
25. Remedies. Xxxxxx and Xxxxxxx'x agree that, because damages at law for
any breach or nonperformance of this Agreement and Release by Xxxxxx or
Xxxxxxx'x, while recoverable, will be inadequate, this Agreement and Release may
be enforced in equity by specific performance, injunction, accounting, or
otherwise. If a lawsuit is brought by (a) a party to this Agreement and Release
to enforce any provision of the same or (b) any person or entity claiming rights
pursuant to paragraph 35 to enforce any provision of the same, the prevailing
party shall be entitled to recover all reasonable attorneys fees and costs of
court from the non-prevailing party. Further, Xxxxxx and Xxxxxxx'x agree that,
in the event Xxxxxx breaches any of his obligations under this Agreement and
Release, Xxxxxx' right to continued medical and dental insurance pursuant to
paragraph 18 shall be forfeited; provided, however, that in the event of such a
forfeiture, Xxxxxx, and any "qualified beneficiary" (as such term is defined in
section 4980B(g)(1) of the Internal Revenue Code of 1986, as amended (the
"Code")), with respect to Xxxxxx, shall have the right to elect COBRA coverage
pursuant to paragraph 26 below.
26. COBRA Rights. Upon the termination of Xxxxxx' medical and/or dental
insurance by reason of (a) the expiration of the thirty-six (36) month period
provided by paragraph 18 or by paragraph 35 together with paragraph 18, (b) the
availability to Xxxxxx of medical and/or dental insurance through another
employer, or (c) forfeiture pursuant to paragraph 25, such termination shall be
treated as a qualifying event pursuant to section 4980B(f)(3) of the Code for
purposes of
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determining the COBRA rights of Xxxxxx and/or any "qualified beneficiary" (as
such term is defined in section 4980B(g)(l) of the Code) with respect to Xxxxxx.
27. Enforcement of Agreement and Release. No waiver or nonaction with
respect to any breach by the other party of any provision of this Agreement and
Release, nor the waiver or nonaction with respect to any breach of the
provisions of similar agreements with other employees shall be construed to be a
waiver of any succeeding breach of such provision, or as a waiver of the
provision itself. Should any provisions hereof be held to be invalid or wholly
or partially unenforceable, such holdings shall not invalidate or void the
remainder of this Agreement and Release. Portions held to be invalid or
unenforceable shall be revised and reduced in scope so as to be valid and
enforceable, or, if such is not possible, then such portion shall be deemed to
have been wholly excluded with the same force and effect as if they had never
been included herein.
28. Choice of Law. This Agreement and Release shall be governed by and
construed and enforced, in all respects, in accordance with the laws of the
State of Texas.
29. Merger. This Agreement and Release supersedes, replaces, and merges
all previous agreements and discussions relating to the same or similar subject
matters between Xxxxxx and Xxxxxxx'x and constitutes the entire agreement
between Xxxxxx and Xxxxxxx'x with respect to the subject matter of this
Agreement and Release. This Agreement and Release may not be changed or
terminated orally, and no change, termination, or waiver of this Agreement and
Release or any of the provisions herein contained shall be binding unless made
in writing and signed by all parties, and in the case of Xxxxxxx'x, by an
authorized officer.
30. No Derogatory Comments. Following the effective date of this Agreement
and Release, each of the Xxxxxxx'x Parties and Xxxxxx shall refrain from making
public or private comments relating to any Xxxxxxx'x Party and Xxxxxx,
respectively, which are derogatory or which may tend to injure any such party in
its business, public or private affairs.
31. Confidentiality. Xxxxxx agrees that, following execution of this
Agreement and Release, he will not disclose the terms thereof or the
consideration for it received from Xxxxxxx'x, to any other person, except in the
case where, and only to the extent that, there is a bona fide need for such
disclosure to a third party, such as in connection with obtaining advice or
furnishing personal financial information, and, in each such case, only on the
condition that such other person keeps such information strictly confidential.
The foregoing exception notwithstanding, Xxxxxx agrees that such information
will in no case be disclosed to any employee or former employee of any of the
Xxxxxxx'x Entities. The foregoing obligations of confidentiality shall not apply
to information that is required to be disclosed as a result of any applicable
law, rule, or regulation of any governmental authority, any stock exchange, or
any court.
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32. ADEA Rights. Xxxxxx acknowledges and agrees:
(a) that he has at least twenty-one (21) days or, if longer, the
applicable period for valid waiver of claims under the Age Discrimination
in Employment Act or the Older Workers Benefit Protection Act to review
this Agreement and Release before accepting;
(b) that he has been advised in writing by Xxxxxxx'x to consult with
an attorney regarding the terms of this Agreement and Release;
(c) that, if he accepts this Agreement and Release, he has seven (7)
days following the execution of this Agreement and Release to revoke this
Agreement and Release.
33. Agreement and Release Voluntary. Xxxxxx acknowledges and agrees that
he has carefully read this Agreement and Release and understands that, except as
expressly reserved herein, it is a release of all claims, known and unknown,
past or present, including all claims under the Age Discrimination in Employment
Act. Xxxxxx further agrees that he has entered into this Agreement and Release
for the above stated consideration. Xxxxxx warrants that he is fully competent
to execute this Agreement and Release which he understands to be contractual.
Xxxxxx further acknowledges that he executes this Agreement and Release of his
own free will, after having a reasonable period of time to review, study, and
deliberate regarding its meaning and effect, and after being advised to consult
an attorney, and without reliance on any representation of any kind or character
not expressly set forth herein. Finally, fully knowing its effect and for the
consideration stated above, Xxxxxx voluntarily executes this Agreement and
Release.
34. Effective Date. The effective date of this Agreement and Release shall
be the earlier of (a) thirty (30) days after the announcement of the
"transactions" which are the subject of the Subscription Agreement dated as of
April 2, 1997, among a Xxxxxxx'x Entity, an affiliate of Kohlberg Kravis Xxxxxxx
& Co., and Xxxxxx X. Xxxxxxx or (b) September 1, 1997; provided however, that
the effective date shall not be before the expiration of seven (7) days after
the date of execution of this Agreement and Release.
35. Death Benefits. In the event of Xxxxxx' death on or after the
effective date of this Agreement and Release, except as provided in this
paragraph 35, all of Xxxxxxx'x obligations to Xxxxxx pursuant to this Agreement
and Release shall expire immediately upon such death and Xxxxxxx'x shall pay
and/or deliver, as applicable, the following death benefits to Xxxxxx' estate on
the later of (i) the Severance Payment Date or (ii) within thirty (30) days
after the date Xxxxxxx'x receives notice of such death:
(a) A death benefit payment equal to the difference between (1)
$900,000 and (2) the sum of (A) any amounts paid out by Xxxxxxx'x pursuant
to this Agreement and Release (other than pursuant to paragraph 7 or as
reimbursements for travel or related expenses or medical or dental
expenses) up to the date such death benefit payment is made and (B) any
amounts forfeited by Xxxxxx under this contract due
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to any breach of this contract by Xxxxxx (other than any breach due to his
death). Such payment shall be net of any applicable withholding.
(b) Provided that the conditions precedent set forth in paragraph 7
of the Restricted Stock Agreement are met, any shares pursuant to the
Restricted Stock Agreement which are deliverable to Xxxxxx pursuant to the
terms of paragraph 5 of this Agreement and Release, shall be delivered to
Xxxxxx' estate.
In the event Xxxxxx' death precedes the cessation of medical and/or dental
benefits provided by Xxxxxxx'x to Xxxxxx pursuant to paragraph 18, any
"qualified beneficiary" (as such term is defined in section 4980B(g)(1) of the
Code) with respect to Xxxxxx shall be entitled to continue medical and/or dental
insurance following the date of Xxxxxx' death for the remaining unexpired
portion of the term of thirty-six (36) months, on the same terms and conditions,
and for the same employee premium (reduced, if applicable, to reflect only such
qualified beneficiary's coverage) as set forth in paragraph 18. Further, any
repurchase obligations under the Repurchase Agreement shall be governed by the
terms of paragraph 5 in the event of Xxxxxx' death after the effective date of
this Agreement and Release.
36. Headings. The section headings contained herein are for the purpose of
convenience only and are not intended to define or limit the contents of such
sections.
37. Notices. Any notices required or permitted to be given under this
Agreement and Release shall be in writing and shall be deemed to have been duly
given when personally delivered or when mailed by United States registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to Randall's to: Xxxxxxx'x Food Markets, Inc.
0000 Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Chief Executive Officer
and
Kohlberg Kravis Xxxxxxx & Co.
c/o Xx. Xxxxx Xxxxxx
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
If to Xxxxxx to: Xxxxx X. Xxxxxx
3711 Panorama
Xxxxxxxx Xxxx, Xxxxx 00000
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IN WITNESS WHEREOF, the parties have caused this Agreement and Release to
be executed in multiple counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the same
instrument, this 1st day of April, 1997.
XXXXXXX'X FOOD MARKETS, INC.
By: /s/ R. Xxxxxxx Xxxxxxx
--------------------------------
Name: R. Xxxxxxx Xxxxxxx
Title: President and CEO
Xxxxx X. Xxxxxx
/s/ Xxxxx X. Xxxxxx
------------------------------------
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XXXXXX XXX XXXXXX 1986 TRUST
-------------------------------------
By: XXXX X. XXXXXXXX, TRUSTEE
/s/ Xxxx Xxxxxxx Xxxxxx
-------------------------------------
Xxxx Xxxxxxx Xxxxxx
/s/ Xxxxxxx Xxxxxx Xxxxxx
-------------------------------------
Xxxxxxx Xxxxxx Xxxxxx
ACKNOWLEDGMENT
April 1, 1997
TO: Xxxxxxx'x Food Markets, Inc.
0000 Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
In connection with the execution and delivery of the Agreement and Release
dated as of the date hereof (the "Agreement") between Xx. Xxxxx X. Xxxxxx and
Xxxxxxx'x Food Markets, Inc., a Texas corporation ("Xxxxxxx'x"), each of the
undersigned hereby acknowledges that the Agreement shall extinguish all
repurchase obligations and rights of Xxxxxxx'x (and/or any Xxxxxxx'x Entity (as
defined in the Agreement)) and Xx. Xxxxxx under the Repurchase Agreement between
Xxxxxxx'x and Xx. Xxxxxx dated January 15, 1982 (the "Repurchase Agreement");
provided, however, that if the closing of the "transactions" which are the
subject of the Subscription Agreement dated as of the date hereof among
Xxxxxxx'x, RFM Acquisition LLC and Xxxxxx X. Xxxxxxx does not occur on or before
December 31, 1997, such repurchase obligations and rights shall be revived
effective January 1, 1998, and shall continue thereafter in full force and
effect pursuant to the terms of the Repurchase Agreement.
Very truly yours,
XXXXX X. AND XXXXXX X. XXXXXX
CHARITABLE REMAINDER TRUST
------------------------------
Name:
Title: Trustee
XXXX & XXXXXX XXXXX 1986 TRUST
/s/ Xxxx X. Xxxxxxxx
------------------------------
XXXX X. XXXXXXXX, TRUSTEE
ACKNOWLEDGMENT
April 1, 1997
TO: Xxxxxxx'x Food Markets, Inc.
0000 Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
In connection with the execution and delivery of the Agreement and Release
dated as of the date hereof (the "Agreement") between Xx. Xxxxx X. Xxxxxx and
Xxxxxxx'x Food Markets, Inc., a Texas corporation ("Xxxxxxx'x"), each of the
undersigned hereby acknowledges that the Agreement shall extinguish all
repurchase obligations and rights of Xxxxxxx'x (and/or any Xxxxxxx'x Entity (as
defined in the Agreement)) and Xx. Xxxxxx under the Repurchase Agreement between
Xxxxxxx'x and Xx. Xxxxxx dated January 15, 1982 (the "Repurchase Agreement");
provided, however, that if the closing of the "transactions" which are the
subject of the Subscription Agreement dated as of the date hereof among
Xxxxxxx'x, RFM Acquisition LLC and Xxxxxx X. Xxxxxxx does not occur on or before
December 31, 1997, such repurchase obligations and rights shall be revived
effective January 1, 1998, and shall continue thereafter in full force and
effect pursuant to the terms of the Repurchase Agreement.
Very truly yours,
XXXXX X. AND XXXXXX X. XXXXXX
CHARITABLE REMAINDER TRUST
/s/ Xxx Xxxxxx
------------------------------
Name:
Title: Trustee
XXXX & XXXXXX XXXXX 1986 TRUST
------------------------------
XXXX X. XXXXXXXX, TRUSTEE
XXXXXX XXX XXXXXX 1986 TRUST
/s/ Xxxx X. Xxxxxxxx
-------------------------------------
By: XXXX X. XXXXXXXX, TRUSTEE
-------------------------------------
Xxxx Xxxxxxx Xxxxxx
-------------------------------------
Xxxxxxx Xxxxxx Xxxxxx
