EXHIBIT 10.5
EMPLOYMENT, CONSULTING AND RETIREMENT AGREEMENT
THIS EMPLOYMENT, CONSULTING, AND RETIREMENT AGREEMENT ("Agreement") is
made by and between XXXXXXX'X FOOD MARKETS, INC., a Texas corporation
("Randall's") and Xxxxxx X. Xxxxxxx, of Xxxxxx County, Texas ("Xxxxxxx").
W I T N E S S E T H:
WHEREAS, Xxxxxxx has served and continues to serve as Chairman of the
Board of Directors of Randall's (the "Board") and has been and continues to be
employed by Xxxxxxx'x as an officer; and
WHEREAS, Xxxxxxx, at various times, has been an employee, officer, and
director of certain of Xxxxxxx'x 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
WHEREAS, Xxxxxxx, by reason of his experience with Xxxxxxx'x and as a
businessman is uniquely suited to act as Chairman of the Board and as an officer
of Xxxxxxx'x; and
WHEREAS, Xxxxxxx possesses considerable experience and knowledge of the
business and affairs of Xxxxxxx'x, its objectives, policies, methods, personnel,
and operations; and
WHEREAS, Xxxxxxx'x recognizes that Xxxxxxx'x past contributions to
Xxxxxxx'x have been substantial and meritorious and that Xxxxxxx'x standing and
reputation within the business community, locally and nationally, are of great
value to Xxxxxxx'x; and
WHEREAS, Xxxxxxx'x anticipates a reorganization and transition among its
executive officers and desires to retain Xxxxxxx in the employ of Xxxxxxx'x for
such time as is necessary to assure that Xxxxxxx'x is prepared for this
reorganization and transition and desires to secure the consulting services of
Xxxxxxx for a period after the transition so that Xxxxxxx'x experience and
knowledge will continue to be available to Xxxxxxx'x; and
WHEREAS, Xxxxxxx'x and Xxxxxxx desire to continue such employment
relationship and to establish such consulting relationship on the terms and
conditions, and for the consideration, hereinafter set forth for the period
provided herein;
NOW, THEREFORE, for and in consideration of the compensation, benefits,
and perquisites to be paid to Xxxxxxx under this Agreement and the mutual
promises, covenants, and undertakings contained in this Agreement, and intending
to be legally bound, Xxxxxxx'x and Xxxxxxx agree as follows:
ARTICLE 1: EMPLOYMENT, CONSULTING ENGAGEMENT, DUTIES, AND COMPENSATION
1.1 Employment and Consulting Engagement. Xxxxxxx'x agrees to continue to
employ Xxxxxxx and to engage Xxxxxxx as a consultant and Xxxxxxx agrees to
continue to be employed by Xxxxxxx'x and to act as a consultant in accordance
with and subject to the terms and conditions of this Agreement.
1.2 Service. During the term of this Agreement, Xxxxxxx and Xxxxxxx'x
agree as follows:
(i) Commencing on the effective date of this Agreement (the
"Effective Date"), and continuing until July 1, 1998, or for such longer
time as Xxxxxxx and the Board may establish (the "Initial Period"),
Xxxxxxx'x shall (a) employ Xxxxxxx as an officer of Xxxxxxx'x and (b) for
the full term of the Initial Period, cause Xxxxxxx to be nominated for
election as a director of Xxxxxxx'x and as Chairman of the Board and use
its best efforts to secure such election. Upon expiration of the Initial
Period, Xxxxxxx shall retire, whereupon his common law employee
relationship with Xxxxxxx'x shall cease.
(ii) Commencing upon the expiration of the Initial Period and
continuing thereafter until the date as of which ten percent (10%) of the
common stock of Xxxxxxx'x (or any entity interest in a successor to
Xxxxxxx'x as a result of a transaction involving a merger, reorganization,
recapitalization, or the like) (hereinafter "Stock") is tradable on a
national stock exchange, Xxxxxxx'x shall engage Xxxxxxx in the position of
consultant. Hereinafter such period of time shall be referred to as the
"Consulting Period."
(iii) Commencing upon the expiration of the Initial Period and until
Xxxxxxx'x ownership of Stock falls below ten percent (10%) of the
outstanding Stock, Xxxxxxx'x shall cause Xxxxxxx to be nominated as a
director of Xxxxxxx'x and use its best efforts to secure such election.
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1.3 Duties and Extent of Services.
(i) While Xxxxxxx serves as an officer during the Initial Period, he
will not engage in any other business or professional activity without
regard to whether that business or professional activity is pursued for
gain, profit, or any other monetary advantage; however, this should not be
construed as preventing Xxxxxxx from making passive investments in
enterprises that do not require services on his part in the operation or
the affairs of such enterprise. During the Initial Period, Xxxxxxx will
devote his full time, attention, and energies to the operation of
Xxxxxxx'x. The specific duties of Xxxxxxx during the Initial Period shall
be as determined by the Chief Executive Officer in consultation with the
Board in their sole discretion.
(ii) While Xxxxxxx serves as consultant during the Consulting
Period, he will devote time, attention, and energy as needed and as
reasonable in light of the circumstances to assist Xxxxxxx'x senior
executives and the Board with the understanding that he will not be
involved actively in the management of Xxxxxxx'x. As consultant, Xxxxxxx
may assist in ongoing projects and in development of an appropriate agenda
for the operation of Xxxxxxx'x, provide trouble shooting, render
constructive advice, and monitor strategic and fiscal matters of
Xxxxxxx'x. Xxxxxxx'x duties as consultant will also be to facilitate as
much as possible the communication between management of Xxxxxxx'x and the
Board but will in no way preempt sound communication between those
parties. The specific duties of Xxxxxxx during the Consulting Period shall
be as determined by the Chief Executive Officer in consultation with the
Board in their sole discretion. At all times during the Consulting Period,
Xxxxxxx shall be an independent contractor with Xxxxxxx'x.
(iii) Notwithstanding the foregoing Sections 1.3(i) and 1.3(ii),
during the Initial Period and the Consulting Period, Xxxxxxx shall not be
expected to be available during reasonable vacation periods during each
year, during any period of illness or other incapacity, and during any
reasonable times allotted to personal affairs or professional activities.
1.4 Compensation. During the term of this Agreement, Xxxxxxx shall receive
the following minimum annual compensation:
(i) During the Initial Period, Xxxxxxx'x shall pay to Xxxxxxx a
monthly salary of $41,667 and Xxxxxxx'x shall furnish to Xxxxxxx benefits
and perquisites as in effect on the day immediately preceding the
Effective Date; provided, however, that in the event of any change or
modification of any employee pension plan, employee welfare plan, or
program sponsored or maintained by the Xxxxxxx'x Entities on or after the
Effective Date, including changes, if any, that may result in a
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reduction or termination of benefits, Xxxxxxx 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 similarly situated.
(ii) During the Consulting Period and up to the last day of the
calendar month in which the Consulting Period ends, Xxxxxxx'x shall pay
Xxxxxxx a monthly consulting fee of $16,667, payable in accordance with
Xxxxxxx'x normal payroll practices respecting executives. Xxxxxxx'x agrees
that any outside director fees and/or any other consulting fees which
Xxxxxxx receives from any source during the Consulting Period may be
retained by Xxxxxxx and shall not operate to reduce the amounts payable by
Xxxxxxx'x to Xxxxxxx as provided herein.
(iii) Nothing in this Agreement shall limit the Board, in its sole
discretion, from increasing in any year Xxxxxxx'x compensation from that
minimum compensation which is established herein.
1.5 Location and Conditions of Employment and Consulting Engagement. The
Chief Executive Officer shall determine Xxxxxxx'x principal place of business in
consultation with the Board in their sole discretion.
1.6 Working Facilities. Xxxxxxx'x shall furnish to Xxxxxxx a private
office, at a location or locations to be determined by the Chief Executive
Officer in consultation with the Board in their sole discretion, together with
appropriate office furniture and equipment for as long as Xxxxxxx shall live.
Further, except as otherwise provided pursuant to Section 4.2, Xxxxxxx'x shall
furnish to Xxxxxxx for as long as he shall live (i) a personal secretary devoted
on a full time basis exclusively to Xxxxxxx'x use and (ii) unlimited use of a
WATS Line or comparable worldwide long distance service. Notwithstanding
anything in the foregoing to the contrary, the total value of all facilities and
services provided to Xxxxxxx pursuant to this Section 1.6 shall not exceed
$100,000 per annum.
1.7 Chairman Emeritus. Commencing upon the expiration of the Initial
Period and continuing thereafter for as long as Xxxxxxx shall live, Xxxxxxx'x
shall cause Xxxxxxx to be nominated for the honorary title of Chairman Emeritus
of the Board and shall use its best efforts to secure such election.
Notwithstanding the foregoing, Xxxxxxx may, at his option, decline or refuse
such title, or resign from such position, at any time without loss of any other
benefit pursuant to this Agreement.
ARTICLE 2: PERQUISITES, BENEFITS, INSURANCE, AND INDEMNITIES
2.1 Perquisites. Commencing on the effective date of this Agreement and
continuing through the earlier of (a) the date as of which Xxxxxxx owns less
than three percent (3%) of the outstanding common stock of Xxxxxxx'x (or, if
applicable, three percent (3%) of the outstanding equity interest in a successor
to Xxxxxxx'x as a result of a transaction including a merger,
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reorganization, recapitalization, or the like) (such date hereinafter referred
to as the "Liquidation Date") or (b) the date which is thirty (30) days after
the effective date of a "Corporate Change" (as defined in Section 3.4),
Xxxxxxx'x shall provide to Xxxxxxx the benefits and perquisites set forth in
this Article 2.1 subject to the approval of the Chief Executive Officer in his
sole discretion.
(i) Business and Entertainment Expenses - Xxxxxxx'x shall reimburse
Xxxxxxx for, or pay on behalf of Xxxxxxx, reasonable and appropriate
expenses incurred by Xxxxxxx for business related purposes, including dues
and fees to industry and professional organizations and costs of
entertainment and business development in accordance with business and
entertainment expense policies and procedures adopted by Xxxxxxx'x from
time to time for its top executives; provided, however, that in no event
shall Xxxxxxx'x reimburse Xxxxxxx for political contributions.
(ii) Conventions and Conferences - Xxxxxxx'x shall reimburse Xxxxxxx
for, or pay on behalf of Xxxxxxx, reasonable and appropriate expenses
incurred by Xxxxxxx in traveling to and attending up to two (2) business
conventions or conferences for the grocery industry or any related
business including costs incurred in connection with Xxxxxxx'x spouse
accompanying him on such trips. Such reimbursable expenses shall include,
but not be limited to, reasonable and appropriate expenses incurred for
first class travel and the cost of meals and entertainment.
2.2 Other Xxxxxxx'x Benefits. During the Initial Period, Xxxxxxx and, to
the extent applicable, Xxxxxxx'x family, dependents and beneficiaries, shall be
allowed to participate in all benefits, plans, and programs, including
improvements or modifications of the same, which are now, or may hereafter be,
available to similarly-situated Xxxxxxx'x executives. Such benefits, plans, and
programs may include, without limitation, any profit sharing plan, employee
stock ownership plan, thrift plan, pension plan, health insurance or health care
plan, disability insurance, and the like. Xxxxxxx'x shall not, however, by
reason of this Section 2.2 be obligated to institute, maintain, or refrain from
changing, amending or discontinuing, any such benefit plan or program, so long
as such changes are similarly applicable to executives generally.
Notwithstanding the foregoing, nothing in this Section 2.2 shall be deemed to
create any rights or benefits for Xxxxxxx which would not otherwise be provided
by the terms of any such benefit plan or program respecting Xxxxxxx'x applicable
status as an executive employee, consultant, or retiree.
2.3 Lifetime Medical/Dental Insurance. Xxxxxxx'x shall furnish to Xxxxxxx
for life and to Xxxxxxx'x Spouse for life, at no cost to Xxxxxxx or Xxxxxxx'x
Spouse, medical and dental insurance on the same terms and conditions as it is
offered to officers of Xxxxxxx'x who are currently employed. For purposes of
this Section 2.3, the term "Spouse" shall mean the spouse to whom Xxxxxxx is
married at the time of coverage and, for purposes of providing coverage to
Xxxxxxx'x spouse after his death, the spouse of Xxxxxxx on the date of his
death.
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2.4 Lifetime Life Insurance. Notwithstanding any other provision in this
Agreement to the contrary, for as long as Xxxxxxx shall live and regardless of
Xxxxxxx'x status as an employee, consultant, or retiree, Xxxxxxx'x shall
continue to provide life insurance in the same amounts and under the same terms
as is offered to officers of Xxxxxxx'x who are currently employed. Any other
special policies (not available to Xxxxxxx'x executives generally) insuring the
life of Xxxxxxx as in effect on the day immediately preceding the Effective Date
shall no longer be the obligation of Xxxxxxx'x from and after the Effective
Date.
2.5 Liability Insurance. Xxxxxxx'x agrees to maintain on behalf of
Xxxxxxx, on a basis no less favorable than as provided by Xxxxxxx'x on behalf of
Xxxxxxx on the day prior to the Effective Date, all insurance coverages
respecting any liability or potential liability which Xxxxxxx may incur in the
scope of his employment, in the scope of his consulting engagement, in his
status as a fiduciary, or as an officer or director of any Xxxxxxx'x Entity.
Such coverages shall be maintained during Xxxxxxx'x active employment and during
his consulting engagement hereunder and at least for such "trailing" periods as
are provided by such coverages on the day prior to the Effective Date.
2.6 Indemnities. Xxxxxxx'x agrees to maintain on behalf of Xxxxxxx, on a
basis no less favorable than as provided by Xxxxxxx'x on behalf of Xxxxxxx on
the day prior to the Effective Date, 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 or
protections to, or indemnify Xxxxxxx respecting his employment, his consulting
relationship, his status as a fiduciary, or his position as an officer or
director of any Xxxxxxx'x Entity.
ARTICLE 3: TERMINATION OF EMPLOYMENT AND CONSULTING ENGAGEMENT
3.1 Termination by Xxxxxxx'x. Notwithstanding the provisions of Article 1,
Xxxxxxx'x shall have the right to terminate Xxxxxxx'x employment pursuant to
Section 1.2(i) or his consulting engagement pursuant to Section 1.2(ii) at any
time for any of the following reasons:
(i) upon Xxxxxxx'x death;
(ii) upon Xxxxxxx'x becoming incapacitated by accident, sickness, or
any other circumstance which renders him mentally or physically incapable
of performing the duties and services required of him hereunder for a
period of at least 120 consecutive days or for a period of 180 business
days during any 12-month period;
(iii) for cause, which for purposes of this Agreement shall mean
Xxxxxxx'x xxxxx negligence or willful misconduct in performance of the
duties and services required of him pursuant to this Agreement, or
Xxxxxxx'x indictment for a felony or final conviction of a misdemeanor
involving moral turpitude;
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(iv) for Xxxxxxx'x material breach of any material provision of this
Agreement which, if correctable, remains uncorrected for thirty (30) days
following written notice to Xxxxxxx by Xxxxxxx'x of such breach;
(v) in connection with the insolvency, liquidation, or the
occurrence of any other event resulting in the discontinuance of the
existence of Xxxxxxx'x (without a successor thereto); or
(vi) for any reason other than as specified above.
3.2 Termination by Xxxxxxx. Notwithstanding the provisions of Article 1,
Xxxxxxx shall have the right to terminate his employment pursuant to Section
1.2(i) or his consulting engagement pursuant to Section 1.2(ii) at any time for
any of the following reasons:
(i) a material breach by Xxxxxxx'x of any material provision of this
Agreement which, if correctable, remains uncorrected for thirty (30) days
following written notice of such breach by Xxxxxxx to Xxxxxxx'x; or
(ii) for any reason other than as specified in Section 3.2(i) above.
3.3 Notice. If Xxxxxxx'x or Xxxxxxx desire to terminate Xxxxxxx'x
employment or consulting engagement hereunder at any time prior to expiration of
the term of employment as provided in Section 1.2(i) or the expiration of the
consulting engagement as provided in Section 1.2(ii), it or he shall do so by
giving written notice to the other party that it or he has elected to terminate
Xxxxxxx'x employment and/or consulting engagement hereunder, as applicable, and
stating the effective date and reason for such termination, provided that no
such action shall alter or amend any other provisions hereof or rights arising
hereunder. Xxxxxxx'x expressly agrees that any such termination of the
employment and/or consulting engagement shall not extinguish Xxxxxxx'x
obligations pursuant to Section 1.2(i)(b) or Section 1.2(iii).
3.4 Change of Control. Notwithstanding any other provision of this
Agreement to the contrary, in the event that (a) Xxxxxxx'x sells, leases, or
exchanges all or substantially all of its assets to another person or entity
(other than Kohlberg Kravis Xxxxxxx & Co. or an entity which controls or is
controlled by, or is under common control with Kohlberg Kravis Xxxxxxx & Co.) or
(b) any person or entity (other than Kohlberg Kravis Xxxxxxx & Co. or an entity
which controls or is controlled by, or is under common control with Kohlberg
Kravis Xxxxxxx & Co.), including a "group" as contemplated by Section 13(d)(3)
of the Securities Exchange Act of 1934, as amended, acquires or gains ownership
or control (including without limitation, power to vote) of more than fifty
percent (50%) of the outstanding shares of Xxxxxxx'x voting stock (based on
voting power), or as a result of or in connection with a contested election of
directors of Xxxxxxx'x, the persons who were directors of Xxxxxxx'x before such
election shall cease to constitute a majority
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of the Board (each such event is referred to herein as a "Corporate Change"),
then upon the expiration of thirty (30) days after the effective date of such
Corporate Change, Xxxxxxx'x employment pursuant to Section 1.2(i) and/or his
consulting engagement pursuant to Section 1.2(ii) shall terminate.
ARTICLE 4: EFFECT OF TERMINATION AND RETIREMENT
4.1 Survival of Certain Benefits. If Xxxxxxx'x employment and/or
consulting engagement hereunder shall terminate for any reason whatsoever,
Xxxxxxx'x rights and Xxxxxxx'x obligations pursuant to Section 1.2(i)(b),
Section 1.2(iii), Section 1.6, Section 1.7, Section 2.1, Section 2.3, Section
2.4, Section 2.5, Section 2.6, Section 4.2, Section 4.3, Section 4.4, and any
other Section which by its terms or context so provides shall survive such
termination. Further, unless otherwise expressly provided herein, upon
termination of Xxxxxxx'x employment and/or consulting engagement hereunder,
Xxxxxxx shall be entitled to such benefits as governed by the terms of the
relevant benefit plans and programs of Xxxxxxx'x.
4.2 Compensation and Benefits After Termination.
(i) If Xxxxxxx'x employment and/or consulting engagement pursuant to
Section 1.2(i) and or Section 1.2(ii), respectively, is terminated prior
to the expiration of the term provided in such sections by Xxxxxxx'x
pursuant to Section 3.1(i), Section 3.1(ii), Section 3.1(iii), Section
3.1(iv) or Section 3.1(v), or by Xxxxxxx pursuant to Section 3.2(ii), or
by operation of Section 3.4, compensation provided pursuant to Section
1.4(i) and/or Section 1.4(ii), as applicable, shall terminate
contemporaneously with the termination of Xxxxxxx'x employment and/or
consulting engagement.
(ii) If Xxxxxxx'x employment pursuant to Section 1.2(i) is
terminated prior to the expiration of the term provided in such section by
Xxxxxxx'x pursuant to Section 3.1(vi) or by Xxxxxxx pursuant to Section
3.2(i), Xxxxxxx'x shall pay, within 30 days of the effective date of such
termination, to Xxxxxxx the aggregate amount Xxxxxxx would have received
for the remainder of the Initial Period pursuant to Section 1.4(i) and an
amount equal to the economic value of the benefits provided pursuant to
Section 2.2 which Xxxxxxx would have received had such termination not
occurred.
(iii) If Xxxxxxx'x consulting engagement pursuant to Section 1.2(ii)
is terminated prior to the expiration of the term provided in such section
by Xxxxxxx'x pursuant to Section 3.1(vi) or by Xxxxxxx pursuant to Section
3.2(i), Xxxxxxx'x shall continue to pay all amounts due to Xxxxxxx
pursuant to Section 1.4(ii) in the same
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amounts and at the same times as provided thereunder throughout the entire
Consulting Period as though Xxxxxxx had remained a consultant.
4.3 No Duty to Mitigate Losses. Xxxxxxx shall have no duty to find new
employment following the termination of his employment and/or consulting
engagement. Any salary or remuneration received by Xxxxxxx from a third party
for the providing of personal services (whether by employment or by functioning
as an independent contractor) following Xxxxxxx'x termination of his employment
or consulting engagement hereunder shall not reduce Xxxxxxx'x obligation to make
any payments or provide any benefits under this Agreement.
4.4 Retirement Payments. In recognition of Xxxxxxx'x past service and
contributions to Xxxxxxx'x, Xxxxxxx'x shall pay to Xxxxxxx on the first day of
each calendar month, beginning as of the earlier of (a) the first day of the
calendar month coinciding with the expiration of the Initial Period, or (b) the
first day of the calendar month next following the expiration of the Initial
Period, a monthly retirement payment of $8,333. Such payments shall continue to
Xxxxxxx through the earlier of (i) the last day of the calendar month which
contains the Liquidation Date or (ii) the date which is thirty (30) days after
the effective date of a Corporate Change.
ARTICLE 5: CONFIDENTIAL INFORMATION
5.1 Proprietary and Confidential Information. In accordance with Xxxxxxx'x
existing and continuing obligations, Xxxxxxx 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, Xxxxxxx 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, which are in Xxxxxxx'x 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, Xxxxxxx agrees
that he will not at any time, either during or subsequent to the term of this
Agreement, 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, any
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such Proprietary and Confidential Information (whether or not developed by
Xxxxxxx) without Xxxxxxx'x prior written consent. Except as may be required by
law, Xxxxxxx further agrees to maintain in confidence any proprietary and
confidential information of third parties received or of which Xxxxxxx has
knowledge as a result of his employment, consulting engagement, association, or
work with any Xxxxxxx'x Entity. Xxxxxxx agrees that in the event of an actual
breach by Xxxxxxx of the provisions of this Section, Xxxxxxx'x shall be entitled
to inform all potential or new employers of this Agreement. The prohibitions of
this Section 5.1 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).
5.2 Documents. Xxxxxxx agrees to leave in his office or deliver to
Xxxxxxx'x following the relationship covered by this Agreement correspondence,
memoranda, notes, records, drawings, sketches, plans, supplier lists, employee
lists, customer lists, product compositions, data or information, analyses, 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, Xxxxxxx 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 Xxxxxxx or under his
direction or which may have come into Xxxxxxx'x possession in any way during the
term of his employment and/or consulting engagement 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.
5.3 Covenants Regarding Other Employees. During the term of this
Agreement, Xxxxxxx agrees not to solicit or induce any employee of any Xxxxxxx'x
Entity to terminate their employment, accept employment with anyone else, or to
interfere in a similar manner with the business of any Xxxxxxx'x Entity.
ARTICLE 6: NON-COMPETITION
Xxxxxxx and Xxxxxxx'x agree and acknowledge that Xxxxxxx has
contemporaneously herewith, agreed to a Covenant not to Compete with Xxxxxxx'x
as set forth in Section 6.02 of the Voting, Repurchase, and Shareholders
Agreement dated as of April 2, 1997 among a Xxxxxxx'x Entity, an affiliate of
Kohlberg Kravis Xxxxxxx & Co., and certain shareholders of Xxxxxxx'x.
ARTICLE 7: MISCELLANEOUS
7.1 Effective Date. The Effective Date of this Agreement shall be the
"closing date" 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.
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7.2 Notices. Any notices required or permitted to be given under this
Agreement 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 Xxxxxxx to: Xxxxxx X. Xxxxxxx
0000 Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
7.3 Applicable Law. This contract is entered into under, and shall be
governed for all purposes by, the laws of the State of Texas.
7.4 No Waiver. No failure by either party hereto at any time to give
notice of any breach by the other party of, or to require compliance with, any
condition or provision of this Agreement shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same time or at any prior or
subsequent time.
7.5 Severability. If, as a result of arbitration proceedings pursuant to
Section 7.13 or as the result of the determination of a court of competent
jurisdiction, it is determined that any provision of this Agreement is invalid
or unenforceable, then the invalidity or unenforceability of that provision
shall not affect the validity or enforceability of any other provision of this
Agreement, and all other provisions shall remain in full force and effect.
7.6 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same Agreement.
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7.7 Withholding of Taxes. Xxxxxxx'x may withhold from any compensation,
perquisites, or benefits payable under this Agreement all federal, state, city,
or other taxes as may be required pursuant to any law or governmental regulation
or ruling.
7.8 Headings. The Section headings have been inserted for purposes of
convenience and shall not be used for interpretive purposes.
7.9 Gender and Plurals. Wherever the context so requires, the masculine
gender includes the feminine or neuter, and the singular number includes the
plural and conversely.
7.10 Affiliate; Affiliated Company. Unless the context otherwise provides,
as used in this Agreement, the term "affiliate" or "affiliated company" shall
mean any entity which owns or controls, is owned or controlled by, or is under
common ownership or control with, Xxxxxxx'x.
7.11 Assignment. This Agreement, and the rights and obligations of the
parties hereunder, are personal and neither this Agreement, nor any right,
benefit, or obligation of either party hereto, shall be subject to voluntary or
involuntary assignment, alienation or transfer, whether by operation of law or
otherwise, without the prior written consent of the other party.
7.12 Entire Agreement. This Agreement constitutes the entire agreement of
the parties with regard to the subject matter hereof, and contains all the
covenants, promises, representations, warranties, and agreements between the
parties with respect to employment and consulting engagement of Xxxxxxx by
Xxxxxxx'x. Each party to this Agreement acknowledges that no representation,
inducement, promise or agreement, oral or written, has been made by either
party, or by anyone acting on behalf of either party, which is not embodied
herein, and that no agreement, statement, or promise relating to the employment
and consulting engagement of Xxxxxxx by Xxxxxxx'x, which is not contained in
this Agreement, shall be valid or binding. Any modification of this Agreement
will be effective only if it is in writing and signed by the party to be
charged.
7.13 Enforcement and Remedies. The terms of this Agreement have been
carefully considered and agreed upon by Xxxxxxx'x and Xxxxxxx and represent the
sole obligations of Xxxxxxx'x and Xxxxxxx with respect to Xxxxxxx'x employment
and consulting engagement with Xxxxxxx'x. If a dispute arises out of or related
to this Agreement and the dispute cannot be settled through direct discussions,
Xxxxxxx'x and Xxxxxxx agree that they shall first endeavor to settle the dispute
in an amicable fashion, including the use of a mediator. If such efforts fail to
resolve the dispute, then any and all claims, demands, causes of action,
disputes, controversies, and other matters in question arising out of or
relating to this Agreement, any of its provisions, or the relationship between
the parties created by this Agreement, whether sounding in contract, tort, or
otherwise, whether provided by statute or the common law, for damages or any
other relief (all of which are referred to herein as "Claims"), shall be
resolved by binding arbitration pursuant to the Commercial Arbitration Rules
then in effect with the American Arbitration Association. The arbitration
proceeding shall be
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conducted in Houston, Texas. The enforcement of this agreement to arbitrate, the
validity, construction, and interpretation of this agreement to arbitrate, and
all procedural aspects of the proceeding pursuant to this agreement to arbitrate
shall be governed by and construed pursuant to the Commercial Arbitration Rules
then in effect with the American Arbitration Association. In deciding the
substance of the parties' Claims, the arbitrators shall apply the substantive
laws of the State of Texas (excluding Texas choice-of-law principles that might
call for the application of some other state's law). Only actual damages may be
awarded. It is expressly agreed that the arbitrators shall have no authority to
award treble, exemplary, or punitive damages of any type under any circumstances
regardless of whether such damages may be available under the applicable law.
Any and all of the arbitrators' orders and decisions may be enforceable in, and
judgment upon any award rendered in the arbitration proceeding may be confirmed
and entered by, any federal or state court having jurisdiction. Any costs of
attorney fees, arbitration, mediation, or litigation which are incurred as a
result of a Claim shall be paid by the party who incurs the costs.
IN WITNESS WHEREOF, the parties have caused this Agreement 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
Xxxxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxxxx
--------------------------------
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