Exhibit 10.21
Xxxxxxxx Drug Stores, Inc.
00 Xxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
CONFIDENTIAL
------------
March 6, 1998
Xx. Xxxxx Livon
00 Xxxxx Xxxxx
Xxxxxxxxxx, Xxx Xxxx 00000
Re: Separation from Employment
Dear Xx. Xxxxx:
This letter agreement ("Agreement") sets forth the agreement
reached concerning the termination of your employment with Xxxxxxxx Drug Stores,
Inc., including its parents, subsidiaries and affiliated corporations, and their
respective current and former successors, assigns, representatives, agents,
attorneys, shareholders, officers, directors and employees ("Xxxxxxxx").
1. Your employment with Xxxxxxxx will terminate May 1, 1998.
Xxxxxxxx will continue through that date your salary, less applicable
deductions, and all employee welfare benefits under currently existing Xxxxxxxx
benefit plans in which you are now participating. Xxxxxxxx also will provide you
with a lump-sum payment, less applicable deductions, which represents the value
of your accrued but unused vacation as of May 1, 1998, if any. As of the date
hereof, you had one week of accrued but unused vacation; and an additional 2
weeks will accrue on May 1, 1998.
2. In consideration for signing this Agreement and in exchange
for the promises, covenants, restrictions and waivers set forth herein, Xxxxxxxx
will, provided you have not revoked this Agreement as set forth below and
subject to your compliance with its terms, provide you with the following
payments of cash and other benefits:
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a. a lump-sum payment of $607,692, less
applicable deductions, payable on April 15,
1998, or on the first business day following
the expiration of the revocation period
described in numbered paragraph 19 below,
whichever is later;
x. Xxxxxxxx will continue your family medical
and dental insurance benefits for a period
of 30 months following termination of your
employment commencing May 2, 1998;
thereafter, you may elect COBRA healthcare
continuation coverage at your own expense,
if eligible;
c. reasonable attorneys' fees incurred in
connection with negotiation and preparation
of this Agreement, not to exceed $5,000 in
the aggregate, payable within 30 days after
you provide Xxxxxxxx with a copy of a
billing statement from your attorney;
d. accelerated vesting and payout of shares of
bonus stock--all of your bonus shares (2,953
shares as of the date hereof) in Xxxxxxxx
will be fully vested and paid to you as of
April 15, 1998;
e. extended expiration date of options--the
expiration date of all of your outstanding
options to purchase shares of Xxxxxxxx will
be extended until December 31, 2001, and
your eligibility for the Xxxxxxx Xxxxx
cashless exercise program for such options
will continue until the extended expiration
date, provided, however that such options
shall immediately expire and be forfeited in
the event that you breach any of the
covenants contained in numbered paragraph 11
of this Agreement or in the event that you
breach, in any material respect, any of the
covenants contained in numbered paragraph 8
of this Agreement;
(i) As of the date hereof, you held
options to purchase shares of
Xxxxxxxx as follows:
Per Share
Grant Exercise
Options Date Price
------- ----- ---------
8,858 3/8/92 6.85
8,858 12/10/92 5.72
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7,321 3/8/94 8.87
6,655 3/7/95 7.98
4,840 3/26/96 7.85
5,500 3/12/97 12.27
44,000 6/16/97 17.62
(ii) Attached hereto as Appendix A is a
copy of a resolution adopted
January 26, 1998, by the
Compensation Committee of the
Xxxxxxxx board of directors,
extending the expiration date of
all your outstanding options
subject to the conclusion of this
Agreement. Xxxxxxxx hereby
represents that the Compensation
Committee was duly authorized to
take that action, and that no
further or other action by any
person is or was necessary to
effect such an extension of your
options.
f. automobile--the automobile currently
provided by Xxxxxxxx for your use will be
purchased by Xxxxxxxx and transferred to
your ownership, without charge, in
accordance with the terms of an arrangement
of general application to certain Xxxxxxxx
employees that is in the process of being
adopted by Xxxxxxxx; Xxxxxxxx will use
commercially reasonable efforts to adopt
such arrangement and effect such transfer on
or before May 1, 1998; you may continue to
use the automobile under the same terms and
conditions as currently apply to such use
until the transfer of ownership actually
occurs; Xxxxxxxx will pay any sales tax
required to be paid in connection with such
transfer; and
3. You will be entitled to receive the retirement benefits
payable to you pursuant to the Xxxxxxxx Employee Stock Ownership Plan,
consisting of shares of Xxxxxxxx stock distributable to you pursuant to such
plan (as of December 31, 1996, you had 258.37 shares in your account; we
anticipate a more current valuation shortly), which distribution is expected to
occur on or about April 1, 1999; and your account balance, if any, in the
Xxxxxxxx Retirement and Savings Plan (401(K) plan). Such benefits will be paid
to you subject to and in accordance with the terms of those plans.
4. Releases
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a. In consideration of the payments and other
consideration described in numbered
paragraph 2 above, and for other good and
valuable consideration, you hereby release
and forever discharge, and by this
instrument release and forever discharge,
Xxxxxxxx from all debts, obligations,
promises, covenants, agreements, contracts,
endorsements, bonds, controversies, suits,
actions, causes of action, judgments,
damages, expenses, claims or demands, in law
or in equity, which you ever had, now have,
or which may be raised in the future,
regarding any matter that occurred or arose
on or before the date of your execution of
this Agreement, including but not limited to
all claims, whether known or unknown and
whether asserted or unasserted, regarding
your employment at or termination of
employment from Xxxxxxxx, any contract
(express or implied), any claim for
equitable relief or recovery of punitive,
compensatory, or other damages or monies,
attorneys' fees, any tort, and all claims
for alleged discrimination based upon age,
race, color, sex, sexual orientation,
marital status, religion, national origin,
handicap, disability, or retaliation,
including any claim, asserted or unas
serted, which could arise under Title VII of
the Civil Rights Act of 1964; the Civil
Rights Act of 1991; the Equal Pay Act of
1963; the Age Discrimination in Employment
Act of 1967; the Older Workers Benefit
Protection Act of 1990; the Americans With
Disabilities Act of 1990; the Civil Rights
Act of 1866, 42 X.X.X.xx. 1981; the Employee
Retirement Income Security Act of 1974; the
Family and Medical Leave Act of 1993; the
New York State Human Rights Law; and any
other federal, state or local laws, rules or
regulations, whether equal employment
opportunity laws, rules or regulations or
otherwise, or any right under any Xxxxxxxx
pension, welfare, or stock plans, except the
obligations to you that Xxxxxxxx has
undertaken pursuant to this Agreement,
including the right to receive payments and
benefits in accordance with the provisions
of numbered paragraphs 1 through 3 above;
provided, that nothing in this release shall
affect or diminish your rights to
(i) enforce this Agreement, (ii) receive
accrued, vested benefits, if any, under
Xxxxxxxx employee benefit plans, or (iii)
obtain COBRA healthcare continuation
coverage at your own expense, unemployment
insurance benefits, or other similar post-
employment rights or benefits, if you are
eligible therefor. This Agreement does not
constitute any admission by Xxxxxxxx that it
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has violated any law or legal obligation
with respect to any aspect of your
employment or termination therefrom.
b. In consideration of the promises contained
herein, and for other good and valuable
consideration, Xxxxxxxx hereby releases and
forever discharges, and by this instrument
releases and forever discharges, you from
all debts, obligations, promises, covenants,
agreements, contracts, endorsements, bonds,
controversies, suits, actions, causes of
action, judgments, damages, expenses, claims
or demands, in law or in equity, which it
ever had, now has, or which may arise in the
future, regarding any matter arising on or
before the date of your execution of this
Agreement, except the obligations to
Xxxxxxxx that you have undertaken pursuant
to this Agreement.
c. You agree that prior to the payment of the
amount described in numbered paragraph 2.a.
hereof, and as a condition of Xxxxxxxx'x
obligation to make such payment, you will
provide Xxxxxxxx with a release,
substantially in the form of the release
contained in subparagraph a. of this
paragraph, in respect of any matter arising
on or after the date of this Agreement and
on or before the date of such payment.
5. You represent and agree that you have not filed any
lawsuits against Xxxxxxxx, or filed or caused to be filed any charges or
complaints against Xxxxxxxx with any municipal, state or federal agency charged
with the enforcement of any law. You also agree, to the extent consistent with
applicable law, not to initiate any legal action, charge or complaint against
Xxxxxxxx in any forum whatsoever, in connection with the claims released by you.
In addition, to the extent any such action may be brought, you expressly waive
any claim to any form of monetary or other damages, or any other form of
recovery or relief in connection with any such action, or in connection with any
action brought by a third party. If you violate this Agreement by filing or
bringing any charges, claims or actions contrary to this paragraph, in addition
to any other rights and remedies Xxxxxxxx may have, you will immediately
reimburse Xxxxxxxx for all amounts paid to you pursuant to this Agreement. You
also agree to pay all costs and expenses of Xxxxxxxx in defending against such
charges, claims or actions brought by you or on your behalf, including
reasonable attorneys' fees.
6. You understand and agree that the consideration provided to
you under numbered paragraphs 2 and 4.b. of this Agreement is in addition to
anything of value to which you are otherwise entitled. You represent, warrant
and acknowledge that Xxxxxxxx owes you no wages, commissions, bonuses, sick pay,
personal leave pay, severance pay, vacation pay or
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other compensation or payments or form of remuneration of any kind or nature,
except as expressly set forth herein.
7. You will not issue any communication, written or otherwise,
that disparages, criticizes or otherwise reflects adversely or encourages any
adverse action against Xxxxxxxx, except if testifying under oath pursuant to any
lawful court order or subpoena or otherwise responding to or providing
disclosures required by law.
8. Xxxxxxxx Property; Confidential Information
a. You agree to hold all of Xxxxxxxx'x
Confidential Information (as that term is
defined below) in strictest secrecy and
confidence, and to use it solely for the
performance of your duties as a consultant
for Xxxxxxxx and for no other purpose. You
agree that you will not otherwise, directly
or indirectly, take, use or disclose (or
enable any other person to take, use or
disclose) any of Xxxxxxxx'x Confidential
Information during the Consulting Period or
thereafter without Xxxxxxxx'x prior written
consent.
b. You agree to return to Xxxxxxxx at the
termination of your employment all files,
records, specifications, or other documents,
and all computer software files, databases
and the like relating to the business of
Xxxxxxxx, or which contain Confidential
Information, whether prepared or acquired by
you during the course of your employment
with Xxxxxxxx (and you similarly agree to
return at the end of the Consulting Period
all such files, records, specifications or
other documents, and all such computer
software, files, databases and the like),
including in each case all photocopies,
extracts or summaries of such material that
are or may then be in your possession,
custody or control. For purposes of this
paragraph 8.b., the term "document" shall
include files, records, correspondence,
memoranda whether in written form or on
computer files, video and audio discs and
tapes and all other recorded, taped, filmed
or graphic material however produced or
reproduced, and any tangible thing that, in
whole or in part, contains, records,
illustrates or conveys information.
c. For the purposes of this Agreement, the
term, "Confidential Information" shall mean
and include all trade secrets, know-how,
sources of supply, prices, contracts with
third parties and any and
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all other information that is disclosed to
or acquired by you during or in the course
of your employment or Consulting Period with
Xxxxxxxx, that relates to the business of
Xxxxxxxx, and that is not generally
available to the public or generally known
in the drug or retail industry. Confidential
Information includes, without limitation,
lists of suppliers, customer lists and
names, address and phone numbers of
customers, customers' requirements for
products, pricing information and product
price discount structures. The term also
includes any formulas, patterns, devices,
inventions, methods, techniques, processes,
or combinations thereof, or compilations of
information, records, and specifications,
which are owned by Xxxxxxxx and regularly
used in its products (offered or to be
offered), research, development, marketing,
pricing, business methods, strategies,
policies, or business opportunities. For the
purposes of this definition, the term
"know-how" shall be deemed to mean any and
all general and specific knowledge and
information relating to Xxxxxxxx'x business
operations not in written or printed form,
and not generally available to the public or
generally known in the industry in which
Xxxxxxxx is engaged.
d. You further agree that you will deliver to
Xxxxxxxx at the termination of your
employment, and will then confirm your
performance hereof, any and all property and
equipment of Xxxxxxxx which may have been in
your possession.
9. You acknowledge and agree that, other than as this
Agreement or its underlying facts and circumstances may be required to be
disclosed pursuant to the rules and regulations of the Securities and Exchange
Commission applicable to Xxxxxxxx, you will not disclose the terms, contents or
execution of this Agreement, any claims that have been or could have been raised
against Xxxxxxxx, or the facts and circumstances underlying this Agreement,
except in the following circumstances:
a. You may disclose the terms of this Agreement
to your immediate family, so long as such
family member agrees to be bound by the
confidential nature of this Agreement;
b. You may disclose the terms of this Agreement
to (i) your tax advisors and financial
planners so long as such persons are advised
of the confidential nature of this
Agreement, (ii) taxing authorities if
requested by such authorities and so long as
they are
Page 8
advised of the confidential nature of this
Agreement or (iii) your legal counsel; and
c. Pursuant to a subpoena or other legal
process requiring such disclosure or the
order of a court or governmental agency of
competent jurisdiction, or for purposes of
securing enforcement of the terms and
conditions of this Agreement.
10. Upon service on you, or anyone acting on your behalf, of
any subpoena, order, directive or other legal process requiring you to engage in
conduct encompassed within numbered paragraphs 7, 8, or 9 of this Agreement, you
or your attorney shall immediately notify Xxxxxxxx of such service and of the
content, if known, of any testimony or information to be provided pursuant to
such subpoena, order, directive or other legal process. Such notice shall be
provided as set forth in numbered paragraph 20 below.
11. You agree that for a period of two years following the
termination of your employment with Xxxxxxxx, you will not, directly or
indirectly, own, engage in, invest in, manage, operate, finance, control, be
employed by, be associated with, or render services or advice to any Competing
Business (as such term is defined below), other than by ownership of 2% or less
of the outstanding publicly traded securities of any entity. For purposes of the
foregoing, a "Competing Business" shall be any person or entity, other than
Xxxxxxxx, that owns or operates two or more pharmacies, or retail or grocery
store facilities that regularly have a licensed pharmacist on the premises,
within the geographic area consisting of the states of New York, New Jersey and
Connecticut. Notwithstanding the foregoing, this paragraph 11 shall be
terminated and shall have no further force or effect after the date of an
ownership change of Xxxxxxxx in which all or substantially all of the voting
capital stock or the assets of Xxxxxxxx is acquired by a person or group of
persons acting in concert, which person or group is not an affiliate of Xxxxxxxx
immediately prior to such ownership change. For purposes of the immediately
preceding sentence, an affiliate of Xxxxxxxx is any person or entity (i) which
directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with Xxxxxxxx, or (ii) fifty percent
or more of the voting capital stock (or in the case of an entity which is not a
corporation, fifty percent or more of the equity interest) of which is
beneficially owned or held by Xxxxxxxx directly or indirectly through one or
more intermediaries; and the term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of an entity (other than a natural person), whether through the
ownership of voting capital stock, by contract or otherwise.
12. You agree that you will make all reasonable efforts to
assist and cooperate with Xxxxxxxx in connection with the defense or prosecution
of any claim that may be made against or by Xxxxxxxx, or in connection with any
ongoing or future investigation or
Page 9
dispute or claim of any kind involving Xxxxxxxx, including any proceeding before
any arbitral, administrative, judicial, legislative, or other body or agency,
including testifying in any proceeding to the extent such claims, investigations
or proceedings relate to services performed or required to be performed by you,
pertinent knowledge possessed by you, or any act or omission by you, at
reasonable times and in reasonable circumstances, provided that upon
presentation of substantiating documentation consistent with reasonable
reimbursement policies and procedures of Xxxxxxxx as in effect from time to
time, Xxxxxxxx will reimburse all of your reasonable expenses incurred to
fulfill this obligation, including, without limitation, reasonable attorneys
fees in the event that the matter reasonably requires you to obtain separate
counsel. You further agree to perform all acts and execute and deliver any
documents that may be reasonably necessary to carry out the provisions of this
paragraph.
13. You acknowledge that you have carefully read and
understood all provisions of this Agreement and, having done so, you agree that
any and all restrictions set forth in this Agreement are fair and reasonable and
are reasonably required for the protection of the business and the interest of
Xxxxxxxx. You acknowledge that if you violate any of the agreements contained in
numbered paragraphs 7, 8, 9 or 11 of this Agreement, Xxxxxxxx will suffer
irreparable harm and will have no adequate remedy at law. You hereby consent to
the enforcement of such provisions by means of a temporary or permanent
injunction or any other appropriate equitable relief ordered by any court of
competent jurisdiction, which shall be in addition to any other remedies that
Xxxxxxxx may have under this Agreement (including without limitation forfeiture
of your options to purchase Xxxxxxxx shares) or otherwise.
14. Except as otherwise expressly provided in this Agreement,
you acknowledge and agree that Xxxxxxxx has no obligation now or at any time in
the future, to rehire or reemploy you in any capacity, including as an
independent contractor or consultant. By this Agreement, you intend to remove
yourself from consideration from future employment with Xxxxxxxx. You agree that
execution of this Agreement is good and sufficient cause to reject any
application you may make notwithstanding this paragraph and to terminate your
employment with Xxxxxxxx should you obtain such employment or enter into any
employment contract with Xxxxxxxx.
15. This Agreement constitutes the entire agreement between
Xxxxxxxx and you, and supersedes and cancels all prior written and oral
agreements, if any, between Xxxxxxxx and you concerning the subject matter
hereof. You affirm that, in entering into this Agreement, you are not relying
upon any oral or written promise or statement made by anyone at any time on
behalf of Xxxxxxxx.
16. The parties intend that the provisions of this Agreement,
including its covenants and restrictions, shall be enforced to the fullest
extent permitted by law. If any particular portion of its provisions, covenants
or restrictions is adjudicated or otherwise
Page 10
determined to be invalid, illegal, unenforceable or ineffective, then that
portion of the provisions, covenants or restrictions shall be deemed severable,
and the remaining provisions, covenants and restrictions set forth in this
Agreement shall be enforceable to the fullest extent permissible under
applicable law.
17. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to its
provisions concerning conflicts of law. You and Xxxxxxxx each hereby (i) agree
that any legal action or proceeding against you or against Xxxxxxxx under,
arising out of or in any manner relating to this Agreement may be brought in any
of the courts of the State of New York located within the Southern or Eastern
Districts of New York or in the United States District Court for the Southern or
Eastern District of New York, (ii) consent and submit to the personal
jurisdiction of any of such courts in any such action or proceeding, (iii)
consent to the service of any complaint, summons, notice or other process
relating to any such action or proceeding by delivery thereof to him or it by
any method authorized by the law and rules of civil procedure governing actions
brought in such courts, (iv) waive and agree not to assert any claim or defense
in any such action or proceeding based on any alleged lack of personal
jurisdiction or improper venue for lack of residence, inconvenient forum or
otherwise.
18. This Agreement has been reached by mutual and purely
voluntary agreement of the parties, and the parties by their signatures indicate
their full agreement with, and understanding of, its terms. You should consult
an attorney before deciding whether to execute this Agreement. You acknowledge:
a. that you understand that this Agreement has
binding legal effect;
b. that you have been apprised that you are
free to disclose this Agreement to the
attorney of your choice, and of the
advisability of doing so; and
c. that you have been given up to 45 days to
consider this Agreement.
d. that you have been given the following
information, attached hereto as Exhibit A:
(i) the group of individuals covered by
this program;
(ii) the eligibility factors for this
program;
(iii) the time limits applicable to this
program;
Page 11
(iv) the job titles and ages of all
individuals eligible or selected
for this program and the job titles
and ages of all individuals in the
same job classification who are not
eligible or selected for the
program.
In the event that you execute this Agreement before the end of the 45-day period
described above in subparagraph c of this paragraph, you hereby acknowledge that
you do so voluntarily, and you waive and agree not to assert any claim or
defense in any legal action or proceeding against Xxxxxxxx or against you, as
the case may be, based on any alleged failure to provide you with up to 45 days
to consider this Agreement.
19. Xxxxxxxx agrees that you may revoke this Agreement within
7 days from the date you sign this Agreement, in which case this Agreement shall
be null and void and of no force or effect on either Xxxxxxxx or you. Any
revocation must be in writing and received by Xxxxxxxx by 5:00 p.m. on or before
the seventh day after this Agreement is executed by you. Such revocation must be
sent to:
Xxxx X. Xxxxxx, Esq.
Vice President and General Counsel
Xxxxxxxx Drug Stores Inc.
00 Xxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
20. All notices, requests, demands and other communications
provided for or permitted under this Agreement shall be in writing and shall be
either personally delivered (including delivery by express courier such as FedEx
or DHL) or sent by prepaid, certified or registered mail, return receipt
requested, addressed to the party to which notice is to be given at the address
as set forth below, or to such other address as such party may have fixed by
notice given in accordance with the terms hereof:
If to Xx. Xxxxx:
Xx. Xxxxx Livon
00 Xxxxx Xxxxx
Xxxxxxxxxx, Xxx Xxxx 00000
with a copy to:
Xxxxx X. Xxxxxx, Esq.
Xxxxxxxx Xxxxx Xxxxxxxx Xxxx & Ballon LLP
000 Xxxxx Xxxxxx
Xxxx 00
Xxx Xxxx, Xxx Xxxx 00000
If to Xxxxxxxx:
Xxxxxxxx Drug Stores, Inc.
00 Xxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attn: General Counsel
with a copy to:
Xxxx X. Xxxxxxxxxx, Esq.
Xxxxxxx Xxxxxx & Green, P.C.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Any notice sent as aforesaid shall be deemed given and effective upon the
earlier of (i) delivery to the address for the receiving party provided as set
forth herein and (ii) the date falling three days after notice of attempted
delivery has been left at the address for the receiving party provided as set
forth herein.
21. This Agreement may not be amended and its terms may not be
altered, modified or waived, except by a writing signed by Xxxxxxxx and by you.
No waiver of one provision shall be construed as a waiver of any other provision
and the fact that an obligation is waived for any period of time shall not be
considered to be a continuing waiver. Without limiting the foregoing, no waiver
of any breach or violation of this Agreement shall be implied from any party's
forbearance or failure to take action.
22. This Agreement shall expire upon the full performance or
other satisfaction of the obligations hereunder, provided that the provisions of
numbered paragraphs 3, 4, 5, 7, 8.a, 9, 10, 12, 13, 14, 16, 17, 20, and 22 of
this Agreement shall survive its termination.
23. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original for all purposes.
Page 13
By your signature below, you accept this Agreement and agree
to abide by its terms, conditions, and restrictions, effective after the
expiration of the period for revocation set forth in numbered paragraph 19
hereof.
XXXXXXXX DRUG STORES INC.
By: /s/ Xxxxxxx Xxxxxxxx
------------------------
Name: Xxxxxxx Xxxxxxxx
Title: President
Accepted and Agreed:
Date: March 6, 1998
/s/ Xxxxx Xxxxx
---------------
Xxxxx Xxxxx
State of New York )
) ss:
County of Suffolk )
On this 6th day of March, 1998, before me personally came
Xxxxx Xxxxx, to me known to be the individual described in the foregoing
instrument, who executed the foregoing instrument in my presence, and who duly
acknowledged to me that he executed the same.
/s/Xxxxxx Xxxxxxxx
------------------
Notary Public
My commission expires: 8/24/99
