Exhibit 10.16
EARLY RETIREMENT AGREEMENT AND RELEASE
The Penn Traffic Company, including all of its divisions (hereinafter
referred to as "Penn Traffic" or the "Company"), and Xxxx X. Xxxxx
("Employee"), of 00 Xxxx Xxxx Xxxx, Xxxxxxxxxxx, Xxx Xxxx 00000, hereby
enter into this EARLY RETIREMENT AGREEMENT AND RELEASE ("Agreement"),
effective September 3, 1996, and the Company and Employee each hereby agree
as follows:
1. The Employee will be entitled to all employee benefits,
including, but not limited to pension, for the period through January 17,
1998, which shall be considered his normal retirement date.
2. The Employee's last day of active employment with the Company is
September 30, 1996. The Employee hereby resigns as a Director of the
Company, effective September 3, 1996, and as an Officer of the Company and
all of its subsidiaries and divisions on which he serves, including as a
director, effective September 30, 1996,
3. The terms and conditions of this Agreement have been fully
explained to the Employee.
4. The Employee has been advised that he may take up to twenty-one
(21) days to review and consider entering into this Early Retirement
Agreement and Release and has been advised that he may consult with an
attorney or anyone of his choosing and, by executing same, has decided he
wants to sign it.
5. The Employee is entitled to change his mind and revoke this
Agreement within seven (7) days of signing it. This Agreement will not
become effective until the eighth (8th) day after he signs it.
6. In consideration of the execution by the Employee of this Early
Retirement Agreement and Release and compliance with the promises made
herein, the Company will pay the Employee the following amounts and provide
the following benefits:
(a) Salary Continuation. The Employee shall receive a sum
equal to his weekly salary for the period through January 17, 1998, with
normal payroll deductions being withheld. This sun shall be paid as
follows:
(1) $365,000, with normal payroll deductions being
withheld, within fourteen (14) days of the execution of this
Early Retirement Agreement, and
(2) the balance in weekly payments of $2,622.86 through
January 17, 1998, with normal payroll deductions being withheld.
(b) Insurance Benefits:
(1) The Company will provide coverage for the Employee and
his spouse in the Company Health Care Plan for the period through
November 30, 2004, or until the Employee becomes employed and has
comparable insurance coverage. Such coverage will be subject to
the same terms and conditions that apply to all non-union covered
employees of the Company. After November 30, 2004, the Company
will extend the Company's group health care benefits to Employee
and his spouse, at his cost, but at Company's group rate, as
provided under COBRA, if the Employee does not already have
insurance coverage through a new employer.
(2) The Company will provide group term life insurance in
the amount of $500,000 for the Employee for the period through
November 30, 1999.
(c) Incentive Compensation. The Employee will be eligible for a
prorated Incentive Compensation Bonus for Calendar 1996. Penn Traffic
agrees to pay the Employee said applicable Calendar 1996 bonus, if any,
minus withholding and other normal deductions, all in accordance with the
terms and provisions of the Penn Traffic Incentive Compensation Plan. The
Employee shall not be eligible for any Incentive Compensation for any
period after September 30, 1996.
(d) Stock Options. The Employee shall have, unless earlier
terminated pursuant to the normal terms of the Plan, until January 17,
2003, whichever occurs first, to exercise any of his stock options, as
applicable under the respective Stock Option Plans.
(e) Restricted Stock. The Employee shall continue to retain his
27,500 shares of restricted stock, which shall not terminate as a result of
this resignation and early retirement. The Employee shall not be entitled
to any loan from the Company under any circumstances, and the restricted
stock shall otherwise be governed by the terms and conditions of The Penn
Traffic Company 1993 Long Term Incentive Plan as though the Employee were
still employed by the Company.
(f) Company Vehicle. The Employee agrees to return all gas,
credit and other cards associated with the Company vehicle to the Company
on or before September 30, 1996. The Company shall transfer ownership of
the 1995 Cadillac which has been assigned to the Employee as a Company car
within thirty (30) days of the execution of this Early Retirement
Agreement. The book value of this car at that time, approximately $30,000,
will be reported as compensation to the Employee on his W-2 Form for 1996.
(g) Moving Expenses. The Employee intends to sell his residence
in Skaneateles, New York and plans on moving to the State of Tennessee.
The Company agrees to reimburse the Employee in connection with real estate
brokers' commissions, attorneys' fees, other related expenses with regard
to the sale of his Skaneateles, New
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York residence and transportation and moving expenses to the State of
Tennessee up to an aggregate amount not to exceed $35,000,
(h) Pension. The Employee is eligible under the Company's
Supplemental Retirement Income Plan to receive an annual pension benefit
for an eligible Employee with at least thirty (30) years of credited
service equal to forty percent (40%) of the yearly average of the highest
aggregate compensation received by the Employee during a period of five
(5) consecutive years of employment, less offsets for benefits paid under
the Company's other retirement plans and for Social Security benefits.
7. The Employee acknowledges that he knows there are various State
and Federal laws which prohibit employment discrimination on the basis of
race, color, creed, sex, age, national origin, marital status, religion,
disability or veteran status.
In consideration for the Company's making the payments listed in this
Agreement, which it is not otherwise required to make, the Employee intends
to voluntarily give up any rights he may have under these or any other laws
with respect to his employment with the Company or the retirement and
termination of his employment, including his rights under the Age
Discrimination in Employment Act and Title VII of the Civil Rights Act of
1964.
8. The Employee agrees not to disclose, either directly or
indirectly, to any person or entity, any information whatsoever regarding
the existence or substance of this Early Retirement Agreement and Release.
The Employee also agrees not to disclose, either directly or indirectly, to
any person or entity, any information concerning the business, operations
or condition (financial or otherwise) of the Company.
Employee will effect and will provide all reasonable cooperation in
effecting a prompt and orderly transition of his responsibilities at the
Company. Employee agrees to cooperate fully with the Company in connection
with litigations, arbitrations and governmental or other proceedings to
which the Company is or may be from time to time a party, without
compensation, provided that the Company's requests for such cooperation are
reasonable under the circumstances.
9. The Employee hereby agrees that he will not compete in any
capacity whatsoever, directly or indirectly, with the Company in any area
in which the Company presently conducts its business for the period through
January 17, 2000. In the event Employee breaches this Agreement, he shall
no longer be entitled to any of the benefits and payments set forth in this
Agreement.
10. In exchange for the payments the Employee will receive under this
Early Retirement Agreement and Release, the Employee, on behalf of himself,
his heirs, executors, administrators, successors and assigns, hereby
releases and forever discharges the Company from any and all causes of
action, charges or claims and/or damages of any kind arising out of
employment, including the January 29, 1995 Employment Agreement between the
Employee and the Company, and retirement from the beginning of his
employment to and including the effective date of this Agreement. This
includes, but is not limited to, claims arising under the
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Federal Age Discrimination in Employment Act of 1967 and Title VII of the
Civil Rights Act of 1964, as amended, and claims of discrimination based on
race, creed, color, sex, age, national origin, disability or marital
status.
11. This Early Retirement Agreement and Release sets forth the entire
agreement between the Company and the Employee and shall supersede any and
all prior agreements or understandings between the parties, except as
otherwise specified in this Early Retirement Agreement and Release. It may
not be amended, except by a written agreement signed by both parties.
12. BY SIGNING THIS AGREEMENT AND GENERAL RELEASE AND WAIVER, THE
EMPLOYEE STATES THAT: HE HAS READ IT; HE UNDERSTANDS IT; HE AGREES WITH
EVERYTHING IN IT; HE WAS TOLD, IN WRITING, TO CONSULT AN ATTORNEY BEFORE
SIGNING IT; HE HAS BEEN GIVEN TWENTY-ONE (21) DAYS TO REVIEW THE AGREEMENT
AND TO THINK ABOUT WHETHER OR NOT HE WANTS TO SIGN IT; AND HAS SIGNED IT
KNOWINGLY AND VOLUNTARILY.
THE PENN TRAFFIC COMPANY
By: /s/ Xxxx X. Xxxxxx
----------------------
Xxxx X. Xxxxxx, Chairman
AGREED:
/s/ Xxxx X. Xxxxx
--------------------
Xxxx X. Xxxxx
Dated: October 5, 1996
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