EXHIBIT 10.90
-------------
SEPARATION AGREEMENT
AND MUTUAL GENERAL RELEASE
This Separation Agreement and Mutual General Release ("Agreement") is
made and entered into as of the 12th day of February, 1998, at Los Angeles,
---- --------
California by and among SMART & FINAL, INC., a Delaware corporation ("SFI"), on
the one hand; and XXXXX X. XXXXXXX, III, an individual ("Xxxxxxx") and XXXX
XXXXXXX, an individual, on the other hand.
R E C I T A L S
---------------
X. Xxxxxxx has been employed by SFI or its predecessor from April 2,
1979 through the present, most recently as Chief Executive Officer, as a member
of the Board of Directors of SFI, and as an officer and director of various
affiliates and subsidiaries of SFI.
X. Xxxxxxx has been most recently employed by SFI pursuant to that
certain Employee Agreement made, entered into, and effective as of January 1,
1997 (the "Employment Agreement").
C. SFI and Xxxxxxx have determined that Xxxxxxx should end his
employment as Chief Executive Officer of SFI, as a member of SFI's Board of
Directors, and as an officer and/or director of SFI's subsidiaries and
affiliates effective a date to be determined.
D. Certain differences have arisen as to the respective rights and
obligations of SFI and Xxxxxxx pursuant to the Employment Agreement.
X. Xxxxxxx and SFI desire to resolve their disputes and differences,
and to determine their respective rights, benefits, duties and obligations, and
therefore enter into this Agreement upon the terms and conditions hereinafter
set forth.
NOW, THEREFORE, in consideration of the mutual promises, covenants,
representations and agreements herein contained, the parties hereto agree as
follows:
A G R E E M E N T
-----------------
1. Payments to Xxxxxxx. Commencing May 1, 1998 or such other date as
-------------------
the parties may agree (the "Commencement Date"), SFI shall pay Xxxxxxx the total
of Two Million Two Hundred and No/100 Dollars ($2,200,000.00) in equal monthly
payments for thirty-six (36) months, each installment to be payable on the last
day of each month, subject to the ordinary withholding taxes. Five Thousand and
No/100 Dollars ($5,000.00) of each such payment shall represent compensation of
Xxxxxxx pursuant to the Consultant Agreement described in Paragraph 5 of this
Agreement.
2. Continuing Benefits. For thirty-six (36) consecutive months
-------------------
commencing on the Commencement Date:
(a) Xxxxxxx shall receive health, dental, vision, life insurance, and
other incidental benefits (except the AYCO financial consulting services, which
are specifically excluded) on the same basis as Xxxxxxx receives such benefits
as of the date of execution of this Agreement.
(b) Xxxxxxx shall be eligible to contribute to SFI's 401(k) plan and
the Smart & Final Supplemental Deferred Compensation Plan; provided, however,
that SFI shall have no obligation to make any contributions to either plan on
Xxxxxxx'x behalf.
(c) Xxxxxxx shall participate in the SFI automobile plan and receive
an automobile allowance on the same basis as that received by him during
calendar year 1997.
(d) Xxxxxxx shall continue to accrue years of service for purposes of
computing his SERP benefit under SFI's Supplemental Executive Retirement Plan
(the "SERP").
(e) Xxxxxxx may exercise all unqualified stock options which have
vested as of the Commencement Date to the extent such options have not expired
pursuant to their respective terms.
3. SERP Benefit. SFI and Xxxxxxx shall amend Xxxxxxx'x SERP
------------
agreement to provide that Xxxxxxx will continue to be a Plan participant until
"Normal Retirement" or "Early Retirement" as those terms are defined in the SERP
Plan.
-2-
Xxxxxxx'x SERP Plan Agreement shall survive his termination of employment.
Depending on when Xxxxxxx opts to commence receiving benefits under the SERP,
Xxxxxxx'x benefit may be actuarially reduced as provided in the SERP. The "Final
Average Compensation" which shall be utilized for determining Plan benefits Six
Hundred Ninety-Four Thousand and No/100 Dollars ($694,000.00) (determined using
"Compensation" of Eight Hundred Twenty Thousand and No/100 Dollars ($820,000.000
for calendar 1996, Four Hundred Fifty Thousand and No/100 Dollars ($450,000.00)
for calendar 1997 and an aggregate of Two Million Two Hundred Thousand and
No/100 Dollars ($2,200,000.00) for calendar years 1998 through and including
2000.
4. Retiree Medical Benefits. Xxxxxxx and his wife, Xxxx, shall be
------------------------
entitled to the maximum retiree health benefits available as those benefits are
defined in that certain SmartCare brochure entitled "General Information for
Retirees" and in the pertinent Plan documents and policies as they exist as of
the date of execution of this Agreement.
5. Deferred Compensation and 401(k) Plan Benefits. Xxxxxxx shall be
----------------------------------------------
entitled to all benefits under the Smart & Final Deferred Compensation Plan,
that certain Deferred Compensation Agreement between SFI and Xxxxxxx dated as of
March 31, 1994, that certain Deferred Compensation Agreement between SFI and
Xxxxxxx dated as of April 15, 1992, and SFI's 401(k) plan, to the extent such
benefits have vested as of the last day of the thirty-sixth (36th) month
following the Commencement Date.
6. Employment of Xxxxxxx as a Consultant. Commencing with the
-------------------------------------
Commencement Date and continuing for thirty-six (36) months thereafter, Xxxxxxx
shall be employed by SFI as a consultant. No later than the Commencement Date,
Xxxxxxx and SFI shall execute a Consultant Agreement in the form attached hereto
as Exhibit A.
7. Change of Control. In the event of a "change of control," all
-----------------
payment pursuant to Section 1 of this Agreement shall immediately become due and
payable. For purposes of this Agreement, "change of control" shall mean the
sale of fifty percent (50%) or more of the common stock or assets of SFI or when
current shareholders of SFI or their affiliates otherwise fail to own 50% or
more of the common stock of SFI or the approval by the stockholders of SFI of a
plan of complete liquidation of SFI or an agreement for the sale or disposition
(including, without limitation, dispositions through merger or consolidation) by
SFI of all or substantially all of SFI's assets.
8. General Release of SFI. Except for the obligations set forth
----------------------
herein and any obligation to indemnify Xxxxxxx imposed by operation of law or
provided in
-3-
SFI's Certificate of Incorporation or Bylaws, Xxxxxxx and Xxxx Xxxxxxx hereby
acknowledge full and complete satisfaction of and do hereby release and fully
discharge SFI, its predecessor, successor, parent, subsidiary and affiliated
entities, past and present as well as its partners, officers, directors,
shareholders, agents, servants, employees, representatives, attorneys, heirs,
successors and assigns, past and present, and each of them (collectively
referred to as the "SFI Releasees"), from any and all claims, demands, and
causes of action of every kind and nature (including, without limitation, claims
for damages, costs, expenses, loss of services, loss of consortium, and
attorneys' and accountants' fees and expenses), whether known or unknown,
suspected or unsuspected, which Xxxxxxx and Xxxx Xxxxxxx now owns or holds or at
any time heretofore has owned or held against the SFI Releasees, or any of them,
arising out of, resulting from, or in any way related to any transaction,
agreement, occurrence, act, or omission whatsoever occurring, existing, or
omitted at any time before the date hereof, including, without limiting the
generality of the foregoing, such claims, demands, and causes of action
(a) Arising out of or in any way connected with Xxxxxxx'x
employment by SFI.
(b) Arising out of any federal, state or other government statute or
ordinance, including without limitation, Title VII of the Civil Rights Act of
1964, the federal Age Discrimination in Employment Act of 1967 (29 U.S.C. (S) 21
et seq.), the California Fair Employment and Housing Act, or any other legal
limitation on the employment relationship.
9. Review and Revocation Period; Effective Date. SFI and Xxxxxxx
--------------------------------------------
agree that Xxxxxxx shall have twenty-one (21) days to review this Agreement and
consult legal counsel if he so chooses, during which time the proposed terms of
this Agreement shall not be amended, modified or revoked by SFI. Xxxxxxx may
revoke this Agreement if he so chooses by providing notice of his decision to
revoke the Agreement to SFI within seven days following the date he signs this
Agreement. This Agreement shall become effective and enforceable upon
expiration of such seven (7)-day revocation period. Xxxxxxx acknowledges and
agrees that the compensation and benefits he is receiving pursuant to this
Agreement is greater than the compensation and benefits to which he would
otherwise have been entitled to upon termination of his employment with SFI.
10. General Release of Xxxxxxx. Except for the obligations set forth
--------------------------
herein, any claims for willful misconduct or fraud, and any loans or borrowings
by Xxxxxxx from any deferred compensation plan or agreement, SFI for itself and
for its subsidiaries and affiliate corporations hereby acknowledges full and
complete satisfaction of and does hereby release and fully discharge Xxxxxxx,
his agents, servants, employees,
-4-
representatives, attorneys, heirs, successors and assigns, past and present, and
each of them (collectively referred to as the "Xxxxxxx Releasees"), from any and
all claims, demands, and causes of action of every kind and nature (including,
without limitation, claims for damages, costs, expenses, loss of services, and
attorneys' and accountants' fees and expenses), whether known or unknown,
suspected or unsuspected, which SFI or its subsidiary or affiliate corporations
now own or hold or at any time heretofore has owned or held against the Xxxxxxx
Releasees, or any of them, arising out of, resulting from, or in any way related
to any transaction, agreement, occurrence, act, or omission whatsoever
occurring, existing, or omitted at any time before the date hereof, including,
without limiting the generality of the foregoing, such claims, demands, and
causes of action arising out of or in any way connected with Xxxxxxx'x
employment by SFI.
11. Release of Unknown Claims. It is the intention of the parties
-------------------------
hereto in executing this Settlement Agreement that this instrument is a General
Release which shall be effective as a bar to each and every claim, demand, or
cause of action released hereby. Each party recognizes that he or it may have
some claim, demand, or cause of action against another party of which he or it
is totally unaware and unsuspecting, which he or it is giving up by execution of
the General Release. It is the intention of the parties in executing this
instrument that it will deprive them of each such claim, demand or cause of
action and prevent them from asserting it against any other party to whom a
General Release has been given. In furtherance of this intention, each party
hereto expressly waives any rights or benefits conferred by the provisions of
Section 1542 of the Civil Code of the State of California, which provides as
follows:
"A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his
settlement with the debtor."
12. Consultation With Counsel. Each party hereto acknowledges and
-------------------------
represents that he or it has consulted with legal counsel before effecting this
settlement and executing this Agreement and that he or it understands its
meaning, including the effect of Section 1542 of the California Civil Code and
the release of any claims under the Age Discrimination in Employment Act of 1967
(20 U.S.C. (S) 21, et. seq.), and expressly consents that this Agreement shall
be given full force and effect according to each and all of its express terms
and provisions, including those relating to the release of unknown and
unsuspected claims, demands, and causes of action.
13. No Admissions. This Agreement is part of the compromise and
-------------
settlement of contested claims. No action taken by the parties hereto, either
previously or
-5-
in connection with the compromise reflected in this Agreement, shall be deemed
or construed to be an admission of the truth or falsity of any matter pertaining
to any claim, demand, or cause of action referred to herein or relating to the
subject matter of this Agreement, or any acknowledgment by them, or any of them,
of any fault or liability to any party hereto or to any other person in
connection with any matter or thing.
14. Non-Disparagement. Xxxxxxx shall not disparage or negatively
-----------------
criticize SFI, its management, its products, or any of its employees to any
other person in any manner whatsoever. SFI shall not disparage or negatively
criticize Xxxxxxx in any manner whatsoever.
15. No Assignments. Each party hereto represents and warrants to
--------------
each other party hereto, and each of them, that no portion of any claim, demand,
cause of action, or other matter released herein, nor any portion of any
recovery or settlement to which one party might be entitled from another party,
has been assigned or transferred to any other person or entity, either directly
or by way of subrogation or operation of law. Each party hereby agrees to
indemnify, defend, and hold harmless each other party, and each of them, from
all loss, cost, claim, or expense (including, but not limited to, all expenses
of investigation and defense of any such claim or action, including reasonable
attorneys' and accountants' fees and expenses) arising out of any claim made or
action instituted by any person or entity who claims to be the beneficiary of
such assignment or transfer, and to pay and satisfy any judgment resulting from
or any settlement of any such claim or action.
16. Governing Law. This Agreement and its terms and conditions shall
-------------
be governed by the laws and construed solely in accordance with the laws of the
of State of California.
17. Failure or Delay Not a Waiver. No failure or delay on the part
-----------------------------
of any party to exercise any right hereunder, nor any other indulgence of such
party, shall operate as a waiver of any other rights hereunder, nor shall any
single exercise by any party of any right hereunder preclude any other or
further exercise thereof. The rights and remedies herein provided are
cumulative and not exclusive of any rights or remedies provided by law.
18. No Representations. Each party hereto acknowledges that he or it
------------------
has relied wholly upon his or its own judgment, belief and knowledge of the
existence, nature and extent of each claim, demand, or cause of action that he
or it may have against another which is hereby released and that he or it has
not been influenced to any extent in
-6-
entering into this Agreement by any representations or statements regarding any
such claim, demand, or cause of action made by any other party hereto. Each
party acknowledges that he or it is executing and delivering this Agreement
after having received from legal counsel of his or its own choosing legal advice
as to her or its rights hereunder and the legal effect hereof.
19. Attorneys' Fees and Costs. SFI shall pay Xxxxxxx'x reasonable
-------------------------
attorneys' fees, expenses, and costs incurred in the disputes being resolved by
this Agreement and the preparation of this Agreement. All disputes arising
under or relating in any fashion to this Agreement shall be determined by
arbitration before the American Arbitration Association at Los Angeles,
California. In the event any litigation, arbitration or other proceeding is
brought for the interpretation or enforcement of this Agreement, or because of
an alleged dispute, default, misrepresentation, or breach arising out of or
relating to any of the provisions of this Agreement, the successful or
prevailing party or parties shall be entitled to recover reasonable attorneys'
fees, costs, and expenses actually incurred in connection therewith, in addition
to any other relief to which she, it, or they may be entitled.
20. Integration. This Agreement constitutes the entire understanding
-----------
between the parties hereto pertaining to the subject matter hereof and fully
supersedes any and all prior agreements and understandings, whether written or
oral, between the parties hereto pertaining to the subject matter hereof.
21. Amendments. No changes in, additions to, or modifications of
----------
this Agreement shall be valid unless set forth in writing executed by all
parties hereto.
22. Successors and Assigns. The provisions of this Agreement shall
----------------------
be binding upon and inure to the benefit of the respective parties and their
heirs, executors, administrators, agents, representatives, successors, and
assigns.
23. Additional Documents. The parties hereto agree to execute such
--------------------
additional documents and perform such further acts as may be reasonably
necessary to effectuate the purpose of this Agreement.
24. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
-7-
25. Headings. The Headings in this Agreement are for convenience or
--------
reference only, and shall not limit or otherwise affect the meaning hereof.
26. Authority to Execute. Each individual signing this Agreement,
--------------------
and any other documents executed in connection with this Agreement, whether
signed individually or on behalf of any person or entity, warrants and
represents that he or he has full authority to so execute the Agreement on
behalf of the parties on whose behalf he so signs. Each separately acknowledges
and represents that this representation and warranty is an essential and
material provision of this Agreement and shall survive execution of this
Agreement. The parties hereto each respectively represents that the attorneys
signing this Agreement and the documents executed with this Agreement on their
behalf respectively have been duly authorized and empowered to do so. SFI
represents and warrants that it has the authority and capacity to perform each
of its obligations under this Agreement or that it will cause such obligation to
be fulfilled.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
consisting of eleven (11) pages, including Exhibit A, as of the date and year
first written above.
SMART & FINAL, INC.
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxx
----------------
Its: Chairman & CEO
--------------
Date Signed: 2/11/98
-------
APPROVED AS TO FORM:
XXXXXXX COIE
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------
Xxxxxxx X. Xxxxxx
Attorneys for Smart & Final, Inc.
-8-
/s/ XXXXX X. XXXXXXX, III
------------------------------------
XXXXX X. XXXXXXX, III
Date Signed: 2/10/98
-------
/s/ XXXX XXXXXXX
------------------------------------
XXXX XXXXXXX
Date Signed: 2/10/98
-------
APPROVED AS TO FORM:
LAW OFFICES OF XXXX X. BOSS
By: /s/ XXXX X. BOSS
--------------------------------------
Xxxx X. Boss
Attorneys for Xxxxx X. Xxxxxxx, III
and Xxxx Xxxxxxx
-9-
EXHIBIT A
CONSULTANT AGREEMENT
This Agreement is made and entered into as of the ____ day of
_____________, 1998 at Los Angeles, California by and between SMART & FINAL,
INC. (the "Company"), and XXXXX X. XXXXXXX, III ("Xxxxxxx").
R E C I T A L S
---------------
A. The Company desires to retain the services of Xxxxxxx as a
consultant to provide advice and assistance to the Company on various issues
related to the management of the Company.
X. Xxxxxxx desires to be employed by the Company as a consultant.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements herein contained, the parties hereto agree as follows:
A G R E E M E N T
-----------------
1. Services. Xxxxxxx shall be employed by the Company as a consultant to
--------
advise and assist the Company on management issues or such other matters as the
Company from time to time may determine. Xxxxxxx shall provide such consulting
services at such times and in such manner as the Company may reasonably
determine. The Company shall give Xxxxxxx reasonable notice. During the term
of this Agreement, Xxxxxxx shall be available to provide such services for the
Company for at least twenty-five (25) hours per month. The Company agrees and
acknowledges that subject to Paragraph 4 hereof, Xxxxxxx may be employed on a
part-time or full-time basis by one or more third party employers during the
term hereof.
2. Compensation. Five Thousand and No/100 Dollars ($5,000.00) of each of the
------------
monthly payments provided in paragraph 1 of that certain Separation Agreement
and Mutual General Release between the Company, one the one hand, and Xxxxxxx
and Xxxx Xxxxxxx, on the other hand, shall constitute compensation to Xxxxxxx
for his services rendered under this Consultant Agreement.
3. Term. The term of this Consultant Agreement shall be three (3) years
----
commencing on May 1, 1998 or such other date as the parties may agree.
4. Noncompetition. During the first twelve (12) months of the term of this
--------------
Consultant Agreement, Xxxxxxx will not, directly or indirectly, be employed by,
own, manage, operate, join, control, or participate in the ownership,
management, operation or
-10-
control of any business or entity engaged in the food service distribution
business or the cash-and-carry grocery business.
5. Nonsolicitation. During the term of this Consultant Agreement, Xxxxxxx
---------------
will not induce or attempt to induce, directly or indirectly, any employee of
the Company to terminate his or her employment with the Company to work for
Xxxxxxx or any other person or entity.
6. Remedy. Xxxxxxx acknowledges that any breach by Xxxxxxx of paragraphs 4
------
or 5 of this Consultant Agreement will cause irreparable injury to the Company.
Accordingly, in the event of such breach or an impending breach, the Company
shall be entitled to obtain temporary restraining orders, injunctions and other
equitable relief from a court in addition to and not in lieu of the right to
seek damages and any other right or remedy afforded to the Company by law or
otherwise. The prevailing party in any action to enforce the provisions of this
Consultant Agreement shall be entitled to recover from the other party all
reasonable expenses incurred in such action, including reasonable attorneys'
fees.
7. Entire Agreement. This Consultant Agreement constitutes the entire
----------------
agreement, and supersedes any and all prior agreements, whether written or oral,
of the parties hereto relating to the services rendered hereunder and the
subject matter hereof. This Consultant Agreement may only be amended by a
written agreement signed by all parties.
IN WITNESS WHEREOF, the parties hereto have executed this Consultant
Agreement as of the date and year first written above.
SMART & FINAL, INC.
a Delaware corporation
By ____________________________________
Name: ____________________________
Its: _______________________________
Date Signed: _______________________
/s/ XXXXX X. XXXXXXX, III
______________________________________
XXXXX X. XXXXXXX, III
Date Signed: ____________________________
-11-
