Exhibit 10.(iii)(A)(4)
7-ELEVEN, INC.
March 7, 2000
Xxxxx X. Xxxxxxxx, XX
7005 Xxxxxxx
Xxxxxx, Xxxxx 00000
Dear Xxxxx:
This letter (the "Agreement") sets forth the terms and conditions under
which 7-Eleven, Inc. ("7-Eleven" or the "Company") will provide you with
certain enhanced benefits upon your retirement from the Company:
1. Your service as an officer and employee of
7-Eleven, and as an officer or director of any subsidiaries or
affiliates of 7-Eleven, shall end as of April 30, 2000 (the
"Retirement Date"). You have been nominated for reelection to the
Company's Board of Directors on or about April 26, 2000. If you
are reelected to the Board of Directors, you will not be entitled
to any director's fees for your service on the Board or any
committee thereof; however, you will be reimbursed for any
reasonable travel and related expenses associated with such
service.
2. On or before May 15, 2000, 7-Eleven shall pay you
the total sum of $3,657,037 (the "Retirement Grant"), as well as
certain other benefits outlined in this Agreement. The terms of
payment and the various components of the Retirement Grant are
specifically delineated in the document attached hereto as Exhibit
A. The Retirement Grant, and many of the other benefits outlined
in this Agreement, represent benefits in excess of what you are
otherwise entitled to receive upon your retirement from the
Company, and shall, therefore, constitute good and valuable
consideration for the release of any and all claims that you might
have by virtue of such retirement (for purposes of this Agreement,
the term "Retirement" shall refer to your employment with, and
retirement from, 7-Eleven). The Retirement Grant (and any other
benefits under this Agreement) shall be subject to such deductions
as may be required by law.
Tab 4
3. Your active employment with the Company shall continue
between now and the Retirement Date (the "Transition Period").
During the Transition Period, you will continue to carry out your
current duties as president and chief executive officer. During
the Transition Period, you shall be paid your current base salary
and you shall remain eligible to participate in 7-Eleven's
benefit plans as an active employee. As with other agreements
involving departing Company executives, the Transition Period is
an essential part of this Agreement. Therefore, if you should
(i) voluntarily resign from 7-Eleven prior to the Retirement
Date, (ii) be separated from employment with 7-Eleven for gross
misconduct or willful refusal to perform your job duties, or
(iii) refuse to cooperate reasonably in effectuating an orderly
transition between now and the Retirement Date, no benefits shall
be available to you under this Agreement. In addition,
notwithstanding any other provision of this Agreement, if your
employment should end by reason of your death between now and the
Retirement Date, you shall be eligible for any and all benefits
that are generally provided to similarly situated employees
pursuant to 7-Eleven's policies and practices (including, without
limitation, the Pre-Retirement Salary Continuation Benefit under
the Executive Protection Plan), but no benefits shall be payable
to your heirs or beneficiaries by virtue of this Agreement.
4. By signing below, you agree that between the Retirement
Date and the date you cease to receive any benefit under this
Agreement, you shall cooperate with the Company, upon the
Company's reasonable request (and only to the extent that such
cooperation does not interfere with your other business and
personal obligations), if your assistance should be needed in
connection with (i) any legal matters in which the Company is, or
may become, involved, or (ii) the transfer of knowledge or
information regarding operational or other issues with which you
were involved during your employment. Such cooperation is an
integral part of this Agreement, and you shall not be entitled to
any further compensation for such cooperation; however, the
Company will reimburse any reasonable expenses you may incur in
connection with such cooperation.
5. With respect to the annual performance incentive ("API")
for 2000 and 2001, your entitlement to API payments for those
years is specifically and completely described in Exhibit A
attached hereto. You shall not be eligible for any API
corresponding to any years subsequent to 2001.
6. With respect to the Executive Protection Plan ("EPP"), if
you had chosen to retire as of April 30, 2000, you would have
been entitled to post-retirement salary continuation and post-
retirement life insurance benefits at a 90 percent level, based
on your age (at retirement) of 63, and based on your total
compensation in 1997. As part of this Agreement, however, you
shall be provided the benefits listed in (i) and (ii), below,
which are at the 100 percent level (in other words, as if you had
retired at age 65), and based on your compensation for 1999.
Your entitlement to pre-retirement salary continuation benefits
under the EPP shall be controlled by the EPP plan document.
(i). a payment that is equivalent to the net present value of
the total of ten annual installments of $119,194, which is what
you would have received under the EPP Post-Retirement Salary
Continuation benefit if you retired at age 65 and based the
calculation on your 1999 compensation. The details of this
payment are set forth in Exhibit A attached hereto; and,
(ii). an assignment of post-retirement life insurance
benefits comparable to the benefit that would have been provided
under the EPP if you had retired under the EPP at age 65, and
based the calculation on your 1999 compensation, such assignment
to be made during May 2000. Under this benefit, 7-Eleven shall
pay your designated beneficiaries a post-retirement life
insurance benefit of $1,604,250.00 upon your death, provided
your death occurs after April 30, 2000.
7. 7-Eleven previously completed an additional assignment of
life insurance to you under the EPP in the amount of $822,000.00.
This assignment was made from a portion of a policy owned by the
Company, said policy being more particularly described as
Manufacturers Life Insurance Co. Policy No. 5816436-9, in the
face amount of $3,000,000. The portion of this policy that was
not assigned to you remains the property of 7-Eleven, and you
shall retain the benefit of the previously assigned $822,000
portion of that policy.
8. Beginning as of May 1, 2000, you and your eligible
dependents shall receive retiree medical and dental coverage
under the 7-Eleven, Inc. Comprehensive Welfare Benefits Plan (the
"Benefits Plan"), subject to (i) your timely payment of all
applicable monthly retiree medical and dental premiums to 7-
Eleven's Group Insurance Department; and (ii) the terms and
conditions contained in the applicable plan document. In order
to receive this coverage, you must remit payment of premiums for
this coverage in the same manner as other covered retirees and
their dependents, and your premiums for this coverage will be the
same amount as other 7-Eleven retirees with equivalent coverage.
As indicated in Exhibit A, as a part of the Retirement Grant, 7-
Eleven will make a single payment to you, the amount of which
will be approximately equal to the cost of retiree medical and
dental coverage for you and your covered dependents through April
30, 2004, less an amount equal to the premiums that would be
charged to an active employee of 7-Eleven for comparable coverage
over the same time period.
9. Your entitlement to any benefits under the 1995 Stock
Incentive Plan shall be governed by the terms of the plan
document and any applicable award agreements; provided, however,
that your Retirement shall be deemed to be as a result of Early
Retirement, as that term is defined in the plan document.
10. You shall remain covered under the Company's directors
and officers liability coverage for acts and omissions that
occurred on or prior to the Retirement Date, and for so long as
you continue to serve on the Company's Board of Directors, but
only to the same extent, and subject to the same deductibles, as
other officers and directors of the Company.
11. You shall not be permitted to make any deferrals to the
7-Eleven, Inc. Employees' Savings and Profit Sharing Plan (the
"Profit Sharing Plan") after the Retirement Date. Your other
rights pertaining to the Profit Sharing Plan shall be governed by
the terms of the plan document.
12. You shall be permitted to retain ownership of a life
insurance policy previously obtained for your benefit by 7-
Eleven, said policy being more particularly described as
Transamerica Life Companies Policy No. 5812034-6, in the face
amount of $1,050,000.
13. Your coverage under the 7-Eleven, Inc. Basic Life Plan
(the "Life Plan") shall cease as of the Retirement Date. Within
31 days after the Retirement Date, you shall have the option to
convert your coverage under the Life Plan to an individual
policy, on such terms as may be prescribed by 7-Eleven's Group
Insurance Department.
14. Your coverage under any and all employee-paid life
insurance programs, including optional term life insurance and
accidental death and dismemberment insurance, shall cease as of the
Retirement Date. You may convert any employee-paid life insurance
you may have to individual policies within 31 days after the
Retirement Date, on such terms as may be prescribed by the
respective insurance companies.
15. The Retirement Grant is intended to include any separation
pay you might have been entitled to under the 7-Eleven, Inc.
Separation Pay Plan, and 7-Eleven shall not be otherwise obligated
to provide you any separation pay (other than the retirement
benefits referenced in this Agreement).
16. Your coverage under the 7-Eleven, Inc. Executive Physical
Plan shall continue through April 30, 2004.
17. Your coverage, and your entitlement to any benefits, under
the short- and long-term disability components of the Benefits
Plan, as well as your entitlement to any other benefits not
specifically mentioned in this Agreement, shall cease as of the
Retirement Date.
18. After the Retirement Date and until April 30, 2003, 7-
Eleven will provide you with, at 7-Eleven's expense, office
space, secretarial assistance, and access to and use of
appropriate office equipment in the Cityplace Center East, or at
another location of the Company's choice. As with all occupants
of Cityplace Center East, your continued occupancy of an office
in the facility will be conditioned upon your compliance with all
of the facilities' rules, City ordinances, and any other
applicable laws.
19. On or before the Retirement Date, you shall (i) return to
7-Eleven any items in your possession that are owned by 7-Eleven
and (ii) repay to 7-Eleven any outstanding balance in your
account entitled "Employee Receivables." With regard to the
computer you currently use at your home, you may retain
possession of it until April 30, 2003, at which time you will be
given the option of returning or purchasing that computer at its
then-current book value.
20. You covenant that as of your execution of this Agreement,
you have neither filed nor authorized another person or entity to
file on your behalf any administrative actions, claims, or
lawsuits of any type with respect to the Retirement or otherwise.
In addition, from the date of execution of this Agreement
forward, you shall not institute any actions or lawsuits, or
otherwise assert or attempt to assert any claim against 7-Eleven
or any of its present and former officers, directors, employees,
agents, representatives, and any and all of its subsidiaries,
affiliates, successors, predecessors, benefit plans and all of
its present and former stockholders (collectively, the "Released
Parties"), including but not limited to administrative claims of
any sort, with respect to any matter relating to the Retirement.
Moreover, you shall not authorize the bringing of any such action
on your behalf by any person, agency, organization, or other
entity. If you should breach this provision by filing a claim or
lawsuit in which you assert that the release contained in this
Agreement is invalid,
you agree that you shall be immediately obligated to repay to 7-
Eleven all the consideration previously paid to you by 7-Eleven
in connection with the Agreement, and 7-Eleven shall be permitted
to discontinue any benefits contemplated under this Agreement
that have not been paid as of the time such a claim or lawsuit is
filed. If any other person or entity should file a claim or
lawsuit on your behalf or in your name (despite your agreement
that you shall not authorize such a claim or lawsuit to be
filed), this Agreement shall constitute a complete bar to any
recovery in connection with the assertion of such a claim or
lawsuit.
21. You, for yourself, your heirs, and assigns, and any
person claiming by, through, or under you, unconditionally
release the Released Parties from any existing claims or
liabilities of any kind whatsoever, known or unknown, fixed or
contingent, that you, your heirs, assigns or administrators may
have or may have had, including all matters that could have been
alleged in any suit, charge, or claim related in any way to the
Retirement. This release includes but is not limited to claims
arising under federal, state, or local laws, ordinances, and/or
regulations prohibiting employment discrimination (for example,
discrimination based on age, sex, race, color, national origin,
religion, or disability), including but not limited to claims
under Title VII of the Civil Rights Act of 1964, as amended, and
the Age Discrimination in Employment Act of 1967, as amended (the
"ADEA"), or claims arising out of any other legal restrictions on
7-Eleven's right to control the terms, conditions, privileges,
and/or duration of 7-Eleven's employment relationships.
Notwithstanding any other provision of this Agreement, you shall
not be required to waive any rights or claims that may arise
under the ADEA after the date this Agreement is executed.
22. By signing this Agreement below, you indicate (i) your
concurrence with 7-Eleven that the enhanced retirement benefit
package contained in this Agreement is the product of negotiation
between you and 7-Eleven, and does not constitute an "exit
incentive or other employment termination program offered to a
group or class of employees" within the meaning of federal law
and (ii) your understanding that 7-Eleven is relying upon your
concurrence on this issue in providing you the enhanced
retirement benefit package. Further, you agree that at no time
will you, or anyone authorized by you, contend in a charge,
lawsuit, or other proceeding that the enhanced retirement benefit
package is an "exit incentive or other employment termination
program offered to a group or class of employees." If, despite
your agreement to the contrary, you contend in a charge, lawsuit,
or other proceeding that the enhanced retirement benefit package
is an "exit incentive or other employment termination program
offered to a group or class of employees," 7-Eleven shall have
the right to immediately terminate any further unpaid benefits or
payments under the Agreement and to recover from you any benefits
under the enhanced retirement benefit package already provided to
you.
23. You acknowledge that the nature of your employment with
the Company has, of necessity, involved the creation,
transmittal, handling of, and access to confidential information
of a secret or proprietary nature (collectively, "Proprietary
Information"). You acknowledge and agree that all items of such
Proprietary Information are valuable, special, and unique assets,
the disclosure or use of which may cause substantial injury and
loss of profits and goodwill to the Company. You agree that you
will not, either directly or indirectly, use, disclose, or
disseminate to any person or other entity any such Proprietary
Information.
24. You acknowledge that the information and experience you
have acquired during the course of your employment may enable
you, even inadvertently, to injure the Company if you should
engage in any business that is competitive with the business
conducted by the Company. You agree that from now until April
30, 2004, unless you obtain prior written permission from 7-
Eleven's then-president and chief executive officer, you shall
not, directly or indirectly, provide consulting, management, or
advisory services to any entity, or operational unit of any
entity, that owns, operates, or franchises convenience stores or
"g" stores (collectively, "Competing Businesses"). The
restriction shall apply only with respect to entities that
operate Competing Businesses in any of those counties of the
United States and any of those cities and towns in Canada in
which 7-Eleven, its franchisees, or its licensees operate
convenience stores. In addition, from now until April 30, 2004,
you shall not, directly or indirectly (through a professional
search firm, human resources department, or otherwise) induce,
encourage, or otherwise recruit any 7-Eleven employee to accept
employment at any company or other entity.
25. You expressly covenant and warrant that neither you nor
others acting at your behest will disclose the contents of this
Agreement or the substance of any inducements to enter into this
Agreement including, but not limited to, the nature or amount of
the benefits afforded to you by this Agreement, unless compelled
to do so by law. 7-Eleven recognizes that you may, without
breaching the Agreement, disclose the terms of this Agreement to
members of your immediate family, your attorney, and your
accountant or tax adviser, subject to your agreement first to
caution such persons about this confidentiality provision. This
confidentiality provision is an essential aspect of the
consideration for 7-Eleven's entering into this Agreement,
however, the parties also acknowledge that some disclosure of the
terms of this Agreement may be legally required as a part of the
regular public reporting obligations of the Company. Nothing in
this paragraph is intended to limit either parties' ability or
obligation to comply with those laws and regulations.
26. You shall refrain from making any derogatory or harmful
public statements of any kind about the Company.
27. You agree that if you breach any obligation contained in
paragraphs 4, 19, 20, 21, 22, 23, 24, 25, or 26 7-Eleven shall
have the right to withhold permanently any benefits that, at the
time of such breach, remain unpaid.
28. In the event you shall bring an action, claim, or suit
against 7-Eleven that is covered by the release provisions of
this Agreement, and 7-Eleven is the prevailing party in such
action, claim or suit, then you shall pay to 7-Eleven any costs
or expenses (including attorney fees and court costs) incurred by
7-Eleven in connection with such action, claim or suit.
29. You further covenant and warrant that you have not
assigned or transferred to any person any portion of any claims
that are waived, released and/or discharged in this Agreement.
30. The furnishing of the Retirement Grant and the other
benefits under this Agreement shall not be deemed or construed at
any time or for any purpose to be an admission of liability by 7-
Eleven. 7-Eleven expressly denies any liability related to the
Retirement.
31. This Agreement contains all of the agreements and
understandings between 7-Eleven and you, and supersedes any prior
negotiations or proposed agreements, written or oral. 7-Eleven
and you acknowledge that no other party, directly or through an
agent, has made any promises, representations or warranties
whatsoever, express or implied, not contained in this Agreement,
to induce the execution of this Agreement. This document may be
amended only by a subsequent written document signed by 7-
Eleven's then-president and chief executive officer and you.
32. The language of all parts of this Agreement shall in all
cases be construed as a whole, according to its fair meaning, and
not strictly for or against either you or 7-Eleven.
33. Should any provision of this Agreement be declared or be
determined by any court to be illegal, invalid, or unenforceable
under present or future laws, such provision shall be fully
severable; this Agreement shall be construed and enforced as if
such illegal, invalid, or unenforceable provision had never
comprised a part of this Agreement; and the remaining provisions
of this Agreement shall remain in full force and effect and shall
not be affected by the illegal, invalid, or unenforceable
provision or by its severance from this Agreement. Furthermore,
in place of each such illegal, invalid, or unenforceable
provision, there shall be added automatically as a part of this
Agreement a provision as similar in terms to such illegal,
invalid, or unenforceable provision as may be possible and be
legal, valid, and enforceable.
34. BY SIGNING THIS AGREEMENT BELOW, YOU EXPRESSLY COVENANT
AND WARRANT THAT YOU PERSONALLY HAVE READ THIS AGREEMENT, THAT
YOU HAVE BEEN ADVISED IN WRITING TO CONSULT WITH AN ATTORNEY
PRIOR TO EXECUTING THIS AGREEMENT, THAT 7-ELEVEN HAS GIVEN YOU
THE OPTION OF CONSIDERING THIS AGREEMENT, PRIOR TO YOUR EXECUTING
IT, FOR A PERIOD OF AT LEAST 21 DAYS, AND THAT YOU FULLY
UNDERSTAND ITS CONTENTS. FURTHER, YOU ACKNOWLEDGE THAT YOU HAVE
FREELY AND VOLUNTARILY ENTERED INTO THIS AGREEMENT.
35. IN ACCORDANCE WITH THE REVOCATION PERIOD ADEA, YOU SHALL
BE ALLOWED A SEVEN-DAY PERIOD FOLLOWING THE DATE OF YOUR
SIGNATURE TO REVOKE THIS AGREEMENT (THE "REVOCATION PERIOD").
THIS AGREEMENT SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE BY
EITHER 7-ELEVEN OR YOU UNTIL THE FIRST BUSINESS DAY FOLLOWING THE
EXPIRATION OF THE. IF YOU WISH TO REVOKE THIS AGREEMENT, YOU
MUST DELIVER A WRITTEN STATEMENT OF REVOCATION TO XXXX XXXXX IN
7-ELEVEN'S LEGAL DEPARTMENT BEFORE THE REVOCATION PERIOD EXPIRES.
36. The Parties shall each bear their own costs and attorney
fees associated with the negotiation and preparation of this
Agreement, as well as the costs and fees associated with
representation sought and received in this matter.
If you are in accord with the terms of this Agreement, please sign in
the space indicated below and return the enclosed copy of the Agreement
to me.
Sincerely,
Xxxxx X. Xxxxx
Executive Vice President
and Chief Operating Officer
ACCEPTED AND AGREED TO:
---------------------------------
Xxxxx X. Xxxxxxxx, XX
---------------------------------
Date
EXHIBIT A
RETIREMENT GRANT SUMMARY
XXXXX X. XXXXXXXX, XX
The $3,657,037 Retirement Grant referenced in paragraph 1 of the
Agreement to which this Exhibit is attached (the "Agreement") shall be
paid in a lump sum on or before May 15, 2000, and is comprised of the
following components:
1. RETIREMENT PAY: $1,648,732
This amount is equivalent to the present value of four (4) years of
Xx. Xxxxxxxx' base salary ($490,000 per year), discounted at a rate
of 8.75%.
2. API FOR 2000, 2001: $527,790
This amount is equivalent to the present value of payments of 100%
of Xx. Xxxxxxxx' API bonus potential for the years 2000 and 2001
($294,000 for each year), discounted at a rate of 8.75%.
3. CAR ALLOWANCE: $48,000
This amount is equivalent to four (4) years of Xx. Xxxxxxxx'
executive car allowance paid through April 30, 2004 ($1,000 per
month).
4. SPECIAL BONUS: $526,047
This amount is being paid in recognition of Xx. Xxxxxxxx 34 years of
service to the Company.
5. EPP POST-RETIREMENT SALARY CONTINUATION BENEFIT: $841,112
This amount is equivalent to the present value of the Post-Retirement
Salary Continuation Benefit portion of the Executive Protection Plan
("EPP") benefits to which Xx. Xxxxxxxx is entitled under the terms of
the Agreement ($1,191,940, paid in 10 annual installments of $119,194),
discounted at a rate of 8.75%.
6. VACATION PAY: $62,192
This amount is equivalent to the value of Xx. Xxxxxxxx' remaining
vacation time as of March 17, 2000. This amount will be reduced to
reflect any additional vacation time taken prior to April 30, 2000.
7. RETIREE MEDICAL: $3,164
This amount is approximately equal to the present value of the
difference between active employee rates and retiree rates for the type
of medical coverage currently selected by Xx. Xxxxxxxx, calculated
through April 30, 2004, and discounted at a rate of 8.75%.
TOTAL RETIREMENT GRANT $3,657,037
