RETIREMENT AGREEMENT
THIS AGREEMENT, dated as of May 12, 1998, is entered into by and between Xxxx
Xxxxx Company, a Delaware corporation (the "Company"), and Xxxxxx X. Xxxxxx, an
individual presently residing in the State of Minnesota (the "Executive").
RECITALS
A. The Company and the Executive have agreed to certain terms and conditions
relating to the remaining term of the Executive's employment with the
Company and membership on the Company's Board of Directors and the
Executive's retirement from the Company and the Board of Directors.
B. All of the terms and conditions relating to the Executive's employment with
the Company and membership on the Company's Board of Directors and the
Executive's retirement from the Company and the Board of Directors are set
forth herein and this Agreement supersedes and replaces in its entirety any
previous agreement or understanding relating thereto between the Company
and the Executive.
In consideration of the foregoing and the mutual agreements set forth below the
parties hereto agree as follows:
1. RETIREMENT. The Executive's employment with the Company will continue
until June 1, 1998 (the "Retirement Date"). Effective on the Retirement
Date, without any further action or notice, the Executive will resign as an
employee, officer and director of the Company and all of its subsidiaries.
The terms of the announcement of the Executive's retirement will be
mutually agreed upon by the Executive and the Chair of the Nominating
Committee of the Company's Board of Directors.
2. COMPENSATION FOR SERVICES THROUGH RETIREMENT DATE. From the date of this
Agreement through the Retirement Date, the Executive will continue to
receive his base salary at his current rate and will continue to
participate in all employee benefit plans for which he is eligible in
accordance with the terms of those plans.
3. ADDITIONAL COMPENSATION. Subject to compliance by the Executive with the
terms and conditions of this Agreement, and subject to the execution and
delivery by the Executive of the release in the form attached hereto (the
"Release") and the effectiveness of the Release following the passage of
any applicable period of time during which the Release may be revoked by
the Executive, and in consideration for the obligations of the Executive
under Sections 5 and 6 of this Agreement, the Company agrees as follows.
A. PERIODIC PAYMENTS. From the Retirement Date until December 31, 1999
or the date of the Executive's death, whichever is earlier, the
Company will make periodic cash payments to the Executive at $462,500,
the Executive's current annual rate of base salary. The payments will
be made in accordance with the Company's standard payroll practices.
B. LUMP SUM PAYMENT. In lieu of any cash bonus payment for fiscal year
1998, not later than the date on which the Company pays cash bonuses
to executives for fiscal year 1998, the Company will make a cash
payment to the Executive in the amount of $127,000 (the amount of the
Executive's cash bonus for fiscal year 1997). The Executive is not
eligible for any further cash bonuses from the Company.
C. RETIREE MEDICAL. The Company acknowledges that as of the Retirement
Date, the Executive will be eligible for retiree medical coverage
under the terms of the Xxxx Xxxxx Company Welfare Benefit Plan in
effect on the date of this Agreement. From the Retirement Date until
December 31, 1999 or the date of the Executive's death, whichever is
earlier, the Company will reimburse the Executive for premiums paid by
the Executive for retiree medical coverage under the Plan to the
extent the premiums paid by the Executive exceed the premiums paid
under the Plan for similar medical coverage by an active employee of
the Company. To the extent the reimbursement payments are includible
in the Executive's gross income, the Executive acknowledges that he is
responsible for the tax due. The Executive acknowledges that the
Company reserves the right to amend, modify or terminate the Xxxx
Xxxxx Company Welfare Benefit Plan, including without limitation, the
provisions of the Plan relating to retiree medical coverage, and that
nothing in this Agreement in any way eliminates or changes that right.
D. LIFE INSURANCE. The Company acknowledges that as of the Retirement
Date, the Executive will be eligible for retiree life insurance
benefits in accordance with the Company's group life insurance plan.
If the Executive is eligible for and elects to continue group life
insurance coverage pursuant to the Company's group life insurance
plan, from the effective date of such coverage until December 31, 1999
or the date of the Executive's death, whichever is earlier, the
Company will reimburse the Executive for premiums paid by the
Executive for the continuation coverage. To the extent the
reimbursement payments are includible in the Executive's gross income,
the Executive acknowledges that he is responsible for any tax due.
E. EXECUTIVE INCENTIVE BONUS AND DEFERRED COMPENSATION PLAN. Subject to
Section 8 of the Xxxx Xxxxx Company Executive Incentive Bonus and
Deferred Compensation Plan, distribution of amounts to which the
Executive is entitled pursuant to the Plan will be made in equal
monthly installments over a period of 120 months commencing with the
second month following the month that includes the Retirement Date.
If the Retirement Date is on or after the last day of the 1998 fiscal
year, the Executive will be eligible for an allotment pursuant to the
Plan for fiscal year 1998 in accordance with the terms of the Plan.
If the Retirement Date is before the last day of fiscal year 1998, in
lieu of an allotment pursuant to the Plan for fiscal year 1998, the
Company will determine the amount, if any, that would have been
allotted to the Executive under the Plan for fiscal year 1998 if he
had continued employment until the end of the fiscal year, his base
salary for the year were $462,500 and his bonus for the year were
$127,000. The determination will be made at the same time allotments
are determined pursuant to the Plan for fiscal year 1998. The amount
so determined and interest thereon determined in accordance with
Section 6 of the Plan will be paid by the Company to the Executive in
equal monthly installments commencing with the month first following
the month during which the determination is made and continuing for as
many months as the Executive receives installment payments pursuant to
the Plan, as if such amounts were paid
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pursuant to the Plan, including for example, the provisions of Section
8 of the Plan relating to forfeitures and the provisions of Section
14.c. of the Plan relating to acceleration of payment in the event of
a change in control. Other than as provided in this Section 3.E, the
Executive acknowledges that he is not eligible for allotments pursuant
to the Plan for the 1998 fiscal year or any subsequent fiscal year.
F. PROFIT SHARING PLAN. For the plan year ending December 31, 1998, if
the Company determines that the Executive is not eligible to share in
the Company's profit sharing contribution, if any, pursuant to the
Xxxx Xxxxx Company Profit Sharing Plan because he fails to satisfy
applicable eligibility conditions as a result of his retirement, and
for the plan year ending December 31, 1999, the Company will make a
cash payment to the Executive in an amount, if any, equal to the
amount of the Company's profit sharing contribution that would have
been allocated to his account pursuant to the Plan for the 1998 and
1999 plan years had he satisfied applicable eligibility conditions and
received eligible earnings for the plan year equal to the maximum
amount that may be taken into account for the plan year under I.R.C.
Section 401(a)(17). Any payments to the Executive pursuant to this
Section 3.F. will be made as soon as administratively practicable
after the Company makes its profit sharing contribution pursuant to
the Plan for the plan year in question but not later than 10 days
after the Company makes its profit sharing contribution. The
Executive acknowledges that except as provided in this Section 3.F. he
is not eligible for any further allocations of contributions to his
accounts under the Plan other than pre-tax contributions relating to
compensation earned through the Retirement Date.
4. 1994 STOCK INCENTIVE PLAN. The Company acknowledges that for purposes of
the Xxxx Xxxxx Company 1994 Stock Incentive Plan, including the Management
Restricted Stock Purchase Program and the Performance Equity Plan
implemented thereunder, the Executive's separation from service constitutes
a "retirement" and the Executive's rights under the Plan will be determined
accordingly. The Executive is not eligible for any further grants or
awards under the Plan.
5. CONSULTING SERVICES. On and after the Retirement Date and through
December 31, 1999 or the date of the Executive's death or disability,
whichever is earlier, the Executive will make himself available to the
Company to provide consulting services as reasonably requested by the Chief
Executive Officer of the Company or the Chair of the Company's Board of
Directors and will diligently and conscientiously perform such services.
In no case will the Executive be required to perform consulting services in
excess of an average of 30 hours in any calendar month. The Company will
pay the Executive a fee of $100 per hour for each hour of consulting
services actually performed by the Executive. The Executive will invoice
the Company at the end of each month during which he performs services and
the Company will pay the Executive within 30 days of receiving the invoice.
Consulting fees payable to the Executive pursuant to this Section 5 are in
addition to any other compensation to which the Executive is entitled
pursuant to this Agreement. The Company will reimburse the Executive in
accordance with the Company's normal reimbursement policy for reasonable
travel and other expenses incurred in connection with his consulting
services. The Executive will serve the Company as an independent
contractor with respect to consulting services provided pursuant to this
Section 5 and will not be considered an employee of the Company or any of
its subsidiaries or affiliates. The Executive agrees that he is
responsible for any taxes due in connection with his consulting income and
that he is not entitled to any benefits provided to employees of the
Company or any of its subsidiaries
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or affiliates in connection with the performance of consulting services and
agrees not to make any claims for benefits.
6. NON-COMPETITION AND NON-DISCLOSURE OF CONFIDENTIAL INFORMATION. The
Executive agrees that from and after the date of this Agreement and through
December 31, 1999, without the prior written consent of the Company's Chief
Executive Officer, the Executive will not alone or in any capacity (other
than by way of holding shares listed on a stock exchange in a number not
exceeding five percent of the outstanding class or series of shares so
listed) with any other person or entity:
A. directly or indirectly engage in any commercial activity involving
retail or wholesale food and grocery sales or services to retail food
stores and military commissaries anywhere in the world in which the
Company or any of its subsidiaries or affiliates then conducts
business or has publicly announced plans to conduct business in the
future, except to the extent that the Executive's direct or indirect
engagement in such commercial activities preceded the date on which
the Company and its subsidiaries and affiliates first conducted or
publicly announced plans to conduct business; or
B. in any way interfere or attempt to interfere with the Company's
relationships with any of its current or potential vendors, suppliers,
distributors or customers; or
C. solicit for employment, employ or attempt to employ any employee
currently employed by the Company or any employee that hereafter
becomes employed by the Company.
The Executive acknowledges that his entitlement to receive benefits under
the Xxxx Xxxxx Company Executive Incentive Bonus and Deferred Compensation
Plan after the Retirement Date is subject to all of the terms and
conditions of that Plan, including, for example, the terms and conditions
set forth in Section 8 of the Plan relating to competition with the Company
or its subsidiaries and availability for consultation, and that nothing in
this Agreement in any way eliminates or changes any of those terms and
conditions. The Executive further agrees that from and after the date
hereof, except as may be expressly required in the performance of the
Executive's duties for and on behalf of the Company, the Executive will not
use or disclose to any party any proprietary or confidential information of
the Company or any of its subsidiaries. The parties agree that the
additional compensation described in Section 3.A of this Agreement is
allocable to the Executive's agreement not to compete pursuant to this
Section 6. If the Executive breaches his agreement not to compete pursuant
to this Section 6, the Executive will not be entitled to any further
payments pursuant to Section 3.A and the Company may pursue other remedies
in accordance with Section 16 of this Agreement.
7. NON-DISPARAGEMENT. The Executive agrees that he will not, at any time,
disparage, demean or criticize, or do or say anything to cause injury to,
the business, reputation, management, employees, members of the Board of
Directors or products or services of the Company. The Company agrees that
it will not, at any time, disparage, demean or criticize, or do or say
anything to cause injury to the reputation or career development of the
Executive. In addition to any other damages or remedies that may be
available to a non-breaching party for any breach of this Section 7, any
breaching party will further be obliged to the non-breaching party for any
reasonable attorneys fees and costs incurred by the non-breaching party to
enforce the provisions of this Section 7.
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8. CONFIDENTIALITY. The Company and the Executive each agree that they will
hold the facts and circumstances of this Agreement in strict confidence and
will not reveal the existence of this Agreement or the terms of this
Agreement to anyone except as may be required by law or as expressly
provided in this Agreement. Notwithstanding the foregoing, each of the
parties hereto will be entitled to advise their respective professional
advisors of the terms hereof, and the Executive will be entitled to discuss
the terms hereof with immediate family members.
9. NO OTHER COMPENSATION. Other than his right to receive distributions of
the benefits he has earned through the Retirement Date pursuant to the
terms of the Xxxx Xxxxx Company Profit Sharing Plan, the Xxxx Xxxxx Company
1994 Stock Incentive Plan, the Xxxx Xxxxx Company Income Deferral Plan and
the Xxxx Xxxxx Company Executive Incentive Bonus and Deferred Compensation
Plan in accordance with the express terms of these Plans and his right to
elect continuation coverage pursuant to I.R.C. Section 4980B or the
corresponding provisions of Minnesota law and to exercise any conversion
rights available under any Company welfare benefit plan, and the rights
granted to the Executive under this Agreement, the Executive agrees and
understands that he is entitled to no other compensation other than as
expressly enumerated in this Agreement and will not accrue or become
entitled to any benefits other than as expressly enumerated herein.
Without limiting the prior sentence, the Executive acknowledges that as of
the Retirement Date, the change in control agreement between the Executive
and the Company dated April 12, 1991, as amended effective February 16,
1993, is terminated. The Executive also understands that payments made
pursuant to this Agreement may be subject to withholding of applicable
income and other employment-related taxes and consents to the Company's
right to withhold from such payments. Furthermore, the Executive
acknowledges that the benefits under this Agreement are more than he would
have received under normal policies in the absence of this Agreement and
the Release.
10. VOLUNTARY AGREEMENT. The Executive hereby acknowledges that he fully
understands and accepts the terms of this Agreement, that his signature is
freely, voluntarily and knowingly given, and that he has been provided 21
days and a full opportunity to review and reflect on the terms of this
Agreement and to obtain the advice of legal counsel of his choice, which
advice the Company has encouraged him to obtain.
11. RESCISSION PERIOD. On June 2, 1998, the Executive will hand deliver to the
Company the executed Release, dated as of the delivery date. The Executive
understands that he may rescind this Agreement (and the Release) by
delivering written notice of such rescission within 15 days of the date on
which he delivers the Release. The notice of rescission may be
hand-delivered to the Company's General Counsel or may be mailed by
certified mail, return receipt requested, to Xxxx Xxxxx Company, 0000
Xxxxxx Xxxxxx, Xxxxx, Xxxxxxxxx 00000, Attn.: General Counsel. The
Executive understands that this Agreement (and the Release) will not become
effective until the end of such 15-day period and only if the Executive
does not rescind this Agreement (and the Release).
12. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
the parties and supersedes all previous negotiations, representations and
agreements heretofore made by the parties with respect to the subject
matter hereof and except as to those rights reserved to the Executive under
this Agreement with respect to any other agreement between the Company and
the Executive as recited herein. The headings in this Agreement are
included only for convenience of reference; if there is a conflict between
a heading and the text of the Agreement, the text will control. No
amendment, waiver or discharge hereof will be valid unless in writing
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and executed by both parties hereto. The waiver by either of the parties,
express or implied, of any right under this Agreement or any failure to
perform under this Agreement by the other party does not constitute a
waiver of any other right under this Agreement or of any other failure to
perform under this Agreement by the other party.
13. GOVERNING LAW. The laws of the State of Minnesota will govern the
validity, construction and performance of this Agreement, without regard to
the conflict of law provisions of any jurisdictions. Any legal proceeding
related to this Agreement, will be brought in an appropriate Minnesota
court, and both the Company and the Executive hereby consent to the
exclusive jurisdiction of that court for this purpose.
14. SEVERABILITY. Whenever possible, each provision of this Agreement will be
interpreted so that it is valid under applicable law. If any provision of
the Agreement is to any extent rendered invalid under applicable law, that
provision will still be effective to the extent it remains valid. The
remainder of this Agreement also will continue to be valid, and the entire
Agreement will continue to be valid in other jurisdictions.
15. NO ASSIGNMENT. The Executive may not assign this Agreement to any third
party for whatever purpose without the express written consent of the
Company. The Company may not assign this Agreement to any third party,
except by operation of law through merger, consolidation, liquidation or
recapitalization, or by sale of all or substantially all of the assets of
the Company, without the express written consent of the Executive.
16. REMEDIES. The parties hereto agree that the rights granted by this
Agreement are both unique and special, and the parties contemplate that
enforcement of this Agreement may be had by recourse to the equitable
remedies available in courts of appropriate jurisdiction in addition to any
other remedies which may be or may become available at law.
17. BINDING EFFECT. This Agreement and the obligations of the respective
parties hereunder shall be binding upon and inure to the benefit of the
successors and assigns of the parties hereto. In furtherance of, and not
in limitation of, the foregoing, the Company agrees that the provisions of
this Agreement will be binding upon any successor to the business and
assets of the Company and the provisions of this Agreement for the benefit
of the Executive will inure to the benefit of the Executive's estate in the
event of the Executive's death.
The parties have duly executed this Agreement as of the date set forth above.
XXXX XXXXX COMPANY
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------------------
Its: Vice President, Secretary & General Counsel
-------------------------------------------
XXXXXX X. XXXXXX
/s/ Xxxxxx X. Xxxxxx
-----------------------------------------------------
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RELEASE
I, Xxxxxx X. Xxxxxx, for good and valuable consideration, do hereby fully and
completely release and waive any and all claims, complaints, causes of action or
demands of whatever kind, which I have or may have against Xxxx Xxxxx Company,
its predecessors, successors, subsidiaries and affiliates and all of its past
and present board members, officers, employees, consultants and agents of those
persons and companies (collectively "Xxxx Xxxxx") for any actions, conduct,
decisions, behavior or events relating to or arising out of the terms,
conditions, or circumstances of my employment, and membership on the Board of
Directors, and separation from employment with, and membership on the Board of
Directors of, Xxxx Xxxxx Company occurring up through the date of my signature
on this Release.
I understand and accept that I am giving up any claims, complaints, causes of
actions or demands which I have or may have against Xxxx Xxxxx relating in any
way to the terms, conditions or circumstances of my employment and my separation
from employment including, but not limited to, claims for employment
discrimination prohibited under Title VII of the Federal Civil Rights Act of
1964, as amended, the Civil Rights Act of 1991, the Age Discrimination in
Employment Act, the Americans With Disabilities Act and the Minnesota Human
Rights Act, any other state or federal statutes and all claims which I may have
based on statutory or common law claims for negligence or other breach of duty,
wrongful discharge, breach of express or implied contract, sexual harassment,
promissory estoppel, breach of any express or implied promise,
misrepresentation, fraud, retaliation, negligent or intentional infliction of
emotional distress, defamation, invasion of privacy, tortious interference with
contract, negligent hiring, retention or supervision, retaliatory discharge
contrary to public policy and any other theory whether legal or equitable.
This Release does not apply to any rights of indemnification that I may have had
as an officer and director of Xxxx Xxxxx Company or any of its subsidiaries or
affiliates, including without limitation, any rights that I may have under my
July 18, 1995 Indemnification Agreement with Xxxx Xxxxx Company and any rights
that I may have under any directors and officers insurance policy. In addition,
this Release does not apply to any rights that I have under my May 12, 1998
Retirement Agreement with Xxxx Xxxxx Company.
I acknowledge that I have been given 21 days to consider whether I should enter
into this Release and have been advised to consult with legal counsel of my
choice.
By my signature below, I acknowledge that I freely, voluntarily and knowingly
accept the terms of this Release. I believe that the money and other
consideration I am receiving from Xxxx Xxxxx Company is a full and fair payment
for this Release. I understand that I may rescind this Release if I do so in
writing delivered by certified mail, return receipt requested, to Xxxx Xxxxx
Company in the care of the General Counsel, 0000 Xxxxxx Xxxxxx, Xxxxx, Xxxxxxxxx
00000 postmarked within 15 days of the date below. I further acknowledge that I
have been given the full opportunity to review and reflect on the terms of this
Release.
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Xxxxxx X. Xxxxxx
Subscribed and sworn to before me this
______ day of June, 1998
----------------------------------------
Notary Public
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