Exhibit 10.2
June 11, 1998
Xxxxx X. Xxxxxxx
00 Xxxxxxxxxx Xxxx
Xxxxxxxx, Xxxxx 00000
Re: Consulting and Non-Competition Agreement
Dear Xxxxx:
Xxxxxxxxx Bros. Co. (the "Company") and you executed a letter agreement
dated June 11, 1998, outlining our mutual understanding regarding your
resignation from employment with the Company. This letter sets forth our
further understanding relating to your consulting arrangements and non-
competition with the Company following your resignation from employment.
1. Consulting Arrangements.
1.1. Consulting Services to be Provided.
Following your resignation from employment with the Company (presently scheduled
to occur on January 5, 1999), you will provide Hannaford with 25 days of your
services during 1999 and 25 days of your services during 2000 (such days of
service to be selected by mutual agreement of you and the Company) as a real
estate development consultant in connection with such Company projects and tasks
as may be designated from time to time by the Company's Executive Vice President
- Strategic Development. You agree to apply yourself diligently to these
projects. It is understood that these 25 working days need not be consecutive in
each calendar year and that you are free (except as provided in section 2 below,
relating to non-competition arrangements) to render your services to others
during the term of this agreement. You and the Company may mutually agree to
additional days of consulting services.
1.2. Compensation.
The Company will pay you One Thousand Dollars ($1,000) per day for your
consulting services rendered hereunder; provided, however, that any days of
service in excess of twenty-five (25) in 1999 or in 2000 (which may be
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mutually agreed to by you and the Company pursuant to section 1.1. above) will
be paid for at the rate of Two Thousand Dollars ($2,000) per day. If the Company
should request less than 25 days of service in either 1999 or 2000, the Company
will pay you, after the end of the applicable calendar year, for the "unused"
days at the rate of $1,000 per day. All payments under this section 1.2. will be
made within 30 days after your submission of an invoice therefor, containing a
reasonably detailed description of the services rendered.
1.3. Reimbursement of Expenses.
The Company will reimburse you for all out-of-pocket expenses reasonably
incurred by you in connection with your services hereunder. Upon request by the
Company, you agree to provide reasonable written documentation supporting such
expenditures. The Company will also pay your airfare, hotel, registration fee,
meals, and other reasonable expenses related to your attendance at the annual
ICSC conference in 1999 and 2000, but will not pay any consulting service fee
for your time spent attending that conference unless you are specifically
requested to perform services there on behalf of the Company as part of your
consulting arrangements as described herein.
1.4. Termination.
The consulting arrangements set forth in this section 1 shall terminate on the
first to occur of the following:
(a) December 31, 2000;
(b) Termination by you;
(c) Termination by the Company for cause (as defined below).
Upon termination, you will not be required to render any further services under
this section 1 (although you shall continue to be subject to the provisions of
sections 2 and 3 below) and the Company will have no further obligation to you
under this section 1 except to pay you for services rendered through, and
reimburse you for expenses incurred through, the date of termination in
accordance with the provisions of sections 1.2 and 1.3 above. The Company shall
have the right to terminate your consulting arrangement as described herein "for
cause" (a) if it determines, in good faith, that you have failed to apply
yourself diligently or that you have taken affirmative acts that are contrary to
the best interests of the Company, or (b) in the event that your death or
disability renders you unable to substantially complete the services required of
you hereunder.
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Except in the event of your death, any termination shall be effective only if
the terminating party gives written notice of such termination to the other
party at least fifteen (15) days prior to the effective date of such
termination.
1.5. Independent Contractor.
We agree that any services rendered by you under this agreement shall be
rendered as an independent contractor and not as an employee. In connection with
your services hereunder, you will provide all legally required worker's
compensation insurance and reasonable amounts of automobile and liability
insurance coverage, and Hannaford shall have no responsibility to furnish any
such insurance. You acknowledge that, in your capacity as an independent
contractor and consultant hereunder, you will not be entitled to any of the
employee benefits available to Hannaford associates.
2. Non-Competition Arrangements.
2.1. Non-Competition Agreement.
Beginning January 5, 1999, and until December 31, 2000, you agree, without prior
written approval from the Company's Chief Executive Officer (which approval may
be granted or withheld in his absolute discretion) not to:
(a) render services, either as an employee, officer, consultant, director,
adviser, or in any other capacity, to the owner or operator of any
supermarket, any "supercenter" (such as Kmart or Wal-Mart), any "box
store" (such as Aldi's or Sav-A-Lot), any wholesale club store (such as
Costco, BJ's, or Sam's), any drugstore, or any store or other facility
engaged primarily in the sale of food to consumers for off-premises
preparation (hereinafter, a "Competitor") with respect to any store or
facility location or prospective location within the Restricted Geographic
Area defined below; or
(b) render services, in any capacity, to any of the following supermarket
operators, regardless of the location with respect to which such services
might be sought: DeMoulas / Market Basket, Xxxx'x Supermarkets, Price
Chopper (based in Rotterdam, New York), Ukrop's, Xxxxxx-Xxxxxx, and Farm
Fresh; or
(c) acquire directly or indirectly, any interest in, as stockholder,
director, officer, consultant, agent, employee, or partner, or otherwise
act for, any Competitor, with the exception of minority stock holdings in
companies whose shares are listed for trading on the American or New York
Stock Exchange, or traded "over the counter" and regularly reported by
NASDAQ.
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The "Restricted Geographic Area" referred to in subsection 2.1(a) above includes
all of the states of Maine, New Hampshire, and Vermont; that portion of New York
state east of Interstate 81 and more than 20 miles from Syracuse; that portion
of South Carolina within 20 miles of Rock Hill; that portion of North Carolina
lying south and east of a straight line which passes through (and continues
beyond) the northernmost point in Raleigh and the northernmost point in
Charlotte; that portion of Virginia south of an east-west line located 50 miles
north of Richmond and east of a north-south line located 50 miles west of
Richmond; that portion of Massachusetts that is east of Interstate 91 and north
of Route 2 and outside Route 128; and that portion of Massachusetts within five
(5) miles of the Company's store in Peabody.
Notwithstanding anything to the contrary in section 2.1(a) above, the term
"Competitor" as used herein shall not include convenience stores (such as 7-11
and Cumberland Farms) and restaurants.
It is understood and agreed that nothing herein shall restrict your:
(i) speaking to trade associations and groups on topics of general
interest to the supermarket or drug store industry, even though employees
of Competitors may be present in the audience;
(ii) developing real estate for your own account and leasing or selling it
to a Competitor, provided that you have first offered that opportunity to
Hannaford on no less favorable terms and Hannaford, after being given a
period of no less that twenty business days to consider it, has declined
the opportunity; or
(iii) redeveloping, either for your own account or that of a developer to
whom you are rendering services, a shopping center or other retail project
within which a retail location of a Competitor is located, even if your
efforts may result in the expansion, modernization, or improvement of that
Competitor's location.
2.2. Consideration for Non-Competition.
In consideration for your agreement set forth in section 2.1 not to compete with
the Company, the Company will pay you Two Hundred Thirty Four Thousand Five
Hundred Sixty Eight Dollars ($234,568.00) on January 6, 1999 and Two Hundred
Thirty Four Thousand Five Hundred Sixty Eight Dollars ($234,568.00) on December
30, 1999. It is understood and agreed that these amounts shall be payable even
if you should die or become disabled before December 31, 2000, or otherwise be
unable to render any or all of the services contemplated in section 1 of this
agreement.
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2.3. Enforcement; Reasonableness.
You and the Company agree that the Company would be irreparably damaged by a
breach of the non-competition provision of this agreement set forth in section
2.1. It is accordingly agreed that the Company shall be entitled to injunctive
relief in order to prevent any breach of that provision and to specifically
enforce it, in addition to any other remedy to which the Company may be
entitled. You and the Company further agree that the subject matter, duration
of, and geographic area covered by your non-competition agreement are reasonable
in light of the facts as they exist on the date hereof. However, if at any time,
a court or other body having jurisdiction over this agreement determines that
any of the subject matter, duration, or geographic area of your covenant not to
compete is unreasonable in any respect, it shall be reduced, and not terminated,
as such court or body determines may be reasonable.
3. Miscellaneous Provisions.
Upon the written request of either you or the Company, the other party agrees to
execute such other documents as the requesting party or its counsel reasonably
deem necessary or advisable to implement the terms of this letter. This letter
sets forth the entire agreement between you and the Company regarding your
consulting arrangements and your agreement not to compete with the Company. This
agreement may be amended only by written document signed by both you and the
Company, and it will be governed by the laws of the State of Maine.
If this letter accurately sets forth our understanding and agreement, would you
please sign both copies, return one to me, and keep one for your records.
Sincerely,
HANNAFORD BROS. CO.
By: ___________________________
Xxxx X. Xxxxxxxxxx
President and Chief Executive Officer
Seen and agreed to this _____ day of June, 1998.
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Xxxxx X. Xxxxxxx
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