EXHIBIT 10(an)
CONFIDENTIAL SETTLEMENT AGREEMENT AND
RELEASE OF ALL CLAIMS
This Confidential Settlement Agreement and Release of all Claims
(hereinafter "Agreement") is entered into on this 13th day of April, 2005, by,
between and among C. Xxxx Xxxxx, a resident of Florida ("Xxxx Xxxxx"),
Xxxxxx-Xxxxx & Company, a Delaware corporation ("Xxxxxx-Xxxxx"), and Xxxxx
Supermarkets, Inc., an Indiana corporation with its principal place of business
in Xxxxxxxx County, Indiana (the "Company");
WHEREAS, Xxxx Xxxxx filed a lawsuit against the Company in the United
States District Court for the Southern District of Indiana, Indianapolis
Division, entitled C. Xxxx Xxxxx x. Xxxxx Supermarkets, Inc., Case No.
1:04-CV-1407-SEB-VSS (the "Lawsuit"); and
WHEREAS, the Company has filed a counterclaim against Xxxx Xxxxx and a
third-party complaint against Xxxxxx-Xxxxx in the Lawsuit; and
WHEREAS, the parties have agreed to compromise and settle all claims and
counterclaims which were asserted or could have been asserted in the Lawsuit,
together with other matters as enumerated herein, in order to avoid the expense,
inconvenience and delay of further litigation; and
NOW, THEREFORE, Xxxx Xxxxx, Xxxxxx-Xxxxx, and the Company, in
consideration of the mutual covenants herein and the exchange of valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
hereby agree to the foregoing and as follows:
1. The Company shall pay to Xxxx Xxxxx on April 4, 2005, an amount
equal to the greater of (a) Nine Hundred Eighty-Five Thousand Seven Hundred
Eighty-Four Dollars and
Sixty-Eight Cents ($985,784.68), or (b) the then current cash surrender value of
the two split-dollar life insurance policies identified in the Lawsuit (the
"Insurance Policies").
2. Within thirty (30) days after the Company receives a letter from
Xxxx Xxxxx'x accountant certifying the estimated total federal income tax
liability that Xxxx Xxxxx will incur as a result of the payment to him of the
cash sum identified in paragraph 1 above, plus a "gross up" for the additional
tax liability that Xxxx Xxxxx will incur as a result of the Company's payment of
that estimated federal income tax liability pursuant to this paragraph 2
(collectively, the "Estimated Income Tax Liability"), the Company shall pay to
Xxxx Xxxxx an amount equal to the Estimated Income Tax Liability. Xxxx Xxxxx
shall cause his accountant to deliver the letter referenced in this paragraph 2
on or before May 31, 2005.
3. Within thirty (30) days after the Company receives an itemized
statement of the actual attorneys' and accountants' fees incurred by Xxxx Xxxxx
in connection with the Lawsuit, the Company shall pay to Xxxx Xxxxx that amount,
which will not exceed the sum of Fifty Thousand Dollars ($50,000.00). Said
itemized statement shall be delivered to the Company on or before June 15, 2005.
4. The payments provided for in paragraphs 1 through 3 above shall be
made by wire transfer as directed by Xxxx Xxxxx.
5. Beginning with the payment due on or about March 24, 2005, the
periodic payments to which Xxxx Xxxxx is entitled under the Supplemental
Employee Retirement Plan referred to in paragraph 11 of the Consulting Agreement
between Xxxx Xxxxx and the Company dated October 9, 1998 (the "Consulting
Agreement") shall be reduced from Eight Thousand
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Three Hundred Thirty Dollars ($8,330.00) to Six Thousand Seven Hundred
Twenty-Four Dollars and Eighty-Seven Cents ($6,724.87).
6. Xxxxxx-Xxxxx shall pay to the Company the sum of Thirty-Two Thousand
Eight Hundred and Forty Dollars ($32,840.00) on or before April 11, 2005.
7. The parties acknowledge that strict confidentiality is of the
essence of this Agreement, and that Xxxxxx-Xxxxx and the Company would suffer
immediate and irreparable harm in the event of any breach of that
confidentiality. The Parties, their attorneys, and their agents, will keep
completely confidential the settlement amount and the terms of this Agreement,
and will not disclose, directly or indirectly, any such information to any
person or entity whatsoever; provided that the Company may make any and all
disclosures required by or appropriate under any applicable statute, law, or
regulation; provided further that Xxxx Xxxxx may disclose such information to
his spouse and his tax and/or estate planning advisor(s) and attorney(s)
(hereinafter "Professionals") for the limited purpose of obtaining advice or
counseling as may be necessary; provided further that in the event that Xxxx
Xxxxx makes such limited disclosure to his spouse or Professionals, Xxxx Xxxxx
shall affirmatively instruct and require them to abide strictly by the
conditions of confidentiality imposed hereunder; provided further that in the
event Xxxx Xxxxx, his spouse or Professionals are asked about the Lawsuit, its
resolution, or its subject matter, such persons are authorized to divulge only
that the Lawsuit has been resolved. Likewise, if any inquiry is made of the
Company about the Lawsuit by any person or entity to whom or which the Company
is not obliged by statute, law, or regulation to make disclosures, the Company
will divulge only that the Lawsuit has been resolved. The
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undersigned attorney(s) also agree to be bound by this confidentiality clause,
but shall not be responsible for any separate breaches by their respective
clients.
8. The parties agree not to do or say anything concerning the Lawsuit
or the matters which are the subjects of the Lawsuit which would portray the
other party in a negative or poor light, except that any truthful response by
any party as may be required in legal or statutory proceedings shall not be
deemed a breach of this Agreement.
9. Effective upon payment of the amount set forth in paragraph 1
through 3 above, Xxxx Xxxxx and the Company each release one another and each of
its or his present and past respective shareholders, owners, officers,
directors, successors, assigns, parents, subsidiaries, affiliates, members,
managers, employees, attorneys, advisors, representatives and agents of any kind
(all of them individually and in such official capacities as each may hold), and
each of their respective heirs, executors, administrators, successors, and
assigns, from any and all claims, rights, contracts, actions, causes of action,
demands, debts, obligations and remedies, of any kind or character, at law or in
equity, whether known or unknown, accrued or yet to accrue, direct or
derivative, which they may have had or have now. Notwithstanding the foregoing,
this release shall not affect the parties' obligations under this Agreement,
including the Company's obligations to make SERP payments as set forth in
paragraph 5 above; nor shall this release otherwise affect, subtract from, or
add to either the provisions of the Deferred Benefit Trust for Xxxxx
Supermarkets, Inc with Xxxxx Union Bank and Trust Company dated December 4,
1998, or the provisions of Paragraphs 2, 9, 11(a), or 11(b) of the Consulting
Agreement.
10. Xxxxxx-Xxxxx, the Company, and Xxxx Xxxxx each release one another
and each of its present and past respective shareholders, owners, officers,
successors, assigns, parents,
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affiliates, subsidiaries, members, managers, attorneys, advisers,
representatives and agents of any kind (all of them individually and in such
official capacities as each may hold), and each of their respective heirs,
executors, administrators, successors and assigns, from any and all claims,
demands, causes of action, debts, obligations, and remedies, of any kind or
character, at law or in equity, whether known or unknown, accrued or yet to
accrue, direct or derivative, which arise out of or relate to the allegations in
the Lawsuit, including any and all claims involving allegations of acts or
omissions of Xxxxxx-Xxxxx with respect to services for, provided to, or to be
provided to Xxxx Xxxxx, or with respect to Xxxx Xxxxx or his benefits or
compensation.
11. The parties are entering into this Agreement as a result of
arms-length negotiations to avoid the risk and expense of protracted litigation.
The parties recognize and acknowledge that this Agreement does not constitute
and shall not be construed as an admission of any acts of misconduct, or
negligence by any of the parties. The parties do not admit, and in fact
specifically deny, any wrongdoing, liability, or culpability arising out of,
related to, or connected with the Lawsuit. The parties acknowledge that they
subsequently may discover facts in addition to or different from those that they
now know or believe to be true with respect to the Lawsuit, and that they may
have sustained or may yet sustain damages, costs, or expenses that are presently
unknown and that relate to the Lawsuit. The parties acknowledge, however, that
they have negotiated, agreed upon, and entered into this Agreement in light of
that situation. To the extent allowed by law, the parties waive any and all
rights which they may have under any state or federal statute or common law
principle that would otherwise limit the effect of this Agreement to claims
known or suspected as of the effective date of this Agreement.
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12. Within (7) days of Xxxx Xxxxx'x receipt of the payments provided for
in paragraphs 1 through 3 above, the parties will file with the Court a proposed
order of dismissal, with prejudice, in the form appended hereto as Exhibit "A."
13. In the event that it is determined that a party has breached his or
its obligation(s) under this Agreement, the breaching party shall be liable for
all damages caused by the breach, including but not limited to reasonable
attorney's fees and expenses; provided that this provision shall not limit or
restrict the recoverability of damages under state or federal law or as provided
by other provisions of this Agreement.
14. Xxxx Xxxxx represents and warrants to the Company that there are no
liens or claims upon the claims pursued in the Lawsuit or which could have been
pursued by Xxxx Xxxxx in the Lawsuit. Xxxx Xxxxx further represents and warrants
to the Company that he is the sole owner of and has not sold, pledged, assigned,
granted, or otherwise transferred the claims described in the Lawsuit or which
could have been pursued by Xxxx Xxxxx against the Company in the Lawsuit.
15. This Agreement is governed by and shall be construed, interpreted,
and enforced by Indiana law. Exclusive jurisdiction and venue over any and all
disputes arising out of or in connection with this Agreement shall be in Xxxxxx
County, Indiana, or in the United States District Court for the Southern
District of Indiana, Indianapolis Division.
16. No waiver of any term or condition contained in this Agreement shall
be effective unless made or confirmed in writing by the person or entity alleged
to have waived the right. Unless that writing expressly states otherwise, no
such waiver shall be construed as a waiver of a
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subsequent breach or failure of the same term or condition or a waiver of any
other term or condition contained in this Agreement.
17. The parties and their respective counsel mutually contributed to the
preparation of, and have had the opportunity to review and revise this
Agreement. Accordingly, no provision of this Agreement shall be construed
against any party because that party, or its counsel, drafted the provision.
This Agreement and all of its terms shall be construed equally as to all
parties.
18. Each party represents and warrants to the other party that this
Agreement embodies the entire understanding and agreement between and among the
parties, supersedes all prior agreements and understandings, if any, between and
among the parties, and no other representations, agreements, arrangements, or
understandings, oral or written, concerning the subject matter of this
Agreement, which are not expressed in this Agreement, exist between or among the
parties.
19. Should any portion of this Agreement be declared or be determined to
be illegal, invalid, or unenforceable, the validity of the remaining parts,
terms, or provisions shall not be affected thereby and said illegal, invalid, or
unenforceable part, term, or provision shall be deemed not to be a part of this
Agreement.
20. Each party executing this agreement represents and warrants that he
or she is duly authorized to execute the Agreement on behalf of the party he or
she purports to represent.
21. Each party represents and warrants that there are no actions,
proceedings or investigations pending, nor is any such action, proceeding or
investigation threatened, which would challenge the validity of this Agreement,
the validity of the transfers contemplated hereunder, or any of the actions or
transactions contemplated by this Agreement; and that he or it
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has not entered into any arrangement or agreement which limits his or its
ability to consummate the transactions contemplated by this Agreement. Neither
the execution of this Agreement, nor the consummation of the transactions
contemplated hereby, nor compliance with or fulfillment of the terms and
provisions of this Agreement will (i) conflict with, result in a breach of the
terms, conditions or provisions of, or constitute a default, an event of default
or any event creating rights of termination or cancellation under any
instrument, agreement, mortgage, judgment, order, award, decree or other
restriction to which he or it is a party, subject to or by which he or it is
bound, or any statutes, other law or regulatory provision affecting him or it,
or (ii) require the approval, consent or authorization of, or the making of any
declaration, filing or registration with, any third party or any foreign,
federal, state or local court, governmental authority or regulatory body, except
as the Company may be required by statute, law, or regulation to do so.
22. The parties represent and acknowledge that they have consulted with
their attorneys prior to executing this Agreement, and that they had a
reasonable amount of time in which to consider this Agreement.
23. This Agreement may be executed by facsimile signature and in any
number of counterparts, each of which will be deemed an original document, but
all of which will constitute a single document, provided, however, that this
Agreement shall not be binding on or constitute evidence of a contract between
the parties until such time as a counterpart of this Agreement has been executed
by each party and a copy thereof delivered via facsimile to each party to this
Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement individually
and with approval of their attorneys, whose names appear herein. By executing
this Agreement, each party stipulates, agrees, and warrants as follows:
(i) that the terms of this Agreement are reasonable;
(ii) that the person executing this Agreement has consulted with an
attorney prior to executing this Agreement, that the party has thoroughly
discussed all aspects of this Agreement with his attorneys, and THAT THE
PARTY HAS CAREFULLY READ AND UNDERSTANDS ALL OF THE PROVISIONS OF THIS
AGREEMENT AND IS VOLUNTARILY ENTERING INTO THIS AGREEMENT;
(iii) that the person executing this Agreement will not challenge or
contest in any way the capacity or authority of any party hereto to enter
into this Agreement; and
(iv) that the person executing this Agreement has the necessary and
appropriate authority and capacity to execute this Agreement and to make
this Agreement fully binding upon and enforceable against himself or the
entity he represents.
/s/ C. Xxxx Xxxxx
____________________ ----------------------------
Dated C. Xxxx Xxxxx
APPROVED AS TO FORM
AND SUBSTANCE:
/s/ Xxxxx X. Xxxxx
---------------------------
Xxxxx X. Xxxxx
X. X. Xxxxxxxx, III
Attorneys for C. Xxxx Xxxxx
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XXXXXX-XXXXX & COMPANY
April 8, 2005
Dated By: /s/ Xxxx X. Xxxxx
--------------------------
Its Associate General Counsel
& Assistant Secretary
APPROVED AS TO FORM
AND SUBSTANCE:
/s/ Xxxx X. Xxxxxxx
-------------------------
Xxxx X. Xxxxxxx
Attorney for Xxxxxx-Xxxxx
& Company
XXXXX SUPERMARKETS, INC.
April 4, 2005
Dated By: /s/ Xxxxxxx X. Xxxxx
--------------------------
Its: Chairman, Audit Committee
APPROVED AS TO FORM
AND SUBSTANCE:
/s/ Xxxxxx X. Xxxxxxx
---------------------------------------
Xxxxxx X. Xxxxxxx
Xxxx X. Xxxxx
Xxxxxxx X. Xxxxxxx
Attorneys for Xxxxx Supermarkets, Inc.
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