EXHIBIT 10.6
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made by and between XXXXXXX'X
FOOD MARKETS, INC., a Texas corporation ("Randall's") and R. Xxxxxxx Xxxxxxx,
Xx. of Fort Bend County, Texas ("Xxxxxxx").
W I T N E S S E T H:
WHEREAS, Xxxxxxx has been and continues to be employed by Randall's as an
officer and has served and continues to serve on the Board of Directors of
Xxxxxxx'x (the "Board"); and
WHEREAS, Xxxxxxx, at various times, has been an employee, officer, and
director of certain of Xxxxxxx'x affiliated and subsidiary companies, and/or
their predecessors or successors in interest (collectively, with Xxxxxxx'x, the
"Xxxxxxx'x Entities" or, individually, a "Xxxxxxx'x Entity"); and
WHEREAS, Xxxxxxx'x presently employs Xxxxxxx and Xxxxxxx'x desires to
continue to employ Xxxxxxx in an executive capacity on the terms and conditions
and for the consideration hereinafter set forth, and Xxxxxxx desires to continue
in the employ of Xxxxxxx'x on such terms and conditions and for such
consideration;
NOW, THEREFORE, for and in consideration of the compensation to be paid to
Xxxxxxx under this Agreement and the mutual promises, covenants, and
undertakings contained in this Agreement, and intending to be legally bound,
Xxxxxxx'x and Xxxxxxx agree as follows:
ARTICLE 1: EMPLOYMENT AND DUTIES
1.1 Employment. Xxxxxxx'x agrees to employ Xxxxxxx and Xxxxxxx agrees be
employed by Xxxxxxx'x in accordance with and subject to the terms and conditions
of this Agreement.
1.2 Position. During the term of employment under this Agreement,
Xxxxxxx'x shall (a) employ Xxxxxxx in the position of President and Chief
Executive Officer of Xxxxxxx'x, or in such other executive positions as the
parties mutually may agree, and (b) cause Xxxxxxx to be nominated for election
as a director of Xxxxxxx'x and use its best efforts to secure such election.
1.3 Duties and Services. Xxxxxxx agrees to serve in the position referred
to in Section 1.2 and to perform diligently and to the best of his abilities the
duties and services appertaining to such office, as well as such additional
duties and services appropriate to such office
which the parties mutually may agree upon from time to time. Xxxxxxx'x
employment shall also be subject to the policies maintained and established by
Xxxxxxx'x, as the same may be amended from time to time.
1.4 Other Interests. Xxxxxxx agrees, during the period of his employment
hereunder, to devote his primary business time, energy, and best efforts to the
business and affairs of Xxxxxxx'x and its affiliates and not to engage, directly
or indirectly, in any other business, investment, or activity that interferes
with Xxxxxxx'x performance of his duties hereunder, is contrary to the interests
of any Xxxxxxx'x Entity, or requires any significant portion of Xxxxxxx'x
business time.
1.5 Duty of Loyalty. Xxxxxxx acknowledges and agrees that during his
employment with Xxxxxxx'x he owes a fiduciary duty of loyalty, fidelity, and
allegiance to act at all times in the best interests of Xxxxxxx'x and to do no
act which would injure the business, interests, or reputation of any Xxxxxxx'x
Entity. In keeping with these duties, Xxxxxxx shall make full disclosure to
Xxxxxxx'x of all business opportunities pertaining to Xxxxxxx'x business and
shall not appropriate for Xxxxxxx'x own benefit business opportunities
concerning the subject matter of the fiduciary relationship.
1.6 Location and Conditions of Employment. During Xxxxxxx'x employment
pursuant to Section 1.1, Xxxxxxx'x may not, without Xxxxxxx'x consent (which
consent shall not be unreasonably withheld), require Xxxxxxx'x principal place
of business to be anywhere other than within 20 miles of Xxxxxxx'x principal
place of business on the day immediately preceding the Effective Date.
Notwithstanding the forgoing, in the event (a) Xxxxxxx'x shall not be the
surviving entity in any merger or consolidation (or survives only as a
subsidiary of an entity), (b) Xxxxxxx'x sells, leases or exchanges, or agrees to
sell, lease or exchange all or substantially all of its assets to another person
or entity, (c) Xxxxxxx'x is to be dissolved or liquidated, (d) any person or
entity (other than Kohlberg Kravis Xxxxxxx & Co. or an entity which controls or
is controlled by, or is under common control with Kohlberg Kravis Xxxxxxx &
Co.), including a "group" as contemplated by Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended, acquires or gains ownership or control
(including without limitation, power to vote) of more than fifty percent (50%)
of the outstanding shares of Xxxxxxx'x voting stock (based on voting power), or
as a result of or in connection with a contested election of directors of
Xxxxxxx'x, the persons who were directors of Xxxxxxx'x before such election
shall cease to constitute a majority of the Board (each such event is referred
to herein as a "Corporate Change"), then at no time subsequent to the earlier of
(x) such Corporate Change or (y) the approval by the shareholders of Xxxxxxx'x
of such merger, consolidation, reorganization, sale, lease or exchange of assets
or dissolution or such election of directors (with the earlier of such time
referred to herein as "Time of Change"), may Xxxxxxx'x, without Xxxxxxx'x
consent, require Xxxxxxx'x principal place of business to be anywhere other than
within 20 miles of Xxxxxxx'x principal place of business on the day immediately
preceding the Time of Change. For purposes of the parenthetical in clause (c) of
the preceding
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sentence, "control" shall mean the power to direct or cause the direction of the
management and policies of the controlled entity through the ownership of more
than fifty percent (50%) of the equity interests in such controlled entity.
1.7 Working Facilities. Xxxxxxx'x shall not take any action that would
materially adversely affect the physical conditions existing on the day
immediately preceding the Effective Date in or under which Xxxxxxx performs his
employment duties.
ARTICLE 2: COMPENSATION, PERQUISITES, BENEFITS, INSURANCE AND INDEMNITIES
2.1 Base Salary. During the term of this Agreement, Xxxxxxx shall receive
a minimum monthly base salary equal to the greater of (i) $35,417 or (ii) such
greater amount as the parties mutually may agree upon from time to time.
Xxxxxxx'x annual base salary shall be paid in equal installments in accordance
with Xxxxxxx'x standard policy regarding payment of compensation to executives
but no less frequently than monthly.
2.2 Bonuses. While Xxxxxxx is actively employed under this Agreement,
Xxxxxxx shall be entitled to participate in the Randalls Corporate Incentive
Plan, as amended and in effect for top executives from time to time, which is
attached, in its current form, as Exhibit A hereto. Further, for the fiscal year
ending June 28, 1997, Xxxxxxx shall be entitled to participate in the Randalls
Corporate Incentive Plan in accordance with the thresholds, award levels, and
allocation percentages as adopted by the Compensation Committee of the Board and
as set forth in Schedules 1 through 3 attached as Exhibit B hereto.
2.3 Perquisites. While Xxxxxxx is actively employed under this Agreement,
he shall be entitled to participate in, on the same basis as his participation,
and as such perquisites are maintained, on the day immediately preceding the
effective date of this Agreement (the "Effective Date"), those perquisites which
are extended to similarly-situated executives of Xxxxxxx'x; provided, however,
that no company car allowance or country club dues shall be included in
Xxxxxxx'x perquisites. In addition, and not by way of limitation, Xxxxxxx shall
be afforded the following perquisites and benefits as incidences of his
employment:
(i) Business and Entertainment Expenses - Xxxxxxx'x shall reimburse
Xxxxxxx for, or pay on behalf of Xxxxxxx, reasonable and appropriate
expenses, pursuant to and in accordance with Xxxxxxx'x reimbursement
policy, incurred by Xxxxxxx for business related purposes, including dues
and fees to industry and professional organizations and costs of
entertainment and business development.
(ii) Club Memberships - In addition to the other business and
entertainment expenses reimbursable pursuant to Section 2.3(i) above,
Xxxxxxx'x
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shall pay to Xxxxxxx an amount equal to the sum of (A) the full initiation
fee for Xxxxxxx'x personal membership to the Houston Country Club, plus
(B) any federal income tax and payroll tax for which Xxxxxxx will be
liable as a result of clause (A) and as a result of this clause (B).
(iii) Life Insurance - Notwithstanding any other provision in this
Agreement to the contrary, Xxxxxxx'x shall continue to provide life
insurance in the same amounts and under the same terms as in effect for
Xxxxxxx on the day immediately preceding the Effective Date; provided,
however, that the Split Dollar Life Insurance Agreement between Xxxxxxx
and Xxxxxxx'x dated March 31, 1992 (the "Split Dollar Agreement"), shall
be amended to provide that upon Xxxxxxx'x termination of employment
pursuant to Section 3.2(vi), Section 3.3(i), or Section 3.3(ii) of this
Agreement, Xxxxxxx'x shall transfer all right, title, and interest in its
investment in the policies thereunder to Xxxxxxx. Further, within 10 days
after the effective date of any such termination, Xxxxxxx'x shall transfer
custody of any and all insurance policies covered by the Split Dollar
Agreement to Xxxxxxx.
(iv) Stock Incentive Plan - While employed by Xxxxxxx'x, Xxxxxxx
shall participate in the 1997 Stock Purchase and Option Plan for Key
Employees of Xxxxxxx'x Food Markets, Inc. and Subsidiaries, attached in
draft form as Exhibit C hereto. Xxxxxxx'x agrees to adopt such plan in
substantially the same form as attached in Exhibit C on or before the
effective date. Xxxxxxx'x agrees that, pursuant to such plan, Xxxxxxx
shall be granted, as of the Effective Date and in recognition of Xxxxxxx'x
existing ownership of Xxxxxxx'x common stock ("Stock"), an option for the
number of shares of Stock equal to the quotient of $4.5 million divided by
the per share price set forth in the Voting, Repurchase and Shareholders
Agreement dated as of April 2, 1997, among a Xxxxxxx'x Entity, an
affiliate of Kohlberg Kravis Xxxxxxx & Co, and shareholders of Xxxxxxx'x,
with such number to be rounded up to the nearest integer. Xxxxxxx'x
further agrees that the foregoing option shall comply with the terms
attached hereto as Exhibit D.
(v) Other Xxxxxxx'x Benefits - While employed by Xxxxxxx'x, Xxxxxxx
and, to the extent applicable, Xxxxxxx'x family, dependents, and
beneficiaries, shall be allowed to participate in all benefits, plans, and
programs, including improvements or modifications of the same, which are
now, or may hereafter be, available to similarly-situated Xxxxxxx'x
executives. Such benefits, plans, and programs may include, without
limitation, any profit sharing plan, employee stock ownership plan, thrift
plan, pension plan, health insurance or health care plan, disability
insurance, and the like. Xxxxxxx'x shall not, however, by reason of this
Section 2.3(iv) be obligated to institute, maintain, or refrain from
changing, amending, or
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discontinuing, any such benefit plan or program, so long as such changes
are similarly applicable to executives generally.
2.4 Liability Insurance. Xxxxxxx'x agrees to maintain on behalf of
Xxxxxxx, on a basis no less favorable than as provided by Xxxxxxx'x on behalf of
Xxxxxxx on the day prior to the Effective Date, all insurance coverages
respecting any liability or potential liability which Xxxxxxx may incur in the
scope of his employment, in his status as a fiduciary, or as an officer or
director of any Xxxxxxx'x Entity. Such coverages shall be maintained during
Xxxxxxx'x active employment hereunder and at least for such "trailing" periods
as are provided by such coverages on the day prior to the Effective Date.
2.5 Indemnities. Xxxxxxx'x agrees to maintain on behalf of Xxxxxxx, on a
basis no less favorable than as provided by Xxxxxxx'x on behalf of Xxxxxxx on
the day prior to the Effective Date, all contractual provisions (whether
embodied in articles of incorporation, bylaws, board resolutions, agreements, or
otherwise) which in any way limit the liability of, or provide advances or
protections to, or indemnify Xxxxxxx respecting his employment, his status as a
fiduciary, or his position as an officer or director of any Xxxxxxx'x Entity.
2.6 Line of Credit. At any time after the Effective Date and for the term
of Xxxxxxx'x employment hereunder, Xxxxxxx'x shall extend to Xxxxxxx a line of
credit (the "Line of Credit") of up to $750,000 with such Line of Credit to bear
interest at the rate prescribed in section 7872(f)(2) of the Internal Revenue
Code of 1986, as amended. Such interest shall be payable every six months.
Amounts advanced by Xxxxxxx'x to Xxxxxxx pursuant to the Line of Credit shall be
repaid to Xxxxxxx'x at such times and amounts as determined in Xxxxxxx'x
discretion; provided, however, that Xxxxxxx'x shall offset any compensation due
to Xxxxxxx and payable in cash upon the termination of Xxxxxxx'x employment
against any outstanding balance under the Line of Credit. Further, such Line of
Credit shall be secured by any shares of Stock held by Xxxxxxx pursuant to the
Management Shareholders Agreement entered into by Xxxxxxx in 1997 and any cash
proceeds from the disposition of any such stock or any options held by Xxxxxxx
pursuant to such agreement that are realized upon or after the termination of
Xxxxxxx'x employment shall be applied against any remaining outstanding balance
under the Line of Credit; and, provided further, any remaining outstanding
balance shall be due and payable not later than 180 days after the effective
date of such termination. In addition to the foregoing provisions, at Xxxxxxx'x
option and regardless of whether such security agreement is enforceable under
Texas law, upon making any withdrawal under the Line of Credit pursuant to this
Section 2.6, Xxxxxxx may execute a security agreement which secures all or a
portion of the outstanding balance under such Line of Credit with Xxxxxxx'x
residence.
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2.7 Increases in Compensation, Perquisites, Benefits, Insurance, and
Indemnities. Nothing in this Agreement shall limit the Board, in its sole
discretion, from increasing at any time Xxxxxxx'x compensation, perquisites,
benefits, liability insurance, and/or indemnity protection above and beyond the
minimums or levels established herein.
ARTICLE 3: TERM AND TERMINATION OF EMPLOYMENT
3.1 Term. The employment relationship created herein is a calendar
month-to-month at-will relationship. Such at-will relationship may be terminated
at any time by either Xxxxxxx'x in accordance with Section 3.2 or by Xxxxxxx in
accordance with Section 3.3 upon thirty (30) days' prior written notice to the
other party, provided that no such action shall alter or amend any other
provisions hereof or rights arising hereunder. A written notice by Xxxxxxx'x or
Xxxxxxx given to the other party pursuant to this Section 3.1 shall state that
it or he has elected to terminate Xxxxxxx'x employment hereunder and the
effective date and the reason for such termination.
3.2 Termination by Xxxxxxx'x. Xxxxxxx'x shall have the right to terminate
Xxxxxxx'x employment pursuant to Section 1.2 at any time for the following
reasons:
(i) upon Xxxxxxx'x death;
(ii) upon Xxxxxxx'x becoming incapacitated by accident, sickness, or
any other circumstance which renders him mentally or physically incapable
of performing the duties and services required of him hereunder for a
period of at least 120 consecutive days or for a period of 180 business
days during any 12-month period;
(iii) for cause, which for purposes of this Agreement shall mean
Xxxxxxx'x xxxxx negligence or willful misconduct in performance of the
duties and services required of him pursuant to this Agreement, or
Xxxxxxx'x indictment for a felony or final conviction of a misdemeanor
involving moral turpitude;
(iv) for Xxxxxxx'x material breach of any material provision of this
Agreement which, if correctable, remains uncorrected for 30 days following
written notice to Xxxxxxx by Xxxxxxx'x of such breach;
(v) in connection with the insolvency, liquidation, or the
occurrence of any other event resulting in the discontinuance of the
existence of Xxxxxxx'x (without a successor thereto); or
(vi) for any reason other than as specified above.
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3.3 Termination by Xxxxxxx. Xxxxxxx shall have the right to terminate his
employment pursuant to Section 1.2 at any time for the following reasons:
(i) the assignment to Xxxxxxx by the Board of duties materially
inconsistent with the duties associated with the position described in
Section 1.2;
(ii) a material breach by Xxxxxxx'x of any material provision of
this Agreement which, if correctable, remains uncorrected for 30 days
following written notice of such breach by Xxxxxxx to Xxxxxxx'x; or
(iii) for any reason other than as specified above.
ARTICLE 4: EFFECT OF TERMINATION
4.1 Survival of Certain Benefits. Upon termination of Xxxxxxx'x employment
for any reason whatsoever, Xxxxxxx'x rights and Xxxxxxx'x obligations pursuant
to Section 2.4, Section 2.5, Section 2.6, and any other Section which by its
terms or context so provides shall survive such termination. Further, unless
otherwise expressly provided herein, upon termination of Xxxxxxx'x employment
hereunder, Xxxxxxx shall be entitled to such benefits as governed by the terms
of the relevant benefit plans and programs of Xxxxxxx'x.
4.2 Compensation Through Termination. In the event of Xxxxxxx'x
termination for any reason whatsoever, Xxxxxxx'x shall pay to Xxxxxxx (or, in
the case of Xxxxxxx'x death, to his designated beneficiary), within 10 days of
the later of (a) the effective date of such termination or (b) the date
Xxxxxxx'x has notice of such termination (hereinafter referred to as the
"Payment Date"), Xxxxxxx'x regular salary through the date of such termination
and any unpaid bonus or incentive compensation, including but not limited to any
bonus pursuant to Section 2.2, which is due and payable as of the effective date
of such termination. Notwithstanding the foregoing, compensation pursuant to the
Xxxxxxx'x Food Markets, Inc. 1997 Stock Option Plan attached as Exhibit B shall
be governed by the terms of such plan. Further, in the event Xxxxxxx'x
employment is terminated pursuant to Section 3.2(vi), Xxxxxxx'x shall pay to
Xxxxxxx (or, in the case of Xxxxxxx'x death, to his designated beneficiary) an
allocable portion of any bonus or incentive compensation, including but not
limited to any bonus pursuant to Section 2.2, which would have been paid in the
future but for Xxxxxxx'x termination and which takes into account any
performance or period of time which elapsed before Xxxxxxx'x effective date of
termination. Such bonus shall be paid at the time and in the manner as is
customary or as is prescribed by the terms of any written plan or policy
pursuant to which such bonus or incentive compensation is paid.
4.3 Cessation of Compensation and Benefits. If Xxxxxxx'x employment is
terminated by Xxxxxxx'x pursuant to Section 3.2(i), Section 3.2(ii), Section
3.2(iii),Section 3.2(iv), or Section 3.2(v), or by Xxxxxxx pursuant to Section
3.3(iii), compensation, bonuses and incentive
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compensation (except as otherwise provided for in Section 4.2), perquisites, and
benefits provided pursuant to Section 2.1, Section 2.2, and Section 2.3 shall
terminate contemporaneously with the termination of Xxxxxxx'x employment and no
severance benefits shall be payable hereunder.
4.4 Severance Benefits for Involuntary Termination. In the event Xxxxxxx'x
employment is terminated by Xxxxxxx'x pursuant to Section 3.2(vi) or by Xxxxxxx
pursuant to Section 3.3(i) or Section 3.3(ii):
(i) In the event such termination occurs within two years of the
Effective Date, Xxxxxxx'x shall pay, on or before the Payment Date, a
severance payment equal to three times the sum of (a) Xxxxxxx'x annual
salary as of the date of his termination and (1)) the annual average of
the total value of all bonuses paid or payable on account of the
immediately preceding three calendar years (including, but not limited to,
bonuses pursuant to Section 2.2);
(ii) In the event such termination occurs after two years from the
Effective Date, Xxxxxxx'x shall pay, on or before the Payment Date, a
severance payment equal to two times the sum of (a) Xxxxxxx'x annual
salary as of the date of his termination and (b) the annual average of the
total value of all bonuses paid or payable on account of the immediately
preceding two calendar years (including, but not limited to, bonuses
pursuant to Section 2.2);
(iii) Regardless of the timing of such termination, for a period of
two years from the effective date of Xxxxxxx'x termination, Xxxxxxx'x
shall furnish to Xxxxxxx, to Xxxxxxx'x Spouse, and to any dependents of
Xxxxxxx and/or Xxxxxxx'x Spouse who would qualify for coverage under
Xxxxxxx'x medical and dental plans if Xxxxxxx had remained employed, at no
cost to Xxxxxxx, Xxxxxxx'x Spouse, or Xxxxxxx'x dependents, medical and
dental insurance on the same terms and conditions as it is offered to
similarly-situated executives of Xxxxxxx'x who are currently employed (and
such executives' spouses and dependents); provided, however, in the event
Xxxxxxx terminates within two years of the Effective Date, the foregoing
coverages shall be provided for a term of three years from the effective
date of such termination. For purposes of this Section 4.4(iii), the term
"Spouse" shall mean the spouse to whom Xxxxxxx is married at the time of
coverage and, if applicable, for purposes of providing coverage to
Xxxxxxx'x spouse after his death, the spouse of Xxxxxxx on the date of his
death; and
(iv) Regardless of the timing of such termination, Xxxxxxx'x
obligation to transfer all right, title, and interest in its investment in
the policies underlying the Split Dollar Agreement (as defined in Section
2.3(iii)) shall be triggered upon the effective date of any such
termination.
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4.5 No Duty to Mitigate Losses. Xxxxxxx shall have no duty to find new
employment following the termination of his employment. Any salary, benefits, or
other remuneration received by Xxxxxxx from a third party for the providing of
personal services (whether by employment or by functioning as an independent
contractor) following Xxxxxxx'x termination of his employment hereunder shall
not reduce Xxxxxxx'x obligation to make any payments or provide any benefits
under this Agreement.
ARTICLE 5: CONFIDENTIAL INFORMATION
5.1 Proprietary and Confidential Information. In accordance with Xxxxxxx'x
existing and continuing obligations, Xxxxxxx agrees and acknowledges that the
various Xxxxxxx'x Entities have developed and own "Proprietary and Confidential
Information" which constitutes valuable and unique property including, without
limitation, concepts, ideas, plans, strategies, analyses, surveys, and
proprietary information related to the past, present, or anticipated business of
various of the Xxxxxxx'x Entities, including, but not limited to, costs, prices,
uses, applications of products and services, results of investigations or
experiments, and all apparatus, products, processes, compositions, samples,
formulas, computer programs, pricing policy, financial information, policy
and/or procedure manuals, training and recruiting procedures, accounting
procedures, the status and content of Xxxxxxx'x Entities' contracts with
suppliers, employees, and customers, the Xxxxxxx'x Entities' business
philosophy, and servicing, retailing, or marketing methods and techniques at any
time used, developed, or investigated by any Xxxxxxx'x Entity which are not
generally available to the public or which are maintained as confidential by any
Xxxxxxx'x Entity. Moreover, Xxxxxxx agrees and acknowledges that the term
Proprietary and Confidential Information of the Xxxxxxx'x Entities includes,
without limitation, all analyses, correspondence, data or information,
memoranda, notes, records, or other documents, including charts or drawings, and
all copies thereof which are in Xxxxxxx'x possession, custody, or control and
which are related in any manner to the past, present, or anticipated business of
any of the Xxxxxxx'x Entities. Except as may be required by law, Xxxxxxx agrees
that he will not at any time, either during or subsequent to his employment with
Xxxxxxx'x, disclose to others, permit to be disclosed, use, permit to be used,
copy, or permit to be copied, except in pursuance of his services on behalf of
any Xxxxxxx'x Entity, any such Proprietary and Confidential Information (whether
or not developed by Xxxxxxx) without Xxxxxxx'x prior written consent. Except as
may be required by law, Xxxxxxx further agrees to maintain in confidence any
proprietary and confidential information of third parties received or of which
Xxxxxxx has knowledge as a result of his employment, association, or work with
any Xxxxxxx'x Entity. Xxxxxxx agrees that in the event of an actual breach by
Xxxxxxx of the provisions of this Section, Xxxxxxx'x shall be entitled to inform
all potential or new employers of this Agreement. The prohibitions of this
Section 5.1 shall not apply, however, to information in the public domain (but
only if the same becomes part of the public domain through a means other than a
disclosure prohibited hereunder).
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5.2 Documents. Xxxxxxx agrees to leave in his office or deliver to
Xxxxxxx'x at the termination of his employment all correspondence, memoranda,
notes, records, drawings, sketches, plans, supplier lists, employee lists,
customer lists, product compositions, data or information, analyses, or other
documents and all copies thereof (all of which are hereafter referred to as the
"Documents"), which are in his possession, custody, or control and which are
related in any manner to the past, present, or anticipated business of any of
the Xxxxxxx'x Entities. In this regard, Xxxxxxx hereby grants and conveys to
Xxxxxxx'x all right, title, and interest in and to, including without
limitation, the right to possess, print, copy, and sell or otherwise dispose of,
any reports, records, papers, summaries, photographs, drawings, data,
information, or other documents, and writings, and copies, abstracts or
summaries thereof, which may have been prepared by Xxxxxxx or under his
direction or which may have come into Xxxxxxx'x possession in any way during the
term of his employment with any of the Xxxxxxx'x Entities which relate in any
manner to past, present, or anticipated business of any of the Xxxxxxx'x
Entities.
ARTICLE 6: NON-COMPETITION
Xxxxxxx and Xxxxxxx'x agree and acknowledge that Xxxxxxx has
contemporaneously herewith, agreed to a Covenant not to Compete with Xxxxxxx'x
as set forth in Section 6.02 of the Voting, Repurchase and Shareholders
Agreement dated as April 2, 1997, among a Xxxxxxx'x Entity, an affiliate of
Kohlberg Kravis Xxxxxxx & Co., and certain shareholders of Xxxxxxx'x.
ARTICLE 7: MISCELLANEOUS
7.1 Effective Date. The Effective Date of this Agreement shall be the
"closing date" of the "transactions" which are the subject of the Subscription
Agreement dated as of April 2, 1997, among a Randall's Entity, an affiliate of
Kohlberg Kravis Xxxxxxx & Co., and Xxxxxx X. Xxxxxxx.
7.2 Notices. Any notices required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or when mailed by United States registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:
If to Randall's to: Xxxxxxx'x Food Markets, Inc.
0000 Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Chief Financial Officer
and
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Xxxxxxxx Xxxxxx Xxxxxxx & Co.
c/o Xx. Xxxxx Xxxxxx
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, X.X. 00000-0000
If to Xxxxxxx to: R. Xxxxxxx Xxxxxxx, Xx.
000 Xxxx Xxxxxx Xxxx Xxxxx
Xxxxx Xxxx, Xxxxx 00000
7.3 Applicable Law. This contract is entered into under, and shall be
governed for all purposes by, the laws of the State of Texas.
7.4 No Waiver. No failure by either party hereto at any time to give
notice of any breach by the other party of, or to require compliance with, any
condition or provision of this Agreement shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same time or at any prior or
subsequent time.
7.5 Severability. If, as a result of arbitration proceedings pursuant to
Section 7.13 or as the result of the determination of a court of competent
jurisdiction, it is determined that any provision of this Agreement is invalid
or unenforceable, then the invalidity or unenforceability of that provision
shall not affect the validity or enforceability of any other provision of this
Agreement, and all other provisions shall remain in full force and effect.
7.6 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same Agreement.
7.7 Withholding of Taxes. Xxxxxxx'x may withhold from any compensation,
perquisites, or benefits payable under this Agreement all federal, state, city,
or other taxes as may be required pursuant to any law or governmental regulation
or ruling.
7.8 Headings. The Section headings have been inserted for purposes of
convenience and shall not be used for interpretive purposes.
7.9 Gender and Plurals. Wherever the context so requires, the masculine
gender includes the feminine or neuter, and the singular number includes the
plural and conversely.
7.10 Affiliate, Affiliated Company. Unless the context otherwise provides,
as used in this Agreement, the term "affiliate" or "affiliated company" shall
mean any entity which owns or controls, is owned or controlled by, or is under
common ownership or control with, Xxxxxxx'x.
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7.11 Assignment. This Agreement, and the rights and obligations of the
parties hereunder, are personal and neither this Agreement, nor any right,
benefit, or obligation of either party hereto, shall be subject to voluntary or
involuntary assignment, alienation or transfer, whether by operation of law or
otherwise, without the prior written consent of the other party.
7.12 Entire Agreement. This Agreement constitutes the entire agreement of
the parties with regard to the subject matter hereof, and contains all the
covenants, promises, representations, warranties, and agreements between the
parties with respect to the employment of Xxxxxxx by Xxxxxxx'x. Each party to
this Agreement acknowledges that no representation, inducement, promise, or
agreement, oral or written, has been made by either party, or by anyone acting
on behalf of either party, which is not embodied herein and that no agreement,
statement, or promise relating to the employment of Xxxxxxx by Xxxxxxx'x which
is not contained in this Agreement shall be valid or binding. Any modification
of this Agreement will be effective only if it is in writing and signed by the
party to be charged.
7.13 Enforcement and Remedies. The terms of this Agreement have been
carefully considered and agreed upon by Xxxxxxx'x and Xxxxxxx and represent the
sole obligations of Xxxxxxx'x and Xxxxxxx with respect to Xxxxxxx'x employment
with Xxxxxxx'x. If a dispute arises out of or related to this Agreement and the
dispute cannot be settled through direct discussions, Xxxxxxx'x and Xxxxxxx
agree that they shall first endeavor to settle the dispute in an amicable
fashion, including the use of a mediator. If such efforts fail to resolve the
dispute, then any and all claims, demands, causes of action, disputes,
controversies, and other matters in question arising out of or relating to this
Agreement, any of its provisions, or the relationship between the parties
created by this Agreement, whether sounding in contract, tort, or otherwise,
whether provided by statute or the common law, for damages or any other relief
(all of which are referred to herein as "Claims"), shall be resolved by binding
arbitration pursuant to the Commercial Arbitration Rules then in effect with the
American Arbitration Association. The arbitration proceeding shall be conducted
in Houston, Texas. The enforcement of this agreement to arbitrate, the validity,
construction, and interpretation of this agreement to arbitrate, and all
procedural aspects of the proceeding pursuant to this agreement to arbitrate
shall be governed by and construed pursuant to the Commercial Arbitration Rules
then in effect with the American Arbitration Association. In deciding the
substance of the parties' Claims, the arbitrators shall apply the substantive
laws of the State of Texas (excluding Texas choice-of-law principles that might
call for the application of some other state's law). Only actual damages may be
awarded. It is expressly agreed that the arbitrators shall have no authority to
award treble, exemplary, or punitive damages of any type under any circumstances
regardless of whether such damages may be available under the applicable law.
Any and all of the arbitrators' orders and decisions may be enforceable in, and
judgment upon any award rendered in the arbitration proceeding may be confirmed
and entered by, any federal or state court having jurisdiction. Any costs of
attorney fees, arbitration, mediation, or litigation which are incurred as a
result of a Claim shall be paid by the party who incurs the costs.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
in multiple counterparts, each of which shall be deemed to be an original, but
all of which together shall constitute one and the same instrument, this 1st day
of April, 1997.
XXXXXXX'X FOOD MARKETS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chairman
R. Xxxxxxx Xxxxxxx, Xx.
/s/ R. Xxxxxxx Xxxxxxx, Xx.
-----------------------------
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