EXHIBIT 10
EMPLOYMENT SEVERANCE AGREEMENT
AND MUTUAL RELEASE
Food Lion, Inc. (the "Company") and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (the
"Executive") hereby agree as follows:
1. Purpose of Severance Agreement and Release.
A. The parties recognize that during his more than 18
years of employment with the Company, the
Executive has performed valuable service to the Company in a
confidential capacity. By virtue of his responsibilities during
his employment, the Executive has acquired proprietary
information of a sensitive and confidential nature pertaining to
the Company's business operations, trade secrets, its strategies
and plans, particularly in the area of store operations, which, if
disclosed to individuals or entities not employed by the Company, would
materially harm the Company and/or provide an unfair advantage to
its competitors.
B. The purpose of this Employment Severance Agreement and
Mutual Release of Liability (the "Severance Agreement and Release")
is to set forth the terms of the Executive's severance from
employment with the Company, to resolve fully any and all
obligations arising out of his employment and
severance from employment, and to protect the Company's
legitimate interest in maintaining the confidentiality
of information pertaining to its business plans and operations
known to, or possessed by, the Executive.
2. Termination of Employment.
A. The Executive will resign from employment with the
Company effective July 1, 1995 (the "termination date").
B. The Executive will resign from the Board of Directors
of the Company effective July 1, 1995.
C. On July 1, 1995, the Executive shall terminate his
participation in the Profit Sharing Retirement Plan of Food Lion, Inc.
The Executive shall be entitled to receive all vested benefits owing
under the Company's employee benefit plans in which the Executive
is participating as of the date of his resignation to the extent
set forth and specifically provided for by such plans and/or to
the extent otherwise required by law.
3. Consideration.
A. In consideration of the Executive's release of all
claims that may exist against the Company in connection with his
employment as more specifically set forth below in Paragraph 4,
and in consideration of the Executive's compliance with the
obligations set forth below in Paragraphs 7 and 8, and provided
the Executive complies with all other terms and conditions of
this Severance Agreement and Release, the Company agrees that:
1. the Company will pay the Executive his current
weekly salary of $5,348.08 for the period beginning July 2, 1995
and ending April 15, 1997, payable on regular biweekly pay periods during
this term. These payments shall be subject to all legally
required state and federal tax deductions and withholdings.
2. The Company will pay $5,000 toward outplacement
services provided by the firm of Executives choice.
3. The Company will pay the Executive accrued vacation
of two (2) weeks on or before July 13, 1995.
B. The Employee acknowledges that the rights and payments
provided in Paragraph 3(A):
1. represent valuable consideration over and above what he is
otherwise entitled to in connection with the termination of his
employment and that his release of claims in Paragraph 4 and his
agreement to comply with the obligations of paragraphs 7 and 8 of
this Severance Agreement and Release are in return for this
consideration;
2. shall be in lieu of any and all claims for severance pay,
additional wages, bonus, salary, accrued vacation and sick leave
pay or other compensation, or benefits, or claim of
damages he may have as of his termination date other than vested
benefits described in paragraph 2(C) and such rights as Executive
may have to obtain continued insurance coverage under COBRA; and
3. arise solely out of the terms of this Severance Agreement
and Release and are not part of any Company severance pay plan.
C. The Company acknowledges that its promises and releases contained
in this Severance Agreement and Release are for good and valuable consideration.
4. Waiver and Release.
As a material inducement for Executive and Company to enter
this Severance Agreement and Release, each of them hereby
irrevocably and unconditionally releases and forever discharges
the other as detailed below.
A. The Executive releases and forever discharges all
claims he may have against the Company, its subsidiaries
affiliates, parents, predecessors, and all officers, directors,
representatives agents or employees in any manner arising out of
or attributable to his employment with the Company. This release
includes all claims that may have existed on his termination date
relating to the Executive's employment with and termination from
the Company, whether brought by Executive or by a third party on
his behalf, including, but not limited to:
1. discrimination on the basis of age, including claims under
the Age Discrimination in Employment Act as amended, the
Americans with Disabilities Act, or other applicable federal
statutes and other applicable state and local statutes;
2. any claim under any statute, law or regulation, based on any
fact, matter, event or cause, whether known or unknown, arising
out of or relating to the employment relationship between the
Executive and the Company or the Executive's termination
therefrom.
B. The Executive agrees not to institute any legal or
administrative proceeding against the Company or those persons
described in Paragraph 4(A) as to any matter based upon, arising
out of or related to his employment, compensation during his
employment, or termination of his employment with the Company.
C. The Company, on behalf of its officers, directors,
employees, agents, counsel, successors, assigns and related
entities hereby releases and forever discharges Executive, his
heirs, assigns and representatives from any and all claims,
liabilities, damages, costs, and other obligations in any manner
arising out of or attributable to his employment with the
Company, and will indemnify and hold harmless the Executive, his
heirs, assigns and representatives from such claims, except those
claims attributable to the gross negligence or willful misconduct
of the Executive.
D. This Severance Agreement and Release does not waive or
release rights or claims for occurrences after the effective date
of this Severance Agreement and Release. This Severance
Agreement and Release does not preclude the Executive or Company
from filing a lawsuit against the other for purposes of enforcing
rights conferred to each other under this Severance Agreement and
Release.
5. Company Property.
On or before July 1, 1995, the Executive agrees to return
all property belonging to the Company he may possess, or that he
has possessed but has provided to a third party, including, but
not limited to, all original and copies of Company documents,
files, memoranda, notes, computer-readable information(maintained
in disc or any other form) and video or tape recordings of any
kind other than personal materials relating solely to the
Executive. Executive promises that he has not and will not
retain, distribute, or cause to be distributed, any original or
duplicates of any such Company material specified in this
Paragraph.
6. Loans.
The Company and the Executive acknowledges that, as of
the date of this Agreement, there is an outstanding balance of
one hundred sixty thousand, eight hundred seventy-five dollars
($160,875.00) (the "Loan") owed by the Executive to the Company
pursuant to the Company's Low Interest Loan Plan (the "Plan") .
Provided the Executive is in compliance with the terms of this
Agreement, the Company agrees to forgive the outstanding balance
of the loan and all interest accrued thereon as follows: one-
third (1/3) on December 1, 1995, one-third (1/3) on December 1,
1996, and one-third (1/3) on December 1, 1997.
7. Confidentiality.
A. The Executive and Company agree that the existence and
terms of the Severance Agreement and Release are and shall remain
confidential, and further agree not to disclose the existence or
terms of the Severance Agreement and Release to any third party,
except that:
1. the Executive may disclose to his family that he resigned
from the Company and the amount of consideration he received in
connection with his separation and disclose the terms and
conditions of this Severance Agreement and Release to his
attorneys, tax consultants, state and federal authorities or as
may be required by law;
2. the Company may disclose the terms and conditions of this
Severance Agreement and Release as is necessary to carry out the
terms of this Agreement to its managers, officers and board of
directors, insurers, consultants, accountants, attorneys, state
and federal tax authorities, or as may be required by law,
including but not limited to disclosure as may be required in the
Company's proxy statement and as required by SEC public reporting
requirements;
3. the Company and the Employee may disclose to other parties
only that the Executive resigned voluntarily and that the parties
parted amicably; and
4. the Company and the Executive agree that Exhibit A
shall be the sole public statement by
either party concerning Executive's termination
of employment.
B. As described more fully in Paragraph 1(A) of this
Severance Agreement and Release, the Executive acknowledges that
as a result of his employment by the Company, he has acquired
confidential or proprietary information of special value to the
Company. The Executive covenants and agrees:
1. that he shall not, directly or indirectly, orally or in
writing, at any time in the future disclose any information of
the Company as defined in Paragraph 7(B) (2), whether such
information is a trade secret, confidential or proprietary, to
any person, partnership, corporation or other business entity,
except with the written permission of the Company.
2. that for purposes of Paragraph 7(B) (1), the term "any
information of the Company" means all information which relates
to matters such as, but not necessarily limited to, trade
secrets, research and development activities, books and records,
expansion strategies, operational plans or strategies, real
estate strategies, or other processes or strategies, distribution
channels, pricing information and private processes, real estate
site selection, projected store openings or closings, employee
communications, training or development strategies, advice given
by any legal counsel or other consultants retained by the Company
whether or not protected by the attorney-client or work product
privileges.
3. Paragraph 7(B) (1) or (2) shall not be violated by the
disclosure of information which is disclosed pursuant to a court
order or as otherwise required by law, on conditions that notice
of the requirement for such disclosure is given to the Company
before the Executive's making any disclosure and the Executive
cooperates in resisting such disclosure upon reasonable request
by the Company at the Company's expense.
C. The Executive acknowledges that, by virtue of the
responsibilities assigned to him throughout
his employment, in the event he should make any public
statements relating to the Company after
his termination, such statements could be attributed to
the Company or be viewed as authoritative and based on
information to which the Executive had access while employed by
the Company. Accordingly, the Executive agrees that for the period
from the effective date of this Agreement until
December 1, 1997, he will make no public comment in any way
relating to the Company.
8. AGREEMENT NOT TO COMPETE. The Executive acknowledges that
the Company has legitimate business interests in assuring that
the skills and knowledge obtained by the Executive during his
employment with the Company are not converted to the use of
entities in competition with the Company or who are engaged in
activities aimed at damaging the Company's public image or otherwise
antithetical to the Company's lawful interests. In recognition
of these legitimate interests, the Executive agrees that:
A. The Executive agrees that from July 1, 1995 until
December 1, 1997, he will not compete with the Company, directly
or indirectly, by acting either individually or as an advisor,
representative, agent, employee, partner, shareholder, investor,
director, consultant, or in any other similar capacity, on behalf
of any other person, partnership, corporation or other business
in the retail grocery or wholesale grocery industry, which shall
include warehouse membership clubs predominately selling
groceries or other alternate retail formats, selling food
products, (but which shall not include manufacturers of food
products not engaged in the retail or wholesale grocery business,
and shall not include stores of 10,000 square feet or less) in
the geographical area defined in Paragraph 8(B). The Executive's
ownership of not more than one percent (1%) of the stock of any
publicly-held grocery chain shall not be deemed to be a violation
of this Paragraph.
B. The Executive agrees not to act in the capacities set
forth in Paragraph 8(A) for entities operating:
i) in the states of Delaware, Georgia, Kentucky,
Maryland, North Carolina, South Carolina, Tennessee, Virginia, and Florida
(excluding the area south of the line created by the Everglades Parkway
between Naples and Fort Lauderdale);
ii) within a 60 mile radius of the cities Dallas,
Texas and Fort Worth, Texas; within a 30 mile radius of Oklahoma City,
Oklahoma; Shreveport, Louisiana; and Houston, Texas; or within a 15 mile radius
of Abilene, Texas and Wichita Falls, TX;
iii) in the state of Pennsylvania, excluding the area
within a 60 mile radius of Philadelphia, and excluding the area north and
west of the line created by the following highways and as delineated on the
map attached as Exhibit B (Highway 219 from the New York state
border south to its intersection with Interstate Highway 80,
following Highway 80 west to Highway 28 south to its intersection with
Interstate Highway 79; following Highway 79 south to the West Virginia border);
iv) in the state of West Virginia, excluding the area
north and west of the line created by the following highways and as
delineated on the map attached as Exhibit C (Interstate Highway 77
from the Ohio border south to the intersection with Highway 119,
following Highway 119 to the Kentucky border.)
C. From July 1, 1995 until December 1, 1997 the Executive
further agrees not to recruit, solicit or
otherwise contact employees of Food Lion on behalf of any other
entity, either directly or as an agent, in order to induce any
Food Lion employee to accept employment with another entity.
D. In the event the Company ceases to operate in any of
the states included above, then the restriction with respect to
said state shall cease upon the date the Company ceases
operations in said state.
9. ENFORCEMENT. The Executive agrees that he has received
good and valuable consideration for his agreement both to adhere to the
confidentiality provisions of Paragraph 7 and to the non-compete
provisions of Paragraph 8 and that in the event the Company
obtains evidence that Executive has violated Paragraphs 7 or 8 in
any respect, the Company shall have the option to:
A. cease payment of any additional amounts provided for in
Paragraph 3(A) of this Severance Agreement and Release; or
B. obtain temporary and permanent injunctive relief in a
Superior Court of the State of North Carolina to remedy such violation.
The Executive consents to jurisdiction of that court to provide such
injunctive relief. The Executive agrees that failure to comply
with his obligations under Paragraphs 7(B), 7(C), or 8(A), 8(B)
or 8(C) of this Severance Agreement and Release shall constitute
irreparable harm to the Company, without regard to any demonstrable economic
harm to the Company from Executive's breach, and that the appropriate remedy
for partial or total breach of those provisions shall be an interim and
permanent order directing specific performance with each and every term of
this Severance Agreement and Release, with damages resulting
from the breach, and all costs and attorneys fees incurred in
obtaining enforcement of this Severance Agreement
and Release to be awarded to the Company. The Executive further
agrees that in such proceeding, he shall make no assertion of
mitigation in defense to the Company's prayer for injunctive
relief.
10. Acknowledgment of Voluntary Nature of Severance Agreement
and Release.
By signing this Severance Agreement and Release, the
Employee and the Company acknowledge:
A. That each has entered into this Severance Agreement and
Release voluntarily and fully understands all of its terms;
B. That the Executive has been advised and has had the
opportunity to consult with an attorney prior to signing this
Severance Agreement and Release;
C. That the Executive has been given the opportunity to
consider this Severance Agreement and Release for a period of at
least twenty-one (21) days, and, after consulting with his
attorney, has voluntarily and freely executed this Agreement
prior to the expiration of the twenty-one day period, and has
voluntarily and freely waived the right to consider the Agreement
and Release for the full twenty-one day period; and,
D. That the Executive and Company are not relying on any
statement or promise other than as contained in this Severance
Agreement and Release.
11. Assistance.
Upon reasonable notice, the Executive agrees to willingly
give his assistance, including his attendance, where appropriate,
to the Company's defense or prosecution of any existing or future
claims or litigation. The Company will reimburse the Executive
for all reasonable travel expenses incurred by the Executive in
complying with this section. In the event the Executive is no
longer entitled to the payments set forth in Section 3 of this
Agreement, then the Executive shall be compensated at the rate of
$100 per hour for such assistance.
12. Revocation Period.
The Executive understands that he has a seven (7) day period
after signing this Severance Agreement and Release in which to
revoke or rescind his agreement and release of claims, by
informing the Company's President in writing of his decision to
revoke. To be effective, the rescission must be delivered to the
Company's Chief Executive Officer either by hand or by mail
within the seven day period. If sent by mail, the rescission
must be postmarked within the seven day period, properly address
to the Company's Chief Executive Officer, and sent by certified
mail, return receipt requested.
13. Binding Agreement.
A. This Severance Agreement and Release will become
effective and enforceable upon the expiration of the seven day
revocation period referred to in Paragraph 12 (the "effective
date"). The Executive and the Company understand that following
the seven day revocation period, this Severance Agreement and
Release will be final and binding.
B. This Severance Agreement and Release constitutes the
entire agreement of the parties with respect to the subject
matter set forth herein and there are no promises, understandings
or representations, oral or written, other than those set forth
herein.
C. The Executive and the Company promise that, after the
Severance Agreement and Release becomes final and binding, they
will not pursue any claim which has been waived under the
Severance Agreement and Release and will not challenge the
enforceability of the Severance Agreement and Release by filing
or instigating any lawsuit or administrative complaint or
investigation arising out of the Employee's employment or
termination.
14. Law of North Carolina.
This Severance Agreement and Release, having been prepared,
executed and delivered in the State of North Carolina, and shall
be governed by the laws of the State of North Carolina.
15. Severability.
Each provision of this Severance Agreement and Release is
intended to be severable. If any provision, sentence, phrase or
word of this Severance Agreement and Release or the application
thereof to any person or circumstance shall be held invalid or
unenforceable, the remainder of this Severance Agreement and
Release, or the application of such provision, sentence, phrase
or word to persons or circumstances, other than those as to
which it is held invalid, shall not be affected thereby.
16. Notices.
Any notices required or permitted to be given by the parties
shall be given in writing by certified mail, return receipt
requested, or by prepaid telegram, delivered to:
R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Vice President of Legal Affairs
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
and
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
17. Death of Executive.
In the event of the death of the Executive prior to December
1, 1997, any payments due under this Severance Agreement and
Release will be made to the beneficiary designated by the
Executive in writing, and, if no beneficiary is designated, to
his Estate. In addition, any remaining principal and accrued
interest on the loan referred in Section 6 shall be deemed
forgiven as of the date of Executive's death.
FOOD LION, INC.
Dated: By:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice President -- Human Resources
EMPLOYEE
Dated: By:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
EXHIBIT A
TO WHOM IT MAY CONCERN:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Senior Vice President of Operations and
COO, resigned from Food Lion effective July, 1, 1995. ▇▇▇▇ joined
Food Lion June 1, 1977 as a Store Manager Trainee. During his
tenure with the company, ▇▇▇▇ has had responsibility in the Human
Resources Department, Organization Development Department,
Merchandising Department, and Store Operations including
Distribution and Store Planning and Development.
I very much appreciate John's contributions to the growth
and success of the company, including increases in quarterly
sales and earnings during the past five quarters. I am sure his
abilities will be of great value to any venture he is connected
with in the future.
I wish him well in his career.
Best regards,
EXTRA LOW PRICES AND MORE
▇▇▇ ▇. ▇▇▇▇▇
President/CEO
EXHIBIT A
June 23, 1995
Contact: ▇▇▇▇▇ ▇▇▇▇▇▇
(704) 633-8250 ext. 2892
For Immediate Release
FOOD LION APPOINTS NEW CHIEF OPERATING OFFICER
Salisbury, NC-- Food Lion, Inc., has announced that ▇▇▇▇
▇▇▇▇▇▇▇, Chief Operating Officer, will be leaving the company
July 1 to pursue other interests. ▇▇▇▇▇▇▇ has been with the
company for 18 years, serving for the past two years as COO.
"Although I find it difficult to leave Food Lion and the
great people here, I am excited about the chance to pursue
another business opportunity," explained ▇▇▇▇▇▇▇. His plans will
be announced at a future date.
Food Lion Chairman and CEO, ▇▇▇ ▇▇▇▇▇, praised ▇▇▇▇▇▇▇ for
his contributions to the growth and success of the company,
including increases in quarterly sales and earnings during the
past five quarters.
▇▇▇ ▇▇▇▇ has been appointed Senior Vice President of
Operations and Chief Operating Officer, effective July 1. In his
new position, ▇▇. ▇▇▇▇ will be responsible for the operations of
the company's 1045 supermarkets and nine distribution centers.
A Salisbury native and graduate of Wake Forest University,
▇▇. ▇▇▇▇ has 20 years of experience in all aspects of the supermarket
industry. He joined Food Lion in 1975 as a
Grocery Buyer and has held increasingly responsible positions in
buying, purchasing, advertising, marketing and merchandising. He
was appointed Vice President of Buying in 1987, and served most
recently as Vice President of Operations for the company's
Central Division.
"▇▇▇ has demonstrated outstanding leadership during his
career with Food Lion," said ▇▇▇ ▇▇▇▇▇, Food Lion Chairman and
Chief Executive Officer. "In ▇▇▇, we have an executive who
understands our company and the supermarket industry. His
appointment will afford us continuity in the things we do well as he works to
develop the new ideas we need to hold on to our leadership
position in the industry for the future."
Food Lion is one of the nation's largest supermarket chains,
offering consumers Extra Low Prices and More in 1045 stores in 14
states.
EXHIBIT B
MAP
EXHIBIT C
MAP