EXHIBIT 10.2
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CONSULTING AGREEMENT
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CONSULTING AGREEMENT (the "Agreement"), dated as of August 20, 1998, by
and between RICHFOOD HOLDINGS, INC., a Virginia corporation (the "Company"), and
DONALD D. BENNETT ("Consultant").
RECITALS
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WHEREAS, the Company and the Consultant are parties to an Employment
and Severance Benefits Agreement, dated as of April 28, 1996 (the "Employment
Agreement"); and
WHEREAS, the Company and the Consultant desire to terminate the
Employment Agreement as of the date hereof, and enter into this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth herein, the parties agree as follows:
ARTICLE I
TERMINATION OF EMPLOYMENT;
COMMENCEMENT OF CONSULTING RELATIONSHIP
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1.01 TERMINATION OF EMPLOYMENT AGREEMENT; RETIREMENT BENEFITS.
Consultant and the Company hereby agree that the Employment Agreement is
terminated in all respects as of the date hereof, and that all rights and
obligations of the parties thereunder have been satisfied in full or are waived
in favor of the benefits provided under this Agreement. The Company acknowledges
and agrees that, as a result of the termination of the Consultant's employment
with the Company, the Consultant shall begin receiving retirement benefits as of
the date hereof under the Company's pension plan and its Supplemental Executive
Retirement Plan (as previously amended or otherwise modified in accordance with
Section 5 of the Employment Agreement) in accordance with the terms of such
plans. Consultant acknowledges specifically that the termination of his
employment and entering into this Agreement does not and is not intended to
trigger the severance provision in Section 7 of the Employment Agreement and
that the consideration provided under this Agreement is and is accepted in lieu
thereof.
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1.02 DUTIES OF CONSULTANT. Throughout the term of this Agreement,
Consultant shall provide services and advice to the officers and directors of
the Company on an as-needed basis relating to the operations of the Company and
its subsidiaries, but shall not be required or expected to maintain regular
office hours at the Company.
1.03 COMPENSATION. In return for the services to be provided hereunder,
Consultant shall receive: (a) a consulting fee of $100,000 per annum throughout
the term of this Agreement, payable in monthly installments; and (b) (i)
coverage under life insurance policies consistent with those currently provided
for the benefit of Consultant through age 65, and (ii) coverage under such
medical and dental plans as is generally provided from time to time to the
Company's executive employees until Consultant's death (or, if Consultant is not
entitled to participate in such plans under the terms thereof, then under third
party arrangements (including, without limitation, Medicare, Medicade and
"Medigap" plans) that provide substantially comparable overall coverage);
provided, however, that the Company agrees to pay Consultant's portion of the
premiums for all such coverage. In addition, Consultant shall be reimbursed for
all expenses reasonably incurred by him in connection with the performance of
services hereunder in accordance with the Company's executive expense
reimbursement policies in effect from time to time.
1.04 OTHER BUSINESS OF CONSULTANT. Consultant may alone, or through any
business, partnership, corporation, affiliate or other related party, engage
independently or with others in other businesses and activities of any nature or
description so long as such activity does not violate Article III hereof.
1.05 INDEPENDENT CONTRACTOR. Consultant at all times will act as an
independent contractor and will not act or hold himself out to third parties as
an employee or agent of the Company. Nothing in this Agreement or to be done
pursuant to its terms and conditions is intended to, or shall, create a
partnership, joint venture, principal-agent or employer-employee relationship
between the parties. Consultant shall be responsible for all taxes and
recordkeeping in connection with amounts paid to him hereunder and, except as
provided in Section 1.03(b) hereof, shall have no right to participate in any of
the Company's employee benefit or welfare plans and specifically waives such
right to the extent it otherwise exists even if it is subsequently determined
that the Consultant constitutes a common-law employee of the Company.
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ARTICLE II
TERM OF AGREEMENT
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This term of this Agreement will commence as of the date hereof and
will continue in full force and effect until the earlier of the Consultant's
death or the second anniversary of the date hereof.
ARTICLE III
NONCOMPETITION; CONFIDENTIALITY
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3.01 NONCOMPETITION AGREEMENT. Consultant covenants and agrees that
during the term hereof, Consultant shall not, directly or indirectly, engage in
or accept employment with (as a consultant or otherwise), own a material
interest in, or otherwise give assistance to, whether or not for compensation,
any person, firm or corporation engaged in the ownership or management of a
wholesale or retail grocery business within the United States. In the event that
any provision of this Article III is determined to be invalid or overbroad by
any court or other entity of competent jurisdiction, the provisions of this
Article III shall be deemed to have been amended, and the parties hereto agree
to execute all documents necessary to evidence such amendment, so as to
eliminate or modify any such invalid or overbroad provision so as to carry out
the intent of this Article III as far as possible and to render the terms of
this Article III enforceable in all respects as so modified. Consultant
acknowledges that a violation of this Article III by the Consultant may cause
irreparable harm to the Company. Accordingly, Consultant hereby grants the
Company the right to seek and be granted injunctive relief for any such
violation, in addition to any other legal remedies that may be available.
3.02 CONFIDENTIALITY. Consultant agrees and acknowledges that by virtue
of his past employment relationship and his future consulting relationship with
the Company, he has acquired and will continue to acquire an intimate knowledge
of the activities and affairs of the Company and its affiliates, including trade
secrets and other confidential matters. Consultant agrees at all times during
the term of this Agreement and thereafter, to hold in strictest confidence, and
not to use for his own benefit or disclose to any person, firm or corporation
without express authorization of the Company's Board of Directors or as required
by law, any confidential information, development or experimental work, trade
secrets, or any other secret or confidential matter relating to the financial
affairs, personnel, products, sales, business or other affairs of the Company or
any division,
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subsidiary, affiliate, or parent of the Company or their successors, including,
without limitation, the name or names of any of the clients, customers or
accounts of the Company, their addresses, phone numbers or requirements.
Consultant agrees that upon termination of this Agreement, he will
deliver to the Company and will not keep in his possession nor deliver to anyone
else, any and all documents, or any other materials containing or disclosing any
confidential information relating to the Company, and Consultant will return to
the Company all calculations, letters, papers, books and records, and
information of any type or description relating to the business of the Company
and its affiliates.
3.03 ACKNOWLEDGMENTS. Consultant and the Company are entering into this
Agreement with full awareness of the geographic breadth of the noncompetion
provisions hereof, and acknowledge that this Agreement reflects exactly what the
parties intend, and both parties have negotiated this Agreement at arms length,
hold equal bargaining positions, and have had the opportunity to be advised by
experienced legal counsel in regard thereto. Further, the Company and Consultant
acknowledge that Consultant has extensive experience in the wholesale and retail
grocery business and possesses proprietary information about the Company's and
its affiliates' operations and has the ability to substantially injure the
Company, and for this reason the Company is willing to pay Consultant
substantial compensation for his future and ongoing agreement not to compete
with the Company. Consultant acknowledges that because of his extensive business
experience, and his ability to work in other industries and engage in other
business activities, this Agreement, including its noncompetition provision,
does not unduly curtail his ability to support himself and his family.
ARTICLE IV
MISCELLANEOUS
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4.01 SUCCESSORS; BINDING AGREEMENT. (a) the Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company expressly to assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession had taken place. As used in this Agreement, "the Company"
shall mean the Company as defined herein and any successor to its business
and/or assets that otherwise becomes bound by all the terms and provisions of
this Agreement by operation of law or otherwise.
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(b) This Agreement shall inure to the benefit of and be enforceable by
the personal or legal representatives, executors, administrators, successors,
heirs, distributees, devises and legatees of Consultant.
4.02 WAIVER. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
and signed by Consultant and such officer as may be specifically designated by
the Board of Directors of the Company. No waiver by either party hereto at any
time of any breach by the other party hereof of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by either party which are not set forth expressly in this
Agreement. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the Commonwealth of Virginia.
4.03 VALIDITY. If any sentence, paragraph, clause or combination of the
same in this Agreement is held by a court of competent jurisdiction to be
unenforceable in any jurisdiction, such sentence, paragraph, clause or
combination will be unenforceable in the jurisdiction where it is invalid and
the remainder of this Agreement shall remain binding on the parties in such
jurisdiction as if such unenforceable provision had not been contained herein.
The unenforceability of such sentence, paragraph, clause or combination of the
same in this Agreement will be otherwise unaffected and will remain enforceable
in all other jurisdictions.
4.05 NOTICES. All notices required or permitted hereunder shall be
given in writing and shall be deemed to have been duly given when delivered or
mailed by United States registered mail, return receipt requested, to the
following addresses or at such other places as shall be designated in writing
(any such designation to be effective upon receipt):
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If to Consultant: Mr. Donald D. Bennett
49 Ribaut Drive
Hilton Head, South Carolina 29926
If to the Company: Richfood Holdings, Inc.
4860 Cox Road, Suite 300
Glen Allen, VA 23060
Attention: President
With copies to: Gary E. Thompson, Esq.
Hunton & Williams
Riverfront Plaza, East Tower
951 East Byrd Street
Richmond, Virginia 23219
4.06 HEADINGS. The headings in this Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized corporate officer, and Consultant has duly
executed this Agreement as of the day and year first written above.
RICHFOOD HOLDINGS, INC.
By: /s/ John E. Stokely
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John E. Stokely
Chairman, President & CEO
CONSULTANT:
/s/ Donald D. Bennett
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Donald D. Bennett