January 29, 1999
HAND DELIVERY
Thomas L. Zaricki
Dear Tom:
This letter outlines the severance package Fleming is offering you and, along
with the attached General Release, will also reflect our agreement if you decide
to accept this package. This individualized severance package supersedes the
one described in my January 19, 1999 letter, and is the result of our subsequent
discussions.
The terms of your severance package are as follows:
1. SALARY REPLACEMENT. The Company will pay you salary replacement in the
gross amount of one year's base salary at your current annual pay rate of
$283,500 payable in equal installments without regard to whether you have
obtained new employment. The first installment will be paid on the Company's
first regular payday after you return executed copies of this letter agreement
and the General Release referenced hereafter or seven (7) days following that
return date, whichever is later. The remaining installments will be paid
throughout the one year period on the Company's regular paydays.
2. BONUS BANK. The portion of your bonus which has previously been retained
by the Company in a bookkeeping account under the Economic Value Added Incentive
Bonus Plan for Fleming Companies, Inc. and its Subsidiaries (the "EVA Plan") for
potential future payment (the "Bonus Bank") equals $128,733. The Company will
distribute the entire gross amount of your Bonus Bank to you in a lump sum.
This payment will be made seven (7) days after you return executed copies of the
letter agreement and General Release.
3. ACCRUED VACATION. The Company will pay you for 1999 vacation accrued as of
January 1, 1999 and not used.
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4. "COBRA PREMIUM" REPLACEMENT. You have the right pursuant to COBRA to
continued coverage under the Fleming Companies, Inc. Health Choice Plan (the
"Medical Plan"). The Company will pay you a "COBRA premium" replacement in the
amount of twelve (12) times the monthly COBRA premium for your current level of
coverage under the Medical Plan, plus a "gross up" to offset income taxes, FICA
and any other payroll taxes. You will receive this payment in a lump sum with
the first installment of your salary replacement.
5. PAST SERVICE BENEFIT PLAN. The Company will waive any qualifying
requirements relating to vesting or distribution of the Fleming Companies, Inc.
Executive Past Service Benefit Plan (the "Past Service Plan") applicable to the
award of $274,260 made to you on November 1, 1997. This benefit, plus interest
as provided by the Past Service Plan, will be paid to you in accordance with
the election you have previously made under the terms of the Past Service Plan.
6. RESTRICTED STOCK AWARDS. The Company will waive all qualifying
requirements and accelerate distribution to you of 7,500 shares of restricted
stock (plus any paid dividends attributable to those shares) which were awarded
to you on November 1, 1997, under the Fleming Companies, Inc. 1996 Stock
Incentive Plan (the "1996 SIP"). Of those shares, 2,500 vested by time on
January 1, 1998, 2,500 vested by performance on March 31, 1998, and 2,500 vested
by time on January 1, 1999. Likewise, the Company will waive the qualifying
requirements and accelerate both vesting and distribution of 2,500 additional
shares of restricted stock (plus any paid dividends attributable to those
shares) awarded to you on November 1, 1997 under the 1996 SIP which, but for
your separation from employment with the Company, would have vested on January
1, 2000. Distribution of these restricted shares will be made seven (7) days
after you return the signed letter agreement and General Release. All other
restricted shares or awards which you might have become eligible to receive over
time under the 1996 SIP or any other Fleming plans will be forfeited.
7. AUTOMOBILE. The Company will transfer title to you of the automobile which
you have been driving in connection with Company business seven (7) days after
you return executed copies of the letter agreement and General Release.
8. REIMBURSEMENT OF RELOCATION COSTS. The Company will reimburse you for
costs you may incur prior to December 31, 1999, in connection with a relocation
from your current residence in order to accept new employment to a residence
outside a 75 mile radius of Oklahoma City, Oklahoma, provided that your next
employer does not regularly pay for relocation of new executive-level employees
and provided that such relocation costs are reasonable and would be reimbursed
in connection with the relocation of an executive-level associate pursuant to
the Company's established policies and practices. This reimbursement will be
paid within thirty (30) days after you submit vouchers representing the payment
of the relocation costs to the Company.
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9. OUTPLACEMENT. The Company will provide you with a "Level One" executive
outplacement package with James Farris & Associates. If you prefer to use a
different outplacement firm, the Company will pay that firm a reasonable fee (up
to 15% of your annual base salary) for whatever substitute outplacement package
you may select.
10. TAXES. Unless otherwise noted, any payments and benefits which are subject
to federal and state income tax withholding, FICA and other payroll taxes will
be reduced by those amounts by the Company.
11. GENERAL RELEASE. You will execute the General Release which is attached
and return it, along with the executed copy of this letter agreement, within
twenty-one (21) days. You will also agree not to attempt to revoke or rescind
the General Release at any time in the future nor commence any action against
Fleming in regard to your prior employment relationship. By signing this
letter, you are representing to the Company that you fully understand the
General Release and will have had an opportunity to seek legal advice regarding
the General Release and the agreement proposed by this letter, if you desire to
do so, before signing it. You are also representing to the Company that between
January 19, 1999, and the date you sign the General Release, you have not
commenced any charge, action or complaint with any court or with the Equal
Employment Opportunity Commission, the United States or Oklahoma Departments of
Labor nor with any other judicial or administrative agency in regard to your
employment relationship or any matters arising out of that relationship.
Finally, you are representing to the Company that you fully understand that any
such filing or commencement shall constitute a rejection by you of the Company's
severance package offered in this letter.
12. CONTINUED LITIGATION ASSISTANCE. You will continue to cooperate with and
assist the Company and its representatives and attorneys as requested with
respect to any litigation, arbitrations or other dispute resolutions by being
available for interviews, depositions and/or testimony in regard to any matters
in which you are or have been involved or with respect to which you have
relevant information. The Company will reimburse you for reasonable expenses
you may incur for travel in connection with this obligation.
13. FUTURE EMPLOYMENT AND CONFIDENTIALITY OF INFORMATION. Except with the
prior written consent of the Company, during the period you are receiving salary
replacement installments from the Company under paragraph 1, you will not be
employed by or otherwise act on behalf of any entity which directly competes
with ABCO Markets, Inc., Baker's Supermarkets, Rainbow Foods or
Sentry/Supersaver; provided that this non-competition obligation is not intended
to preclude an employment or other relationship between you and any national
retail grocery chain, regardless of location. Except with the prior written
consent of the Company, you will not at any time in the future be employed or
otherwise act as an "expert witness" or "consultant" or in any similar capacity
in any litigation, arbitration, regulatory or agency hearing or other
adversarial or investigatory proceeding involving Fleming. Also, except with
the prior written consent of the Company, you will not at any
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time hereafter make any independent use of or disclose to any other person or
organization any of the Company's confidential, proprietary information or trade
secrets. This shall apply to any information concerning Fleming which is of a
special and unique value and includes, without limitation, both written and
unwritten information relating to operations; business planning and strategies;
litigation strategies; finance; accounting; sales; personnel, salaries and
management; customer names, addresses and contracts; customer requirements;
costs of providing products and service; operating and maintenance costs; and
pricing matters. This shall also apply to any trade secrets of the Company the
protection of which is of critical importance to Fleming and includes, without
limitation, techniques, methods, processes, data and the like. This commitment
of confidentiality shall also apply to the terms of this severance package,
except for discussions with your spouse, your personal attorney and/or
accountants, or as needed to enforce our agreement. Any disclosure by such
individuals shall be deemed a disclosure by you and shall have the same
consequences as a breach of our agreement directly by you.
14. PRESERVING COMPANY NAME. You will not at any time in the future defame,
disparage or make statements which could embarrass or cause harm to the
Company's name and reputation or the names and reputation of any of its
officers, directors or representatives to the Company's current, former or
prospective vendors, customers, professional colleagues, industry organizations,
associates or contractors, to any governmental or regulatory agency or to the
press or media.
15. FORFEITURE. The continued payment by the Company and retention by you of
any payments to be made or benefits provided under this letter agreement shall
be contingent not only on your execution of the General Release described in
paragraph 11, but also on your on-going compliance with your other obligations
under our agreement, including your commitments in paragraphs 12, 13 and 14.
Breach of your obligations at any time in the future shall entitle the Company
to cease all payments to be made or benefits provided under this letter
agreement and shall entitle the Company to immediate reimbursement from you of
any payments you have previously received.
16. ARBITRATION. You and the Company agree that your employment and this
severance package relate to interstate commerce, and that any disputes, claims
or controversies between you and Fleming which may arise out of or relate to our
prior employment relationship or this letter agreement shall be settled by
arbitration. Our agreement to arbitrate shall survive the termination or
rescission of this letter agreement. Any arbitration shall be in accordance
with the Rules of the American Arbitration Association and shall be undertaken
pursuant to the Federal Arbitration Act. Arbitration will be held in Oklahoma
City, Oklahoma unless we mutually agree on another location. The decision of
the arbitrator(s) will be enforceable in any court of competent jurisdiction.
The arbitrator(s) may award costs and attorneys' fees in connection with the
arbitration to the prevailing party; however, in the arbitrator's(s')
discretion, each party may be ordered to bear its/his own
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costs and attorneys' fees. We agree that punitive, liquidated or indirect
damages shall not be awarded by the arbitrator(s). Nothing in this agreement to
arbitrate, however, shall preclude the Company from obtaining injunctive relief
from a court of competent jurisdiction prohibiting any on-going breaches by you
of your continuing obligations under paragraphs 11, 12, 13 or 14 of this letter
agreement pending arbitration.
The agreement of you and the Company, in the event you execute this letter, will
be in consideration of the mutual promises described above. Also, this letter
and the General Release will constitute the entire agreement between you and
Fleming with respect to your separation from employment and your severance
package.
Please contact me if you have any questions about the severance package. I will
need to know your decision no later than the close of business 21 days from the
date you receive this letter.
Very truly yours,
William J. Dowd
President and Chief Operating Officer
ACCEPTED AND AGREED TO BY:
/s/ Thomas L. Zaricki
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Thomas L. Zaricki
February 3, 1999
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Date
NOTICE. VARIOUS STATE AND FEDERAL LAWS, INCLUDING TITLE VII OF THE CIVIL
RIGHTS ACT OF 1964, THE AGE DISCRIMINATION IN EMPLOYMENT ACT, THE AMERICANS WITH
DISABILITIES ACT, THE EMPLOYEE RETIREMENT INCOME SECURITY ACT AND THE VETERANS
REEMPLOYMENT RIGHTS ACT (ALL AS AMENDED FROM TIME TO TIME), PROHIBIT EMPLOYMENT
DISCRIMINATION BASED ON SEX, RACE, COLOR, NATIONAL ORIGIN, RELIGION, AGE,
DISABILITY, ELIGIBILITY FOR COVERED EMPLOYEE BENEFITS OR VETERAN STATUS. THESE
LAWS ARE ENFORCED THROUGH THE EQUAL OPPORTUNITY EMPLOYMENT COMMISSION (EEOC),
UNITED STATES DEPARTMENT OF LABOR AND VARIOUS STATE OR MUNICIPAL FAIR EMPLOYMENT
BOARDS, HUMAN RIGHTS COMMISSIONS OR SIMILAR AGENCIES.
THIS GENERAL RELEASE IS BEING PROVIDED TO YOU IN CONNECTION WITH THE
SPECIAL, INDIVIDUALIZED SEVERANCE PACKAGE OUTLINED IN A PROPOSED LETTER
AGREEMENT DATED JANUARY 29, 1999. THE FEDERAL OLDER WORKER BENEFIT PROTECTION
ACT REQUIRES THAT YOU HAVE AT LEAST TWENTY-ONE (21) DAYS, IF YOU WANT IT, TO
CONSIDER WHETHER YOU WISH TO SIGN A RELEASE SUCH AS THIS ONE IN CONNECTION WITH
A SPECIAL, INDIVIDUALIZED SEVERANCE PACKAGE. YOU HAVE UNTIL THE CLOSE OF
BUSINESS TWENTY-ONE (21) DAYS FROM THE DATE YOU RECEIVE THE JANUARY 29, 1999
LETTER TO MAKE YOUR DECISION. YOU MAY ACCEPT THE SPECIAL, INDIVIDUALIZED
SEVERANCE PACKAGE AT ANY TIME DURING THAT PERIOD. BEFORE EXECUTING THIS GENERAL
RELEASE YOU SHOULD REVIEW IT AND THE PROPOSED LETTER AGREEMENT CAREFULLY AND
CONSULT WITH YOUR ATTORNEY.
YOU MAY REVOKE THIS GENERAL RELEASE WITHIN SEVEN (7) DAYS AFTER YOU SIGN IT
AND IT SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THAT REVOCATION PERIOD
HAS EXPIRED. IF YOU DO NOT ACCEPT THE SEVERANCE PACKAGE AND SIGN AND RETURN
THIS GENERAL RELEASE WITHIN TWENTY-ONE (21) DAYS, OR IF YOU EXERCISE YOUR RIGHT
TO REVOKE THE GENERAL RELEASE AFTER SIGNING IT, YOU WILL NOT BE ELIGIBLE FOR THE
SPECIAL, INDIVIDUALIZED SEVERANCE PACKAGE. ANY REVOCATION MUST BE IN WRITING
AND MUST BE RECEIVED BY FLEMING COMPANIES, INC., ATTENTION: DEE JEROME, 6301
WATERFORD BLVD., OKLAHOMA CITY, OK 73126, WITHIN THE SEVEN-DAY PERIOD FOLLOWING
YOUR EXECUTION OF THIS GENERAL RELEASE.
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GENERAL RELEASE
In consideration of the special, individualized severance package offered
to me by Fleming Companies, Inc. and the separation benefits I will receive as
reflected in a letter dated January 29, 1999 (the "Letter Agreement"), I release
and discharge Fleming Companies, Inc. and its successors, affiliates, parent,
subsidiaries, partners, employees, officers, directors and agents (hereinafter
referred to collectively as the "Company") from all claims, liabilities, demands
and causes of action, known or unknown, fixed or contingent, which I may have or
claim to have against the Company, including any claims arising out of or
relating to my past employment with the Company and the severance of that
relationship, as well as my decision to accept the separation benefits described
in the Letter Agreement, and do hereby covenant not to file a lawsuit to assert
such claims. This includes but is not limited to claims arising under federal,
state, or local laws prohibiting employment discrimination (including the Age
Discrimination in Employment Act), relating to any prior written, oral or
implied contracts pertaining to employment, severance or retirement or growing
out of any legal or equitable restrictions on the Company's rights not to
continue an employment relationship with its employees, but not to include any
claims under the Employee Retirement Income Security Act with regard to vested
rights in any of the Company's qualified retirement plans.
I have carefully reviewed and fully understand all the provisions of the
Letter Agreement, the foregoing Notice and this General Release, which set forth
the entire agreement between me and the Company.
I understand that my receipt of the separation benefits under the Letter
Agreement is dependent on my execution of this General Release, upon my return
to the Company of any Company property within my possession or control and upon
my continued cooperation in providing information necessary for transition and
maintenance of the Company's ongoing business. I also understand that my
receipt and retention of the separation benefits are also contingent on my
continued nondisclosure of the Company's confidential information, including the
terms of my severance package, and that prohibited disclosure of information or
any future defamation, disparaging remarks or statements by me to any third
parties, other associates or the media which could embarrass or cause harm to
the Company's name and reputation or to the name and reputation of its officers,
directors or representatives shall entitle the Company to reimbursement or
retention of any separation benefits I have received or may receive.
I acknowledge that the Company has given me a 21-day period to consider
this General Release and whether to accept the special, individualized severance
package, and that the Company has advised me to seek independent legal advice as
to these matters if I chose to do so. I further acknowledge that I have not
relied upon any representation or statement, oral or written, by the Company not
set forth in those materials and documents.
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DATED this 3rd day of February, 1999.
/s/ Thomas L. Zaricki
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(Print Name) Thomas L. Zaricki
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(Print Name) Witness
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