February 22, 1999
HAND DELIVERY
Harry L. Winn, Jr.
Dear Harry:
This letter outlines the revised severance package Fleming is offering you and
supersedes the package in the letter dated February 17, 1999. This February 22,
1999 letter, along with the attached General Release, will reflect our agreement
if you decide to accept this package.
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
$334,400 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 $98,841. 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 made to you on November 1, 1997. This benefit, plus interest as provided
by the Past Service Plan, equalled approximately $265,592 as of December 31,
1998. It 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 22,500 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, 7,500 vested by time on
January 1, 1998, 7,500 vested by performance on March 31, 1998, and 7,500 vested
by time on January 1, 1999. Likewise, the Company will waive the qualifying
requirements and accelerate both vesting and distribution of 7,500 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, LAPTOP COMPUTER AND OFFICE ARTWORK. 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. The Company will also allow you to keep the
laptop computer you have been using, although we will, of course, expect you to
expunge any of the Company's business information you have downloaded onto it.
The Company also recognizes that the artwork and maps which have been in your
office are your personal property and that you are free to remove those items.
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8. REIMBURSEMENT OF RELOCATION COSTS. The Company will reimburse you for
costs you may incur in the twelve (12) months following your separation in
connection with relocating your family members and personal possessions from
your current residence to a residence outside a 75 mile radius of Oklahoma City,
Oklahoma in order to accept new employment, provided that your next employer
does not regularly pay for these types of relocation expenses for new
executive-level employees and provided that such relocation costs are reasonable
and would be reimbursed to Fleming associates under the Company's reimbursement
practices regarding personal travel expenses to the new destination and
household goods shipment expenses. This reimbursement will be paid within
thirty (30) days after you submit vouchers representing the payment of these
relocation costs to the Company.
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 of the date you receive this letter. You will also agree
not to attempt to revoke or rescind the General Release at any time in the
future or 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 the date of this letter 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 or 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.
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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 an entity which competes with the
Company in the food distribution or marketing business. 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 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
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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 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.
17. INDEMNIFICATION AND INSURANCE. The Company shall hereafter indemnify you
and hold you harmless in the same manner as it would any other key management
associate of the Company with respect to acts or omissions occurring prior to
your separation from employment. In addition, for a period of five years
following your separation from employment, the Company shall cover you under any
Directors and Officers liability insurance policy which is in effect covering
acts or omissions occurring prior to the termination of your employment to the
same extent it provides such coverage for directors and officers of the Company
at that time.
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.
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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 twenty-one (21)
days from the date you receive this letter.
Very truly yours,
Mark S. Hansen
Chairman and Chief Executive Officer
DELIVERED BY:
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Signature
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Date
ACCEPTED AND AGREED TO BY:
/s/ Harry L. Winn, Jr.
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Harry L. Winn, Jr.
February 25, 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 FEBRUARY 22, 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 FEBRUARY 22, 1999
LETTER AND THIS GENERAL RELEASE 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.
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 February 22, 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
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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.
DATED this 25th day of February, 1999.
/s/ Harry L. Winn, Jr.
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(Print Name) Harry L. Winn, Jr.
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(Print Name) Witness
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