Consulting Agreement - Fleming Companies Inc., Malone & Hyde Inc. and Robert F. Harris
THIS AGREEMENT (the 'Agreement') is entered into by and among FLEMING
COMPANIES, INC. ('Fleming'), MALONE & HYDE, INC. ('Malone & Hyde' and collec-
tively with Fleming the 'Companies') and ROBERT F. HARRIS (the 'Consultant'),
this ___ day of __________, 1993.
In consideration of the mutual covenants set forth and for valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Consultant and the Companies agree as follows:
AGREEMENT AND RELEASE
1.1 AGREEMENT AND COBRA. The Companies and the Consultant have reached a
mutual understanding with respect to Consultant's retirement from active
employment with the Companies. Consultant's duties shall cease effective
January 22, 1994 (the 'Effective Date') at which time he shall assume the duties
of a consultant as provided in Article II below. Until the Effective Date
Consultant shall receive his normal salary and benefits. Upon the termination
of Consultant's employment on the Effective Date, Consultant shall be offered
continuation of health care coverage under the Consolidated Omnibus Budget
Reconciliation Act of 1984 ('COBRA').
1.2 OUTPLACEMENT SERVICES AND COOPERATION. From January 22, 1994, through
December 31, 1994 (the 'Consulting Period') the Companies shall provide
Consultant with outplacement services at their expense. Consultant shall
continue to cooperate with the Companies during the Consulting Period and so
long thereafter as requested by the Companies on ongoing business matters and
litigation of the Companies, including specifically the LaGatta litigation
pending in federal court in Nashville and the Taylor litigation pending in state
court in Shreveport, Louisiana.
1.3 AUTOMOBILE. On January 22, 1994, or as soon thereafter as
practicable, Malone & Hyde will transfer to Consultant full ownership of and
clear title to the Buick Park Avenue automobile now being used by Consultant
without charge or cost to Consultant except for income or other taxes arising
from the transfer, which will be Consultant's responsibility. Thereafter, all
costs of ownership, operation, maintenance, and insurance of the car shall be
the responsibility of Consultant. Title papers will be transferred to
Consultant as soon as practicable.
1.4 1994 VACATION. Consultant shall in 1994 take his vacation earned in
1993 only after June 1, 1994, or in lieu thereof at Consultant's option,
Companies shall pay Consultant on June 1, 1994, for such vacation (the 'Vacation
1.5 PENSION. Beginning January 1, 1995, Consultant will receive (i) for
his lifetime only, a pension of $25,766 annually (ii) until Consultant is age
62, a social security bridge for Consultant and his spouse of $17,544 annually.
Beginning January 22, 1994, Consultant will receive pre-medicare insurance
until both Consultant and his spouse are eligible for medicare so long as
Consultant does not elect COBRA coverage or become employed elsewhere.
1.6 RELEASE. In consideration of the provisions of this Agreement,
Consultant hereby releases the Companies, their subsidiaries, affiliates and
related companies, and their employees, officers, directors, and agents from any
liability, claim or cause of action arising out of or related to his employment
with, or the termination of his employment from, the Companies.
In agreeing to and signing this release, Consultant recognizes that he is
waiving any right he may have to file any lawsuits against the Companies, their
subsidiaries, affiliates and related companies, and their employees, officers,
directors, and agents or to collect any financial or other award as the result
of any claims made with any state or federal agencies, or to make any claims
whatsoever against the Companies, their subsidiaries, affiliates and related
companies, and their employees, officers, directors, and agents, including any
claim Consultant has that he was discriminated against because of his race, sex,
national origin, physical disability, religion or age in violation of the Title
VII of the Civil Rights Act, or the Age Discrimination in Employment Act
(enforced by the Equal Employment Opportunity Commission) or the Fair Employment
Statutes of Tennessee, Tenn. CA SECTION 4-21-101 et seq., CA SECTION 50-2-201 et
seq. and CA SECTION 8-50-103 et seq. (enforced by the Tennessee Human Rights
Commission and the Tennessee Commission for Human Development).
1.7 OLDER WORKERS BENEFIT PROTECTION ACT. Consultant acknowledges that he
has been advised of his rights to seek the services of legal counsel and that
the Companies have encouraged him to do so. Consultant further acknowledges
that he has up to twenty-one (21) days from the date of this Agreement and
receipt of the Companies' offer as set forth herein, or through December __,
1993, to accept the offer. If Consultant accepts the Companies' offer, such
acceptance shall be manifested by his signing of this Agreement. Consultant
also understands that he has seven (7) days from his signing of this Agreement
within which to change his mind, after which this Agreement becomes final and
binding on all parties.
1.8 RESIGNATION. As of the Effective Date, Consultant hereby resigns from
each elected or appointed position he holds with Fleming, Malone & Hyde, and
2.1 CONSULTING ENGAGEMENT. The Companies hereby engage Consultant as a
consultant and advisor and Consultant agrees to accept such engagement for the
Consulting Period upon the terms and conditions set forth herein. During the
Consulting Period, Consultant agrees to act to the best of his ability the
service of the Companies; provided, however, nothing contained herein shall
prevent Consultant from engaging in other endeavors not in conflict with the
business of the Companies or their subsidiaries or his duties and
responsibilities under this Agreement or in violation of Section 2.6 of this
2.2 CONSULTING DUTIES. Consultant shall take direction from Jerry Austin
or Bob Stauth or their designee. During the Consulting Period, Consultant shall
render such service and promote the name and goodwill of the Companies as they
may reasonably request so that the Companies may have the benefit of
Consultant's experience and knowledge of the business and affairs of the
Companies and his reputation and contacts in the Companies' businesses.
Consultant agrees that he will be available for advice and counsel to the
officers and directors of the Companies at all reasonable times by telephone,
letter, or in person during the Consulting Period.
2.3 STATUS OF CONSULTANT. Consultant shall be an independent contractor
and not an 'associate' or 'employee' of the Companies. Accordingly, the
Companies shall not withhold amounts of applicable federal and state income,
withholding and employment taxes from the fees to be paid Consultant hereunder
unless otherwise required by law. Consultant shall be solely responsible for
and shall pay all of such taxes.
2.4 TERM. The term of the Consulting Period shall commence on January 22,
1994 and end on December 31, 1994.
2.5 CONSULTING FEE; EXPENSES. In recognition of the valuable and
meritorious services performed on behalf of the Companies by Consultant
throughout the years in which he has served the Companies as an officer and
associate, and in consideration of Consultant's agreeing to make himself
reasonably available to render to the Companies the services provided in Section
2.2, during the Consulting Period Consultant shall receive a consulting fee (the
'Consulting Fee') of One Hundred Eighty-Nine Thousand Seven Hundred Eighty-Six
Dollars ($189,786) payable in installments of $36,150 on January 22, 1994, and
in equal installments of Fifty-One Thousand Two Hundred Twelve Dollars ($51,212)
each on April 1, 1994, July 1, 1994 and October 1, 1994.
In addition, Consultant shall be reimbursed for all reasonable
business and travel expenses incurred by Consultant for the benefit of the
Companies, in accordance with the policies of the Companies with respect to key
management associates, as approved by the Chief Financial Officer of Fleming.
2.6 NONCOMPETITION COVENANT. During the Consulting Period, Consultant
shall not directly or indirectly, own, manage, operate, join, advise, control or
otherwise engage or participate in or be connected as an employee, partner,
investor, stockholder, creditor, guarantor, advisor or consultant in, the busi-
ness of selling or distributing food and related products, groceries, frozen
foods, dairy, health and beauty care and general merchandise products, or
associated items at retail or wholesale (the 'Food Business'), to any person or
any entity; provided, however, Consultant may hold stock representing up to five
percent of the equity of a company engaged in the Food Business. In the event
that Consultant violates this paragraph, Consultant shall forfeit all of the
unpaid portion of the Consulting Fee and shall be required to reimburse the
Companies for any portion of the Consulting Fee paid to Consultant prior to such
3.1 TYPES OF TERMINATION. This Agreement may be terminated prior to
December 31, 1994 as follows:
3.1.1 DEATH OR DISABILITY. By the Companies upon the death or
Disability of Consultant. Disability means Consultant has been totally
incapacitated by bodily injury or physical or mental disease so as to be
prevented from engaging in any comparable occupation or employment for
remuneration or profit, and such total incapacity will, in the opinion of a
qualified physician who has been approved by Consultant (or if applicable, the
person legally empowered to make such decisions on behalf of the Consultant) and
Fleming, be permanent and continuous during the remainder of the Consultant's
3.1.2 CAUSE. By the Companies for Cause. Cause means (i) the
conviction of the Consultant of a felony under federal, state or local criminal
law, or (ii) willful and gross misconduct by the Consultant that is materially
detrimental to the Companies or their subsidiaries, or (iii) a violation by the
Consultant of Sections 2.6 and 4.1 hereof, each as determined in good faith by a
written resolution adopted by the affirmative vote of at least two-thirds of all
3.1.3 INVOLUNTARY TERMINATION. An Involuntary Termination by the
Companies, meaning for reasons other than Cause, the Consultant's death or
3.1.4 VOLUNTARY TERMINATION. A Voluntary Termination, meaning by
Consultant for reasons other than Cause, the Consultant's death or Disability.
3.2 NOTICE OF TERMINATION. Any termination by one party shall be
communicated by a written notice to the other party in accordance with the terms
of this Agreement. The notice must (a) indicate the specific termination
provision in this Agreement relied upon, (b) set forth the facts claimed as the
basis for the termination, (c) if applicable, include a copy of the resolution
of the Fleming Board of Directors, and (d) specify a date of termination, which
date shall be the last day of the month of such notice.
3.3 OBLIGATIONS OF THE COMPANIES UPON TERMINATION.
3.3.1 DEATH OR DISABILITY. In the event of the death of the
Consultant, the Companies shall continue to pay (a) the Consulting Fee during
the Consulting Period and (b) to the extent not already taken or paid, the
Vacation Pay, to the Consultant's legal representative. In the event of the
Disability of the Consultant, the Companies shall continue to pay (a) the
Consulting Fee during the Consulting Period and (b) to the extent not already
taken or paid, the Vacation Pay, to the Consultant or his legal representative.
In either event, any approved expenses due under Subsection 2.5 not reimbursed
by the Companies shall be paid to the Consultant or his legal representative.
In either event, with the exception of the Consulting Fee and the Vacation Pay,
the Companies shall have no further obligation to Consultant or his legal
representative pursuant to this Agreement.
3.3.2 CAUSE. If this Agreement is terminated for Cause, the
Companies shall have no further obligation to the Consultant from the date of
Fleming's determination that Cause exists except for Vacation Pay to the extent
not already taken or paid.
3.3.3 VOLUNTARY TERMINATION. If this Agreement is terminated
voluntarily by the Consultant, the Companies shall have no further obligation to
the Consultant from the date of such Voluntary Termination except for Vacation
Pay to the extent not already taken or paid.
3.3.4 INVOLUNTARY TERMINATION. If this Agreement is terminated
because of Involuntary Termination, the Companies shall continue to pay (a) the
Consulting Fee during the Consulting Period and (b) to the extent not already
taken or paid, the Vacation Pay, to the Consultant notwithstanding such
4.1 CONFIDENTIAL INFORMATION. Consultant shall hold in a fiduciary
capacity for the benefit of the Companies all secret or confidential
information, knowledge or data relating to the Companies or any of their
subsidiaries, and their respective businesses, which is known to Consultant and
which shall not be or become public knowledge. After termination of this
Agreement, Consultant shall not, without the prior written consent of the
Companies, communicate or divulge any such information, knowledge or data to
anyone other than the Companies and those designated by it unless required by
4.2 ASSIGNMENT. This Agreement is personal to Consultant and without the
prior written consent of the Companies shall not be assignable by Consultant.
4.3 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Oklahoma, without reference to
principles of conflict of laws.
4.4 NOTICES. All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
IF TO CONSULTANT:
Robert F. Harris
775 Pleasant Grove Road
Route 1, Box 188
Moscow, Tennessee 38057
IF TO THE COMPANIES:
Fleming Companies, Inc.
6301 Waterford Boulevard
P.O. Box 26647
Oklahoma City, Oklahoma 73126
Attention: Robert E. Stauth
President and Chief Executive Officer
or such other address as either party shall have furnished to the other in
writing in accordance herewith. Notices and communications shall be effective
when actually received by the addressee.
IN WITNESS WHEREOF, Consultant has hereunto set his hand and the Companies
have caused these presents to be executed in their names on their behalf, all as
of the day and year first above written.
Robert F. Harris
Companies: FLEMING COMPANIES, INC.
Robert E. Stauth, President
and Chief Executive Officer
MALONE & HYDE, INC.
David R. Almond