May 20, 1999 HAND DELIVERY William J. Dowd Dear Bill: As we have just discussed, we have decided, with the concurrence of the Board, to request your resignation as an associate and officer of the Company. We appreciate all your efforts since you came to Fleming, but simply believe a change needs to be made. Your separation will be effective as of the close of business today. 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 is, of course, an individualized severance package for you. We think it is appropriate and fair under all the circumstances. We hope you will agree. The terms of your severance package are as follows: 1. Salary Replacement. The Company will pay you salary replacement in the gross amount of two (2) years' base salary, 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 two year period on the Company's regular paydays. 2. Bonus Potential. If the Company determines at the conclusion of 1999 that you would otherwise have been eligible for a 1999 bonus under the Fleming Companies, Inc. Corporate Officer Incentive Plan (the 'Bonus Plan'), the Company will pay you a gross amount equal to the pro rated portion of the bonus you would have earned under the Bonus Plan between January 1, 1999 through May 20, 1999. This payment, if any, will be made in calendar year 2000 contemporaneously with the payment of bonuses under the Bonus Plan, if any, to other eligible Fleming corporate officers. 3. Accrued Vacation. The Company will pay you for 1999 vacation accrued as of January 1, 1999 and not used. You will receive this in a lump sum with the first installment of your salary replacement. 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 eighteen (18) 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. 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. 6. 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. 7. 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. 8. 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. 9. 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. 10. 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. 11. 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. 12. 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. 13. 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 9, but also on your on-going compliance with your other obligations under our agreement, including your commitments in paragraphs 10, 11 and 12. 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. 14. 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 at least five years following your separation from employment, the Company shall cover you under any Directors and Officers liability insurance policy which may be 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. 15. 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 9, 10, 11 or 12 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 twenty-one (21) days from the date you receive this letter. Very truly yours, MARK S. HANSEN Mark S. Hansen Chairman and Chief Executive Officer DELIVERED BY: MARK S. HANSEN Mark S. Hansen Signature Date May 20, 1999 ACCEPTED AND AGREED TO BY: WILLIAM J. DOWD William J. Dowd Date June 17, 1999 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 May 20, 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 May 20, 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 May 20, 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 or commence any other legal action 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. DATED this 17th day of June, 1999. WILLIAM J. DOWD (Print Name) William J. Dowd (Print Name) Witness
Severance Agreement - Fleming Companies Inc. and William J. Dowd
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