Exhibit 10.2
SETTLEMENT AND RELEASE
AGREEMENT
This Settlement
and Release Agreement (“ Agreement ”) is made
and entered into by and among Frank C. Mroczka (“
Employee ”) on the one hand, and Zale
Corporation and Zale Delaware, Inc. (collectively,
“ Zale ” or the “ Company ”)
on the other, hereinafter collectively referred to as the “
Parties .”
RECITALS
WHEREAS, Employee
had been employed by Zale as Senior Vice President of the Company
and President of the Gordon’s Jewelers Division of the
Company; and
WHEREAS, the
Parties desire to settle fully and finally, in the manner set forth
herein, all differences between them which have arisen, or which
may arise, prior to, or at the time of, the execution of this
Agreement, including, but in no way limited to, any and all claims
and controversies arising out of the employment relationship
between Employee and Zale, and the cessation of Employee’s
employment with Zale, effective January 4, 2007 (the “
Separation Date ”).
NOW, THEREFORE, in
consideration of the Recitals and the mutual promises, covenants,
and agreements set forth herein, the Parties covenant and agree as
follows:
1.
Employee, for himself and on behalf of his attorneys, heirs,
assigns, successors, executors, and administrators, hereby
GENERALLY RELEASES, ACQUITS, AND DISCHARGES Zale Corporation, Zale
Delaware, Inc. and their respective current and former parent,
subsidiary, affiliated, and related corporations, firms,
associations, partnerships, and entities (collectively, all of the
Zale entities are referred to as the “ Company Parties
”), their successors and assigns, and the current and former
owners, shareholders, directors, officers, employees, agents,
attorneys, representatives, and insurers of said corporations,
firms, associations, partnerships, and entities, and their
guardians, successors, assigns, heirs, executors, and
administrators (hereinafter collectively referred to as the “
Releasees ”) from and against any and all claims,
complaints, grievances, liabilities, obligations, promises,
agreements, damages, causes of action, rights, debts, demands,
controversies, costs, losses, and expenses (including
attorneys’ fees and expenses) whatsoever, under any
municipal, local, state, or federal law, common or statutory
— including, but in no way limited to, claims arising under
the Employment Agreement (as defined below), the Age
Discrimination in Employment Act of 1967, 29 U.S.C. § 621,
et seq. , as amended, Title VII of the Civil Rights Act
of 1964, 42 U.S.C. § 2000e, et seq. , as amended
(including the Civil Rights Act of 1991), the Americans with
Disabilities Act of 1990, 42 U.S.C. §§ 12101, et
seq ., as amended, the Employee Retirement Income Security Act
of 1974, (ERISA), 29 U.S.C. §§ 1001 et seq. , as
amended, the Family and Medical Leave Act (“ FMLA
”), 29 U.S.C. §§ 2601 et seq. , as
amended, the Labor Management Relations Act, 29 U.S.C. §§
141 et seq. , as amended, the Occupational Safety and Health
Act (“ OSHA ”), 29 U.S.C. §§ 651 et
seq ., as amended, the Racketeer Influenced and Corrupt
Organizations Act (RICO), 18 U.S.C. §§ 1961 et seq
., as amended, the Sarbanes Oxley Act of 2002, the Sabine
CONFIDENTIAL SETTLEMENT AND
RELEASE AGREEMENT
1
Pilot Doctrine, the American Jobs Creation Act
of 2004, the Texas Workforce Commission Act (“ TWCA
”), Texas Labor Code §§ 21.001 et seq ., as
amended, the Texas Pay Day Law, Texas Labor Code §§
61.001 et seq ., as amended, and/or the Texas Worker’s
Compensation Discrimination Law, Texas Labor Code §§
451.001 et seq ., as amended, or any other claims, including
claims in equity — for any actions or omissions whatsoever,
whether known or unknown and whether connected with the employment
relationship between Employee and Zale, and/or the cessation of
Employee’s employment with Zale, or not, which existed or may
have existed prior to, or contemporaneously with, the execution of
this Agreement (collectively, the “ Released Claim(s)
”). Furthermore, to the extent permitted by law,
Employee forever waives, releases, and covenants not to sue or file
or assist with suing or filing any complaint or claim against any
Releasee with any court, governmental agency or other entity based
on a Released Claim, whether known or unknown at the time of
execution. Employee also waives any right to recover from any
Releasee in a civil suit brought by any governmental agency or any
other individual on his behalf with respect to any Released
Claim. This general release covers both claims that Employee
knows about and those he may not know about, except that it does
not release any claims or rights that Employee may have under the
Age Discrimination in Employment Act of 1967 (and any amendments
thereto) that arise after the date Employee signs this
Agreement. Notwithstanding anything to the Company contained
herein, this release shall not include and shall not limit or
release Employee rights to indemnification from any Company Party
as provided by law, any indemnification agreement or similar
agreement by and between the Company and Employee or the
certificates of any Company Party.
2.
Employee acknowledges and agrees that he will keep the negotiations
leading to this Agreement, as well as the terms, amount, and fact
of this Agreement STRICTLY AND COMPLETELY CONFIDENTIAL, and that he
will not communicate or otherwise disclose to any employee of Zale
(past, present, or future), or to any member of the general public,
the terms, amounts, copies, or fact of this Agreement, except as
may be required by law or compulsory process; provided,
however , that Employee may make such disclosures to his
tax/financial advisors as long as they agree to keep the
information confidential. If asked about any of such matters,
Employee’s response shall be that he does not care to discuss
any of such matters. In the event of a breach of the
confidentiality provisions set forth in this paragraph of the
Agreement by Employee, Zale may suspend any payments due under this
Agreement pending the outcome of litigation and/or arbitration
regarding such claimed breach of this Agreement by Employee.
The parties agree that this paragraph is a material inducement to
Zale entering into this Agreement.
3.
Employee expressly acknowledges, agrees, and covenants that he will
not make any public or private statements, comments, or
communication in any form, oral, written, or electronic, which in
any way could constitute libel, slander, or disparagement of Zale
or any other Releasee or which may be considered to be derogatory
or detrimental to the good name or business reputation of Zale or
any other Releasee; provided, however , that the terms of
this paragraph shall not apply to communications between Employee
and his spouse, clergy, or attorneys, which are subject to a claim
of privilege existing under common law, statute, or rule of
procedure. Employee specifically agrees not to issue any
public statement concerning his employment at Zale and/or the
cessation of such employment. The parties agree that
this
2
provision is a material inducement to Zale
entering into this Agreement. Additionally, the parties agree
that Zale may enforce this paragraph without posting a
bond.
4.
Employee agrees that in addition to the cessation of his employment
with Zale, he shall cease from holding any other positions as a
director, officer, and/or employee with Zale and/or any of the
Releases, effective on the Separation Date.
5.
Employee waives and releases forever any right and/or rights he may
have to seek or obtain employment, reemployment, and/or
reinstatement with Zale and/or its subsidiaries and agrees not to
seek reemployment with any of the same.
6.
Employee and Zale specifically agree that following the execution
of this Agreement, neither Party shall be bound by the terms of
that certain Employment Agreement executed by and between the
Parties as of August 1, 2006 (the “ Employment
Agreement ”), except that Employee shall continue to be
bound by all obligations contained in paragraphs 9, 10, 11, 12 and
13 of the Employment Agreement.
7.
Subject to the terms of paragraph 20 contained herein, effective
ten (10) days after the complete and proper execution of this
Agreement by Employee and in exchange for the general release set
forth in this Agreement and other valuable consideration received
by the Parties, the Parties agree as follows:
(a)
For a period of six (6) months from the Separation Date (the
“Severance Period”), Zale will continue to pay
Employee his base salary in effect as of the Separation Date
(“ Severance Pay ”), which amounts to an
aggregate total of One Hundred Fifty Two Thousand Eight Hundred
Thirty Three Dollars and 32/100 cents ($152,833.32), less
deductions required by law, in consideration for the promises,
covenants, agreements, and releases set forth herein. The
Severance Pay described in this paragraph will be paid to Employee
at Zale’s regular pay periods during the Severance Period
pursuant to the direct deposit arrangement between Employee and
Zale in effect as of the Separation Date.
(b)
During the Severance Period, Zale will continue to provide Employee
his medical benefits and Medical Expense Reimbursement Plan
(“ MERP ”) benefits, if any, in effect as of the
Separation Date. Any continued medical insurance and MERP
benefits provided pursuant to this paragraph 7(b) will count in
satisfaction of Employee’s right to continue such benefits
pursuant to the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended (“ COBRA ”). Employee
must elect to continue his benefits by completing and submitting
the COBRA election forms to the Zale COBRA Administrator. Through
the Severance Period, Employee will only be required to pay the
employee portion of the cost of such medical benefits and such cost
will be submitted by Employee to the Zale COBRA
Administrator. After the Severance Period, Employee will have
the right to elect to continue such medical benefits for the
remainder of the COBRA continuation period by paying the full cost
of such coverage to Zale’s COBRA Administrator to the extent
provided by and pursuant to the provisions of
3
COBRA.
Employee will be provided with a notice of the interaction of the
extended medical insurance benefits under this Agreement and his
COBRA rights following his Separation Date. In the event
that Employee becomes eligible to receive medical and/or MERP
benefits from another employer or source, consultancy or otherwise,
during the Severance Period, he shall promptly notify Zale in
writing and Zale’s obligation to provide such benefits under
this Agreement shall cease.
(c)
Zale will pay to Employee the value of any remaining unused
vacation time through January 4, 2007. Zale shall pay to
Employee his Supplemental Executive Retirement Plan (“
SERP ”) benefit to the extent such benefit was fully
vested as of December 31, 2004, less deductions required by law,
subject to the terms of that certain letter dated December 20, 2006
from Zale to Employee. Employee agrees to immediately return
to Zale his employee identification badge, keys, and all
Company-owned equipment and documents and will not maintain copies
of
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