Exhibit 10.1
SETTLEMENT AND RELEASE
AGREEMENT
This Settlement
and Release Agreement (“ Agreement ”) is made
and entered into by and among Mark R. Lenz (“
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 Group Senior Vice President and Chief
Financial Officer (“ CFO ”); 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 July 31, 2006 (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 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
CONFIDENTIAL SETTLEMENT AND
RELEASE AGREEMENT
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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 contrary, this release shall
not include and shall not limit or release Employee’s rights
to indemnification from any Company Party in respect of his
services as a director, officer or employee of a 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, subject to the terms and conditions of that certain
Undertaking Agreement dated July 12, 2006 by and between the
Company and Employee.
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
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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
Releasees, effective on the Separation Date. 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.
5.
Subject to the terms of paragraph 18 contained herein and unless a
different time period is expressly set forth in this paragraph 5,
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 nine (9) months from February 1, 2007 (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 Two Hundred Seven Thousand One Hundred
Eighty-Seven Dollars and 50/100 cents ($207,187.50 ), 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 period from July 31, 2006 through April 30,
2007 (the “ Insurance Period ”), Zale will
continue to provide Employee his medical and dental insurance
benefits and Medical Expense Reimbursement Plan (“
MERP ”) benefits, if any, in effect as of the
Separation Date. Any continued medical insurance provided pursuant
to this paragraph 5(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. During the
Insurance Period, Employee will only be required to pay the
employee portion of the cost of such medical and dental benefits
and such cost will be submitted by Employee to the Zale COBRA
Administrator. After the Insurance Period, Employee will have
the right to elect to continue such medical and dental benefits for
the remainder of the COBRA continuation period by paying the full
cost of such coverage to the Zale COBRA Administrator to the extent
provided by and pursuant to the provisions of 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 Insurance Period, he shall promptly notify
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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 July 31, 2006, if any, and his Supplemental
Executive Retirement Plan (“ SERP ”) benefit, to
the extent such benefit was fully vested as of December 31, 2004,
pursuant to the terms of the SERP, less deductions required by
law. 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 the
same.
(d)
Employee agrees to reconcile his outstanding expenses and advances
with Zale within ten (10) days of the execution of this Agreement,
and to pay Zale any outstanding balance owed after all agreed
offsets are taken; provided ho
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