Exhibit
10.1
SETTLEMENT AND RELEASE
AGREEMENT
This Settlement and Release Agreement (“
Agreement ”) is made and entered into by and among
John A. Zimmermann (“ 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 ” or
individually as a “ Party .”
RECITALS
WHEREAS, Employee had been employed by Zale as
Group President, Zale North America; 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
August 6, 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, without
limitation, 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, the Older Workers Benefit Protection Act, 29 U.S.C.
§ 626(f) et seq. , 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 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
CONFIDENTIAL
SETTLEMENT AND RELEASE AGREEMENT
1
American Jobs Creation Act of 2004, Texas Labor
Code §§ 21.001 et seq ., as amended, Texas Labor
Code §§ 61.001 et seq ., as amended, or any
other claims, including, without limitation, 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. Employee represents and warrants that he has not
assigned or otherwise transferred, in whole or in part, any or all
of the claims released by him hereunder.
Employee acknowledges that the amount being
paid pursuant to Paragraph 7 of this Agreement constitutes complete
satisfaction and full compensation for any and all alleged
unpaid salary, vacation, severance, hours worked.
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, or existence of this Agreement, except as may
be required by law or compulsory process; provided, however
, disclosure of this Agreement and its terms and conditions by
Employee to his tax/financial advisors, spouse, or attorneys, each
of whom or which agree to maintain confidentiality, or to taxing
authorities, or to an arbitrator in a proceeding to enforce the
terms of this Agreement, shall not be a breach of this
Agreement. If asked about any of such matters,
Employee’s response shall be that he does not care to discuss
any of such matters. The Parties agree that this paragraph is
a material inducement to Zale entering into this Agreement.
Additionally, the Parties agree that Zale may enforce this
paragraph without posting a bond.
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 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.
CONFIDENTIAL
SETTLEMENT AND RELEASE AGREEMENT
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4.
Employee agrees and acknowledges 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.
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 or any one or more other Releasees, 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 February 16, 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, except to the extent such
provisions are in conflict with this Agreement.
7.
Subject to the terms of paragraphs 18, 20 and 22 contained herein,
effective 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)
Employee shall receive a
total of total of six hundred forty-eight thousand seven hundred
fifty-eight dollars and seventy-seven cents ($648,758.77) in
“ Severance Pay ” representing Employee’s
base salary as of the Separation Date for the period from the
Separation Date through February 15, 2009. The Severance
Pay shall be paid as follows: (i) within three (3) days
after the expiration of the Revocation Period (hereinafter
defined), Zale will pay to Employee two hundred forty thousand six
hundred forty two dollars and twenty three cents ($240,642.23)
(which represents Employee’s Severance Pay from the
Separation Date through February 28, 2008), less deductions
required by law; and (ii) beginning on the first regularly
scheduled payroll date that is after the expiration of the
Revocation Period and ending on February 15, 2009, Zale will
pay to Employee the remaining four hundred eight thousand one
hundred sixteen dollars and twenty one cents ($408,116.21) in equal
payments, less deductions required by law, at Zale’s regular
pay periods in consideration for the promises, covenants,
agreements, and releases set forth herein. The Severance Pay
described in this paragraph will be paid to Employee pursuant to
the direct deposit arrangement between Employee and Zale in effect
as of the Separation Date.
(b)
Within three (3) days
after the expiration of the Revocation Period (hereinafter
defined), Zale will pay to Employee $1,077.25 per month (less
$470.86 per month for the aggregate amount of the bi-monthly
co-pays Employee was obligated to pay) for each month of COBRA
benefits Employee has paid for with his own money since
August 6, 2007. Thereafter, through August 6, 2008,
Zale will continue to provide Employee his medical benefits, if
any, in effect as of the Separation Date. Any continued
medical 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 has elected to continue his benefits by
CONFIDENTIAL
SETTLEMENT AND RELEASE AGREEMENT
3
completing and submitting
the COBRA election forms to the Zale COBRA Administrator. From
August 6, 2007, through August 6, 2008, Employee’s
premiums for coverage will be equal to the amount that Company
employees pay for such coverage and such premiums will be submitted
by Employee directly to the Zale COBRA Administrator.
Thereafter, Employee will have the right to elect to continue such
medical benefits for the remainder of the COBRA eligibility period
by paying the full cost of such coverage to Zale’s COBRA
Administrator. Employee has been provided with a notice of
the interaction of the extended medical insurance benefits under
this Agreement and his COBRA rights following his Separation
Date.
Any health or
welfare benefits received by or available to Employee from or in
connection with any other employment of Employee that are
reasonably comparable to, but not necessarily as financially or
otherwise beneficial to Employee as the benefits provided to
Employee by Company at the time of the Separation Date will be
deemed the equivalent thereof and will terminate Company’s
obligation under this Section 7(b) to provide medical
coverage through August 6, 2008; provided ,
however , that nothing in this paragraph will limit or
terminate Employee’s or Employee’s dependents’
right to continue any Company group health plan coverage at
Employee’s or such dependent’s cost for the remainder
of the COBRA period. Employee agrees to advise Company of the
availability of any such subsequent benefit coverages within 30
days following such availability.
The
provisions of this Section 7(b) will not prohibit Company
from changing the terms of any medical benefit programs provided
that any such changes apply to all employees of Company (
e.g ., Company may switch insurance carriers or preferred
provider organizations or change coverages).
(c)
The payments which would
have been due and payable in accordance with this Paragraph 7 shall
be reduced by an amount equal to any amounts that the Employee
receives in connection with any other employment from the
Separation Date through February 15, 2009. Any fringe
benefits received by or available to the Employee in connection
with any other employment that are reasonably comparable, but not
necessarily as financially or otherwise beneficial to the Employee
as the fringe benefits then being provided by the Company pursuant
to this Paragraph 7 shall be deemed to be the equivalent thereof
and shall terminate the Company’s responsibility to continue
providing the fringe benefits then being provided by the Company
pursuant to this Paragraph 7.
(d)
Within three (3) days
after the expiration of the Revocation Period (hereinafter
defined), Zale w ill pay to Employee the value of his remaining
four (4) weeks unused and
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