SEPARATION AGREEMENT, WAIVER AND GENERAL RELEASE
This SEPARATION AGREEMENT, WAIVER AND GENERAL RELEASE (this “ Agreement ”) is made and entered into as of this 21st day of October, 2010, by and among Patrick Curran (“ Executive ”), Tops Markets, LLC, a New York limited liability company (the “ Company ”), and Tops Holding Corporation, a Delaware corporation (“ Tops Holding ”) (each a “ Party ,” and, collectively, the “ Parties ”).
WHEREAS, Executive and the Company are parties to an Employment Agreement dated as of March 25, 2008 (the “ Employment Agreement ”);
WHEREAS, Executive was granted an option to purchase 555.55 shares of common stock, par value $0.001 per share, of Tops Holding pursuant to a Tops Holding Corporation 2007 Stock Incentive Plan Non-Qualified Stock Option Agreement dated as of April 28, 2008 (the “ Option Certificate ”);
WHEREAS, Executive and the Company are parties to a letter agreement, dated as of April 28, 2008, relating to certain obligations of Executive relating to non-competition, non-solicitation, non-disclosure, assignment of inventions and non-disparagement (the “ Non-Compete Agreement ”);
WHEREAS, Executive and Tops Holding are parties to a Bonus Award Agreement, dated as of October 27, 2009 (the “ Bonus Award Agreement ”);
WHEREAS, Executive, Tops Holding and the Parties desire to enter into a new agreement that supersedes all prior agreements between them, including without limitation the Employment Agreement, the Option Certificate, the Non-Compete Agreement and the Bonus Award Agreement, as well as all promises, covenants, arrangements, understandings, communications, representations or warranties, whether oral or written, by any Party, or any officer, director, employee, representative or agent thereof, such that any prior agreement between the Parties is hereby terminated;
WHEREAS, the Parties understand that they are waiving legal rights by signing this Agreement, and enter into this Agreement voluntarily, with a full understanding of and agreement with all of its terms;
NOW, THEREFORE, in consideration of the promises and mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties, intending to be legally bound, agree as follows:
1. Separation from Employment; Transition Period.
(a) On October 5, 2010 (the “ Notice Date ”), the Parties agreed that Executive’s employment with the Company will terminate, effective December 31, 2010 (the “ Separation Date ”). During the period between the Notice Date and the Separation Date (the “
Transition Period ”), Executive will continue to be paid his base salary, less applicable deductions and withholdings, in accordance with the Company’s usual and customary payroll procedures, and will continue to receive benefits at the same level in which Executive was participating, and at the same level of contribution, in effect immediately prior to commencement of the Transition Period.
(b) During the Transition Period, Executive will perform such duties as the Company may reasonably request, including without limitation as may be required in connection with the transition of work to his successor(s) and/or to other employees of the Company.
(c) During the Transition Period, Executive shall receive reimbursement for any unpaid expenses to which Executive is entitled in accordance with Company policy.
(d) During the Transition Period and following the Separation Date, Executive shall, to the extent reasonably requested by the Company, and except as may be required by applicable law, cooperate in good faith with and assist the Company or any of its affiliates in the pursuit, defense or investigation of any actual, threatened, anticipated or potential claim, administrative charge or cause of action by or against the Company or any of its affiliates as to which Executive, by virtue of his employment with the Company, has relevant knowledge or information, including by acting as the Company’s representative in any such proceeding.
2. Separation Benefits.
(a) Provided that Executive agrees to and accepts the terms of this Agreement, and does not timely revoke his acceptance, and further provided that, upon the Separation Date, Executive executes and delivers, and does not timely revoke, a general release in the form attached as Exhibit A, Executive shall receive the following (collectively, the “ Separation Benefits ”):
(i) the amount of $244,795, less applicable deductions and withholdings, payable in equal installments and in accordance with the Company’s regular and customary payroll practices, over the period commencing on January 1, 2011 and ending on December 31, 2011 (the “ Benefits Period ”);
(ii) an amount equal to the Annual Bonus payable to Executive for fiscal year 2010 pursuant to the Employment Agreement, calculated based on Executive’s target percentage of 60% of Annual Base Salary and achievement by the Company of its bonus target for such year, such amount to be paid on or about the date on which the Company pays bonuses to other members of the Company’s senior management in respect of such year;
(iii) the amount of $50,000, less applicable deductions and withholdings, payable in one (1) lump sum payment within ten (10) business days
following the Separation Date; provided that upon the Separation Date, Executive returns the Company’s automobile to the Company;
(iv) continuation of participation in all welfare and benefits plans during the Benefits Period at the same level offered to and enrolled in by the Executive and members of his family prior to commencement of the Transition Period at the expense of the Company until the earlier of (a) expiration of the Benefits Period and (b) the date that Executive is eligible to receive coverage and benefits from a new employer; provided, however , that if Executive is precluded from continuing his participation in any such welfare or benefit plan, then the Company shall pay the economic equivalent of the benefits provided under such plan for the period specified above, it being understood that the economic equivalent of a benefit foregone shall be deemed to be the cost in the State of New York that would reasonably be incurred by Executive in obtaining such benefit himself on an individual basis;
(v) utilization of an executive-level outplacement through the end of the Benefits Period with a vendor selected by the Company;
(vi) waiver of objections from the Company regarding Executive’s lawful application to receive unemployment benefits.
(b) Executive agrees and acknowledges that his receipt of the Separation Benefits is subject to and conditioned upon his strict compliance with this Agreement, including without limitation the covenants set forth in Sections 7, 8, 9, 10 and 11 below. Executive further agrees that, should he fail to comply with any such covenants, the Company, in addition to any other legal or equitable remedies available to it, shall be entitled to immediately and forever cease payment of the Separation Benefits, and to recover any consideration already paid to Executive under this Agreement, including without limitation the Separation Benefits.
(c) Executive agrees and acknowledges that, other than as set forth in this Agreement, Executive is not entitled to and shall not receive any additional compensation, payments or benefits of any kind from the Company, and that no representations or promises to the contrary have been made to Executive. Executive further agrees and acknowledges that the payments and benefits set forth in this Agreement exceed the consideration to which Executive would otherwise be entitled, and that such payments and benefits constitute good and sufficient consideration for the promises and covenants of Executive set forth herein.
(d) Executive agrees and acknowledges that the Company shall not have an obligation in the future to reemploy Executive, or to enter into any other business arrangement of any kind with Executive.
3. Options; Bonus Award Agreement. Executive agrees and acknowledges that all options granted him pursuant to the Option Certificate and the bonus awarded pursuant to the Bonus Award Agreement are unvested and shall be forfeited as of the date of this Agreement.
4. Release of Claims. In consideration for the agreements of the Company set forth in this Agreement, including without limitation the Separation Benefits, and on behalf of himself, his spouse, agents, heirs and representatives, Executive irrevocably and unconditionally waives, discharges and releases his right to assert against the Releasees (as such term is defined below) any form of claim, complaint or any other form of action seeking any form of relief, including without limitation equitable relief (whether declaratory, injunctive or otherwise), the recovery of damages or any other form of monetary recovery whatsoever (including without limitation back pay, front pay, compensatory damages, emotional distress damages, punitive damages, attorneys’ fees and any other costs), for any alleged action, inaction or circumstance existing or arising through the date of this Agreement (collectively, “ Claims ”).
For purposes of this Agreement, the “ Releasees ” shall include Morgan Stanley, Tops Holding, the Company, their respective subsidiaries and affiliates, and their past and present officers, directors, employees, stockholders, owners, representatives, assigns, attorneys, agents and insurers, and their employee benefit programs and plans (including without limitation the Tops Holding Corporation 2007 Stock Incentive Plan (as amended, the “ Plan ”)) and the trustees, administrators, fiduciaries and insurers of such programs and plans.
Without limiting the foregoing general waiver and release, Executive specifically waives and releases the Releasees from any Claim arising from or related to Executive’s employment with the Company or the termination thereof, including, without limitation:
· Claims under any federal, state or local discrimination, fair employment practices or other employment-related statute, regulation or executive order prohibiting discrimination or harassment based upon any protected status including, without limitation, race, national origin, age, gender, marital status, disability, veteran status or sexual orientation. Without limitation, specifically included in this Section 4 are any Claims arising under the federal Age Discrimination in Employment Act (the “ ADEA ”), the Older Workers Benefit Protection Act, the Civil Rights Acts of 1866 and 1871, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Equal Pay Act, the Americans with Disabilities Act, the Worker Adjustment and Retraining Notification Act, the Sarbanes-Oxley Act and the Family & Medical Leave Act, the New York State Human Rights Law, the New York Labor Code, the New York Worker Adjustment and Retraining Notification Act, the New York Whistleblower Law, the New York Constitution, as such laws have been amended from time to time.
· Claims under any other federal, state or local statute, regulation or executive order relating to wages, hours or any other terms and conditions of employment. Without limitation, specifically included in this Section 4 are any Claims arising under the National Labor Relations Act, the Employee Retirement Income Security Act of 1974, the Consolidated Omnibus Budget Reconciliation Act of 1985, and any similar statute.
· Claims under any common law theory, including without limitation wrongful discharge, breach of express or implied contract, promissory estoppel, unjust enrichment, breach of covenant of good faith and fair dealing, violation of public
policy, defamation, interference with contractual relations, intentional or negligent infliction of emotional distress, invasion of privacy, misrepresentation, deceit, fraud and negligence.
· Claims under any agreement between Executive and Tops Holding and/or the Company, including without limitation the Employment Agreement, the Option Certificate, the Non-Compete Agreement and the Bonus Award Agreement.
· Claims under any employee welfare, insurance or severance plan, including without limitation the Plan.
· Any other Claim arising under federal, state or local law.
Executive explicitly acknowledges that, because he is over forty (40) years of age, he has specific rights under the ADEA, which prohibits discrimination on the basis of age, and that the releases set forth in this Section 4 are intended to release any right that Executive may have to file a claim against the Releasees alleging discrimination on the basis of age.
Notwithstanding the foregoing, this Section 4 does not:
· release the Company or Tops Holding from any obligation expressly set forth in this Agreement or from any obligation, including without limitation obligations under the Workers Compensation laws, which as a matter of law cannot be released;
· prohibit Executive from filing a charge with the Equal Employment Opportunity Commission (“ EEOC ”);
· prohibit Executive from participating in an investigation or proceeding by the EEOC or a similar state or local agency; or
· prohibit Executive from challenging or seeking a determination in good faith of the validity of this release or waiver under the ADEA or impose any condition precedent, penalty or costs for doing so unless specifically authorized by federal law.
Executive’s waiver and release, however, are intended to be a complete bar to any recovery or personal benefit by or to Executive with respect to any claim whatsoever, including those raised through a charge with the EEOC, except those which, as a matter of law, cannot be released.
Executive acknowledges and agrees that, but for providing this waiver and release, Executive would not be receiving the consideration provided under the terms of this Agreement, including without limitation the Separation Benefits. Executive further agrees that, should Executive breach this Section 4, Tops Holding and/or the Company, in addition to any other legal or equitable remedy available to them, shall be entitled to recover any consideration already paid to Executive under this Agreement, including without limitation the Separation Benefits.
5. Review and Revocation Period.
(a) Executive acknowledges that, before signing this Agreement, he was given a period of 21 days in which to review and consider it; that Executive has, in fact, carefully reviewed this Agreement; and, that he is entering into it voluntarily and of his own free will. Executive further acknowledges that Tops Holding and the Company encouraged him in writing to show this Agreement to and discuss it with his attorney before signing it, and that, to the extent Executive wished to do so, he has done so. Executive further acknowledges that, if he executed this Agreement before the end of the 21-day period, such early execution was completely voluntary, and Executive had reasonable and ample time in which to review this Agreement.
(b) Executive agrees that, for a period of seven days after he signs this Agreement, he has the right to revoke it by providing notice, in writing (delivered in person or by registered or certified mail, return receipt requested), to: Lynne Burgess, Senior Vice President and General Counsel, Tops Markets, LLC, P.O. Box 1027, Buffalo, New York 14240. This Agreement will not become effective and enforceable until after the expiration of the seven-day revocation period.
(c) Executive understands that his acceptance of any payment or benefit set forth in this Agreement at any time more than seven days after he signs this Agreement confirms that he did not revoke his assent to this Agreement and, therefore, that it is effective and enforceable.
6. Pursuit/Assignment of Released Claims. Executive warrants that, as of the date of this Agreement, he has not filed or caused to be filed any lawsuit, complaint or charge with respect to any Claim this Agreement purports to waive or release, or assigned any such Claim to any other person or entity.
7. Non-Competition/Non-Solicitation .
(a) Between the date of this Agreement and the conclusion of the Benefits Period (the “ Restrictive Period ”) Executive shall not, and shall not permit any of his affiliates to, directly or indirectly, own, manage, control, participate in, consult with, render services for, or in any manner engage in any activity or represent any business whether now existing or hereafter established that competes with (or proposes or plans to compete with) the Company or its affiliates (a “ Competitor ”) (as determined in good faith by the Board) in any line of business engaged in or under development by the Company; nor shall Executive entice, induce or encourage any of the Company’s employees to engage in any activity which, were it done by Executive, would violate any provision hereof.
(b) During the Restrictive Period, Executive shall not, directly or indirectly (i) attempt to contact, recruit or solicit any customers of the Company; (ii) enter into any agreement with any party to recruit or solicit such customers; (iii) request any customers of the Company to curtail or cancel their business with the Company; (iv) induce or attempt to induce any employee of the Co