Exhibit 10E1
TRANSITION AGREEMENT
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This agreement is made and executed this ___ day of May, 1997, by and
between UNITED GROCERS, INC., an Oregon corporation, hereinafter referred to as
"UG," and ▇▇▇▇ ▇. ▇▇▇▇▇, hereinafter referred to as "▇▇▇▇▇."
WHEREAS, ▇▇▇▇▇ has occupied the position of Chief Executive Officer of
UG since 1983, and was previously employed by UG in various positions prior
thereto since 1964, and
WHEREAS, UG and ▇▇▇▇▇ previously entered into an Executive Compensation
Agreement - 1991 ("Compensation Agreement"), dated March 7, 1991, and
WHEREAS, ▇▇▇▇▇ and UG are desirous of terminating the aforesaid
Compensation Agreement effective the date hereof, and
WHEREAS, the parties hereto are also desirous of settling any and all
claims either party may have against the other of whatsoever kind, nature or
description, and
WHEREAS, UG is further desirous of retaining the unique experience,
ability and services of ▇▇▇▇▇ as acting Chief Executive Officer for an interim
period until such time as a replacement Chief Executive Officer is retained;
until the Board of Directors determines ▇▇▇▇▇'▇ services are no longer required;
or December 1, 1997, whichever first occurs, and
WHEREAS, UG is further desirous of obtaining ▇▇▇▇▇'▇ assurances as a
condition to the performance by UG of its obligations hereunder, that during the
term of this agreement and of any renewal thereof, he will not directly or
indirectly render any services of an advisory nature, or otherwise to or become
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employed by or participate in, or engage in any business which, directly or
indirectly, is competitive with the wholesale distribution of grocery and
related products which are customarily stocked by retail supermarkets within the
States of Oregon, Washington and California, without the prior written consent
of UG. Provided, however, that nothing herein contained shall prohibit ▇▇▇▇▇
from owning stock or other securities of a competitor which are relatively
insubstantial to the total outstanding stock of such competitor and so long as
he, in fact, does not have the power to control, participate in or direct the
management or polices of such competitor, and does not serve as a director or
officer of, or is not otherwise associated with any competitor. It is expressly
acknowledged, however, by and between the parties hereto, that ▇▇▇▇▇'▇
involvement, employment, affiliation or ownership in the retail grocery industry
shall not constitute a violation of this agreement or a prohibited activity.
NOW, THEREFORE, in consideration of the promises of the parties one
unto the other, and the above recitals which by reference are hereby
incorporated herein, it is hereby agreed as follows:
1. ▇▇▇▇▇ will continue to serve as Chief Executive Officer during the
transition until such time as UG retains the services of a new Chief Executive
Officer or until December 1, 1997, whichever first occurs. Following UG's
employment of a new Chief Executive Officer, ▇▇▇▇▇ will thereafter act as and
serve as an employee of UG and be available upon reasonable notice to provide
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advice and assistance to the Board of Directors or the replacement Chief
Executive Officer. However, such services shall not exceed five hours per month.
2. Term. The term of this agreement shall commence on March 1, 1997, and shall
continue for a period of seven years from said date.
3. Compensation. As compensation for the services to be rendered by
▇▇▇▇▇, UG shall pay ▇▇▇▇▇ base compensation of $275,000 per annum for a period
from March 1, 1997, through February 28, 1999. Thereafter, for a period of five
years, UG shall pay ▇▇▇▇▇ base compensation of $137,500 per annum from March 1,
1999, to February 28, 2004. Such compensation shall be paid to ▇▇▇▇▇ with the
same frequency as executives of UG are compensated. In addition thereto, ▇▇▇▇▇
will have the continuing use of his company car through the expiration of the
current lease in January, 2000. The company shall be responsible for
maintenance, repairs, insurance and other incidental costs attendant thereto.
4. Employee Benefits/Expenses. UG shall reimburse ▇▇▇▇▇ for all
reasonable, customary and necessarily incurred expenses in carrying out his
duties. ▇▇▇▇▇ shall present to UG from time to time an itemized account of such
expenses and in such form as may be required by UG. This reimbursement of
expenses will continue as long as ▇▇▇▇▇ continues to perform the duties of Chief
Executive Officer.
5. Employee Benefits. This agreement is not, however, intended and
shall not be deemed to waive, release and/or modify
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any rights, benefits and/or privileges to which ▇▇▇▇▇ and/or his spouse may be
entitled to as an employee of UG under any retirement or pension plan (qualified
or non-qualified), including without limitation the Executive Deferred
Compensation Plan, 401(k), supplemental 401(k) and medical, dental or other
plans which are now in effect or such other medical and dental plans as may
subsequently be offered to senior management of UG. In the event UG is unable to
include ▇▇▇▇▇ and his spouse in the group medical and dental plans, UG agrees to
provide medical and dental insurance providing comparable benefits for ▇▇▇▇▇ and
his spouse. UG represents and warrants that the benefits ▇▇▇▇▇ will receive
under the pension plan will be determined in the same manner and at the same
level of benefits as if he retired at age 62. The 401(k) benefits will, however,
be based upon the salary actually earned each year during the term of this
agreement. In addition thereto, UG shall continue to pay annually, in addition
to the compensation set forth herein, the sum of $48,387 per year, which sum
shall be used by ▇▇▇▇▇ to satisfy the insurance premium policy with Guardian
Life Insurance Company. The company shall pay to ▇▇▇▇▇ the aforesaid $48,387 sum
prior to the premium due dates through December 1, 2003. The company will, upon
expiration of this agreement, cause the collateral assignment of benefits under
the November 14, 1994 assignment, to be released.
6. Release/▇▇▇▇▇. In consideration of the foregoing payments and as a material
inducement to UG to enter into this agreement, ▇▇▇▇▇ does hereby completely
release and forever discharge UG and its officers, directors, agents, employees,
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successors, estate, heirs and assigns from any and all claims, rights, demands,
actions, obligations and causes of action in every kind, nature, character,
known or unknown, which ▇▇▇▇▇ may now have or has ever had against UG arising
from or in any way connected with ▇▇▇▇▇'▇ prior employment, termination of
employment or lack of employment with UG, including, but not limited to, all
"constructive discharge" and "wrongful discharge" claims, all claims relating to
any contracts of employment, whether express or implied, all past claims
relating to wages, salary, compensation payments, expense reimbursements, loans,
costs, expenses or attorney's fees, any covenant of good faith in fair dealing,
whether express or implied, and any tort of any nature, any legal restriction on
UG's right to terminate employees, or any federal, state or municipal law, rule,
regulation or ordinance, including, without limitation, the Federal Age
Discrimination and Employment Act, as amended, Title VII of the Civil Rights Act
of 1964, as amended, and any other laws or regulations relating to prior
employment, discrimination and expense reimbursement.
7. Release/UG. In consideration for entering into this agreement,
UG hereby releases and forever discharges ▇▇▇▇▇ from any and all claims, rights,
demands, actions, obligations and causes of action of any and every kind, nature
and character, known or unknown, which UG may now have, has ever had, or may
have in the future against ▇▇▇▇▇ arising from or in any way connected with
▇▇▇▇▇'▇ prior employment, including, but not limited to, any and all claims
arising out of any tort of any
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nature, or any federal, state or municipal law, rule, regulation or ordinance,
excepting therefrom only claims arising from criminal wrongdoings, obligations,
preserved or created, by this agreement.
8. Restrictive Covenant. ▇▇▇▇▇ expressly agrees as a condition to the
performance by UG of its obligations hereunder, that during the term of this
agreement and of any renewal thereof, he will not directly or indirectly render
any services of an advisory nature, or otherwise to or become employed by or
participate in, or engage in any business which, directly or indirectly, is
competitive with the wholesale distribution of grocery and related products
which are customarily stocked by retail supermarkets within the States of
Oregon, Washington and California, without the prior written consent of UG.
Provided, however, that nothing herein contained shall prohibit ▇▇▇▇▇ from
owning stock or other securities of a competitor which are relatively
insubstantial to the total outstanding stock of such competitor and so long as
he, in fact, does not have the power to control, participate in or direct the
management or polices of such competitor, and does not serve as a director or
officer of, or is not otherwise associated with any competitor. It is expressly
acknowledged, however, by and between the parties hereto, that ▇▇▇▇▇'▇
involvement, employment, affiliation or ownership in the retail grocery industry
shall not constitute a violation of this agreement or a prohibited activity.
9. This agreement shall be binding and enforceable by ▇▇▇▇▇ against UG,
its successors and assigns.
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10. The parties hereto agree that they respectively will refrain from
making any disparaging statements, releases, comments or publications with
respect to the other party.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
executed the day and year first above written.
UNITED: United Grocers, Inc.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman of the Board
▇▇▇▇▇:
/s/▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇
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