EXHIBIT 10.8
KEY EXECUTIVE EMPLOYMENT AND SEVERANCE AGREEMENT
THIS AGREEMENT, made and entered into as of the 10th day of May, 2000,
by and between XXXXXXX SAV-O STORES, INC., a Wisconsin corporation (the
"Company"), and XXXXXX X. XXXX (the "Executive").
W I T N E S S E T H :
WHEREAS, the Executive is employed by the Company in a key executive
capacity and the Executive's services are valuable to the conduct of the
business of the Company;
WHEREAS, the Company recognizes that circumstances in which a change in
control of the Company occurs, through acquisition or otherwise, are highly
disruptive and will cause uncertainty about the Executive's future employment
with the Company without regard to the Executive's competence or past
contributions and that such uncertainty may adversely affect the Company; and
WHEREAS, the Company and the Executive are desirous that any proposal
for a change in control or acquisition of the Company will be considered by the
Executive objectively, with reference only to the best interests of the Company
and its shareholders and without undue regard for the Executive's personal
interests.
NOW, THEREFORE, in consideration of the foregoing, the parties hereto
agree as follows:
1. Definitions.
(a) Act. For purposes of this Agreement, the term "Act" means the
Securities Exchange Act of 1934, as amended.
(b) Affiliate and Associate. For purposes of this Agreement, the terms
"Affiliate" and "Associate" shall have the respective meanings ascribed to
such terms in Rule 12b-2 of the General Rules and Regulations of the Act.
(c) Beneficial Owner. For purposes of this Agreement, a Person shall
be deemed to be the "Beneficial Owner" of any securities:
(i) which such Person or any of such Person's Affiliates or
Associates has the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding, or upon the exercise of
conversion rights, exchange rights, rights, warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, securities tendered
pursuant to a tender or exchange offer made by or on behalf of such
Person or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose
of or "beneficial ownership" of (as determined pursuant to Rule 13d-3
of the General Rules and Regulations under the Act), including
pursuant to any agreement, arrangement or understanding; provided,
however, that a Person shall not be deemed the Beneficial Owner of, or
to beneficially own, any security under this subparagraph (ii) as a
result of an agreement, arrangement or understanding to vote such
security if the agreement, arrangement or understanding: (A) arises
solely from a revocable proxy or consent given to such Person in
response to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable rules
and regulations under the Act and (B) is not also then reportable on a
Schedule 13D under the Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy as described in Subsection l(c)(ii)
above) or disposing of any voting securities of the Company.
(d) Cause. "Cause" for termination by the Company of the Executive's
employment after a Change of Control of the Company shall, for purposes of
this Agreement, be limited to (i) the engaging by the Executive in
intentional conduct not taken in good faith which has caused demonstrable
and serious financial injury to the Company, as evidenced by a
determination in a binding and final judgment, order or decree of a court
or administrative agency of competent jurisdiction, in effect after
exhaustion or lapse of all rights of appeal, in an action, suit or
proceeding, whether civil, criminal, administrative or investigative; (ii)
conviction of a felony (as evidenced by binding and final judgment, order,
or decree of a court of competent jurisdiction, in effect after exhaustion
or lapse of all rights of appeal) which substantially impairs the
Executive's ability to perform his duties or responsibilities; and (iii)
continuing willful and unreasonable refusal by the Executive to perform the
Executive's duties or responsibilities (unless significantly changed
without the Executive's consent).
(e) Change in Control of the Company. For purposes of this Agreement,
a "Change in Control of the Company" shall mean a change in control of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Act. Without limiting
the inclusiveness of the definition in the preceding sentence, a Change in
Control of the Company shall be deemed to have occurred if:
(i) any Person (other than any employee benefit plan of the
Company, including the Retirement Savings Plan, or of any subsidiary
of the Company or any Person organized, appointed or established
pursuant to the terms of any such benefit plan) is or becomes the
Beneficial Owner of securities of the Company representing at least
20% of the combined voting power of the Company's then outstanding
securities;
(ii) two or more of the members of the Board are not Continuing
Directors;
(iii) there shall be consummated (x) any consolidation or merger
of the Company in which the Company is not the continuing or surviving
corporation or pursuant to which shares of the Company's Common Stock
would be converted into cash, securities or other property, other than
a merger of the Company in which the holders of the Company's Common
Stock immediately prior to the merger have the same proportionate
ownership of common stock of the surviving corporation immediately
after the merger, or (y) any sale, lease, exchange or other transfer
(in one transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company; or
(iv) the shareholders of the Company approve any plan or proposal
for the liquidation or dissolution of the Company.
(f) Continuing Director. For purposes of this Agreement, the term
"Continuing Director" means any member of the Board of Directors of the
Company who was a member of such Board on the date hereof and any successor
of a Continuing Director who is recommended to succeed a Continuing
Director by a majority of the Continuing Directors then on such Board.
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(g) Code. For purposes of this Agreement, the term "Code" means the
Internal Revenue Code of 1986, including any amendments thereto or
successor tax codes thereof.
(h) Covered Termination. For purposes of this Agreement, the term
"Covered Termination" means any termination of the Executive's employment
where the Termination Date is any date on or prior to the end of the
Employment Period.
(i) Employment Period. For purposes of this Agreement, the term
"Employment Period" means a period commencing on the date of a Change in
Control of the Company, and ending at 11:59 p.m. Milwaukee time on the
third anniversary of such date.
(j) Good Reason. For purposes of this Agreement, the Executive shall
have a "Good Reason" for termination of employment after a Change in
Control of the Company in the event of:
(i) any breach of this Agreement by the Company, including
specifically any breach by the Company of its agreements contained in
Sections 4, 5 or 6 hereof;
(ii) the removal of the Executive from, or any failure to reelect
the Executive to, any of the positions held with the Company on the
date of the Change in Control of the Company or any other positions
with the Company to which the Executive shall thereafter be elected or
assigned, except in the event that such removal or failure to reelect
relates to the termination by the Company of the Executive's
employment for Cause or by reason of disability pursuant to Section 12
hereof;
(iii) a good faith determination by the Executive that there has
been a significant adverse change, without the Executive's written
consent, in the Executive's working conditions or status with the
Company from such working conditions or status in effect immediately
prior to the Change in Control of the Company, including but not
limited to (A) a significant change in the nature or scope of the
Executive's authority, powers, functions, duties or responsibilities,
or (B) a reduction in the level of support services, staff,
secretarial and other assistance, office space and accoutrements; or
(iv) failure by the Company to obtain the Agreement referred to
in Section 17(a) hereof as provided therein.
(k) Person. For purposes of this Agreement, the term "Person" shall
mean any individual, firm, partnership, corporation or other entity and
shall include any successor (by merger or otherwise) of such entity.
(l) Retirement Savings Plan. For purposes of this Agreement, the term
"Retirement Savings Plan" means the Xxxxxxx Sav-O Stores, Inc. Retirement
Savings Plan as in effect immediately prior to The Change in Control of the
Company.
(m) Termination Date. For purposes of this Agreement, except as
otherwise provided in Section 10(b) and Section 17(a) hereof, the term
"Termination Date" means (i) if the Executive's employment is terminated by
the Executive's death, the date of death; (ii) if the Executive's
Employment is terminated by reason of voluntary early retirement, as agreed
in writing by the Company and the Executive, the date of such early
retirement which is set forth in such written agreement; (iii) if the
Executive's employment is terminated by reason of disability pursuant to
Section 12 hereof, the earlier of thirty (30) days after the Notice of
Termination is given or one day prior to the end of the Employment Period;
(iv) if the Executive's employment is terminated by the Executive
voluntarily (other than for Good Reason), the date the Notice of
Termination is given; and (v) if the Executive's employment is terminated
by the Company (other than by reason of
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disability pursuant to Section 12 hereof) or by the Executive for Good
Reason, the earlier of thirty (30) days after the Notice of Termination is
given or one day prior to the end of the Employment Period. Notwithstanding
the foregoing,
(A) If termination is by the Company for Cause pursuant to
Section l(d)(iii) of this Agreement and if the Executive has cured the
conduct constituting such Cause as described by the Company in its
Notice of Termination within such thirty (30) day or shorter period,
then the Executive's employment hereunder shall continue as if the
Company had not delivered its Notice of Termination.
(B) If the Company shall give a Notice of Termination for Cause
or by reason of disability and the Executive in good faith notifies
the Company that a dispute exists concerning the termination within
the fifteen (15) day period following receipt thereof, then the
Executive may elect to continue his employment during such dispute and
the Termination Date shall be determined under this paragraph. If the
Executive so elects and it is thereafter determined that Cause or
disability (as the case may be) did exist, the Termination Date shall
be the earlier of (1) the date on which the dispute is finally
determined, either (x) by mutual written agreement of the parties or
(y) in accordance with Section 22 hereof, (2) the date of the
Executive's death, or (3) one day prior to the end of the Employment
Period. If the Executive so elects and it is thereafter determined
that Cause or disability (as The case may be) did not exist, then the
employment of the Executive hereunder shall continue after such
determination as if the Company had not delivered its Notice of
Termination and there shall be no Termination Date arising out of such
Notice. In either case, this Agreement continues, until the
Termination Date, if any, as if the Company had not delivered the
Notice of Termination except that, if it is finally determined that
the Company properly terminated the Executive for the reason asserted
in the Notice of Termination, the Executive shall in no case be
entitled to a Termination Payment (as hereinafter defined) arising out
of events occurring after the Company delivered its Notice of
Termination.
(C) If the Executive shall, in good faith, give a Notice of
Termination for Good Reason and the Company notifies the Executive
that a dispute exists concerning the termination within the fifteen
(15) day period following receipt thereof, then the Executive may
elect to continue his employment during such dispute and the
Termination Date shall be determined under this paragraph. If the
Executive so elects and it is thereafter determined that Good Reason
did exist, the Termination Date shall be the earlier of (1) the date
on which the dispute is finally determined, either (x) by mutual
written agreement of the parties or (y) in accordance with Section 22
hereof, (2) the date of the Executive's death or (3) one day prior to
the end of the Employment Period. If the Executive so elects and it is
thereafter determined that Good Reason did not exist, then the
employment of the Executive hereunder shall continue after such
determination as if the Executive had not delivered the Notice of
Termination asserting Good Reason and there shall be no Termination
Date arising out of such Notice. In either case, this Agreement
continues, until the Termination Date, if any, as if the Executive had
not delivered the Notice of Termination except that, if it is finally
determined that Good Reason did exist, the Executive shall in no case
be denied the benefits described in Sections 8(b) and 9 hereof
(including a Termination Payment) based on events occurring after the
Executive delivered his Notice of Termination.
(D) If an opinion is required to be delivered pursuant to Section
9(b) hereof and such opinion shall not have been delivered, the
Termination Date shall be the earlier of the date on which such
opinion is delivered or one day prior to the end of the Employment
Period.
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(E) Except as provided in Paragraphs (B) and (C) above, if the
party receiving the Notice of Termination notifies the other party
that a dispute exists concerning the termination within the fifteen
(15) day period following receipt thereof and it is finally determined
that the reason asserted in such Notice of Termination did not exist,
then (1) if such Notice was delivered by the Executive, the Executive
will be deemed to have voluntarily terminated his employment and (2)
if delivered by the Company, the Company will be deemed to have
terminated the Executive other than by reason of death, disability or
Cause.
2. Termination or Cancellation Prior to Change in Control. The Company and
the Executive shall each retain the right to terminate the employment of the
Executive at any time prior to a Change in Control of the Company. In the event
the Executive's employment is terminated prior to a Change in Control of the
Company, this Agreement shall be terminated and cancelled and of no further
force and effect and any and all rights and obligations of the parties hereunder
shall cease.
3. Employment Period. If a Change in Control of the Company occurs when the
Executive is employed by the Company, the Company will continue thereafter to
employ the Executive during the Employment Period, and the Executive will remain
in the employ of the Company, in accordance with and subject to the terms and
provisions of this Agreement.
4. Duties. During the Employment Period, the Executive shall, in the same
capacities and positions held by the Executive at the time of the Change in
Control of the Company or in such other capacities and positions as may be
agreed to by the Company and the Executive in writing, devote the Executives's
best efforts and all of the Executive's business time, attention and skill to
the business and affairs of the Company, as such business and affairs now exist
and as they may hereafter be conducted. The services which are to be performed
by the Executive hereunder are to be rendered in the same metropolitan area in
which the Executive was employed at the time of such Change in Control of the
Company, or in such other place or places as shall be mutually agreed upon in
writing by the Executive and the Company from time to time. Without the
Executive's consent the Executive shall not be required to be absent from such
metropolitan area more than forty-five (45) days in any twelve (12) month
period.
5. Compensation. During the Employment Period, the Executive shall be
compensated as follows:
(a) The Executive shall receive, at such intervals and in accordance with
such standard policies of the Company as may be in effect immediately prior to
the Change in Control of the Company, an annual base salary in cash equivalent
of not less than the Executive's annual base salary as in effect immediately
prior to the Change in Control of the Company (which base salary shall, unless
otherwise agreed in writing by the Executive, include the current receipt by the
Executive of any amounts which, prior to the Change in Control of the Company,
the Executive had elected to defer, whether such compensation is deferred under
Section 401(k) of the Code or otherwise), subject to adjustment as hereinafter
provided.
(b) The Executive shall, at such intervals and in accordance with such
standard policies as may be in effect immediately prior to the Change in Control
of the Company, be reimbursed for any and all monies advanced in connection with
the Executive's employment for reasonable and necessary expenses incurred by the
Executive on behalf of the Company, including travel expenses.
(c) The Executive shall be included, to the extent eligible thereunder
(which eligibility shall not be conditioned on the Executive's salary grade or
on any other requirement which excludes persons of comparable status to the
Executive unless such exclusion was in effect for
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such plan or an equivalent plan immediately prior to the Change in Control of
the Company), in any and all plans providing benefits for the Company's salaried
employees in general, including but not limited to group life insurance,
hospitalization, medical, dental, profit sharing (including the Retirement
Savings Plan) and stock bonus plans; provided, that, in no event shall the
aggregate level of benefits under such plans in which the Executive is included
be less than the aggregate level of benefits under plans of the Company of the
type referred to in this Section 5(c) in which the Executive was participating
immediately prior to the Change in Control of the Company.
(d) The Executive shall annually be entitled to not less than the amount of
paid vacation and not fewer than the number of paid holidays to which the
Executive was entitled annually immediately prior to the Change in Control of
the Company or such greater amount of paid vacation and number of paid holidays
as may be made available annually to other executives of the Company of
comparable status and position to the Executive.
(e) The Executive shall be included in all plans providing additional
benefits to executives of the Company of comparable status and position to the
Executive, including but not limited to deferred compensation, split-dollar life
insurance, supplemental retirement, stock option, stock appreciation, stock
bonus and similar or comparable plans; provided, that, in no event shall the
aggregate level of benefits under such plans be less than the aggregate level of
benefits under plans of the Company of the type referred to in this Section 5(e)
in which the Executive was participating immediately prior to the Change in
Control of the Company.
6. Annual Compensation Adjustments. During the Employment Period, the Board
of Directors of the Company (or an appropriate committee thereof) will consider
and appraise, at least annually, the contributions of the Executive to the
Company's operating efficiency, growth, cash flow from operations and operating
profits, and, in accordance with the Company's practice prior to the Change in
Control of the Company, due consideration shall be given to the upward
adjustment of the Executive's base compensation rate, at least annually,
commensurate with (i) increases generally given to other executives of the
Company of comparable status and position to the Executive, and (ii) as the
scope of the Company's operations or the Executive's duties expand.
7. Termination For Cause or Without Good Reason. If there is a Covered
Termination for Cause or due to the Executive's voluntarily terminating his
employment other than for Good Reason (any such terminations to be subject to
the procedures set forth in Section 13 hereof), then the Executive shall be
entitled to receive only Accrued Benefits pursuant to Section 9(a) hereof.
8. Termination Giving Rise to a Termination Payment.
(a) If there is a Covered Termination by the Executive for Good
Reason, or by the Company other than by reason of (i) death, (ii)
disability pursuant to Section 12 hereof, or (iii) Cause, then the
Executive shall be entitled to receive, and the Company shall promptly pay,
Accrued Benefits pursuant to Section 9(a) hereof and, in lieu of further
base salary for periods following the Termination Date, as liquidated
damages and severance pay, the Termination Payment pursuant to Section 9(b)
hereof.
(b) If there is a Covered Termination and the Executive is entitled to
Accrued Benefits and the Termination Payment, then the Executive shall be
entitled to the following additional benefits:
(i) The Executive shall receive, at the expense of the Company,
outplacement services on an individualized basis provided by a
nationally recognized executive placement firm selected by the
Company.
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(ii) Until the earlier of the third anniversary of the
Termination Date or such time as the Executive has obtained new
employment and is covered by benefits which in the aggregate are at
least equal in value to the following benefits the Executive shall
continue to be covered, at the expense of the Company, by the same or
equivalent life insurance, hospitalization, medical and dental
coverage as was required hereunder with respect to the Executive
immediately prior to the date the Notice of Termination is given.
9. Payments Upon Termination.
(a) Accrued Benefits. For purposes of this Agreement, the Executive's
"Accrued Benefits" shall include the following amounts, payable as
described herein: (i) all base salary for the time period ending with the
Termination Date; (ii) reimbursement for any and all monies advanced in
connection with the Executive's employment for reasonable and necessary
expenses incurred by the Executive on behalf of the Company for the time
period ending with the Termination Date; (iii) any and all other cash
earned through the Termination Date and deferred at the election of the
Executive or pursuant to any deferred compensation plan then in effect;
(iv) a lump sum payment of the bonus or incentive compensation otherwise
payable to the Executive with respect to the year in which termination
occurs under all bonus or incentive compensation plan or plans of the
Company in which the Executive is a participant; and (v) all other payments
and benefits to which the Executive may be entitled as compensatory fringe
benefits or under the terms of any benefit plan of the Company, including
severance payments under the Company's severance policies and practices as
in effect immediately prior to the Change in Control of the Company.
Payment of Accrued Benefits shall be made promptly in accordance with the
Company's prevailing practice with respect to Subsections (i) and (ii) or,
with respect to Subsections (iii), (iv) and (v), pursuant to the terms of
the benefit plan or practice establishing such benefits.
(b) Termination Payment. The Termination Payment shall be an amount
equal to the Executive's monthly base salary, as in effect immediately
prior to the Change in Control of the Company, as adjusted upward from time
to time pursuant to Section 6 hereof, multiplied by the greater of the
number of months (which shall include fractions of months rounded up to the
next highest whole number) remaining in the Employment Period or twelve
(12). The Termination Payment shall be paid to the Executive in cash no
later than ten (10) business days after the Termination Date. The Executive
shall not be required to mitigate the amount of the Termination Payment by
securing other employment or otherwise, nor will such Payment be reduced by
reason of the Executive securing other employment or for any other reason.
It is the intention of the Company and the Executive that no portion
of the Termination Payment, Accrued Benefits or any other payment or
benefit under this Agreement, or payments to or for the benefit of the
Executive under any other agreement or plan of the Company, regardless of
whether such payment or benefit was paid or provided for prior to the
Covered Termination (herein all collectively referred to as the "Total
Payments"), be deemed to be an "excess parachute payment" as defined in
Section 280G of the Code. It is agreed that the present value of the Total
Payments and any other payments to or for the benefit of the Executive in
the nature of compensation, receipt of which are contingent on the change
of control of the Company and to which Section 280G of the Code or any
successor provision thereto applies (in the aggregate "Total Benefits")
shall not exceed an amount equal to one dollar less than the maximum amount
which the Executive may receive without becoming subject to the tax imposed
by Section 4999 of the Code or any successor provision (the "Excise Tax")
or which the Company may pay without loss of deduction under Section
280G(a) of the Code or any successor provision thereto. Present value for
purposes of this Agreement shall be calculated in accordance with Section
280G(d)(4) of the Code or any successor provision thereto. Within
forty-five (45) days following a Covered Termination or notice by either
party to the other of its belief that there is a payment or benefit due the
Executive which will result in an excess parachute payment, the Executive
and the Company, at the Company's expense, shall obtain the opinion of such
legal counsel (the opinion of legal counsel
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need not be unqualified), and certified public accountants as the Executive
may choose, which sets forth (a) the amount of the Base Period Income of
the Executive, (b) the present value of Total Benefits, and (c) the amount
and present value of any excess parachute payments. In the event that such
opinions determine that there would be an excess parachute payment, the
Termination Payment or any other payment determined by such counsel to be
includible in Total Benefits, shall be reduced or eliminated as specified
by the Executive in writing delivered to the Company within thirty (30)
days of his receipt of such opinions or, if the Executive fails to so
notify the Company, then as the Company shall reasonably determine, so that
under the bases of calculation set forth in such opinions the Total
Benefits paid to the Executive shall be an amount equal to one dollar less
than the maximum amount which the Executive may receive without becoming
subject to the Excise Tax (the "Reduced Amount"). For purposes of this
Agreement, the term "Base Period Income" shall be an amount equal to the
Executive's "annualized includible compensation" from the Company for the
"base period" as defined in Sections 280G(d)(l) and (2) of the Code or any
successor provisions thereto. In the event that the provisions of Sections
280G and 4999 of the Code or any successor provision are repealed without
succession this provision shall be of no further force or effect.
As a result of the uncertainty in the application of Section 280G of
the Code at the time of the initial determination by legal counsel and
accountants as provided in this provision, it is possible that amounts will
have been paid or distributed by the Company to or for the benefit of the
Executive pursuant to this Agreement which should not have been so paid or
distributed ("Over-payment") or that additional amounts which will have not
been paid or distributed by the Company to or for the benefit of the
Executive pursuant to this Agreement could have been so paid or distributed
("Underpayment"), in each case, consistent with the calculation of the
Reduced Amount hereunder. In the event that such legal counsel, based upon
the assertion of a deficiency by the Internal Revenue Service against the
Company or the Executive which such legal counsel believes has a high
probability of success or other controlling precedent or substantial
authority, determines that an Overpayment has been made, any such
Overpayment paid or distributed by the Company to or for the benefit of the
Executive shall be treated for all purposes as a loan to the Executive
which the Executive shall repay to the Company together with interest at
the applicable federal rate provided for in Section 7872(f)(2) of the Code;
provided, however, that no amount shall be payable by the Executive to the
Company if and to the extent such payment would not reduce the amount which
is subject to the excise tax under Section 4999 of the Code. In the event
that such legal counsel, based upon controlling precedent or other
substantial authority, determines that an Underpayment has occurred, any
such Underpayment shall be promptly paid by the Company to or for the
benefit of the Executive together with interest at the applicable federal
rate provided for in Section 7872(f)(2) of the Code.
10. Death.
(a) Except as provided in Section 10(b) hereof, in the event of a
Covered Termination due to the Executive's death, the Executive's estate,
heirs and beneficiaries shall receive all the Executive's Accrued Benefits
through the Termination Date.
(b) In the event the Executive dies after a Notice of Termination is
given (i) by the Company, other than by reason of disability, or (ii) by
the Executive for Good Reason, the Executive's estate, heirs and
beneficiaries shall be entitled to the benefits described in Section 10(a)
hereof and, subject to the provisions of this Agreement, to such
Termination Payment as the Executive would have been entitled to had the
Executive lived. For purposes of this Subsection 10(b), the Termination
Date shall be the earlier of thirty (30) days following the giving of the
Notice of Termination or one day prior to the end of the Employment Period,
subject to delay pursuant to Section 1(m) hereof.
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11. Retirement. If, during the Employment Period, the Executive and the
Company shall execute an agreement providing for the early retirement of the
Executive from the Company, or the Executive shall otherwise give notice that he
is voluntarily choosing to retire early from the Company, the Executive shall
receive Accrued Benefits through the Termination Date; provided, that if the
Executive's employment is terminated by the Executive for Good Reason or by the
Company other than by reason of death, disability or Cause and the Executive
also, in connection with such termination, elects voluntary early retirement,
the Executive shall also be entitled to receive a Termination Payment pursuant
to Section 9(b) hereof.
12. Termination for Disability. If, during the Employment Period, as a
result of the Executive's disability due to physical or mental illness or injury
(regardless of whether such illness or injury is job-related), the Executive
shall have been absent from the Executive's duties hereunder on a full-time
basis for six (6) consecutive months and, within thirty (30) days after the
Company notifies the Executive in writing that it intends to terminate the
Executive's employment (which notice shall not constitute the Notice of
Termination contemplated below), the Executive shall not have returned to the
performance of the Executives s duties hereunder on a full-time basis, the
Company may terminate the Executive's employment pursuant to a Notice of
Termination given in accordance with Section 13 hereof. In the event the
Executive's employment is terminated on account of the Executive's disability in
accordance with this Section, the Executive shall receive Accrued Benefits in
accordance with Section 9(a) hereof and shall remain eligible for all benefits
provided by any long term disability programs of the Company in effect at the
time of such termination.
13. Termination Notice and Procedure. Any Covered Termination by the
Company or the Executive shall be communicated by written Notice of Termination
to the Executive, if such Notice is given by the Company, and to the Company, if
such Notice is given by the Executive, all in accordance with the following
procedures and those set forth in Section 23 hereof:
(a) If such termination is for disability, Cause or Good Reason, the
Notice of Termination shall indicate in reasonable detail the facts and
circumstances alleged to provide a basis for such termination.
(b) Any Notice of Termination by the Company shall have been approved,
prior to the giving thereof to the Executive, by a resolution duly adopted
by a majority of the directors of the Company (or any successor
corporation) then in office.
(c) The Executive shall have thirty (30) days, or such longer period
as the Company may determine to be appropriate, to cure any conduct or act,
if curable, alleged to provide grounds for termination of the Executive's
employment for Cause under this Agreement.
(d) The recipient of the Notice of Termination shall personally
deliver or mail in accordance with Section 23 hereof written notice of any
dispute relating to such Notice of Termination to the party giving such
Notice within fifteen (15) days after receipt thereof. After the expiration
of such fifteen (15) days, the contents of the Notice of Termination shall
become final and not subject to dispute.
14. Confidentiality Obligations of the Executive; Noncompetition.
(a) During and following the Executive's employment by the Company,
the Executive shall hold in confidence and not directly or indirectly
disclose or use or copy or make lists of any confidential information or
proprietary data of the Company, except to the extent authorized in writing
by the Board of Directors of the Company or required by any court or
administrative agency, other than to an employee of the Company or a person
to whom disclosure is reasonably necessary or appropriate in connection
with the performance by the Executive of duties as an
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executive of the Company. Confidential information shall not include any
information known generally to the public or any information of a type not
otherwise considered confidential by persons engaged in the same business
or a business similar to that of the Company. All records, files, documents
and materials, or copies thereof, relating to the business of the Company
which the Executive shall prepare, or use, or come into contact with, shall
be and remain the sole property of the Company and shall be promptly
returned to the Company upon termination of employment with the Company.
(b) The Executive agrees that, in the event of a Covered Termination
in which the Executive has or will receive a Termination Payment, for a
period of one year after the Termination Date or until the end of the
Employment Period, whichever is shorter, the Employee shall not, within the
State of Wisconsin, except as permitted by the Company's prior written
consent (which shall not be unreasonably withheld), participate in the
management of any business which is a direct and substantial competitor of
the Company. The ownership of less than five percent of any class of
securities of any corporation listed on a national securities exchange or
regularly traded over the counter even though such corporation may be a
competitor of the Company as specified above, shall not be deemed as
constituting a financial interest in such competitor.
15. Expenses and Interest. If, after a Change in Control of the Company, a
good faith dispute arises with respect to the enforcement of the Executive's
rights under this Agreement or if any legal or arbitration proceeding shall be
brought in good faith to enforce or interpret any provision contained herein, or
to recover damages for breach hereof, the Executive shall recover from the
Company any reasonable attorneys' fees and necessary costs and disbursements
incurred as a result of such dispute, legal or arbitration proceeding
("Expenses"), and prejudgment interest on any money judgment or arbitration
award obtained by the Executive calculated at the rate of interest announced by
First Bank, N.A. from time to time as its prime or base lending rate from the
date that payments to him should have been made under this Agreement. Within ten
(10) days after the Executive's written request therefor, the Company shall pay
to the Executive, or such other person or entity as the Executive may designate
in writing to the Company, the Executive's reasonable Expenses in advance of the
final disposition or conclusion of any such dispute, legal or arbitration
proceeding.
16. Payment Obligations Absolute. The Company's obligation during and after
the Employment Period to pay the Executive the amounts and to make the benefit
and other arrangements provided herein shall be absolute and unconditional and
shall not be affected by any circumstances, including, without limitation, any
setoff, counterclaim, recoupment, defense or other right which the Company may
have against him or anyone else. Except as provided in Section 15 of this
Agreement, all amounts payable by the Company hereunder shall be paid without
notice or demand. Except as provided in Subsection 9(b) of this Agreement, each
and every payment made hereunder by the Company shall be final, and the Company
will not seek to recover all or any part of such payment from the Executive, or
from whomsoever may be entitled thereto, for any reason whatsoever.
17. Successors.
(a) If the Company sells, assigns or transfers all or substantially
all of its business and assets to any Person, or if the Company merges into
or consolidates or otherwise combines with any Person, then the Company
shall assign all of its right, title and interest in this Agreement as of
the date of such event to such Person, and the Company shall cause such
Person, by written agreement in form and substance reasonably satisfactory
to the Executive, to expressly assume and agree to perform from and after
the date of such assignment all of the terms, conditions and provisions
imposed by this Agreement upon the Company. Failure of the Company to
obtain such agreement shall be a breach of this Agreement constituting
"Good Reason"
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hereunder, except that for purposes of implementing the foregoing, the date
upon which such transfer or other succession becomes effective shall be
deemed the Termination Date. In case of such assignment by the Company and
of assumption and agreement by such Person, as used in this Agreement,
"Company" shall thereafter mean such Person which executes and delivers the
agreement provided for in this Section 17 or which otherwise becomes bound
by all the terms and provisions of this Agreement by operation of law, and
this Agreement shall inure to the benefit of and be enforceable by such
Person. The Executive shall, in his discretion, be entitled to proceed
against any or all of such Persons, any Person which theretofore was such a
successor to the Company (as defined in the first paragraph of this
Agreement) and the Company (as so defined) in any action to enforce any
rights of the Executive hereunder. Except as provided in this Subsection,
this Agreement shall not be assignable by the Company. This Agreement shall
not be terminated by the voluntary or involuntary dissolution of the
Company.
(b) This Agreement and all rights of the Executive shall inure to the
benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, heirs and beneficiaries. All
amounts payable to the Executive under Sections 7, 8, 9, 10, 11 and 12
hereof if the Executive had lived shall be paid, in the event of the
Executive's death, to the Executive's estate, heirs and representatives.
18. Severability. The provisions of this Agreement shall be regarded as
divisible, and if any of said provisions or any part hereof are declared invalid
or unenforceable by a court of competent jurisdiction, the validity and
enforceability of the remainder of such provisions or parts hereof and the
applicability thereof shall not be affected thereby.
19. Amendment. This Agreement may not be amended or modified at any time
except by written instrument executed by the Company and the Executive.
20. Withholding. The Company shall be entitled to withhold from amounts to
be paid to the Executive hereunder any federal, state or local withholding or
other taxes or charges which it is from time to time required to withhold;
provided, that the amount so withheld shall not exceed the minimum amount
required to be withheld by law. The Company shall be entitled to rely on an
opinion of nationally recognized tax counsel if any question as to the amount or
requirement of any such withholding shall arise.
21. Certain Rules of Construction. No party shall be considered as being
responsible for the drafting of this Agreement for the purpose of applying any
rule construing ambiguities against the drafter or otherwise. No draft of this
Agreement shall be taken into account in construing this Agreement. Any
provision of this Agreement which requires an agreement in writing shall be
deemed to require that the writing in question be signed by the Executive and an
authorized representative of the Company.
22. Governing Law; Resolution of Disputes. This Agreement and the rights
and obligations hereunder shall be governed by and construed in accordance with
the laws of the State of Wisconsin. Any dispute arising out of this Agreement
shall, at the Executive's election, be determined by arbitration under the rules
of the American Arbitration Association then in effect or by litigation. Whether
the dispute is to be settled by arbitration or litigation, the venue for the
arbitration or litigation shall be Sheboygan, Wisconsin or, at the Executive's
election, if the Executive is no longer residing or working in the Sheboygan,
Wisconsin metropolitan area, in the judicial district encompassing the city in
which the Executive resides. The parties consent to personal jurisdiction in
each trial court in the selected venue having subject matter jurisdiction
notwithstanding their residence or situs, and each party irrevocably consents to
service of process in the manner provided hereunder for the giving of notices.
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23. Notice. Notices given pursuant to this Agreement shall be in writing
and, except as otherwise provided by Section 13(d) hereof, shall be deemed given
when actually received by the Executive or actually received by the Company's
Secretary or any officer of the Company other than the Executive. If mailed,
such notices shall be mailed by United States registered or certified mail,
return receipt requested, addressee only, postage prepaid, if to the Company, to
Xxxxxxx Sav-O Stores, Inc., Attention: Secretary, 0000 Xxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxx 00000, or if to the Executive, at the address set forth below the
Executives's signature to this Agreement, or to such other address as the party
to be notified shall have theretofore given to the other party in writing.
24. No Waiver. No waiver by either party at any time of any breach by the
other party of, or compliance with, any condition or provision of this Agreement
to be performed by the other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same time or any prior or subsequent
time.
25. Headings. The headings herein contained are for reference only and
shall not affect the meaning or interpretation of any provision of this
Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first written above.
XXXXXXX SAV-O STORES, INC.
By /s/ Xxxxx X. Xxxxxxxxx
-----------------------------------
Xxxxx X. Xxxxxxxxx
Chairman, Chief Executive Officer and
President
EXECUTIVE
/s/ Xxxxxx X. Xxxx
-----------------------------------------
Xxxxxx X. Xxxx
0000 X. 00xx Xxxxxx
-----------------------------------------
Xxxxxxxxx, XX 00000
-----------------------------------------
[Residential Address to be added above]
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