EXHIBIT 10.50
SEVERANCE AGREEMENT
FOR VICE PRESIDENTS AND SENIOR VICE PRESIDENTS,
AND EXECUTIVE VICE PRESIDENTS WITH LESS THAN THREE YEARS
IN AN OFFICER POSITION
THIS AGREEMENT (the "Agreement") is made and entered into as of this 12/th/ day
of March, 2001, by and between Unified Western Grocers, Inc. (the "Company")
located at 0000 Xxxxxx Xxxxxx Xxxxxxxx, Xxxxxxxxxx 00000 and ((name)) (the
"Executive").
WHEREAS, the Company considers the establishment and maintenance of a sound and
vital management to be essential to protecting and enhancing the best interests
of the Company and its shareholders; and
WHEREAS, the Executive's position has been determined to be an important part of
the senior management team of the Company; and
WHEREAS, the Company recognizes that the possibility of termination due to
Change of Control, Good Reason or without cause creates uncertainty among
management personnel of the Company and may result in the departure or
distraction of management personnel, all to the detriment of the Company and its
shareholders.
NOW, THEREFORE, in consideration of the promises and of the mutual covenants
herein contained, the following is an agreement to provide severance benefits to
the Executive, pursuant to a severance plan generally benefiting selected
similarly situated executives, in the event the Executive's employment with the
Company is terminated under the circumstances described herein.
1. Right to Terminate. The Company or the Executive may terminate the
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Executive's employment at any time, subject to the Company providing the
benefits hereinafter specified in accordance with the terms and eligibility
requirements of this Agreement. Nothing contained in this Agreement is
intended to be nor should be construed to create a contract of employment
for a specified period of time, or otherwise change or alter the at-will
nature of the Executive's employment with the Company.
2. Eligibility Requirements. The Executive shall be entitled to the benefits
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provided in Section 5 upon his termination of employment from the Company
subject to the following terms and conditions:
(a) The Company must have employed him as an Officer immediately prior to
the date of this Agreement, and "Officer" shall mean officers of the
Company as designated as such by and elected by the Board of Directors
of the Company.
(b) his termination is caused:
(i) by the Company other than for Cause or death;
(ii) by disability as defined below;
(iii) by the Executive for Good Reason; or
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(iv) by the Executive within one (1) year of a Change of Control (as
all such capitalized terms are hereinafter defined).
"Cause" means termination upon (i) the willful and continued failure by the
Executive to perform substantially his duties (other than any such failure
resulting from the Executive's incapacity due to physical or mental
illness), after demand for substantial performance is delivered in writing
by the Company to the Executive that specifically identifies the manner in
which the Company believes the Executive has not substantially performed
his duties, (ii) the willful engaging by the Executive in illegal or
fraudulent misconduct which is materially injurious to the Company, or
(iii) the willful material breach of the Confidentiality and
Nonsolicitation Agreement set forth in Section 7. No act, or failure to
act, on the Executive's part shall be considered "willful" unless done, or
omitted to be done, by him not in good faith and without reasonable belief
that his action or omission was in the best interest of the Company.
"Disability" means the Executive's incapacity due to physical or mental
illness to perform substantially his duties on a full-time basis for six
(6) consecutive months and, within thirty (30) days after a notice of
termination is thereafter given by the Company, the Executive shall not
have returned to the full-time performance of the Executive's duties.
However, if the Executive shall not agree with the determination to
terminate him because of Disability, the question of the Executive's
disability shall be subject to the certification of a qualified medical
doctor agreed to by the Company and the Executive or Executive's legal
representative, in the event of the Executive's incapacity to designate a
doctor. In the absence of an agreement between the Company and the
Executive, each party shall nominate a qualified medical doctor and the two
doctors shall select a third doctor, who shall make the determination as to
Disability.
"Good Reason" means (i) an adverse change in the Executive's status or
position(s), in effect immediately prior to the date of this Agreement, or
(ii) a reduction in the Executive's base salary; provided, however, that
any such basis for Good Reason shall be recognized only if the Executive
has provided the Company written notice of the existence of such Good
Reason within ninety (90) days of its first occurrence and the Company has
failed to correct the matter within thirty (30) days of such notice.
"Change of Control" means any of (i) the acquisition by any person, entity
or group within the meaning of Section 13(d) or 14(d) of the Securities and
Exchange Act of 1934, of beneficial ownership of more than fifty percent
(50%) of the outstanding Class A Shares of Unified Western Grocers, Inc.;
(ii) if the individuals who presently serve on the Board of Directors no
longer constitute a majority of the members of the Company's Board of
Directors; provided, however that any person who becomes a director
subsequent to the commencement date of this Agreement who was elected to
fill a vacancy by a majority of the Company's members shall be considered
as if a member prior to the commencement date of this Agreement; and (iii)
a liquidation or dissolution of the Company or the sale of all or
substantially all of the assets of the Company.
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The Executive will not be deemed to have been terminated without Cause by
the Company and entitled to severance benefits under this Agreement merely
by reason of the acquisition of the Company, if the Executive continues to
be employed by any successor entity described in Section 8(a). This
provision, however, will not affect the right of the Executive to receive
benefits due to a termination caused by the Executive for Good Reason or a
Change in Control under Sections 2(b)(iii) and (iv).
3. Notice of Termination. Any purported termination by the Company or by the
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Executive shall be communicated by written Notice of Termination to the
other party hereto. For purposes of this Agreement, a "Notice of
Termination" means a notice indicating the specific termination provision
in this Agreement relied upon.
4. Date of Termination. "Date of Termination" means the date set forth by
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written Notice of Termination or, if none, then by mutual written agreement
of the parties.
5. Benefits Upon Termination
(a) Subject to Section 9 hereof, if the Executive's termination of
employment with the Company satisfies the conditions set forth in
Section 2, then the Executive will be paid the equivalent of twelve
(12) month's pay based on an amount equal to the Executive's highest
annual base salary during the three year period immediately prior to
the Date of Termination, plus an amount equal to one (1) times the
highest annual incentive bonus paid during the three year period prior
to the Date of Termination. The Executive's severance benefits shall
be paid in one of the following manners elected by the Executive: (1)
within thirty (30) days of the Date of Termination, (2) within ten
(10) business days of January 1 of the year following the Date of
Termination, (3) as salary continuation with equal weekly payments
during the twelve (12) month term of the severance, or (4) through the
purchase of an annuity that has a value equal to the total severance
benefit. The Executive shall make this payment election within twenty-
one (21) days of the Date of Termination. If the Executive fails to
make an election, payments will be made as outlined in option (1),
within thirty (30) days of the Date of Termination. Payments made
under this subsection (a) shall not be taken into account under any
other retirement plan of the Company.
(b) With respect to the Executive's continued coverage under the Company's
health insurance plan, or successor plan, the Executive's "qualifying
event" for purposes of the Consolidated Omnibus Budget Reconciliation
Act of 1985 ("COBRA") shall be his Date of Termination from the
Company. If the Executive elects to continue health plan coverage
pursuant to COBRA, the Company shall pay the Executive's COBRA
premiums for a period terminating on the earlier of (i) twelve (12)
months from the Date of Termination or (ii) the cessation of COBRA
eligibility and coverage for the Executive (without regard to any
other COBRA qualified beneficiary). The Company's obligation with
respect to subsection (b)
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shall continue only if the Executive satisfies on a timely basis all
of his obligations under COBRA. As applicable, continued coverage
under this subsection (b) shall be coordinated with corresponding
benefits that the Executive may be eligible to receive under the
Officer Retiree Medical Plan.
(c) All unpaid benefits set forth in this section shall be forfeited if
the Executive violates any material provision of this Agreement
including, without limitation, the Confidentiality and Nonsolicitation
Agreement set forth in Section 7.
(d) If the Executive's termination of employment with the Company does not
satisfy the conditions set forth in Section 2, no payment or benefits
shall be provided under this Agreement. This Agreement does not, and
is not intended to, limit any rights or benefits of the Executive
pursuant to any other non-severance type plan, policy or written
agreement; provided, however, that this Agreement is intended to be
the sole agreement governing severance-type benefits. Under no
circumstances will the Executive be entitled to or eligible for any
other severance type benefits from the Employer, including any
obligations that existed under any prior agreements including but not
limited to prior severance agreements or under the Unified Western
Grocers' Separation Payment Program.
6. No Obligation to Mitigate. The Executive is under no obligation to mitigate
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damages in the amount of any payment provided for hereunder by seeking
other employment or otherwise. Subject to section 5(b), the amount of any
payment provided for in this Agreement shall not be reduced, offset or
subject to recovery by the Company by reason of any compensation earned by
the Executive as the result of employment by another employer after the
Date of Termination, or otherwise.
7. Confidentiality and Nonsolicitation Agreement.
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(a) The Executive acknowledges that in the course of his employment by the
Company, he will have access to and become informed of confidential
and secret information which is a competitive asset of the Company
("Confidential Information"), including (i) the terms of any agreement
between the Company and any employee, customer or supplier, (ii)
pricing strategy, (iii) product development strategies, (iv) personnel
training and development programs, (v) financial results, (vi)
strategic plans and demographic analyses, (vii) proprietary computer
and systems software, and (viii) any confidential non-public
information received from the Company concerning the Company, its
employees, suppliers and customers.
(b) The Executive agrees that he will keep all Confidential Information in
strict confidence during the term of his employment by the Company and
thereafter and will never make known, divulge, reveal, furnish, make
available, or use any Confidential Information (except in the course
of his regular authorized duties on
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behalf of the Company). The Executive agrees that the obligations of
confidentiality hereunder shall survive termination of his employment
at the Company regardless of any actual or alleged breach by the
Company of this Agreement and shall continue for one (1) year
following such termination provided that such obligation shall
terminate earlier (i) as to specific information that shall have
become known through no fault of the Executive or (ii) as to
Confidential Information which the Executive is required by law to
disclose (after giving the Company notice and an opportunity to
contest such requirement). The Executive's obligations under this
Section 7 are in addition to, and not in limitation or preemption of,
any other obligation of confidentiality which the Executive may have
to the Company under general legal or equitable principles.
(c) Except in the ordinary course of the Company's business, the Executive
has not made, nor shall at any time following the date of this
Agreement, make or cause to be made, any copies, pictures, duplicates,
facsimiles, or other reproductions or recordings or any abstracts or
summaries including or reflecting Confidential Information. All such
documents and other property furnished to the Executive by the Company
or otherwise acquired or developed by the Company shall at all times
be the property of the Company. Upon termination of the Executive's
employment by the Company, the Executive will immediately return to
the Company any such documents or other property of the Company which
are in the possession, custody or control of the Executive.
(d) In the event of the Executive's termination of employment at the
Company, the Executive agrees that he will not in any capacity, on his
own behalf or on behalf of any other firm, person, or entity, for a
period of one (1) year, solicit, or assist in the solicitation of, any
employee of the Company to terminate his or her employment with the
Company.
(e) The Executive acknowledges and agrees that a violation of the
foregoing provisions of this Section 7 (referred to collectively as
the "Confidentiality and Nonsolicitation Agreement") that results in
material detriment to the Company would cause irreparable harm to the
Company, and that the Company's remedy at law for any such violation
would be inadequate. In recognition of the foregoing, the Executive
agrees that, in addition to any other relief afforded by law or this
Agreement, including damages sustained by a breach of this Agreement
and forfeiture of any and all compensation or benefit otherwise
provided under Section 5, and without any necessity or proof of actual
damages, the Company shall have the right to enforce this
Confidentiality and Nonsolicitation Agreement by specific remedies,
which shall include, among other things, temporary and permanent
injunctions, it being the understanding of the undersigned parties
hereto that damages, the forfeitures described above and injunctions
shall all be proper modes of relief and are not to be considered as
alternative remedies.
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8. Successors; Binding Agreement.
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(a) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation, reorganization or otherwise) by
agreement in form and substance satisfactory to the Executive,
expressly to assume and agree to perform this Agreement in the same
manner and to the same extent the Company would be required to perform
if no such succession had taken place.
(b) This Agreement shall inure to the benefit of and be enforceable by the
Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees, and
legatees. If the Executive should die while any amount would still be
payable to the Executive hereunder if he had continued to live, all
such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the Executive's
devisee, legatee, or other designee, or if there be no such designee,
to the Executive's estate.
(c) This Agreement, and all of the provisions hereof, shall be binding
upon the Company and all of its affiliates, successors, transferees,
or surviving or continuing entity.
9. Taxes.
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(a) All payments to be made to the Executive under this Agreement will be
subject to required withholding of federal, state, and local income
and employment taxes.
(b) Notwithstanding anything in the foregoing to the contrary, if any of
the payments provided for in this Agreement, together with any other
payments which the Executive has the right to receive from the
Company, would constitute an "excess parachute payment" (as defined in
Internal Revenue Code (S) 280G(b)(2) as it may be amended), payments
pursuant to this Agreement shall be reduced by an amount sufficient to
avoid the payment of an excess parachute payment; provided, however,
that the determination as to whether any reduction in the payments
otherwise owing under this Agreement pursuant to this provision is
necessary shall be made jointly by the Executive and the Company in
good faith, based on then-effective final and proposed Treasury
regulations, and published rulings; provided further, that an
independent qualified national accounting firm selected by mutual
agreement of the parties shall provide conclusive calculations in the
event the parties cannot jointly agree.
10. Notice. For purposes of this Agreement, notices and all other
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communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered by United States registered or
certified mail, return receipt requested, postage prepaid and addressed, in the
case of the Company, to the address set forth on the
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first page of this Agreement or, in the case of the undersigned Executive,
to the address set forth below his signature, provided that all notices to
the Company shall be directed to the attention of the Chief Executive
Officer of the Company, with a copy to the Secretary of the Company, or to
such other address as either party may have furnished to the other in
writing in accordance herewith, except that notice of change of address
shall be effective only upon receipt.
11. Validity. The invalidity or unenforceability of any provision of this
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Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
12. Entire Agreement. This Agreement contains the entire agreement of the
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parties and supersedes any and all other agreements, either oral or in
writing between the parties hereto with respect to the subject matter
hereof and contains all of the covenants and agreements between the parties
with respect to such subject matter.
13. Miscellaneous. No provision of this Agreement may be modified, waived or
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discharged unless such waiver, modifications or discharge is agreed to in
writing signed by the Executive and the Chief Executive Officer of the
Company. No waiver or any breach of any term or provision of this Agreement
shall be construed to be, nor shall be, a waiver of any other breach of
this Agreement. No waiver shall be binding unless in writing signed by the
party waiving the breach. Unless otherwise noted, references to "Sections"
are to sections of this Agreement. The captions used in this Agreement are
designed for convenient reference only and are not to be used for the
purpose of interpreting any provision of this Agreement.
14. Enforceability. Notwithstanding any other provision of this Agreement, to
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the extent that any payment to be made pursuant to this Agreement is
prohibited by applicable federal or state law or regulation, or by any
action of any federal or state regulatory agencies, unless the Company has
obtained prior approval for such otherwise prohibited payment from the
appropriate regulatory authority, the Company shall not be obligated to
make such payments under this Agreement. No other employee shall be
entitled to severance benefits under the plan described in Section 15, and
of which this Agreement is a part, unless such employee has been promised
such severance benefits under a separate written agreement.
15. Agreement Part of ERISA Plan. This Agreement is made pursuant to a
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Company-sponsored severance plan covering selected Company Vice Presidents,
Senior Vice Presidents and Executive Vice Presidents with less than 3 years
of service. All of the terms of the plan that relate to the Executive are
contained in this Agreement. Although the plan (including the Agreement) is
generally subject to the provisions of the Employee Retirement Income
Security Act of 1974 ("ERISA"), the eligible employees constitute a select
group of management or highly compensated employees. Accordingly, the plan
is exempt from the reporting and disclosure provisions of ERISA pursuant to
ERISA
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Regulation (S)2520.104-24. In the event of a dispute, the claims procedures
set forth in Section 16 shall apply unless both parties agree to settle the
dispute through arbitration. The Company may amend or terminate the plan of
which this Agreement is a part; provided, however, that the plan may not be
amended or terminated unilaterally by the Company if such amendment or
termination would result in some or all benefits not being paid as the
terms of the Agreement provide as of the effective date set forth below."
16. Claims Procedure. If the Executive believes that severance benefits are
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not being paid as this Agreement provides, he must file a claim with the
Company's Vice President, Human Resources. The parties shall attempt to
resolve the matter during the 30-day period beginning on the date such
claim is filed. Only after the 30-day period has expired may an action in
court be filed.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be duly
executed as of the date set forth below.
UNIFIED WESTERN GROCERS, INC.
Agreed to this 12th day of March, 2001.
By: ___________________________
Signature
Name: Xxxxxx X. Xxxxxxx
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Title: President & Chief Executive Officer
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"The Executive" Agreed to this _____ day of ____________, 2001.
By: ___________________________
Signature
Name: ((name))
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Title: ((title))
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Executive's Address: _________________________
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