SEVERANCE AGREEMENT
Exhibit
10.55
THIS
SEVERANCE AGREEMENT (“Agreement”) is effective as of _________, 2008, and
is made by and between United Natural Foods, Inc., a Delaware corporation (the
"Company"), and _____________________ ("Employee"). For good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, including without limitation the Employee’s willingness to
continue his employment with the Company and the other obligations of the
parties hereunder, the parties hereby agree as follows:
1. The following
terms shall have the following definitions:
(a) the term “Act”
shall mean the Securities Exchange Act of 1934, as amended to date.
(b) the term
“Affiliate” shall mean any corporation which is a subsidiary of the Company
within the definition of “subsidiary corporation” under Section 424(f) of the
Internal Revenue Code of 1986, as amended.
(c) the term
"Cause" shall mean (i) conviction of Employee of a felony or crime of moral
turpitude under applicable law, (ii) unauthorized acts intended to result in
Employee's personal enrichment at the material expense of the Company or its
reputation, or (iii) any violation of Employee's duties or responsibilities to
the Company which constitutes willful misconduct or dereliction of duty, or
breach of Section 6 of this Agreement.
(d) The term
“Change in Control” means the happening of any of the following:
(i) any “person”,
including a “group” (as such terms are used in Sections 13(d) and 14(d) of the
Act, but excluding the Company, any of its Affiliates, or any employee benefit
plan of the Company or any of its Affiliates) is or becomes the “beneficial
owner” (as defined in Rule 13(d)(3) under the Act), directly or indirectly, of
securities of the Company representing the greater of 30% or more of the
combined voting power of the Company’s then outstanding securities;
(ii) the
stockholders of the Company shall approve a definitive agreement (1) for the
merger or other business combination of the Company with or into another
corporation if (A) a majority of the directors of the surviving corporation were
not directors of the Company immediately prior to the effective date of such
merger or (B) the stockholders of the Company immediately prior to the effective
date of such merger own less than 50% of the combined voting power in the then
outstanding securities in such surviving corporation or (2) for the sale or
other disposition of all or substantially all of the assets of the Company;
or
(iii) the purchase
of 30% or more of the Stock pursuant to any tender or exchange offer made by any
“person”, including a “group” (as such terms are used in Sections
13(d)
and 14(d) of the
Act), other than the Company, any of its Affiliates, or any employee benefit
plan of the Company or any of its Affiliates.
(e) the term
"Disability" shall mean the material inability, in the reasonable opinion of the
Board of Directors, of Employee to render his agreed upon full-time services to
the Company due to physical and/or mental infirmity for a period of one hundred
twenty (120) consecutive days, or an aggregate period of time exceeding one
hundred twenty (120) days in any consecutive twelve (12) month
period.
(f) the term
“Effective Date” means the date on which a Change in Control
occurs. Anything in this Agreement to the contrary notwithstanding,
if a Change in Control occurs and if the Employee’s employment with the Company
is terminated prior to the date on which the Change in Control occurs,
and if it is reasonably demonstrated by the Employee that such
termination of employment (i) was at the request of a third party who has taken
steps reasonably calculated to effect a Change in Control or (ii) otherwise
arose in connection with or in anticipation of a Change in Control, then for all
purposes of this Agreement, the “Effective Date” shall mean the date immediately
prior to the date of such termination of employment.
(g) the
term “Equity Plan” shall mean any option to purchase shares of the
Common Stock $.01 par value per share of the Company
(“Stock”) granted to Employee pursuant to the
Company’s 2002 Stock Incentive Plan, as amended from time to time
(“Options”), any rights the Employee may have under the Company’s Employee Stock
Ownership Plan, as amended from time to time, or any rights the Employee may
have under any other current or future Company plan relating to Options or
restricted stock, such as the 2004 Equity Incentive Plan.
(h) the term the
“Good Reason” shall mean, without the Employee’s express
written consent, the occurrence of any one or more of the following: (i) the
assignment of Employee to duties materially adversely inconsistent with the
Employee’s current duties, and failure to rescind such assignment within thirty
(30) days of receipt of notice from the Employee; (ii) a relocation more than
fifty miles from the Company’s Dayville, Connecticut offices; (iii) a reduction
by the Company in the Employee’s base
salary, or the failure of the Company to pay or cause to be paid any
compensation or benefits hereunder when due or under the terms of any plan
established by the Company, and failure to restore such base salary or make such
payments within five (5) days of receipt of notice from the Employee; (iv)
failure to include the Employee in any new employee benefit plans proposed by
the Company or a material reduction in the Employee’s level of participation in
any existing plans of any type; provided that a Company-wide reduction or
elimination of such plans shall not be a violation of this Section (iv); or (v)
the failure of the Company to obtain a satisfactory agreement from any successor
to the Company with respect to the ownership of substantially all the stock or
assets of the Company to assume and agree to perform this
Agreement.
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2. In the event (a)
the Employee is terminated for reasons other than Cause, death or Disability or
(b) the Employee resigns for Good Reason, in addition to the payment of any
unpaid base salary and accrued and unpaid vacation as of the date of such
termination or resignation, the Company shall continue Employee's base salary
and medical benefits in effect as of the date of such termination or resignation
for a period of one (1) year, subject to applicable withholding and
deductions. The foregoing notwithstanding, if the Employee is a
“specified employee” of the Company (within the meaning of Section 409A of the
Internal Revenue Code and its regulations and other guidance (“Section 409A”)),
any payment that would otherwise be made pursuant to this Section 2 during the
six-month period beginning on the date of termination of employment that
constitutes “nonqualified deferred compensation” within the meaning of Section
409A shall be accrued and paid on the date that is six months and one day after
the date of Employee’s “separation of service” with the Company (within the
meaning of Section 409A of the Code) or, if earlier, the Employee’s date of
death, and no interest or other adjustments shall be made to reflect the delay
in payment.
3. In the event of
termination for Cause, death or Disability, or resignation for other than Good
Reason, the Company shall be under no obligation to other than to provide
payment of any unpaid base salary and accrued and unpaid vacation as of the date
of such termination or resignation; provided, however, that with respect to a
termination for Cause, the Company may withhold any compensation due to Employee
as a partial offset against any damages suffered by the Company as a result of
Employee's actions.
4.
In the event (a) the Employee is terminated for reasons other than Cause, death
or Disability or (b) the Employee resigns for Good Reason, and such termination
or resignation takes place on or within one (1) year after the Effective Date of
a Change in Control, in addition to the compensation set forth in Section 2 and
subject to any limitations imposed under applicable law: (i) any and all Options
awarded to the Employee not previously exercisable and vested shall become fully
vested and exercisable, (ii) subject to the terms of the Employee Stock
Ownership Plan, Employee shall become fully vested in Employee’s account under
the Employee Stock Ownership Plan and (iii) all restrictions shall lapse on and
Employee shall become fully vested in all rights to restricted stock granted to
Employee under any Equity Plan.
5. The
availability, if any, of any other benefits shall be governed by the terms and
conditions of the plans and/or agreements under which such benefits are
granted. The benefits granted under this Agreement are in addition
to, and not in limitation of, any other benefits granted to Employee under any
policy, plan and/or agreement.
6. Employee
covenants with the Company as follows (as used in this Section 6, "Company"
shall include the Company and its subsidiaries and affiliates):
(a) Employee shall
not knowingly use for Employee’s own benefit or disclose or reveal to any
unauthorized person, any trade secret or other confidential information relating
to the
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Company, or to any
of the businesses operated by it, including, without limitation, any customer
lists, customer needs, price and performance information, processes,
specifications, hardware, software, devices, supply sources and characteristics,
business opportunities, potential business interests, marketing, promotional
pricing and financing techniques, or other information relating to the business
of the Company, and Employee confirms that such information constitutes the
exclusive property of the Company. Such restrictions shall not apply
to information which is generally (i) available in the industry or (ii)
disclosed through no fault of Employee. Employee agrees that Employee
will return to the Company upon request, but in any event upon termination of
employment, any physical embodiment of any confidential information and/or any
summaries containing any confidential information, in whole in part, in any
media.
(b) During the term
of employment, and for a period of one year following termination of such
employment for any reason or payment of any compensation, whichever occurs last,
Employee shall not engage, directly or indirectly (which includes, without
limitation, owning, managing, operating, controlling, being employed by, giving
financial assistance to, participating in or being connected in any material way
with any person or entity), anywhere in the United States in any activities with
the following companies, that include Tree of Life or any of its subsidiaries,
Nature’s Best, C&S Distributors or any other company which is a direct
competitor of the Company with respect to (i) the Company’s activities on the
date hereof and/or (ii) any activities which the Company becomes involved in
during the Employee’s term of employment; provided, however, that Employee’s
ownership as a passive investor of less than two percent (2%) of the issued and
outstanding stock of a publicly held corporation so engaged, shall not by itself
be deemed to constitute such competition. Further, during such one-year period
Employee shall not act to induce any of the Company’s vendors, customers or
employees to take action might be disadvantageous to the Company or otherwise
disturb such party’s relationship with the Company.
(c) Employee hereby
acknowledges that Employee will treat as for the Company’s sole benefit, and
fully and promptly disclose and assign to the Company without additional
compensation, all ideas, information, discoveries, inventions and improvements
which are based upon or related to any confidential information protected under
Section (a) herein, and which are made, conceived or reduced to practice by
Employee during Employee’s employment by the Company and within one year after
termination thereof. The provisions of this subsection (c) shall
apply whether such ideas, discoveries, inventions, improvements or knowledge are
conceived, made or gained by Employee alone or with others, whether during or
after usual working hours, either on or off the job, directly or indirectly
related to the Company’s business interests (including potential business
interests), and whether or not within the realm of Employee’s
duties.
(d) Employee shall,
upon request of the Company, but at no expense to Employee, at any time during
or after employment by the Company, sign all instruments and documents and
cooperate in such other acts reasonably required to protect rights to the ideas,
discoveries,
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inventions,
improvements and knowledge referred to above, including applying for,
obtaining and enforcing patents and copyrights thereon in any and all
countries.
(e) Employee
recognizes that the possible restrictions on Employee’s activities which may
occur as a result of Employee’s performance of Employee’s obligations under this
Agreement are required for the reasonable protection of the Company and its
investments, and Employee expressly acknowledges that such restrictions are fair
and reasonable for that purpose. Employee further expressly
acknowledges that damages alone will be an inadequate remedy for any breach or
violation of any of the provisions of this Agreement, and that the Company, in
addition to all other remedies hereunder, shall be entitled, as a matter of
right, to injunctive relief, including specific performance, with respect to any
such breach or violation or threatened breach or violation, in any court of
competent jurisdiction. If any of the provisions of this Agreement
are held to be in any respect an unreasonable restriction upon Employee then
they shall be deemed to extend only over the maximum period of time, geographic
area, and/or range of activities as to which they may be
enforceable. Employee expressly agrees that all payments and benefits
due Employee under this Agreement shall be subject to Employee’s compliance with
the provisions set forth in this Section 6.
(f) Except with
respect to any shorter term as expressly provided herein, this Section 6 shall
survive the expiration or earlier termination of Employee’s relationship with
the Company for a period of ten (10) years.
7. This
Agreement may not be modified or amended except by an instrument in writing
signed by the parties hereto. If, for any reason, any provision of this
Agreement is held invalid, such invalidity shall not affect any other provision
of this Agreement not held so invalid, and each such other provision shall to
the full extent consistent with law continue in force and
effect. This Agreement has been executed and delivered in the State
of Connecticut, and its validity, interpretation, performance, and enforcement
shall be governed by the laws of said State. This Agreement contains
the entire understanding between the parties hereto and supersedes any and all
prior agreements, oral or written, on the subject matter hereof between the
Company and Employee, but it is not intended to, and does not, limit any prior,
present or future obligations of the Employee with respect to confidentiality,
ownership of intellectual property and/or non-competition which are greater than
those set forth herein.
IN WITNESS WHEREOF,
the parties hereto have executed this Agreement, intending the Agreement to
become binding and effective as of the date and year first written
above.
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United
Natural Foods, Inc.
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Employee
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By______________________
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By_________________________
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