EXHIBIT 99
EMPLOYMENT TRANSITION AGREEMENT AND MUTUAL RELEASE
UNITED NATURAL FOODS, INC., a Delaware corporation (the "Company") and XXXXXX X.
XXXXXXXX ("Xx. Xxxxxxxx") hereby agree as follows:
1. Xx. Xxxxxxxx hereby resigns as Chairman of the Board and as Chief
Executive Officer of the Company and as an employee and as an officer and
director of all direct and indirect subsidiaries and other affiliates of
the Company (collectively, unless the context is otherwise, the
"Company"), effective on December 6, 1999 (the "Resignation Date").
2. Upon the expiration of the Revocation Period (as hereinafter defined), the
Company shall pay to Xx. Xxxxxxxx a lump sum payment with respect to
post-employment severance of $1,000,000, less all federal and state income
tax and other required deductions.
3. a. On the Resignation Date, the Company will pay Xx. Xxxxxxxx for any
unused vacation time earned by him through the Resignation Date.
b. The Company shall be obligated to continue to provide Xx. Xxxxxxxx and
his family, at its expense, not less than the medical, dental and other
health insurance coverage provided to the Company's senior executive
officers until December 31, 2002, subject to no applicable benefits
deductions such as "co-pay" contributions, and provided that the Company
shall extend such coverage during the Extension Period (as hereinafter
defined), if applicable. Thereafter, the Company shall respect Xx.
Xxxxxxxx'x rights, if any, to continued medical coverage at his own
expense under the Consolidated Omnibus Budget Reconciliation Act (COBRA).
At such time as Xx. Xxxxxxxx is gainfully employed and his employer
provides at its expense comparable medical, dental and other health
insurance coverage, the Company's obligations under this Section 3(b)
shall terminate.
c. The Company will provide Xx. Xxxxxxxx, at its expense, with executive
outplacement assistance at Right Associates or other comparable executive
outplacement provider of substantially equal cost until the earlier of his
resumption of full-time employment or December 31, 2000.
d. Xx. Xxxxxxxx shall be entitled, at Company expense, to tax planning and
preparation assistance for tax returns for calendar years 1999, 2000, 2001
and 2002. Xx. Xxxxxxxx may continue to use his current service provider.
e. Upon the expiration of the Revocation Period, the Company shall
transfer title of Xx. Xxxxxxxx'x Company-owned automobile to him. Xx.
Xxxxxxxx shall be responsible for all transfer and all other taxes
(exclusive of sales taxes) and registration and title fees customarily
paid by buyers in such sales. The Company shall provide Xx. Xxxxxxxx with
a Form 1099 for the value of such automobile.
f. For one dollar and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the Company hereby sells
to Xx. Xxxxxxxx and Xx. Xxxxxxxx hereby purchases from the Company Xx.
Xxxxxxxx'x personal laptop computer and the cellular phone in his Company
automobile. Said sale is made "as is" and "where is" and the Company
disclaims all warranties, including without limitation all warranties of
merchantability or fitness for a particular purpose. Xx. Xxxxxxxx shall be
responsible for transferring the cellular phone service to his name.
g. The Company shall pay Xx. Xxxxxxxx'x reasonable attorneys' fees
incurred as a result of his resignation, including the negotiation of this
Agreement and the preparation of applicable filings with the Commission.
4. a. As of the Resignation Date, Xx. Xxxxxxxx shall no longer be eligible to
receive long-term disability benefits or to participate in the Company's
401(k) and Profit Sharing Plan. The
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Company will promptly notify Xx. Xxxxxxxx in writing concerning his
options with regard to his 401(k) account.
b. The Company acknowledges that it is currently obligated to indemnify
Xx. Xxxxxxxx in his capacity as a Director and officer of the Company in
accordance with the General Corporation Law of the State of Delaware, the
Company's Certificate of Incorporation and the Company's By-laws
(collectively, "Indemnification Obligations"), and that the Company
maintains so-called Officers and Directors liability insurance to secure,
in part, the Company's Indemnification Obligations. Subsequent to the date
of this Agreement (the "Effective Date"), the Company shall continue to
indemnify Xx. Xxxxxxxx with respect to its Indemnification Obligations for
claims made prior to December 31, 2005, and shall continue to maintain
Officers and Directors liability insurance in an amount and coverage not
less than that provided for other Directors and senior officers of the
Company through December 31, 2005. In the event Xx. Xxxxxxxx becomes,
directly or indirectly, subject to litigation or other adversary
proceedings for which the Indemnification Obligations apply, and Xx.
Xxxxxxxx receives written advice from counsel (and delivers a copy of such
written advice to the Company) that, under the circumstances, Xx. Xxxxxxxx
should retain separate counsel, Xx. Xxxxxxxx may so retain separate
counsel, and the Company shall promptly reimburse Xx. Xxxxxxxx for
reasonable fees and costs of such counsel.
c. In consideration for the release set forth below, the Company hereby
releases and forever discharges Xx. Xxxxxxxx and his successors, heirs and
assigns from any and all liabilities, causes of action, debts, claims and
demands including, without limitation, claims and demands for monetary
payments, both in law and in equity, known or unknown, fixed or
contingent, which it may have or claim to have based upon or in any way
related to Xx. Xxxxxxxx'x actions or omissions as a Director, officer or
employee of the Company and hereby covenants not to file a lawsuit or
charge to assert such claims.
5. a. Schedule 5a attached hereto sets forth the options to purchase the
Company's Common Stock granted to Xx. Xxxxxxxx as of the Effective Date
(collectively, the "Stock Options"). Notwithstanding the terms of the
stock option agreements or other written documentation evidencing such
grant of Stock Options to Xx. Xxxxxxxx, all of the Stock Options shall be
deemed to (i) have been fully vested, (ii) shall be subject to no other
contingency on behalf of or to be performed by Xx. Xxxxxxxx (including,
that he remain an employee or Director of the Company), except for the
payment of the applicable exercise price for the Stock Options, and (iii)
the exercise period shall be extended to the close of business on December
5, 2009.
b. (i) For the period beginning ninety (90) days after the Effective
Date of this Agreement and ending on December 31, 2003 (subject to
the Extension Period as provided below), Xx. Xxxxxxxx may at any
time make a written request to the Company for registration under a
registration statement on Form S-3 (or such similar form or
procedure as then in effect) with the Securities and Exchange
Commission (the "Commission") under and in accordance with the
provisions of the Securities Act of 1933, as amended (the
"Securities Act"), to register all or part of such Company Common
Stock, $0.01 par value per share and Stock Options owned by or
granted to him as of the Effective Date of this Agreement ("Demand
Registration"). Such request shall specify the aggregate number of
such shares proposed to be sold and shall also specify the intended
method of disposition. Xx. Xxxxxxxx shall be entitled to as many
Demand Registrations as he may request, provided, however: (i) Xx.
Xxxxxxxx shall be entitled to no more -------- ------- than one
Demand Registration during any 180 day period; (ii) shall be
entitled to no Demand Registration to the extent, after taking into
effect the shares to be offered pursuant to any Demand Registration,
Xx. Xxxxxxxx'x holdings of the Company's Common Stock (including
shares of the Company's Common Stock issuable pursuant to the Stock
Options granted to him) is less than ten
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percent (10%) of the total amount of the Company's Common Stock then
outstanding; and (iii) each such Demand Registration shall include
such number of shares as equal at least five percent (5%) of the
total amount of the Company's Common Stock then outstanding, or such
lesser amount as may be necessary in order to comply with (ii)
above. In the event that Xx. Xxxxxxxx may otherwise sell the number
of shares of the Company's Common Stock which he then wishes to sell
in the approximate time requested under Rule 144 adopted under the
Securities Act, he shall do so under Rule 144 without requesting the
Company to file a registration statement on Form S-3.
(ii) The Company shall use its best efforts to effect such registrations
and to further the sale of such shares in accordance with the
intended method of disposition thereof as quickly as practicable,
and in connection with any such request the Company shall prepare
and promptly file with the Commission registration statements on
Form S-3 (or similar form or procedure then in effect) and use its
best efforts to cause such registration statements to become
effective at the time requested by Xx. Xxxxxxxx, and to prepare and
file with the Commission such amendments and supplements to such
registration statements and any prospectus used in connection
therewith as may be necessary to keep such registration statements
effective for a period of not less than one hundred twenty (120)
days or such shorter period which will terminate when all shares
covered by such registration statement have been sold.
Notwithstanding the foregoing, the Company shall have no obligations
to Xx. Xxxxxxxx to assist him in the sale of such shares included in
such registration statement.
(iii) To the extent not inconsistent with applicable law, Xx. Xxxxxxxx
agrees not to effect any sale or distribution, public or otherwise,
of securities of the Company, including a sale pursuant to Rules 144
and 144A under the Securities Act, during the seven days prior to,
and during the ninety-day period beginning on, the effective date of
such registration statement (except as part of such registration),
if and to the extent requested by the Company. If the Company's then
current investment banker determines in good faith that the
registration and distribution of such shares would interfere with
any pending public offering by the Company shares of authorized
unissued shares of Common Stock, the net proceeds of which will be
paid directly to the Company, as evidenced by a Registration
Statement filed with the Commission, and promptly gives written
notice to Xx. Xxxxxxxx of such determination, the Company shall be
entitled to postpone the filing of the registration statement
otherwise required to be prepared and filed by the Company hereunder
for a reasonable period of time not to exceed ninety (90) days.
(iv) Xx. Xxxxxxxx may not participate in any underwritten registration
hereunder unless he (a) agrees to sell his shares on the basis
provided in any underwriting arrangements approved by the persons
entitled to approve such arrangement and (b) completes and executes
all questionnaires, powers of attorney, indemnities, underwriting
agreements, and other documents reasonably required under the terms
of such underwriting arrangements and these registration rights.
(v) If Xx. Xxxxxxxx does not sell sufficient shares to reduce his
holdings in the Company under ten percent (10%) during the period
set forth in subsection (i) above, the Company shall extend the
rights granted under this Section 5 for an additional period ending
on the earlier of (a) December 31, 2004 or (b) the date on which he
holds less than ten percent (10% of the outstanding Common Stock of
the Company (the "Extension Period"). During the Extension Period,
if applicable, the Company shall pay Xx. Xxxxxxxx a consulting fee
of $25,000 per month (or pro rata portion thereof), payable on the
last day of each month, commencing January 31, 2003.
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(vi) Notwithstanding the foregoing provisions of this Section 5(b), Xx.
Xxxxxxxx may at any time exercise his rights under the Company's
Employee Stock Option Plan ("ESOP") to effect the distribution and
sale, if he so elects, of shares of the Company's Common Stock
allocated to him, in accordance with the provisions of the ESOP.
6. a. In consideration of the foregoing, which Xx. Xxxxxxxx acknowledges
includes rights he may not otherwise be entitled to, Xx. Xxxxxxxx hereby
releases and forever discharges the Company, its present and former
directors, officers, employees, agents, subsidiaries, shareholders,
successors and assigns from any and all liabilities, causes of action,
debts, claims and demands (including without limitation claims and demands
for monetary payment) both in law and in equity, known or unknown, fixed
or contingent, which he may have or claim to have based upon or in any way
related to employment (as an officer, director or employee), rights or
entitlements related thereto or termination of such employment by the
Company and hereby covenants not to file a lawsuit or charge to assert
such claims. This includes but is not limited to claims arising under the
Federal Age Discrimination in Employment Act, and any other federal, state
or local laws prohibiting employment discrimination or claims growing out
of any legal restrictions on the Company's right to terminate its
employees, provided, however, that the foregoing shall not release or
otherwise limit the Company's obligation with respect to its obligations
set forth in this Agreement.
b. Xx. Xxxxxxxx understands that various State and Federal laws prohibit
employment discrimination based on age, sex, race, color, national origin,
religion, handicap or veteran status. These laws are enforced through the
Equal Employment Opportunity Commission (EEOC), Department of Labor and
State Human Rights Agencies. Xx. Xxxxxxxx acknowledges that he has been
advised by the Company to discuss this Agreement with his attorney and has
been encouraged to take this Agreement home for up to twenty-one (21) days
so that he can thoroughly review it and understand the effect of this
Agreement before acting on it.
7. a. Xx. Xxxxxxxx shall promptly return to the Company any Company property
in his possession.
b. Xx. Xxxxxxxx shall not knowingly use for Xx. Xxxxxxxx'x own benefit or
disclose or reveal to any unauthorized person (except his professional
advisors, each of whom shall be informed by Xx. Xxxxxxxx of the contents
of this provision), any trade secret or other confidential information
relating to the 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, marketing, promotional pricing and financing techniques, or
other information relating to the business of the Company, and Xx.
Xxxxxxxx confirms that such information constitutes the exclusive property
of the Company. Such restriction on confidential information shall remain
in effect until such time as the confidential information is (i) generally
available in the industry or (ii) disclosed in published literature or
otherwise through no act of Xx. Xxxxxxxx. Xx. Xxxxxxxx agrees to return to
the Company any physical embodiment of such confidential information
within seven (7) days of the execution hereof. Xx.Xxxxxxxx expressly
acknowledges that damages alone will be an inadequate remedy for any
breach or violation of any of the provisions of this Section 7(b), 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, in any court of
competent jurisdiction.
c. Xx. Xxxxxxxx shall make himself available in any third party claims,
investigations, litigation or similar proceedings to answer any questions
relating to his employment or actions as an employee, officer or director
of the Company, including without limitation attendance at any
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deposition or similar proceeding. The Company shall pay Xx. Xxxxxxxx'x
expenses and shall be obligated to compensate him at a per diem rate of
$2,500 for time actually expended.
d. The Company shall provide Xx. Xxxxxxxx, or his designated
representatives, reasonable access, under supervision and with reasonably
advance notice, access to such records or other information as Xx.
Xxxxxxxx may reasonably request in order for Xx. Xxxxxxxx to comply with
one or more personal obligations, such as preparation of tax returns and
insurance claims.
8. Xx. Xxxxxxxx shall at no time make any derogatory or disparaging comments
regarding the Company, its business, or its present or past directors,
officers or employees. The Company shall at no time make any derogatory or
disparaging comments regarding Xx. Xxxxxxxx.
9. The execution of this Agreement shall not be construed as an admission of
a violation of any statute or law or breach of any duty or obligation by
either the Company or Xx. Xxxxxxxx.
10. This Agreement is confidential and shall not be made public by either the
Company or Xx. Xxxxxxxx except as required by law, or subpoena or like
instrument, or is necessary in order to enforce this Agreement, in which
event, the party making disclosure shall advise the non-disclosing party
as soon as reasonably practical.
11. The invalidity or unenforceability of any particular provision of this
Agreement shall not affect the other provisions hereof, and this Agreement
shall be construed in all respects as if such invalid and unenforceable
provisions were omitted.
12. This Agreement is personal to Xx. Xxxxxxxx and may not be assigned by him.
However, in the event of Xx. Xxxxxxxx'x death, all the rights of Xx.
Xxxxxxxx set forth in this Agreement, including the rights to request a
Demand Registration, shall accrue to his spouse, if she is living;
otherwise, to his heirs.
13. This Agreement is made pursuant to and shall be governed by the laws of
the State of Rhode Island, without regard to its rules regarding conflict
of laws. The parties agree that the courts of the State of Rhode Island,
and the Federal Courts located therein, shall have exclusive jurisdiction
over all matters arising from this Agreement. Xx. Xxxxxxxx and the Company
hereby agree that service of process by certified mail, return receipt
requested, shall be deemed appropriate service of process.
14. Except as otherwise indicated, this Agreement contains the entire
understanding between Xx. Xxxxxxxx and the Company, supersedes all prior
agreements, oral or written, regarding the subject matter hereof, and may
not be changed orally but only by an agreement in writing signed by the
party against whom enforcement of any waiver, change, modification,
extension or discharge is sought. Xx. Xxxxxxxx acknowledges that he has
not relied upon any representation or statement, written or oral, not set
forth in this Agreement.
15. Xx. Xxxxxxxx may revoke this Agreement at any time during the seven-day
period following the date of his signature below (the "Revocation Period")
by delivering written notice of his revocation to the Company's attention
at 000 Xxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxx 00000; Attention: Xxxxxxx X. Xxxx.
This Agreement shall become effective upon the expiration of the
Revocation Period.
16. All notices required or contemplated by this Agreement shall be deemed
effective if written and delivered in person or if sent by certified mail,
return receipt requested, to the Company at the address shown in Section
15 above, to the attention of Xxxxxxx X. Xxxx, Chief Executive Officer of
the Company, with a copy to E. Xxxxx Xxxxxxx, Esq., Cameron & Xxxxxxxxx
LLP, 56
00
Xxxxxxxx Xxxxxxx, Xxxxxxxxxx, XX 00000 or to Xx. Xxxxxxxx at 00 Xxxxxxx
Xxxxx, Xxxx Xxxxxxxxx, XX 00000, with a copy to: Stanford X. Xxxxxxx, Xx.,
Esq., Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., Xxx Xxxxxxxxx
Xxxxxx, Xxxxxx, XX 00000, or such other persons or addresses as may
hereafter be designated by the respective parties.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date set
forth below.
UNITED NATURAL FOODS, INC. Witness:
By:
---------------------------- -------------------------------
Xxxxxxx X. Xxxx
Chief Executive Officer
December 8, 1999
Witness:
---------------------------- -------------------------------
Xxxxxx X. Xxxxxxxx
December 8, 1999
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SCHEDULE 5a
Stock Options
Grant Date Price # Shares Original Vesting New Vesting Date
---------- ----- -------- ---------------- ----------------
Date
----
7/31/96 $ 6.38 137,500 7/31/96 7/31/96
7/31/96 $10.60 9,433 7/11/96 7/11/96
7/31/96 $10.60 9,433 7/31/97 7/31/97
7/31/96 $10.60 9,433 7/31/98 7/31/98
7/31/96 $10.60 9,433 7/31/99 7/31/99
7/31/96 $10.60 3,518 7/31/00 12/6/99
12/19/97 $20.25 10,562 2/19/97 2/19/97
12/19/97 $20.25 32,737 12/19/00 12/6/99
12/19/97 $20.25 7,062 12/19/01 12/6/99
12/19/97 $20.25 7,062 12/19/02 12/6/99
12/19/97 $22.28 447 12/19/97 12/19/97
12/19/97 $22.28 3,263 12/19/00 12/6/99
12/19/97 $22.28 4,938 12/19/01 12/6/99
12/19/97 $22.28 4,938 12/19/02 12/6/99
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