EXHIBIT 10.54
[LOGO OF SMART & FINAL]
MEMO
DATE: May 31, 2001
TO: Xxxxx Xxxxx
Executive Vice President & Chief Financial Officer
FROM: Xxxx Xxxxxx
Chairman & Chief Executive Officer
SUBJECT: Succession Planning Terms and Consulting Agreement
This purpose of this memorandum is to document the agreement between you and
Smart & Final Inc. ("Company") regarding certain terms relating to your
employment with the Company.
You have communicated your desire to retire from your current position as
Executive Vice President and Chief Financial Officer. You have also assisted in
the search for and transition to a new Chief Financial Officer. The following
terms have been mutually agreed upon as additions or amendments to your
Employment Agreement dated April 1, 1997 and as amended ("Employment Agreement")
with the Company:
1. Your service as Chief Financial Officer of the Company and your
positions as corporate officer and/or director of Company subsidiaries
terminated on May 23, 2001.
2. Your service as Executive Vice President of the Company will cease as
of May 31, 2001.
3. In consideration of your services rendered during fiscal year 2000,
you have received a performance-based bonus of $100,000.00, paid on
March 15, 2001. It is understood that you will not thereafter be
eligible for any additional payments under the Company's Annual
Incentive (Bonus) Plan.
4. Your accrued but unpaid vacation time is agreed to be $62,965.95 as of
May 31, 2001. As soon as practicable after May 31, 2001, this amount
will be paid to you less standard payroll deductions, and you agree
that irrespective of any future service to the Company, that no
additional vacation time shall thereafter accrue.
5. In consideration of your Employment Agreement and in consideration of
your future consulting service below, you will receive 24 months of
severance payments commencing June 1, 2001, at your current annual
rate of pay of $335,000, according to the Company's standard payroll
practices. Payment of severance payments will continue in the event
that you are incapacitated or die during the Consulting Term as
defined below.
6. Commencing June 1, 2001 you have agreed to serve as a consultant to
the Company for a period of 24 months (the "Consulting Term"). In such
capacity you have agreed to hold yourself available to render
consultation and advice to the Company in regard to all aspects of the
business. In consideration of your availability for consulting during
the Consulting Term, you will receive a consulting retainer of $13,500
per month (payable according to the
Xxxxx Xxxxx - Succession and Consulting
May 31, 2000
Page 2
Company's standard payroll practices) in addition to the severance
payments under Paragraph 5 above. Payment of retainer fees will
continue in the event that you are incapacitated or die during the
Consulting Term.
7. During the Consulting Term, it is understood that you will remain
reasonably available for consultation at your residence by telephone
and correspondence. It is expressly understood that you may be away
from your residence for extended periods, but where it is practicable,
you will endeavor to remain available by telephone.
8. During the Consulting Term, if your services are requested by the
Company at the Company's offices or at such other location as may be
designated by the Company and you agree, the Company agrees to pay you
an additional consulting fee on an hourly or per diem basis, including
necessary travel time, with such fee to be negotiated in advance
between the parties. The Company agrees to provide you with reasonable
notice of such requests and if such request cannot be accommodated by
you, you may decline such request without prejudice to any right to
payment for other sums due herein. Unless otherwise agreed by you, the
maximum consulting services required in any one calendar month shall
be ten hours.
9. All of your expenses reasonably incurred by you in the performance of
your consulting duties for the Company during the Consulting Term,
including but not limited to travel and lodging expenses, shall be
promptly reimbursed by the Company.
10. During the Consulting Term, you will not, without prior consent of the
Chief Executive Officer of the Company, directly or indirectly render
any material services to any other person, business, or entity that is
in a materially competitive position with the Company or the Company's
businesses (as described in the Company's Report on Form 10-K for the
fiscal year ended December 31, 2000). In the event that the Chief
Executive Officer of the Company does not grant consent, you have the
right to appeal such decision to the Compensation Committee of the
Board of Directors, whose majority decision shall be binding upon all
parties. This provision, in no way limits your rights to provide
services for compensation or otherwise to persons or firms that do not
compete with the Company.
11. In addition, throughout the term of the Consulting Agreement, you will
continue to receive all other benefits under the Employment Agreement,
and any and all plans, arrangements and agreements under which you are
currently afforded benefits (collectively, the "Xxxxx Agreements"),
except as provided in Paragraphs 3 and 4 above. The Xxxxx Agreements
include, but are not limited to, your deferred compensation agreements
dated April 15, 1992 and March 31, 1994, as amended, and the
Supplemental Executive Retirement Plan ("SERP"). All consulting
retainer payments and other consulting fees referred to herein, with
the exception of reimbursement for expenses, will be treated as
eligible compensation for purposes of determining benefits under the
deferred compensation and SERP agreements.
12. It is expressly acknowledged that at retirement you will be fully
vested in the SERP, with a retirement benefit commencing no later than
June 1, 2003 and payable on a 75% joint-and-survivor annuity basis
where the annual annuity payment shall not be less than $201,269. The
Company agrees that this annual SERP benefit amount shall be increased
in respect
Xxxxx Xxxxx - Succession and Consulting
May 31, 2000
Page 3
of any additional consulting fees which may be paid under Paragraph 8
above, in an amount of additional SERP benefit to be agreed in advance
between the parties.
13. If not sooner vested, the Company shall cause all of your stock
options, restricted stock, and other equity benefits (collectively
"Equity Benefits") to fully vest on June 1, 2003. Equity Benefits will
remain exercisable for a three-year period thereafter. Until June 1,
2003 you will receive the benefit of any modifications or adjustments
to any such Equity Benefits offered generally to other executive
officers of the Company, but it is understood that you will not be
eligible to participate in any new equity benefits which may be
granted subsequent to May 31, 2001.
14. In all other respects, the Xxxxx Agreements shall remain unmodified
and in full force and effect.
15. The consulting services listed hereunder in Paragraphs 6 through and
including 10 may be assigned by you to a professional service
organization in which you own a controlling interest, provided that
the consulting services will be performed by you personally.
Notwithstanding any such assignment, you agree that failure of a
professional service organization to perform such services shall have
the same legal effect as if you had failed to personally perform such
service.
Except as modified by this amendment, in all other respects the Employment
Agreement and all other existing agreements dealing with employment matters
between you and the Company will remain unmodified and in full force and effect.
Xxxxx, we are pleased with your assistance in the mutually agreeable transition
to a new Chief Financial Officer. Your flexibility and cooperation are greatly
appreciated.
If you agree that the above represents our understanding, please indicate this
by your signature below.
For Smart & Final Inc:
/s/ Xxxx X. Xxxxxx
------------------------------------
Xxxx X. Xxxxxx
Chairman and Chief Executive Officer
Agreed and Accepted:
/s/ Xxxxxx X. Xxxxx
------------------------------------
Xxxxxx X. Xxxxx
