Exhibit 10.E2
EXECUTIVE COMPENSATION AGREEMENT
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THIS AGREEMENT, effective the 1st day of July, 1997 (the "Agreement"),
by and between UNITED GROCERS, INC., an Oregon corporation (the "Company"), with
principal offices at 0000 XX Xxxx Xxxx, Xxxxxxxx, Xxxxxx, and XXXXXXX X. XXXXXXX
("Xxxxxxx"), residing in Portland, Oregon.
WHEREAS, The company desires to employ and obtain the unique
experience, ability and leadership skills of Xxxxxxx as President and Chief
Executive Officer, from July 1, 1997, through August 30, 1999, and to preclude
any other competitive business from securing his services and utilizing his
experience, background and know-how; and
WHEREAS, the terms, conditions and undertakings of this Agreement were
submitted to and duly approved and authorized by the Company's Board of
Directors at a meeting held on June 2, 1997, and July 9, 1997;
NOW, THEREFORE, in consideration of the promises of the parties, one
unto the other, it is hereby agreed as follows:
1. Employment.
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1.1 The Company employs Xxxxxxx and Xxxxxxx accepts employment as
the Chief Executive Officer and President of the Company and agrees to perform
services in such an executive capacity. The Company and Xxxxxxx also agree that
Xxxxxxx may occupy and perform services in an executive and/or board capacity to
such wholly owned subsidiaries of the Company as Xxxxxxx may determine
appropriate and/or desirable.
1.2 As the President and Chief Executive Officer,
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Xxxxxxx'x responsibilities shall be the overall operation and management of the
Company, and subject solely to the direction and guidance of the Board of
Directors.
1.3 Xxxxxxx shall devote his full time, effort and energies to the
successful and profitable operation of Company and its wholly owned
subsidiaries. However, the foregoing shall not preclude and/or prevent Xxxxxxx
from serving on the Board of Directors of non-competitor, nonprofit or for
profit companies and/or entities so long as such services do not adversely
affect his ability to perform the services requested hereunder. Any and all
compensation received by Xxxxxxx for such director services shall be for his own
account and benefit.
2. Term.
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2.1 The term of this Agreement shall commence on July 1, 1997, and
shall continue through and including August 30, 1999.
3. Compensation.
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3.1 As compensation for the services to be rendered, the Company
shall pay Xxxxxxx a base compensation of $180,000 per annum. The amount of base
compensation as herein provided may be increased annually by such percentage
amount as the Board of Directors shall determine appropriate in order to address
cost of living increases. Such compensation shall be paid to Xxxxxxx with the
same frequency as other executives of the Company are compensated.
3.2 The salary payments are subject to appropriate withholding, e.g.
federal and state income taxes, FICA, etc.
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3.3 In addition to the base salary, in December of each year, the
Board of Directors or the Compensation Committee shall determine what
appropriate amount of bonus, if any, is to be paid to Xxxxxxx. Such
determination shall take into account such factors as the Board of Directors
shall consider relevant in judging the performance of Xxxxxxx.
Any bonus to be paid to Xxxxxxx shall be paid by January 10 of the
following year. In the event of the death of Xxxxxxx, payment of any
compensation due and owing shall be paid to his then surviving spouse, or if no
surviving spouse, then to his estate.
4. Restrictive Covenant. Xxxxxxx acknowledges and agrees that because
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of and by reason of his employment as President and Chief Executive Officer of
the Company he will become privy to the most confidential and privileged
information possessed by the Company (collectively "Privileged Information").
This Privileged Information shall consist of, without limiting the generality of
the foregoing, financial statements, costs and sales analyses data, supply
sources, business opportunities, general operating procedures and business plans
of the Company. Accordingly, Xxxxxxx covenants and agrees that he will not,
during the term of this Agreement and for a period of five years following
termination of this Agreement, use or disclose any Privileged Information to
anyone other than Company's officers, directors, employees and representatives.
Xxxxxxx will not use any of the Privileged Information for his own account or
any purposes other than for the benefit of Company.
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5. Employee Benefits/Expenses.
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5.1 Expenses. The Company shall reimburse Xxxxxxx for all
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reasonable, customary and necessarily incurred expenses in carrying out his
duties under this Agreement. Xxxxxxx shall present to the Company by the 30th
day of each month an itemized account of such expenses in such form as may be
required by the Company.
5.2 Automobile. In recognition of Xxxxxxx'x need for an automobile
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for business purposes, the Company will provide a suitable vehicle for Xxxxxxx'x
sole and exclusive use or, at his option, reimburse him monthly for all business
related automobile expenses, including mileage, maintenance, repairs,
depreciation, insurance and all operational costs incident thereto.
5.3 Employee Benefits. This Agreement is not intended and shall not
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be deemed to be in lieu of any rights, benefits and privileges to which Xxxxxxx
may be entitled as an employee of the Company under any retirement, pension
(qualified or nonqualified) profit sharing, insurance, 401(k), medical/dental or
other plans which may now be in effect or which may hereinafter be adopted by
the Company; it being understood the Xxxxxxx shall have the same rights and
privileges to participate in such plans and benefits as any other management
employee during his employment period.
6. Termination.
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6.1 This Agreement may be terminated at any time, with or without
cause, by a two-thirds (2/3) vote of the Board of Directors. However, in the
event of a termination without cause, the Company shall continue to pay
Xxxxxxx'x base compensation
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following termination for a period of six months following such termination.
6.2 The Company may terminate this Agreement for "cause" in which
event no further compensation whatsoever shall be due and payable unto Xxxxxxx
(exclusive of any vested pension benefits). Termination for "cause" shall
include:
(a) The employee's unauthorized disclosure of Privileged
Information.
(b) Failure to perform or meet reasonable objective and
measurable standards as from time to time may be provided by the Board of
Directors.
(c) Disloyal, dishonest or illegal conduct.
6.3 Termination either with or without cause shall not and does not
terminate Xxxxxxx'x obligations under any restrictive covenant contained herein.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed in its corporate name by its duly authorized Board of Directors and
Xxxxxxx X. Xxxxxxx has executed this Agreement as of the day and year first
above written.
COMPANY: UNITED GROCERS, INC.
By: /s/Xxxxxx Xxxxx
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Name: Xxxxxx Xxxxx
Title: Chairman of the Board
XXXXXXX:
By: /s/Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
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