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Exhibit 10 (b)
EMPLOYMENT CONTRACT
THIS AGREEMENT ("Agreement"), made and entered into as of June 1, 1997
(the "Effective Date"), by and between ▇▇▇▇▇ SUPERMARKETS, INC., an Indiana
corporation with its principal office at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, and _________ of ___________________________, Indiana
46060 (the "Executive")
R E C I T A L S:
A. Executive has been an employee of the COMPANY (as such italicized
term and each other term hereinafter italicized is defined in Section 7 below)
since _____ and is currently serving as ____________________________.
B. The Salary Committee of the BOARD OF DIRECTORS and the BOARD OF
DIRECTORS believe that Executive's services have been a key factor in the growth
and success of the COMPANY and that it is in the best interests of the COMPANY
that Executive's talent and experience will continue to be available to the
COMPANY.
C. Executive is willing to continue to serve the COMPANY on the terms
and subject to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and in consideration
of the mutual terms and conditions hereinafter set forth, the COMPANY and
Executive agree as follows:
1. TERM. The term of this Agreement shall be for a period (the
Term")which commences on the Effective Date and ends on the earlier of (i)
payment of or provision for the severance benefits provided for in this
Agreement, or (ii) the EXPIRATION DATE as determined in Section 11 below.
2. EMPLOYMENT.
(a) Duties, Salary and Benefits. At all times during the Term, COMPANY
shall employ Executive as __________________________________ of the
COMPANY and Executive agrees that in such position Executive will
perform such duties and functions as requested by the BOARD OF
DIRECTORS and consistent with such position. Executive shall devote his
best efforts to the business of the COMPANY for which Executive shall
be paid an annual base salary of not less than $000,000 per year,
payable at such times as salaries of the officers of the COMPANY are
paid, together with such other additional base or incentive
compensation as the SALARY COMMITTEE of the BOARD OF DIRECTORS may from
time to time determine appropriate. Executive shall also be entitled to
participate in any insurance (life, accident, disability, health and
hospitalization), pension, retirement, profit sharing, stock plan, or
any other plan or benefit afforded by the COMPANY to persons serving in
positions at levels comparable to Executive's or employees generally to
the extent that Executive is eligible to participate or to receive such
benefits in accordance with the provisions of any such plan and
applicable laws and regulations. The COMPANY shall provide Executive
with membership in and expenses related
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to Food Marketing Institute and other management or professional
organizations of which Executive is a member on the Effective Date or
may be a member during the Term, a reasonable expense reimbursement
plan and legal and tax planning services all in accordance with
present practices. Nothing herein is intended or shall be construed to
require the COMPANY to institute any new plan or benefit except as
specifically set forth herein, but it is agreed that during the Term
the aforesaid benefits shall not be more restrictive or in lesser
amounts or quality than Executive is presently receiving, except to
the extent required by applicable law, regulations or rules governing
plans intended to be qualified under the CODE.
(b) Insurance and Indemnity. Subject to the availability thereof, the
Company will procure and maintain at all times during the Term a
Directors' and Officers' Liability Insurance policy or equivalent
insurance policy to cover Executive's acts and omissions as an employee
of and as counsel to the COMPANY. Further, in addition to any rights as
an executive or an officer existing and assumed under the COMPANY'S
Restated Articles of Incorporation, Bylaws, or any agreement with the
COMPANY, the COMPANY shall indemnify (including the advancement of
expenses) and hold harmless Executive, to the fullest extent permitted
by Indiana statutory and case law; and COMPANY hereby covenants that,
from the Effective Date and continuing after the DATE OF TERMINATION,
regardless of whether severance benefits are payable, it shall so
indemnify (including the advancement of expenses) and hold harmless
Executive or his estate against losses, claims, damages, liabilities,
costs, expenses, judgments, and amounts arising out of or in connection
with any claim, action, suit, proceeding or investigation, or threat
thereof (whether brought by or in the right of the COMPANY or
otherwise), civil or criminal, or in connection with any appeal related
thereto, in which Executive or his estate may become involved, or is
threatened to be involved as a party or otherwise, by reason of having
been an officer of or counsel to the COMPANY or a member of any
Committee appointed by the BOARD OF DIRECTORS, or arising from any
actions taken or omissions to act prior to the DATE OF TERMINATION, or
which arises out of or pertains to any of the actions contemplated by
this Agreement.
(c) Covenant to Remain. In the event any other corporation, person or
GROUP begins a tender or exchange offer, circulates a proxy to
shareholders or takes other steps to effect a CHANGE IN CONTROL,
Executive agrees not to leave voluntarily the employ of the COMPANY and
to render services to the COMPANY commensurate with Executive's
position, until such other corporation, person or GROUP has abandoned
or terminated efforts to effect a CHANGE IN CONTROL or until a CHANGE
IN CONTROL has occurred.
(d) Right to Terminate. Subject to the provisions contained in Sections
2, 3, 4, 5 and 6 of this Agreement regarding severance benefits, it is
specifically understood between the parties that either the Executive
or the COMPANY shall have the right to terminate Executive's services
at any time or for any reason, with or without a CHANGE IN CONTROL.
3. SEVERANCE BEFORE A CHANGE IN CONTROL. If a CHANGE IN CONTROL shall
not have occurred while Executive is an employee of the COMPANY, the parties
contemplate that a severance of the employment relationship will ultimately
occur as a result of one of the following circumstances and desire to set forth
Executive's rights in such an event:
(a) CAUSE or Resignation. If Executive's employment is terminated by
the COMPANY for CAUSE or if Executive resigns, Executive shall receive
any BASE SALARY earned through the DATE OF TERMINATION.
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(b) RETIREMENT. If Executive's employment is terminated by RETIREMENT,
whether voluntary or by the COMPANY, Executive shall receive the
LIFETIME MEDICAL BENEFITS, together with Executive's BASE SALARY
through the DATE OF TERMINATION.
(c) Death. If Executive's employment is terminated as a result of
Executive's death, Executive's spouse shall receive LIFETIME MEDICAL
BENEFITS and the COMPANY shall pay a one (1) year continuation of
Executive's BASE SALARY to such persons or entities as Executive shall
have directed prior to death (or if no such designation is made, to
Executive's estate), payable as and when the salaries of the COMPANY'S
officers are paid.
(d) DISABILITY. If Executive's employment is terminated as a result of
DISABILITY, Executive shall receive LIFETIME MEDICAL BENEFITS,
Executive's BASE SALARY through the DATE OF TERMINATION, together with
a two (2) year continuation of Executive's BASE SALARY, payable as and
when the salaries of the COMPANY'S officers are paid.
(e) OTHER. If Executive's employment is terminated for any reason not
enumerated in the immediately preceding paragraphs (a) through (d),
Executive shall receive LIFETIME MEDICAL BENEFITS, Executive's BASE
SALARY through the DATE OF TERMINATION, together with a three (3) year
continuation of Executive's BASE SALARY, payable as and when the
salaries of the COMPANY'S officers are paid.
(f) Salary Continuation Reduction and Termination. Any salary
continuation otherwise payable for any year under the provisions of
Sections 3(c), 3(d) or 3(e) above shall be reduced by the supplemental
retirement benefit paid or payable to Executive or Executive's spouse
for that year (or payable under the assumption that Executive elects
early commencement of benefits) under the terms of the SUPPLEMENTAL
RETIREMENT PLAN. For purposes of calculating this offset, the benefits
payable under the SUPPLEMENTAL RETIREMENT PLAN shall be the reduced
benefit, if any, under the terms of the SUPPLEMENTAL RETIREMENT PLAN
assuming Executive elects to commence payments at the later of
Executive's DATE OF TERMINATION or the earliest date at which benefits
can commence under the SUPPLEMENTAL RETIREMENT PLAN. Any salary
continuation otherwise payable to Executive under the provisions of
Sections 3(c), 3(d) or 3(e) above shall terminate on the date Executive
attains age 65.
(g) Covenant Not to Compete and Confidentiality. Any salary
continuation or severance benefits payable under the provisions of this Section
3 are expressly conditioned upon Executive's compliance with the covenant not to
compete and confidentiality undertaking set forth in Section 8.
4. SEVERANCE FOLLOWING A CHANGE IN CONTROL. If a CHANGE IN CONTROL
shall have occurred while Executive is still an employee of the COMPANY, this
Agreement shall continue in effect from the date of the CHANGE IN Control for
the Term. Upon Executive's termination as an employee after a CHANGE IN CONTROL,
Executive shall be entitled to the following:
(a) If following a CHANGE IN CONTROL Executive's employment shall be
terminated for CAUSE, RETIREMENT, Death or DISABILITY, the COMPANY'S
obligations under this Agreement shall be the same as set forth in
Sections 3(a) through 3(d) of this Agreement, respectively, as if there
had not been any CHANGE IN CONTROL.
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(b) If following a CHANGE IN CONTROL Executive's employment is
terminated by Executive for REASON or by the COMPANY for any reason
other than CAUSE, RETIREMENT, Death or DISABILITY, then Executive shall
be entitled to the BENEFITS UPON CHANGE IN CONTROL.
(c) Golden Parachute Savings Provisions. In the event the COMPANY
determines that any payment or benefit to Executive under this
Agreement, or any other payment to Executive in the nature of
compensation, made as a result of a CHANGE IN CONTROL, would result in
the payment of an EXCESS PARACHUTE PAYMENT and provides to Executive,
within thirty (30) days after the DATE OF TERMINATION or Executive's
actual date of termination, whichever date first occurs, an OPINION,
the BENEFITS UPON CHANGE IN CONTROL shall be adjusted so that the
PRESENT VALUE of the BENEFITS UPON CHANGE IN CONTROL does not exceed
three hundred percent (300%) of Executive's ANNUALIZED INCLUDIBLE
COMPENSATION minus One Dollar ($1.00), or such other formula to
determine a PARACHUTE PAYMENT as may be in effect pursuant to an
amendment of Section 280G(b)(2)(A)(ii) of the CODE, in accordance with
the written instructions of Executive of the payments Executive elects
to have reduced or delayed in order to avoid any payments being deemed
EXCESS PARACHUTE PAYMENTS. If Executive does not agree with the OPINION
or the calculation presented and is unable to resolve any such dispute
with the COMPANY within ten (10) days after receipt of the OPINION,
Executive may seek a judicial determination of Executive's rights under
this Agreement. Any reduction in benefits will be applied against the
BENEFITS UPON CHANGE IN CONTROL pursuant to or described in this
Agreement in the order of priority designated by Executive.
5. BENEFITS UPON CHANGE IN CONTROL. In the event a CHANGE IN CONTROL
shall have occurred while Executive is an employee of the COMPANY, the COMPANY
shall:
(a) Pay to Executive, as severance pay in a lump sum on the fifth (5th)
day following the DATE OF TERMINATION, the following amounts:
(i) Executive's BASE SALARY through the DATE OF TERMINATION at
the rate in effect at the time NOTICE OF TERMINATION is given,
and an amount equal to the sum of any bonus or other awards
made to Executive, if any, which has not yet been paid to
Executive.
(ii) In lieu of any further BASE SALARY payments to Executive
during the Term subsequent to the DATE OF TERMINATION, an
amount equal to the TERMINATION PAYMENT.
(b) Executive's rights to vesting of deferred compensation benefits
under the SUPPLEMENTAL RETIREMENT PLAN shall be determined by the terms
and conditions of such plan, but with the determination of whether a
CHANGE IN CONTROL has occurred for purposes of that plan being made
under the definition of CHANGE IN CONTROL under Section 7(h) of this
Agreement.
(c) The COMPANY shall maintain in full force and effect, for the
continued benefit of Executive and Executive's dependents,
beneficiaries and estate, to the extent applicable, all life and
accident plans, programs or arrangements in which Executive was
entitled to participate immediately prior to the DATE OF TERMINATION,
provided that continued participation by Executive is possible under
the general terms and provisions of such plans, programs or
arrangements, until the earliest of the third anniversary of the DATE
OF TERMINATION, the date Executive is eligible to participate in
similar plans, programs or arrangements provided by any subsequent
employer, or the date Executive attains age 65 (the earliest of these
three dates is
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hereafter referred to as the "Coverage Termination Date"). In the
event that participation by Executive in any such plan, program or
arrangement is barred or would violate any applicable
non-discrimination rule, the COMPANY shall arrange to provide Executive
with benefits substantially similar to those which Executive is
entitled to receive under such plan, program or arrangement for such
period.
(d) Executive shall receive, in addition to any other amounts or
benefits which may be paid to Executive, LIFETIME MEDICAL BENEFITS.
(e) The TERMINATION PAYMENT shall not be included as part of
Executive's last twelve (12) months of EARNINGS for purposes of
calculating Executive's benefits under the PENSION PLAN. In lieu of the
TERMINATION PAYMENT being included in EARNINGS, but in addition to the
benefits to which Executive is entitled under the PENSION PLAN, a lump
sum cash payment at Executive's normal RETIREMENT date (or early
RETIREMENT date if Executive should so elect) in an amount equal to the
ACTUARIAL EQUIVALENT of the retirement pension benefit to which
Executive would have been entitled under the terms of the PENSION PLAN,
without regard to "vesting" thereunder, determined as of the DATE OF
TERMINATION, deeming Executive to be 100% vested, assuming Executive
had accumulated three (3) additional years of continual service (after
termination pursuant to Section 4(b) at Executive's BASE SALARY rate in
effect on the DATE OF TERMINATION, reduced by (y) the single sum
ACTUARIAL EQUIVALENT of any amounts to which Executive is entitled
pursuant to the provisions of the PENSION PLAN. In the event there is
less than thirty-six (36) months remaining from the DATE OF TERMINATION
until Executive's normal RETIREMENT date, the thirty-six (36) month
period of additional accruals shall be reduced to a period not to
exceed the time period from the DATE OF TERMINATION until Executive's
normal RETIREMENT date.
(f) The COMPANY shall pay all legal and accounting fees and expenses
incurred by Executive in contesting or disputing Executive's
termination following a CHANGE IN CONTROL or in seeking to obtain or
enforce any right or benefit provided by this Agreement if Executive is
successful, in whole or in part, whether as a result of a court
judgment or otherwise.
(g) Executive shall not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment or
otherwise, nor shall the amount of any payment provided for herein be
reduced by any compensation earned by Executive as a result of
employment by another employer or otherwise after the DATE OF
TERMINATION.
6. SEVERANCE BEFORE OR AFTER A CHANGE IN CONTROL. Regardless of the
reason for Executive's termination of employment whether before or after a
CHANGE IN CONTROL, Executive shall be entitled to:
(a) Executive's rights under option agreements or grants under the 1987
Stock Option Plan, the 1991 Employee Stock Incentive Plan or any other
similar type of plan adopted by the BOARD OF DIRECTORS after the
Effective Date, which rights shall be determined under the terms and
conditions of the respective plans, including the determination of
whether a CHANGE IN CONTROL has occurred for purposes of each such plan
under the definition thereof in such plan; and
(b) Whatever benefits Executive is entitled to receive by reason of
Executive's participation in the COMPANY'S various welfare and
retirement plans, in accordance with the respective rules of
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each of such plans, except that the determination of whether a CHANGE
IN CONTROL has occurred for payment of benefits under the SUPPLEMENTAL
RETIREMENT PLAN shall be made under the definition of CHANGE IN CONTROL
contained in Section 7(h) of the Agreement.
7. DEFINITIONS. The following definitions shall be applicable to and
govern the interpretation of this Agreement:
(a) ACTUARIAL EQUIVALENT: An amount determined by using the same
methods and assumptions utilized under the PENSION PLAN immediately
prior to a CHANGE IN CONTROL.
(b) ACT: The Securities Exchange Act of 1934.
(c) ANNUALIZED INCLUDIBLE COMPENSATION: The average of the Executive's
total compensation from the COMPANY that was included in the
Executive's gross income for federal income tax purposes during the
period ending December 31 immediately preceding the CHANGE IN CONTROL
and beginning five (5) years before such December 31, consistent with
the definition of that term in Section 280G(d)(1) of the CODE and the
Treasury regulations promulgated thereunder.
(d) BASE SALARY: Executive's full annual base salary at the rate in
effect on the DATE OF TERMINATION, whether due to RETIREMENT, Death,
DISABILITY or otherwise.
(e) BENEFITS UPON CHANGE IN CONTROL: The benefits more particularly
described in Section 5 of this Agreement.
(f) BOARD OF DIRECTORS: The Board of Directors of the COMPANY.
(g) CAUSE: The delivery to Executive of a copy of a resolution
certified by the Secretary of the COMPANY as having been duly adopted
by the affirmative vote of not less than three-quarters of the entire
membership of the BOARD OF DIRECTORS at a meeting of the BOARD OF
DIRECTORS called and held for that purpose (after reasonable notice to
Executive and an opportunity for Executive, together with Executive's
counsel, to be heard before the BOARD OF DIRECTORS) finding that, in
the good faith opinion of the BOARD OF DIRECTORS, Executive was guilt
of an act or acts of dishonesty constituting a felony and resulting or
intended to result, directly or indirectly, in substantial gain or
personal enrichment of Executive at the expense of the COMPANY and
specifying in detail the particulars.
(h) CHANGE IN CONTROL: The happening of any one of the following
events:
(1) The COMPANY shall cease to be a publicly-owned corporation
having its outstanding common stock traded in the over-the-counter
market or other national exchange; or
(2) Any person or entity, including a GROUP, is or becomes the
beneficial owner, directly or indirectly, of securities of the
COMPANY representing 35% or more of the combined voting power of
the COMPANY'S then outstanding securities that may be cast for the
election of directors of the COMPANY; or
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(3) During any period of two (2) consecutive years, individuals
who at the beginning of such period constitute the BOARD OF
DIRECTORS cease for any reason to constitute at least a majority
thereof, unless the election, or the nomination for election by
the COMPANY'S shareholders, of each director of the COMPANY first
elected during such period was approved by a vote of at least
two-thirds of the directors then still in office who were
directors at the beginning of any such period; or
(4) The shareholders of the COMPANY approve (a) any merger,
consolidation or other business combination of the COMPANY with an
other PERSON or any affiliate thereof, other than a merger or
consolidation that would result in the outstanding Class A Common
Stock of the COMPANY immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into common stock of the surviving entity) at least sixty percent
(60%) of the outstanding Class A Common Stock of the COMPANY or
such surviving entity outstanding immediately after such merger or
consolidation; (b) a plan of complete liquidation of the Company;
or (c) any sale, lease, exchange or other transfer (in one
transaction or a series of transactions) of all, or substantially
all, of the assets of the COMPANY.
(5) Notwithstanding the occurrence of any of the events set forth
in the immediately preceding paragraphs (1) through (4), the BOARD
OF DIRECTORS may determine that an event otherwise constituting a
CHANGE IN CONTROL shall not be considered a CHANGE IN CONTROL for
purposes of this Agreement because such event had been approved by
the BOARD OF DIRECTORS prior to its occurrence. Such determination
by the BOARD OF DIRECTORS shall be effective only if it is made by
the BOARD OF DIRECTORS prior to the occurrence of the event which
would otherwise be a CHANGE IN CONTROL
(i) COBRA: The right of continuation coverage of medical benefits under
Section 601 et seq. of the Employee Retirement Income Security Act of
1974 and Section 4908B of the CODE, as either of such statutes may be
amended.
(j) CODE: The Internal Revenue Code as amended and in effect at the
time.
(k) COMPANY: ▇▇▇▇▇ Supermarkets, Inc. and any successor to its business
and/or assets which executes and delivers the agreement provided for in
Section 9 or which otherwise becomes bound by all of the terms and
provisions of this Agreement by the operation of law.
(l) DATE OF TERMINATION: The date on which (a) Executive delivers
NOTICE OF TERMINATION to the COMPANY if Executive's employment with the
COMPANY is terminated by Executive; or (b) NOTICE OF TERMINATION is
given by the COMPANY if the COMPANY terminates Executive's employment;
provided, however, if Executive notifies the COMPANY within thirty (30)
days after receiving NOTICE OF TERMINATION from the COMPANY that a
dispute exists regarding Executive's termination, the DATE OF
TERMINATION shall be the date on which such dispute is finally
determined, either by mutual written agreement of the parties or by a
final judgment, order or decree of a court of competent jurisdiction
(the time for appeal therefrom having expired and no appeal having been
perfected).
(m) DISABILITY: Executive shall be deemed disabled so as to permit
Executive termination for DISABILITY if a licensed physician of
Executive's choosing states, in writing, that Executive is unable, for
either physical or mental reasons, or both, to perform a substantial
portion of
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Executive's ordinary duties and that Executive's condition
has existed for at least six (6) months and will more probable than not
extend for an additional six (6) months into the future.
(n) EARNINGS: The same definition as the term "Earnings" as defined and
computed in the PENSION PLAN.
(o) EXCESS PARACHUTE PAYMENT(S): As defined in Section 280G of the
CODE.
(p) EXPIRATION DATE: The date which three years after the date on which
either the COMPANY or Executive notifies the other party that this
Agreement is being terminated; provided that, during such three year
period, neither a severance of Executive's employment relationship with
the COMPANY nor a CHANGE IN CONTROL shall have occurred.
(q) GROUP: Same definition as the term "group" as used in Section
13(d)(3) of the ACT.
(r) LIFETIME MEDICAL BENEFITS: Coverage for Executive and the
Executive's spouse for their respective lifetimes under the COMPANY'S
group medical, dental and vision plans, programs or arrangements
(individually and collectively referred to hereinafter as the "Medical
Plan"), at no expense to Executive or to Executive's spouse, as if
Executive had continued as an employee of the COMPANY, provided that
such continued participation is possible under the terms and provisions
of the group Medical Plan. Any future increases in benefits available
to employees of the COMPANY generally under the Medical Plan shall also
be provided to Executive and to Executive's spouse, at no expense to
Executive or to Executive's spouse. In the event that participation in
the Medical Plan by Executive as a former employee or by Executive's
spouse is barred, or if the benefits provided to Executive and to
Executive's spouse (after taking into account any Medicare benefits
provided by Title XVIII of the Social Security Act) are reduced to a
level below the level of such benefits on the DATE OF TERMINATION, or
if Executive or Executive's spouse elects at any time by notice, in
writing, to the COMPANY, the COMPANY shall arrange to provide both
Executive and Executive's spouse with benefits substantially similar to
those which they were eligible to receive under the Medical Plan
immediately prior to the DATE OF TERMINATION, such benefits to be
provided at the COMPANY'S expense by means of individual insurance
policies, or if such policies cannot be obtained, from the COMPANY'S
assets. These benefits shall continue after the death of Executive to
Executive's spouse, if Executive's spouse survives Executive, for
Executive's spouse's lifetime. If at any time after the DATE OF
TERMINATION, Executive should accept employment with another employer
and if either Executive or Executive's spouse, or both, should be
covered under that employer's medical benefit plans, then on the
effective date that such coverage commences, the obligation of the
COMPANY to provide Medical Plan benefits to whoever of Executive or
Executive's spouse, or both, is covered under the medical benefit plans
of the other employer shall terminate. The Medical Plan benefits
provided to Executive and to Executive's spouse after the DATE OF
TERMINATION are intended by the parties to be in lieu of the
continuation coverage rights of Executive and his spouse under COBRA.
LIFETIME MEDICAL BENEFITS shall also include the requirement that, if
any Medical Plan benefits provided to Executive or to Executive's
spouse are subject to federal and/or state income taxes, including the
alternative minimum tax, the COMPANY will pay to Executive or to
Executive's spouse, the full amount of such taxes, plus such additional
amount as may be necessary so that the net payment after taxes is
sufficient to reimburse Executive or Executive's spouse for all taxes
imposed on the provision of Medical Plan benefits.
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(s) NOTICE OF TERMINATION: Written notice indicating the specific
termination provision of this Agreement relied upon and setting forth
in reasonable detail the facts and circumstances claimed to provide the
basis for termination of Executive's employment under the provision so
indicated. For purposes of this Agreement, a purported termination
shall not be effective without a NOTICE OF Termination.
(t) OPINION: An opinion of independent accounting advisors to the
COMPANY immediately prior to the CHANGE IN CONTROL that Executive will
be considered to have received EXCESS PARACHUTE PAYMENTS if Executive
were to receive the full amounts owing pursuant to or described in this
Agreement and setting forth with particularity the smallest amount by
which the payment due Executive would have to be reduced to avoid the
imposition of any excise tax or the denial of any deduction pursuant to
Sections 280G and 4999 of the CODE.
(u) PARACHUTE PAYMENT: A "parachute payment" as determined in
accordance with Section 280G of the CODE.
(v) PENSION PLAN: The Employees' Pension Plan of ▇▇▇▇▇ Supermarkets,
Inc. and Subsidiaries or any successor plan, as in effect on the DATE
OF TERMINATION.
(w) PERSON: Same definition as the term "person" in Sections 13(d)
and 14(d) of the ACT.
(x) PRESENT VALUE: The present value of the amount of cash paid, the
fair market value of property transferred, or the fair market value of
benefits provided under each paragraph of this Agreement (and of any
other payments to Executive in the nature of compensation, contingent
upon a CHANGE IN CONTROL) shall be determined as of the time this
Agreement becomes operative (or such other time as may be established
by Treasury regulations issued under Section 280G of the CODE utilizing
a discount rate equal to 120% of the interest rate factor specified in
Section 1274(d) of the CODE, as in effect at the time of the present
value calculation (or such other rate as may be established by Treasury
regulations issued under Section 280G of the CODE).
(y) REASON: If, in Executive's sole judgment, there is a change in the
stature of the position in the COMPANY held by Executive at any time
previously, occasioned by a change in the nature or scope of
Executive's responsibilities or duties, a change in the location where
such duties are to be performed, or a reduction in the aggregate
compensation paid to Executive for the performance thereof, or for any
other reason.
(z) RETIREMENT: Severance by the COMPANY or by Executive of Executive's
employment with the COMPANY based on Executive attaining age of
sixty-five (65), which is the COMPANY'S normal retirement age.
(ab) SUPPLEMENTAL RETIREMENT PLAN: The Supplemental Retirement Plan of
▇▇▇▇▇ Supermarkets, Inc., effective April 1, 1987, or any successor
plan in effect on the DATE OF TERMINATION.
(ac) TERMINATION PAYMENT: An amount equal to the product of (x) the sum
of Executive's annual base salary at the highest rate in effect during
the twelve (12) month period immediately preceding the DATE OF
TERMINATION plus the amount of the highest annual bonus awarded to
Executive during the twenty-four (24) months ended on the DATE OF
TERMINATION (whether or
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not fully paid), multiplied by (y) the number three (3); provided,
however, that in the event there are fewer than thirty-six (36) whole
or partial months remaining from the DATE OF TERMINATION until
Executive's normal RETIREMENT date, the amount calculated pursuant to
this paragraph shall be reduced by multiplying it by a fraction, the
numerator of which shall be the number of whole or partial months so
remaining to Executive's normal RETIREMENT date and the denominator of
which shall be thirty-six (36).
8. NON-COMPETITION/CONFIDENTIALITY.
(a) Noncompetition. During the period Executive is employed by the
COMPANY and during the period after termination of employment prior to
a CHANGE IN CONTROL while salary continuation payments are being made
pursuant to Section 3 of this Agreement, Executive will not:
(i) directly or indirectly own, manage, operate pr participate
in the ownership, management, operation or control of. or be connected
as an officer, employee, partner, director or otherwise with , or have
any financial interest in, or aid or assist anyone else in the conduct
of, any of the following types of businesses: retail supermarkets,
convenience food stores, food and drug combination stores or a
convenience store distribution business in Indiana and Ohio or any
other area where such business is being conducted by the COMPANY or any
of its subsidiaries (provided that ownership of five percent (5%) of
less of the voting stock of any publicly held corporation shall not
constitute a violation hereof); or
(ii) directly or indirectly employ, solicit for employment, or
advise or recommend to any other persons that they employ or solicit
for employment, any person, who at the time of such employment,
solicitation, advice or recommendation, is an employee of the COMPANY
or any of its subsidiaries, provided, however, that this subparagraph
(ii) shall not be construed to prevent Executive form engaging in
generic nontargeted advertising for employees generally.
(b) Unauthorized Disclosure. During the period Executive is employed by
the COMPANY hereunder, Executive shall not, without the prior written
consent of the BOARD OF DIRECTORS, or a person authorized thereby,
disclose to any person, other than a person to whom disclosure is
necessary or appropriate in connection with the performance by
Executive of Executive's duties as an officer of the COMPANY, any
confidential information obtained by Executive while in the employ of
the COMPANY with respect to any of the COMPANY's products,
improvements, designs or styles, processes, methods of marketing or
distribution, systems, procedures, plans, proposals, or policies, the
disclosure of which Executive knows, or should have reason to know,
will be damaging to the COMPANY or its subsidiaries or its affiliates;
provided, however, that confidential information shall not include any
information known generally to the public (other than as a result of
unauthorized disclosure by Executive) or any information of a type not
otherwise considered confidential by persons engaged in the same
business or a business similar to that conducted by the COMPANY.
Following termination of Executive's employment with the COMPANY for
any reason prior to a CHANGE IN CONTROL, Executive shall not disclose
any confidential information of the type described above except as may
be required in the opinion of the Executive's counsel in connection
with any judicial or administrative proceeding or inquiry.
(c) Specific Performance. Executive acknowledges and agrees that, in
the event of a breach of Section 8(a) or Section 8(b) of this Agreement
by Executive, the COMPANY would be
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irreparably harmed and that monetary damages would be an inadequate
remedy in favor of the COMPANY. Accordingly, Executive and the Company
agree that in the event of such a breach, the COMPANY shall be entitled
to injunctive relief against Executive.
(d) Following a CHANGE IN CONTROL. The covenants and other provisions
contained in this Section 8 shall terminate upon the occurrence of a
CHANGE IN CONTROL and shall neither be enforceable nor a condition to
payment to Executive of the BENEFITS UPON CHANGE IN CONTROL.
9. SUCCESSORS; BINDING AGREEMENT.
(a) The COMPANY will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the COMPANY
expressly to assume and agree to perform this Agreement in the same
manner and to the same extent that the COMPANY would be required to
perform it if no such succession had taken place. Failure of the
Company to obtain such agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle
Executive to compensation from the COMPANY in the same amount and on
the same terms as Executive would be entitled hereunder if such
succession had not occurred, except that for the purposes of
implementing the foregoing, the date on which any such succession
becomes effective shall be deemed the DATE OF TERMINATION.
(b) This Agreement shall inure to the benefit of and be enforceable by
Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
If Executive should die while any amounts are still payable hereunder,
all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to Executive's devisee,
legatee or other designee or, if there is no designee, to Executive's
estate.
10. NOTICES. For purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered personally, mailed by United
States certified mail, return receipt requested, postage prepaid, or sent by
prepaid express mail, addressed as follows:
If to the COMPANY:
▇▇▇▇▇ Supermarkets, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Corporate Secretary
If to Executive:
To the address set forth on the first page of this Agreement.
Either party may change the address to which notices are to be sent by
written notice to the other party. Notice of change in notice address shall be
effective only upon receipt by the other party. Following a CHANGE IN CONTROL
any termination of Executive's employment by the COMPANY for any
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reason or any termination by Executive for REASON shall be communicated to
Executive or to the COMPANY, respectively, by written NOTICE OF TERMINATION.
11. TERMINATION OF AGREEMENT. This Agreement may be terminated by
either the Company or Executive upon notice to the other party given in
accordance with Section 10 above. Any such termination shall not be effective
until the EXPIRATION DATE. Upon the EXPIRATION DATE, this Agreement shall become
null and void; provided, however, that if Executive's employment relationship
with the COMPANY should be severed prior to the EXPIRATION DATE, or if a CHANGE
IN CONTROL occurs prior to the EXPIRATION DATE (regardless of whether a
severance of the employment relationship occurs), this Agreement shall continue
in full force and effect until payment of or provision for all severance
benefits provided for in this Agreement.
12. MISCELLANEOUS. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by Executive and such officer of the COMPANY specifically
designated by the BOARD OF DIRECTORS. No waiver by either party hereto at any
time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions at the same or at
any subsequent time. No agreement or representations, oral or otherwise, express
or implied, with respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be govern
by the laws of the State of Indiana.
13. SEVERABILITY. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
IN WITNESS WHEREOF, the COMPANY by its duly authorized officers and
Executive have caused to be executed or executed, respectively, this Agreement
as of the Effective Date.
▇▇▇▇▇ SUPERMARKETS, INC. ▇▇▇▇▇ SUPERMARKETS, INC.
By: By:
-------------------------------- -------------------------------
▇▇▇ ▇. ▇▇▇▇▇, Chairman of the ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Chairman
Board, President and Chief Salary Committee of the
Executive Officer Board of Directors
Attest:
--------------------------------
▇. ▇▇▇▇▇▇▇▇ Butt, Secretary
"COMPANY"
---------------------------
"Executive"
WITNESS:
----------------------------
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