EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the 'Agreement') entered into
between FLEMING COMPANIES, INC., an Oklahoma corporation (the
'Company'), and 1 , an individual (the
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'Executive'), dated as of the 2nd day of March, 1995.
The Board of Directors of the Company (the 'Board'), has
determined that it is in the best interests of the Company and its
shareholders to assure that the Company will have the continued
dedication of the Executive, notwithstanding the possibility,
threat, or occurrence of a 'Change of Control' (as defined in
Section 2 of this Agreement) of the Company. The Board believes it
is important to diminish the inevitable distraction of the
Executive by virtue of the personal uncertainties and risks created
by a pending or threatened Change of Control, and to encourage the
Executive's full attention and dedication to the affairs of the
Company during the term of this Agreement and upon the occurrence
of such event. The Board also believes the Company is best served
by providing the Executive with compensation arrangements upon a
Change of Control which provide the Executive with individual
financial security and which are competitive with those of other
corporations. In order to accomplish these objectives, the Board
has caused the Company to enter into this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. CERTAIN DEFINITIONS.
(a) The 'Effective Date' shall be the first date
during the 'Change of Control Period' (as defined in Section 1(b)
of this Agreement) on which a Change of Control (as defined below)
occurs. Anything in this Agreement to the contrary
notwithstanding, if the Executive's employment with the Company is
terminated prior to the date on which a Change of Control occurs,
and it is reasonably demonstrated that such termination (i) was at
the request of a third party who has taken steps reasonably
calculated to effect a Change of Control or (ii) otherwise arose in
connection with or anticipation of a Change of Control, then for
all purposes of this Agreement the 'Effective Date' shall mean the
date immediately prior to the date of such termination.
(b) The 'Change of Control Period' is the period
commencing on the date hereof and ending on the earlier to occur of
(i) the third anniversary of such date or (ii) the first day of the
month next following the Executive's attainment of age 65 ('Normal
Retirement Date'); PROVIDED, HOWEVER, that commencing on the date
one year after the date hereof, and on each annual anniversary of
such date (such date and each annual anniversary thereof is
hereinafter referred to as the 'Renewal Date'), the Change of
Control Period shall be automatically extended so as to terminate
on the earlier of (i) three years from such Renewal Date or (ii)
the first day of the month coinciding with or next following the
Executive's Normal Retirement Date, unless at least 60 days prior
to the Renewal Date, the Company shall give notice that the Change
of Control Period shall not be so extended in which event this
Agreement shall continue for the remainder of its then current term
and terminate as provided herein.
2. CHANGE OF CONTROL. For the purpose of this
Agreement, a 'Change of Control' shall mean:
(i) The acquisition by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the 'Exchange Act'))
(a 'Person') of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 20% or more (the
'Triggering Percentage') of either (i) the then outstanding shares
of common stock of the Company (the 'Outstanding Company Common
Stock') or (ii) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the
election of directors (the 'Outstanding Company Voting
Securities'); provided, however, in the event the 'Incumbent Board'
(as such term is hereinafter defined) pursuant to Section 7 of the
Rights Agreement between the Company and The Liberty National Bank
and Trust Company of Oklahoma City dated as of July 7, 1986
together with any additional amendments thereto (the 'Rights
Agreement') lowers the threshold amounts set forth in Section 1(a)
or 3(a) of the Rights Agreement, the Triggering Percentage shall be
automatically reduced to equal the threshold set pursuant to
Section 7 of the Rights Agreement; and provided, further, however,
that the following acquisitions shall not constitute a Change of
Control: (i) any acquisition directly from the Company, (ii) any
acquisition by the Company; (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company, (iv) any
acquisition previously approved by at least a majority of the
members of the Incumbent Board, (v) any acquisition approved by at
least a majority of the members of the Incumbent Board within five
(5) business days after the Company has notice of such acquisition,
or (vi) any acquisition by any corporation pursuant to a
transaction which complies with clauses (x), (y), and (z) of
subsection (iii) of this Section 2; or
(ii) Individuals who, as of the date hereof,
constitute the Board (the 'Incumbent Board') cease for any reason
to constitute at least a majority of the Board; provided, however,
that any individual becoming a director subsequent to the date
hereof whose election, appointment or nomination for election by
the Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall
be considered as though such individual were a member of the
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Incumbent Board, but excluding, for purposes of this definition,
any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to
the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person
other than the Board; or
(iii) Approval by the shareholders of the Company
of a reorganization, share exchange, merger or consolidation (a
'Business Combination'), in each case, unless, following such
Business Combination, (x) all or substantially all of the
individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more
than 70% of, respectively, the then outstanding shares of common
stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors,
as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as
a result of such transaction owns the Company through one or more
subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, (y) no Person (excluding any
employee benefit plan (or related trust) of the Company or such
corporation resulting from such Business Combination) beneficially
owns, directly or indirectly, 20% or more of, respectively, the
then outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting
power of the then outstanding voting securities of such corporation
except to the extent that such ownership existed prior to the
Business Combination, and (z) at least a majority of the members of
the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the
time of the execution of the initial agreement, or of the action of
the Board, providing for such Business Combination or were elected,
appointed or nominated by the Board; or
(iv) Approval by the shareholders of the Company of
(x) a complete liquidation or dissolution of the Company or, (y)
the sale or other disposition of all or substantially all of the
assets of the Company, other than to a corporation, with respect to
which following such sale or other disposition, (A) more than 70%
of, respectively, the then outstanding shares of common stock of
such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned,
directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such
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sale or other disposition in substantially the same proportion as
their ownership, immediately prior to such sale or other
disposition, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, (B) less
than 20% of, respectively, the then outstanding shares of common
stock of such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned,
directly or indirectly, by any Person (excluding any employee
benefit plan (or related trust) of the Company or such
corporation), except to the extent that such Person owned 20% or
more of the Outstanding Company Common Stock or Outstanding Company
Voting Securities prior to the sale or disposition, and (C) at
least a majority of the members of the board of directors of such
corporation were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board,
providing for such sale or other disposition of assets of the
Company or were elected, appointed or nominated by the Board.
3. EMPLOYMENT PERIOD. The Company hereby agrees to
continue the Executive in its employ, and the Executive hereby
agrees to remain in the employ of the Company, for the period
commencing on the Effective Date and ending on the earlier to occur
of (a) the third anniversary of such date or (b) the first day of
the month coinciding with or next following the Executive's Normal
Retirement Date (the 'Employment Period').
4. TERMS OF EMPLOYMENT.
(a) POSITION AND DUTIES.
(i) During the Employment Period, (A) the
Executive's position (including status, offices, secretarial and
administrative support, titles and reporting requirements),
authority, duties and responsibilities shall be at least
commensurate in all material respects with the most significant of
those held, exercised and assigned at any time during the 90-day
period immediately preceding the Effective Date and (B) the
Executive's services shall be performed at the location where the
Executive was employed immediately preceding the Effective Date or
any office or location less than 25 miles from such location.
(ii) During the Employment Period, and
excluding any periods of vacation and sick leave to which the
Executive is entitled, the Executive agrees to devote reasonable
attention and time during normal business hours to the business and
affairs of the Company and, to the extent necessary to discharge
the responsibilities assigned to the Executive hereunder, to use
the Executive's reasonable best efforts to perform faithfully and
efficiently such responsibilities. During the Employment Period it
shall not be a violation of this Agreement for the Executive to (A)
serve on corporate, civic or charitable boards or committees, (B)
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deliver lectures, fulfill speaking engagements or teach at
educational institutions and (C) manage personal investments, so
long as such activities do not significantly interfere with the
performance of the Executive's responsibilities as an associate of
the Company in accordance with this Agreement. It is expressly
understood and agreed that to the extent that any such activities
have been conducted by the Executive prior to the Effective Date,
the continued conduct of such activities (or the conduct of
activities similar in nature and scope thereto) subsequent to the
Effective Date shall not thereafter be deemed to interfere with the
performance of the Executive's responsibilities to the Company.
(b) COMPENSATION.
(i) BASE SALARY. During the Employment
Period, the Executive shall receive an annual base salary ('Base
Salary') at least equal to the greater of (i) his annual base
salary in effect immediately prior to the Effective Date or (ii)
the highest average annual base salary paid or payable to the
Executive by the Company and its subsidiaries during the five
fiscal years immediately preceding the fiscal year in which the
Effective Date occurs; provided, however, that the three (which
need not be consecutive) highest annual base salaries paid or
payable during the past five fiscal years which yield the highest
annual base salary payable shall be utilized to compute the highest
average annual base salary. Such Base Salary shall be payable
monthly in cash. Base Salary shall be computed prior to any
reductions for (i) any deferrals of compensation made pursuant to
Sections 125 or 401(c) of the Code and (ii) any withholding, income
or employment taxes. During the Employment Period, the Base Salary
shall be reviewed at least annually and shall be increased at any
time and from time to time as shall be substantially consistent
with increases in base salary awarded in the ordinary course of
business to other key management associates of the Company and its
subsidiaries. Any increase in Base Salary shall not serve to limit
or reduce any other obligation to the Executive under this
Agreement. Base Salary shall not be reduced after any such
increase.
(ii) ANNUAL BONUS. In addition to Base Salary,
the Executive shall be paid, for each fiscal year during the
Employment Period, an annual bonus (an 'Annual Bonus') (either
pursuant to the incentive compensation plan of the Company or
otherwise, including, without limitation, the Economic Value Added
Incentive Bonus Plan for Fleming Companies, Inc. and Its
Subsidiaries) in cash at least equal to the highest annual bonus
paid or payable to the Executive by the Company and its
subsidiaries during or for any of the five fiscal years immediately
preceding the fiscal year in which the Effective Date occurs.
(iii) INCENTIVE, SAVINGS AND RETIREMENT PLANS.
In addition to Base Salary and Annual Bonus, the Executive shall be
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entitled to participate during the Employment Period in all
incentive, savings and retirement plans, practices, supplemental
retirement plan policies and programs applicable to other key
management associates of the Company and its subsidiaries, in each
case providing benefits which are the economic equivalent to those
in effect immediately preceding the Effective Date or as
subsequently amended. Such plans, practices, policies and
programs, in the aggregate, shall provide the Executive with
compensation, benefits and reward opportunities at least as
favorable as the most favorable of such compensation, benefits and
reward opportunities provided by the Company for the Executive
under such plans, practices, policies and programs as in effect at
any time during the 90-day period immediately preceding the
Effective Date or, if more favorable to the Executive, as provided
at any time thereafter with respect to other key management
associates of the Company and its subsidiaries.
(iv) WELFARE BENEFIT PLANS. During the
Employment Period, the Executive and/or the Executive's family, as
the case may be, shall be eligible for participation in and shall
receive all benefits under welfare benefit plans, practices,
policies and programs provided by the Company and its subsidiaries
(including, without limitation, medical, prescription, dental,
disability, salary continuance, employee life, group life,
accidental death and travel accident insurance plans and programs),
at least as favorable as the most favorable of such plans,
practices, policies and programs in effect at any time during the
90-day period immediately preceding the Effective Date or, if more
favorable to the Executive and/or the Executive's family, as in
effect at any time thereafter with respect to other key management
associates of the Company and its subsidiaries.
(v) EXPENSES. During the Employment Period,
the Executive shall be entitled to receive prompt reimbursement for
all reasonable expenses incurred by the Executive in accordance
with the most favorable policies, practices and procedures of the
Company and its subsidiaries in effect at any time during the 90-
day period immediately preceding the Effective Date or, if more
favorable to the Executive, as in effect at any time thereafter
with respect to other key management associates of the Company and
its subsidiaries.
(vi) FRINGE BENEFITS. During the Employment
Period, the Executive shall be entitled to fringe benefits,
including use of an automobile and payment of related expenses, in
accordance with the most favorable plans, practices, programs and
policies of the Company and its subsidiaries in effect at any time
during the 90-day period immediately preceding the Effective Date
or, if more favorable to the Executive, as in effect at any time
thereafter with respect to other key management associates of the
Company and its subsidiaries.
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(vii) OFFICE AND SUPPORT STAFF. During the
Employment Period, the Executive shall be entitled to an office or
offices of a size and with furnishings and other appointments, and
to secretarial and other assistance, at least equal to the most
favorable of the foregoing provided to the Executive by the Company
and its subsidiaries at any time during the 90-day period
immediately preceding the Effective Date or, if more favorable to
the Executive, as provided at any time thereafter with respect to
other key management associates of the Company and its
subsidiaries.
(viii) VACATION. During the Employment Period,
the Executive shall be entitled to paid vacation in accordance with
the most favorable plans, policies, programs and practices of the
Company and its subsidiaries as in effect at any time during the
90-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as in effect at any time thereafter
with respect to other key management associates of the Company and
its subsidiaries.
(ix) EFFECT OF INCREASES. Any increase in Base
Salary, Annual Bonus or any other benefit or perquisite described
in the foregoing Sections (i)-(viii) shall in no way diminish any
obligation of the Company under the Agreement.
5. TERMINATION.
(a) DEATH OR DISABILITY. This Agreement shall
terminate automatically upon the Executive's death. If the Company
determines in good faith that the Disability of the Executive has
occurred (pursuant to the definition of 'Disability' set forth
below), it may give to the Executive written notice of its
intention to terminate the Executive's employment. In such event,
the Executive's employment with the Company shall terminate
effective on the 30th day after the date of such notice (the
'Disability Effective Date'), provided that, within such time
period, the Executive shall not have returned to full-time
performance of the Executive's duties. For purposes of this
Agreement, 'Disability' means disability (either physical or
mental) which, at least 26 weeks after its commencement, is
determined to be total and permanent by a physician selected by the
Company or its insurers and acceptable to the Executive or the
Executive's legal representative (such agreement as to
acceptability not to be withheld unreasonably).
(b) CAUSE. The Company may terminate the
Executive's employment for 'Cause.' For purposes of this
Agreement, termination of the Executive's employment by the Company
for Cause shall mean termination for one of the following reasons:
(i) the conviction of the Executive of a felony by a federal or
state court of competent jurisdiction; (ii) an act or acts of
dishonesty taken by the Executive and intended to result in
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substantial personal enrichment of the Executive at the expense of
the Company; or (iii) the Executive's 'willful' failure to follow
a direct, reasonable and lawful written order from his supervisor,
within the reasonable scope of the Executive's duties, which
failure is not cured within 30 days. Further, for purposes of this
Section (b):
(1) No act or failure to act, on the
Executive's part shall be deemed 'willful' unless done, or omitted
to be done, by the Executive not in good faith and without
reasonable belief that the Executive's action or omission was in
the best interest of the Company.
(2) The Executive shall not be deemed to have
been terminated for Cause unless and until there shall have been
delivered to the Executive a copy of a resolution duly adopted by
the affirmative vote of not less than three-fourths (3/4ths) of the
entire membership of the Board at a meeting of the Board called and
held for such purpose (after reasonable notice to the Executive and
an opportunity for the Executive, together with the Executive's
counsel, to be heard before the Board), finding that in the good
faith opinion of the Board the Executive was guilty of conduct set
forth in clauses (i), (ii) or (iii) above and specifying the
particulars thereof in detail.
(c) GOOD REASON. The Executive's employment may be
terminated by the Executive for Good Reason. For purposes of this
Agreement, 'Good Reason' means:
(i) the assignment to the Executive of any
duties inconsistent in any respect with the Executive's position
(including status, offices, titles and reporting requirements),
authority, duties or responsibilities as contemplated by Section
4(a) of this Agreement, or any other action by the Company which
results in a diminution in such position, compensation, authority,
duties or responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and
which is remedied by the Company promptly after receipt of notice
thereof given by the Executive;
(ii) any failure by the Company to comply with
any of the provisions of Section 4(b) of this Agreement, other than
an isolated, insubstantial and inadvertent failure not occurring in
bad faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Executive;
(iii) the Company's requiring the Executive to
be based at any office or location other than that described in
Section 4(a)(i)(B) hereof, except for periodic travel reasonably
required in the performance of the Executive's responsibilities;
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(iv) any purported termination by the Company
of the Executive's employment otherwise than as expressly permitted
by this Agreement; or
(v) any failure by the Company to comply with
and satisfy Section 12(c) of this Agreement.
For purposes of this Section 5(c), any good faith
determination of 'Good Reason' made by the Executive shall be
conclusive. Anything in this Agreement to the contrary
notwithstanding, a termination by the Executive for any reason
during the 30-day period immediately following the first
anniversary of the Effective Date shall be deemed to be a
termination for Good Reason for all purposes of this Agreement.
(d) NOTICE OF TERMINATION. Any termination by the
Company for Cause or by the Executive for Good Reason shall be
communicated by Notice of Termination to the other party hereto
given in accordance with Section 14(b) of this Agreement. For
purposes of this Agreement, a 'Notice of Termination' means a
written notice which (i) indicates the specific termination
provisions in this Agreement relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the
provision so indicated and (iii) if the Date of Termination (as
defined below) is other than the date of receipt of such notice,
specifies the termination date (which date shall be not more than
15 days after the giving of such notice). The failure by the
Executive to set forth in the Notice of Termination any fact or
circumstance which contributes to a showing of Good Reason shall
not waive any right of the Executive hereunder or preclude the
Executive from asserting such fact or circumstance in enforcing his
rights hereunder.
(e) DATE OF TERMINATION. 'Date of Termination'
means the date of receipt of the Notice of Termination by either
the Company or the Executive as the case may be or any later date
specified therein; PROVIDED, HOWEVER, that if the Executive's
employment is terminated by reason of death or Disability, the Date
of Termination shall be the date of death of the Executive or the
Disability Effective Date, as the case may be.
6. OBLIGATIONS OF THE COMPANY UPON TERMINATION.
(a) DEATH. If the Executive's employment is
terminated by reason of the Executive's death, this Agreement shall
terminate without further obligations to the Executive's legal
representatives under this Agreement, other than those obligations
accrued or earned and vested (if applicable) by the Executive as of
the Date of Termination, including, for this purpose (i) the
Executive's annual full Base Salary through the Date of Termination
at the rate in effect on the Date of Termination or, if higher, at
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the highest annual rate in effect at any time from the thirty-six
month period preceding the Effective Date through the Date of
Termination (the 'Highest Base Salary'), (ii) the product of the
Annual Bonus (defined in Section 4(b)(ii)) paid to the Executive
for the last full fiscal year and a fraction, the numerator of
which is the number of days in the current fiscal year through the
Date of Termination, and the denominator of which is 365 and (iii)
any compensation previously deferred by the Executive (together
with any accrued interest thereon) and not yet paid by the Company
and any accrued vacation pay not yet paid by the Company (such
amounts specified in clauses (i), (ii) and (iii) are hereinafter
referred to as 'Accrued Obligations'). All such Accrued
Obligations shall be paid to the Executive's estate or beneficiary,
as applicable, in a lump sum in cash within 30 days of the Date of
Termination. Anything in this Agreement to the contrary
notwithstanding, the Executive's family shall be entitled to
receive benefits at least equal to the most favorable benefits
provided by the Company and any of its subsidiaries to surviving
families of other key management associates of the Company and such
subsidiaries under such plans, programs, practices and policies
relating to family death benefits, if any, in accordance with the
most favorable plans, programs, practices and policies of the
Company and its subsidiaries in effect at any time during the 90-
day period immediately preceding the Effective Date or, if more
favorable to the Executive and/or the Executive's family, as in
effect on the date of the Executive's death with respect to other
key management associates of the Company and its subsidiaries and
their families.
(b) DISABILITY. If the Executive's employment is
terminated by reason of the Executive's Disability, this Agreement
shall terminate without further obligations to the Executive, other
than those obligations accrued or earned and vested (if applicable)
by the Executive as of the Date of Termination, including for this
purpose, all Accrued Obligations. All such Accrued Obligations
shall be paid to the Executive in a lump sum in cash within 30 days
of the Date of Termination. Anything in this Agreement to the
contrary notwithstanding, the Executive shall be entitled after the
Disability Effective Date to receive disability and other benefits
at least equal to the most favorable of those provided by the
Company and its subsidiaries to disabled key management associates
and/or their families in accordance with such plans, programs,
practices and policies relating to disability, if any, in
accordance with the most favorable plans, programs, practices and
policies of the Company and its subsidiaries in effect at any time
during the 90-day period immediately preceding the Effective Date
or, if more favorable to the Executive and/or the Executive's
family, as in effect at any time thereafter with respect to other
key management associates of the Company and its subsidiaries and
their families.
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(c) CAUSE; OTHER THAN FOR GOOD REASON. If the
Executive's employment shall be terminated for Cause, this
Agreement shall terminate without further obligations to the
Executive other than the obligation to pay to the Executive the
Highest Base Salary through the Date of Termination plus the amount
of any compensation previously deferred by the Executive (together
with accrued interest thereon). If the Executive terminates
employment other than for Good Reason, this Agreement shall
terminate without further obligations to the Executive, other than
those obligations accrued or earned and vested (if applicable) by
the Executive through the Date of Termination, including for this
purpose, all Accrued Obligations. All such Accrued Obligations
shall be paid to the Executive in a lump sum in cash within 30 days
of the Date of Termination.
(d) GOOD REASON; TERMINATION OTHER THAN FOR CAUSE
OR DISABILITY. If, during the Employment Period, the Company shall
terminate the Executive's employment other than for Cause,
Disability, or death or if the Executive shall terminate his
employment for Good Reason:
(i) the Company shall pay to the Executive in
a lump sum in cash within 30 days after the Date of Termination the
aggregate of the following amounts:
A. to the extent not theretofore paid,
the Executive's Highest Base Salary through the Date of
Termination; and
B. the product of (i) the Annual Bonus
paid to the Executive for the last full fiscal year (if any) ending
during the Employment Period or, if higher, the Annual Bonus paid
to the Executive for the last full fiscal year prior to the
Effective Date (as applicable, the 'Recent Bonus') and (ii) a
fraction, the numerator of which is the number of days in the
current fiscal year through the Date of Termination and the
denominator of which is 365; and
C. the product obtained by multiplying
2.99 times the sum of (i) the Highest Base Salary and (ii) the
Recent Bonus; and
D. in the case of compensation
previously deferred by the Executive, all amounts previously
deferred (together with any accrued interest thereon) and not yet
paid by the Company, and any accrued vacation pay not yet paid by
the Company; and
(ii) for the remainder of the Employment
Period, or such longer period as any plan, program, practice or
policy may provide, the Company shall continue benefits to the
Executive and/or the Executive's family at least equal to those
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which would have been provided to them in accordance with the
plans, programs, practices and policies described in Section
4(b)(iv) of this Agreement if the Executive's employment had not
been terminated, including health insurance and life insurance, in
accordance with the most favorable plans, practices, programs or
policies of the Company and its subsidiaries during the 90-day
period immediately preceding the Effective Date or, if more
favorable to the Executive, as in effect at any time thereafter
with respect to other key management associates and their families
and for purposes of eligibility for retiree benefits pursuant to
such plans, practices, programs and policies, the Executive shall
be considered to have remained employed until the end of the
Employment Period and to have retired on the last day of such
period.
7. NON-EXCLUSIVITY OF RIGHTS. Nothing in this
Agreement shall prevent or limit the Executive's continuing or
future participation in any benefit, bonus, incentive or other
plans, programs, policies or practices, provided by the Company or
any of its subsidiaries and for which the Executive may qualify,
nor shall anything herein limit or otherwise affect such rights as
the Executive may have under any stock option or other agreements
with the Company or any of its subsidiaries. Amounts which are
vested benefits or which the Executive is otherwise entitled to
receive under any plan, policy, practice or program of the Company
or any of its subsidiaries at or subsequent to the Date of
Termination shall be payable in accordance with such plan, policy,
practice or program.
8. FULL SETTLEMENT. The Company's obligation to make
the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any set-
off, counterclaim, recoupment, defense or other claim, right or
action which the Company may have against the Executive or others.
In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the
amounts payable to the Executive under any of the provisions of
this Agreement. The Company agrees to pay, to the full extent
permitted by law, all legal fees and expenses which the Executive
may reasonably incur as a result of any contest (regardless of the
outcome thereof) by the Company or others of the validity or
enforceability of, or liability under, any provision of this
Agreement or any guarantee of performance thereof (including as a
result of any contest by the Executive about the month of any
payment pursuant to Section 9 of this Agreement), plus in each case
interest at the applicable Federal rate provided for in Section
7872(f)(2) of the Code.
9. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any
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payment or distribution by the Company to or for the benefit of the
Executive, whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise, including, by
example and not by way of limitation, acceleration by the Company
of the date of vesting or payment or rate of payment under any
plan, program or arrangement of the Company (a 'Payment'), would be
subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended (the 'Code') or any interest or
penalties with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter
collectively referred to as the 'Excise Tax'), then the Executive
shall be entitled to receive an additional payment (a 'Gross-Up
Payment') in an amount such that after payment by the Executive of
all taxes (including any interest or penalties imposed with respect
to such taxes), including any Excise Tax, imposed upon the Gross-Up
Payment, the Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 9(c), all
determinations required to be made under this Section 9, including
whether a Gross-Up Payment is required and the amount of such
Gross-Up Payment, shall be made by Deloitte & Touche LLP (the
'Accounting Firm') which shall provide detailed supporting
calculations both to the Company and the Executive within 15
business days of the receipt of notice from the Executive that
there has been a Payment which would be subject to the Excise Tax,
or such earlier time as is requested by the Company. The initial
Gross-Up Payment, if any, as determined pursuant to this Section
9(b), shall be paid to the Executive within five days of the
receipt of the Accounting Firm's determination. If the Accounting
Firm determines that no Excise Tax is payable by the Executive, it
shall furnish the Executive with an opinion that he has substantial
authority not to report any Excise Tax on his federal income tax
return. Any determination by the Accounting Firm shall be binding
upon the Company and the Executive. As a result of the uncertainty
in the application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by
the Company should have been made ('Underpayment'), consistent with
the calculations required to be made hereunder. In the event that
the Company exhausts its remedies pursuant to Section 9(c) and the
Executive thereafter is required to make a payment of any Excise
Tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment shall be
promptly paid by the Company to or for the benefit of the
Executive.
(c) The Executive shall notify the Company in
writing of any claim by the Internal Revenue Service that, if
successful, would require the payment by the Company of the Gross-
Up Payment. Such notification shall be given as soon as
practicable but no later than ten business days after the Executive
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knows of such claim and shall apprise the Company of the nature of
such claim and the date on which such claim is requested to be
paid. The Executive shall not pay such claim prior to the
expiration of the 30-day period following the date on which he
gives such notice to the Company (or such shorter period ending on
the date that any payment of taxes with respect to such claim is
due). If the Company notifies the Executive in writing prior to
the expiration of such period that it desires to contest such
claim, the Executive shall:
(i) give the Company any information
reasonably requested by the Company relating to such claim,
(ii) take such action in connection with
contesting such claim as the Company shall reasonably request in
writing from time to time, including, without limitation, accepting
legal representation with respect to such claim by an attorney
reasonably selected by the Company,
(iii) cooperate with the Company in good faith
in order effectively to contest such claim, and
(iv) permit the Company to participate in any
proceedings relating to such claim;
provided, however, that the Company shall bear and pay directly all
costs and expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify and
hold the Executive harmless, on an after-tax basis, for any Excise
Tax or income tax, including interest and penalties with respect
thereto, imposed as a result of such representation and payment of
costs and expenses. Without limitation on the foregoing provisions
of this Section 9(c), the Company shall control all proceedings
taken in connection with such contest and, at its sole option, may
pursue or forgo any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect of
such claim and may, at its sole option, either direct the Executive
to pay the tax claimed and sue for a refund or contest the claim in
any permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in
a court of initial jurisdiction and in one or more appellate
courts, as the Company shall determine; provided, however, that if
the Company directs the Executive to pay such claim and sue for a
refund, the Company shall advance the amount of such payment to the
Executive, on an interest-free basis and shall indemnify and hold
the Executive harmless, on an after-tax basis, from any Excise Tax
or income tax, including interest or penalties with respect
thereto, imposed with respect to such advance or with respect to
any imputed income with respect to such advance; and further
provided that any extension of the statute of limitations relating
to payment of taxes for the taxable year of the Executive with
respect to which such contested amount is claimed to be due is
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limited solely to such contested amount. Furthermore, the
Company's control of the contest shall be limited to issues with
respect to which a Gross-Up Payment would be payable hereunder and
the Executive shall be entitled to settle or contest, as the case
may be, any other issue raised by the Internal Revenue Service or
any other taxing authority.
(d) If, after the receipt by the Executive of an
amount advanced by the Company pursuant to Section 9(c), the
Executive becomes entitled to receive any refund with respect to
such claim, the Executive shall (subject to the Company's complying
with the requirements of Section 9(c)) promptly pay to the Company
the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the
receipt by the Executive of an amount advanced by the Company
pursuant to Section 9(c), a determination is made that the
Executive shall not be entitled to any refund with respect to such
claim and the Company does not notify the Executive in writing of
its intent to contest such denial of refund prior to the expiration
of thirty days after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the amount of
such advance shall offset, to the extent thereof, the amount of
Gross-Up Payment required to be paid.
10. CONFIDENTIAL INFORMATION. The Executive shall hold
in a fiduciary capacity for the benefit of the Company all secret
or confidential information, knowledge or data relating to the
Company or any of its subsidiaries, and their respective
businesses, which shall have been obtained by the Executive during
the Executive's employment by the Company or any of its
subsidiaries and which shall not be or become public knowledge
(other than by acts by the Executive or his representatives in
violation of this Agreement). After termination of the Executive's
employment with the Company, the Executive shall not, without the
prior written consent of the Company, communicate or divulge any
such information, knowledge or data to anyone other than the
Company and those designated by it. In no event shall an asserted
violation of the provisions of this Section 10 constitute a basis
for deferring or withholding any amounts otherwise payable to the
Executive under this Agreement.
11. TERMINATION OF SEVERANCE AGREEMENT. The Executive
and the Company are Parties to a Severance Agreement (the
'Severance Agreement'). Effective as of the date of execution and
delivery of this Agreement, the Severance Agreement shall be
terminated and of no further force and effect.
12. SUCCESSORS.
(a) This Agreement is personal to the Executive and
without the prior written consent of the Company shall not be
assignable by the Executive otherwise than by will or the laws of
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descent and distribution. This Agreement shall inure to the
benefit of and be enforceable by the Executive's legal
representatives.
(b) This Agreement shall inure to the benefit of
and be binding upon the Company and its successors and assigns.
(c) 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 to assume expressly 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. As used in this Agreement, 'Company' shall mean the
Company as hereinbefore defined and any successor to its business
and/or assets which assumes and agrees to perform this Agreement by
operation of law, or otherwise.
13. INDEMNIFICATION AND INSURANCE. The Executive shall
be indemnified and held harmless by the Company during the term of
this Agreement and following any termination of this Agreement for
any reason whatsoever in the same manner as would any other key
management associate of the Company with respect to acts or
omissions occurring prior to (a) the termination of this Agreement
or (b) the termination of employment of the Executive. In
addition, during the term of this Agreement and for a period of
five years following the termination of this Agreement for any
reason whatsoever, the Executive shall be covered by a Company held
Directors and Officers liability insurance policy covering acts or
omissions occurring prior to (a) the termination of this Agreement
or (b) the termination of employment of the Executive. Provided,
in no event will the obligation of the Company to indemnify the
Executive or provide Directors and Officers insurance to the
Executive under this Section 13 be less than the obligation and
insurance coverage which the Company had to the Executive
immediately prior to the occurrence of a Change of Control.
14. MISCELLANEOUS.
(a) This Agreement shall be governed by and
construed in accordance with the laws of the State of Oklahoma,
without reference to principles of conflict of laws. The captions
of this Agreement are not part of the provisions hereof and shall
have no force or effect. This Agreement may not be amended or
modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal
representatives.
(b) All notices and other communications hereunder
shall be in writing and shall be given by hand delivery to the
other party or by registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
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IF TO THE EXECUTIVE:
At his last known address evidenced on the
Company's payroll records
IF TO THE COMPANY: Fleming Companies, Inc.
6301 Waterford Boulevard
P. O. Box 26647
Oklahoma City, Oklahoma 73126-0647
Attention: Mr. Robert E. Stauth, Chairman,
President and Chief Executive Officer
WITH A COPY TO: David R. Almond, Esq., Senior Vice President
and General Counsel
Fleming Companies, Inc.
6301 Waterford Boulevard
P. O. Box 26647
Oklahoma City, Oklahoma 73126-0647
WITH A COPY TO: McAfee & Taft A Professional Corporation
10th Floor, Two Leadership Square
Oklahoma City, Oklahoma 73102
Attention: John M. Mee, Esq.
or to such other address as either party shall have furnished to
the other in writing in accordance herewith. Notice and
communications shall be effective when actually received by the
addressee.
(c) The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement.
(d) The Company may withhold from any amounts
payable under this Agreement such federal, state or local taxes as
shall be required to be withheld pursuant to any applicable law or
regulation.
(e) The Executive's failure to insist upon strict
compliance with any provision hereof shall not be deemed to be a
waiver of such provision or any other provision thereof.
(f) This Agreement contains the entire
understanding of the Company and the Executive with respect to the
subject matter hereof.
(g) The Executive and the Company acknowledge that
the employment of the Executive by the Company is 'at will,' and,
prior to the Effective Date, may be terminated by either the
Executive or the Company at any time. Upon a termination of the
Executive's employment or upon the Executive's ceasing to be an
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officer of the Company, in each case, prior to the Effective Date,
there shall be no further rights under this Agreement.
15. NO TRUST. No action under this Agreement by the
Company or its Board of Directors shall be construed as creating a
trust, escrow or other secured or segregated fund, in favor of the
Executive or his beneficiary. The status of the Executive and his
beneficiary with respect to any liabilities assumed by the Company
hereunder shall be solely those of unsecured creditors of the
Company. Any asset acquired or held by the Company in connection
with liabilities assumed by it hereunder, shall not be deemed to be
held under any trust, escrow or other secured or segregated fund
for the benefit of the Executive or his beneficiary or to be
security for the performance of the obligations of the Company, but
shall be, and remain a general, unpledged, unrestricted asset of
the Company at all times subject to the claims of general creditors
of the Company.
16. NO ASSIGNABILITY. Neither the Executive nor his
beneficiary, nor any other person shall acquire any right to or
interest in any payments payable under this Agreement, otherwise
than by actual payment in accordance with the provisions of this
Agreement, or have any power to transfer, assign, anticipate,
pledge, mortgage or otherwise encumber, alienate or transfer any
rights hereunder in advance of any of the payments to be made
pursuant to this Agreement or any portion thereof which is
expressly declared to be nonassignable and nontransferable. No
right or benefit hereunder shall in any manner be liable for or
subject to the debts, contracts, liabilities, or torts of the
person entitled to such benefit.
IN WITNESS WHEREOF, the Executive has hereunto set his
hand and, pursuant to the authorization from its Board of
Directors, the Company has caused these presents to be executed in
its name on its behalf, all as of the day and year first above
written.
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2
'EXECUTIVE'
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FLEMING COMPANIES, INC., an
Oklahoma corporation
By
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Robert E. Stauth, Chairman,
President and Chief Executive
Officer
'COMPANY'
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Change of Control Agreement - Fleming Companies Inc.
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