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Delaware
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1-5418
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41-0617000
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(State or other jurisdiction
of incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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11840 Valley View Road
Eden Prairie, Minnesota
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55344
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(Address of principal executive offices)
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(Zip Code)
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N/A
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(Former name or former address, if changed since last report)
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•
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Base Salary
- Mr. Gross will receive an annual base salary of $1.0 million.
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•
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Annual Bonus
- Mr. Gross will be entitled to an annual cash bonus opportunity with a minimum of zero, a target of 100% of base salary and a maximum of 200% of base salary, which shall be earned based on attainment of the performance goals set by the LDCC or the independent members of the Board.
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•
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Signing Bonus
- Mr. Gross is entitled to a cash signing bonus of $300,000, payable no more than 15 business days after his employment starts, which bonus shall be subject to repayment if Mr. Gross is terminated for cause or resigns for any reason other than good reason prior to the first anniversary of his start date.
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•
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Inducement Long-Term Incentive Awards
- Subject to Mr. Gross’s continued employment, he will be granted a long-term incentive award having an aggregate grant date value of $6.0 million. The award will be comprised of:
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◦
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50% Stock Options
- The first 50% of the award will be granted in the form of stock options on his start date. The number of inducement stock options will be determined based on the Black-Scholes assumptions set forth in the Company’s Form 10-K filed with the SEC on April 28, 2015, but using the prevailing risk-free interest rate and the closing price of a share of the Company’s common stock on Mr. Gross’s start date. The inducement stock options will vest ratably on the first three anniversaries of the start date. If Mr. Gross’s employment is terminated by the Company without cause or he resigns for good reason, any unvested inducement stock options will vest as to a prorated portion of the options scheduled to vest on the next anniversary of the start date.
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◦
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50% Performance Shares
- The other 50% of the award will be granted in the form of performance shares granted at the same time that long-term incentive awards are granted to other senior management for fiscal 2017. The inducement performance shares will vest at the end of a three-year performance period (consisting of fiscal years 2017 - 2019) based on the attainment of performance goals to be set by the LDCC. If Mr. Gross’s employment is terminated by the Company without cause or he resigns for good reason during the performance period, the inducement performance shares will vest as to a portion of the award based on the actual attainment of performance goals over the entire three-year performance period and prorated for the portion of that period during which he was employed.
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•
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Other Long-Term Incentive Awards
- Subject to Mr. Gross’s continued employment, Mr. Gross will be granted:
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◦
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stock options in respect of the Company’s 2018 fiscal year with a grant date value of $500,000, having terms consistent with the inducement stock options.
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◦
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in respect of each year commencing with the Company’s 2019 fiscal year, an annual long-term incentive award with an aggregate grant date value of $3.0 million, with an allocation among types of awards and other terms consistent with the long-term incentive awards granted to other members of senior management at that time.
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•
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Benefits
- Mr. Gross will be entitled to participate in the Company’s benefit programs applicable to senior executives. In addition, Mr. Gross is entitled to reasonable personal use of the Company’s aircraft as approved by the independent members of the Board so long as the Company continues to own such aircraft and subject to the precedence of any business use of the aircraft, provided that Mr. Gross reimburses the Company for such personal use. The Company and Mr. Gross will enter into an aircraft time sharing agreement pursuant to which Mr. Gross will be required to reimburse the Company for the incremental costs of his personal use of the Company’s aircraft.
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•
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Severance and Change of Control Benefits
- Mr. Gross will be entitled to severance benefits in accordance with the Supervalu Executive & Officer Severance Pay Plan at the “Tier I” level as in effect on the date of execution of the letter agreement, which are the same terms as were provided to Mr. Duncan as described in the Company’s proxy statement for its 2015 annual meeting of stockholders except that he is also entitled to severance benefits upon a
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•
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Relocation
- Mr. Gross is required to relocate his primary residence to Minnesota by July 1, 2016, and he will be reimbursed for certain relocation expenses and eight weeks of temporary housing in accordance with the Company’s applicable policy.
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•
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Legal Fees
- The Company will reimburse Mr. Gross’s legal fees incurred in connection with the letter agreement, up to a maximum of $50,000.
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Exhibit Number
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Description
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10.1
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Letter Agreement, dated February 2, 2016, between SUPERVALU INC. and Mark Gross*
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99.1
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News Release of SUPERVALU INC. dated February 3, 2016
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Dated:
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February 3, 2016
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SUPERVALU INC.
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By:
/s/ Karla C. Robertson
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Karla C. Robertson
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Executive Vice President, General Counsel and
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Corporate Secretary
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(Authorized Officer of Registrant)
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Exhibit Number
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Description
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10.1
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Letter Agreement, dated February 2, 2016, between SUPERVALU INC. and Mark Gross*
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99.1
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News Release of SUPERVALU INC. dated February 3, 2016
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SUPERVALU INC.
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P.O. Box 990
Minneapolis, MN 55440
952 828 4623
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/s/ Gerald Storch
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Name: Gerald Storch
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Title: Non-Executive Chairman of the Board
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Date:
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February 2, 2016
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/s/ Matthew E. Rubel
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Name: Matthew E. Rubel
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Title: Chair, Leadership Development and
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Compensation Committee
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Date:
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February 2, 2016
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/s/ Mark Gross
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Name: Mark Gross
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Date:
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February 2, 2016
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1.
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Confidentiality
. You acknowledge that, in the course of your employment with the Employer, You will have access to confidential information that was obtained or developed by the Employer at great expense and that is zealously guarded from unauthorized disclosure. Your access to and possession of this information will be due solely to your employment with the Employer. You agree that You will not, at any time during or following termination of employment for any reason, disclose, use, or otherwise make available to any third party, any confidential information relating to the Employer’s business, products, services, customers, vendors, or suppliers; trade secrets, data, specifications, techniques; long- and short-term plans, existing and prospective client, vendor, supplier, and employee lists, contacts, and information; financial, personnel, and information system information and applications; and any other information concerning the business of the Employer that is not disclosed to the general public or known in the industry, except with the express written consent of the Employer. All confidential information, including all copies, notes regarding, and replications of such confidential information will remain the sole property of the Employer, as applicable, and must be returned to the Employer immediately upon your termination from the Employer.
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2.
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Nonsolicitation of Customers, Vendors, and Suppliers
. You specifically acknowledge that the confidential information described above includes confidential data pertaining to existing and prospective customers, vendors, and suppliers of the Employer, that such data is a valuable and unique asset of the business of the Employer, and that the success or failure of their businesses depends upon their ability to establish and maintain close and continuing personal contacts and working relationships with such existing and prospective customers, vendors, and suppliers and to develop proposals which are specific to such existing and prospective customers, vendors and suppliers. Therefore, You agree that for 12 months following the date of your termination from the Employer, You will not (except on behalf of the Employer, or with the Employer’s express written consent) solicit, approach, contact or attempt to solicit, approach, or contact, either directly or indirectly, on your own behalf or on behalf of any other person or entity, any existing or prospective customers, vendors, or suppliers of the Employer with whom You had contact or about whom You gained confidential information during your employment with the Employer for the purpose of obtaining business or engaging in any commercial
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3.
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Nonsolicitation of Employees
. You specifically acknowledge that the confidential information described above also includes confidential data pertaining to employees and agents of the Employer, and You further agree that for 12 months following your termination of employment, You will not, directly or indirectly, on your own behalf or on behalf of any other person or entity, solicit, contact, approach, encourage, induce or attempt to solicit, contact, approach, encourage, or induce any of the employees or agents of the Employer to terminate their employment or agency with the Employer.
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4.
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Noncompetition
. You covenant and agree that for 12 months following your termination of employment, You will not, in any geographic market in which You worked or had direct or indirect responsibilities on behalf of the Employer, and for any business line or lines for or other functions for which You had direct or indirect responsibility for any sales, marketing, operational, logistical, or other management or oversight responsibility, engage in or carry on, directly or indirectly, as an owner, employee, agent, associate, consultant, partner, or in any other capacity, a business competitive with the Business of the Employer.
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a.
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The “
Business of the Employer
” shall mean any business or activity involved in grocery or general merchandise retailing and supply chain logistics, including but not limited to grocery distribution, business-to-business portal, retail support services, and third-party logistics, of the type provided by the Employer, or presented in concept to You by the Employer at any time during your employment with the Employer, for which you had or were proposed to have any business or business line or operational responsibilities.
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b.
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To “
engage in or carry on
” shall mean to have ownership in such business (excluding ownership of up to 1% of the outstanding shares of a publicly traded company) or to consult, work in, direct, or have responsibility for any area of such business, including but not limited to operations, logistics, sales, marketing, finance, recruiting, sourcing, purchasing, information technology, or customer service.
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5.
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Remedies
. You and the Employer each acknowledges and agrees that the Employer will suffer irreparable harm from a breach by You of any of the covenants or agreements contained in Section 1, 2, 3, or 4 of this
Exhibit A
. You further acknowledge that the restrictive covenants set forth in Section 4 of this
Exhibit A
are of a special, unique, and extraordinary character, the loss of which cannot be adequately compensated by monetary damages. You agree that the terms and provisions of Sections 1, 2, 3, and 4 of this
Exhibit A
are fair and reasonable and are reasonably required for the protection of the Employer in whose favor such restrictions operate. You acknowledge that, but for your agreements to be bound by the restrictive covenants set forth in this
Exhibit A
, the Employer would not have entered into the Letter Agreement. In the event of an alleged or threatened breach by You of any of the provisions of Section 1, 2, 3, or 4 of this
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6.
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Mandatory Arbitration
. You covenant and agree that any controversy or claim arising out of or relating to your employment relationship with the Employer or the termination of that relationship must be submitted for final and binding resolution by a private and impartial arbitration, under the Employment Dispute Resolution rules of the American Arbitration Association. This includes, but is not limited to, any claim that could be asserted in court or before an administrative agency or claims for which You have an alleged cause of action, including without limitation claims for breach of any contract or covenant (express or implied); tort claims; claims for discrimination, harassment or retaliation under local, state or federal statutes; claims for wrongful discharge; claims for violations of the Family and Medical Leave Act or any other local, state, federal or other governmental law, statute, regulation, and whether based on statute or common law. This includes claims against the Employer, any of its affiliated or subsidiary entities, or its individual officers, directors, or employees.
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a.
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claims for workers compensation or unemployment benefits;
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b.
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claims under the National Labor Relations Act, as amended;
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c.
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claims based on current or future employee benefit and/or welfare plans that contain a dispute resolution procedure therein; or
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d.
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claims by the Employer for injunctive or other equitable relief based on your alleged breach of covenants under this
Exhibit A
.
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7.
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Governing Law
. You agree that the internal law, and not the law of conflicts, of the State of Minnesota, shall govern all questions concerning the validity, construction and effect of this
Exhibit A
. The exclusive venue for any arbitration or court proceeding relating to this Agreement shall be a state court or arbitration forum, as required above, within the state of Minnesota unless the parties mutually agree to a different venue. You consent to personal jurisdiction in Minnesota.
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1.
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Option Grant.
The Company hereby grants to Optionee, subject to Optionee’s acceptance hereof, the right and option to purchase the number of Shares indicated below at the exercise price per Share indicated below (the “Exercise Price”), effective as of the Grant Date. The Option has been designated as a Non-Qualified Stock Option (“NQ”) for tax purposes, the consequences of which are set forth in the prospectus that describes the Plan.
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2.
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Acceptance of Option and Stock Option Terms and Conditions.
The Option is subject to and governed by the Stock Option Terms and Conditions (“Terms and Conditions”) attached hereto, which is incorporated herein and made a part hereof, and the terms and provisions of the Plan. To accept the Option, this agreement must be delivered and accepted through an electronic medium in accordance with procedures established by the Company or Optionee must sign and return a copy of this agreement to the Company
within sixty (60) days after the Grant Date.
By so doing, Optionee acknowledges receipt of the accompanying Terms and Conditions and the Plan, and represents that Optionee has read and understands the same and agrees to be bound by the accompanying Terms and Conditions and the terms and provisions of the Plan. In the event that any provision of this agreement or the accompanying Terms and Conditions is inconsistent with the terms and provisions of the Plan, the terms and provisions of the Plan shall govern. Any question of administration or interpretation arising under this agreement or the accompanying Terms and Conditions shall be determined by the Committee administering the Plan, and such determination shall be final, conclusive and binding upon all parties in interest.
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3.
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Vesting, Exercise Rights and Expiration.
Except as otherwise provided in the accompanying Terms and Conditions: (i) the Option shall vest according the schedule below, (ii) the vested portion of the Option may be exercised in whole or part, and (iii) the Option will expire on the expiration date indicated below (the “Expiration Date”).
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By:
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Michele A. Murphy
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FIRST_NAME_MIDDLE_NAME_LAST_NAME
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Executive Vice President
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EMPLOYEE_IDENTIFIER
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Human Resources & Corporate Communications
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1.
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Vesting and Exercisability.
The Option shall vest on the date or dates and in the amount or amounts set forth in the attached Agreement, or at such earlier time or times as may be provided in Sections 6 or 8 below.
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a)
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By delivering a “Notice of Exercise of Stock Option” to the Company at its principal office, attention: Vice President, Compensation, stating the number of Shares being purchased and accompanied by payment of the full purchase price for such Shares (determined by multiplying the Exercise Price by the number of Shares to be purchased). Note: In the event the Option is exercised by any person other than you pursuant to any of the provisions of Section 7 below, the Notice must be accompanied by appropriate proof of such person’s right to exercise the Option; or
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b)
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By entering an order to exercise the Option using E*TRADE’s website.
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a)
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By delivering directly to the Company, cash or its equivalent (personal check, bank draft or money order) payable to the Company;
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b)
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By delivering indirectly to the Company, cash or its equivalent payable to the Company through E*TRADE under a broker-assisted sale and remittance program approved by the Company;
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c)
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By delivering directly to the Company Shares having a Fair Market Value as of the exercise date equal to the purchase price (commonly known as a “Stock Swap”);
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d)
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By delivering directly to the Company the full purchase price in a combination of cash and Shares; or
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e)
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By the Company delivering to you a number of Shares having an aggregate Fair Market Value (determined as of the date of exercise) equal to the excess, if positive, of the Fair Market Value (on the date of exercise) of the Shares as to which the Option is being exercised, over the aggregate exercise price for such Shares under the Option (commonly known as a “net exercise”).
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a)
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In the form of a stock certificate registered in your name or your name and the name of another adult person (twenty-one (21) years of age or older) as joint tenants, and mailed to your address;
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b)
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In “book entry” form, that is, registered with the Company’s stock transfer agent, in your name or your name and the name of another adult person (twenty-one (21) years of age or older) as joint tenants, with a notice of issuance provided to you; or
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c)
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sent by electronic delivery to your brokerage account.
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a)
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Delivering directly to the Company, cash or its equivalent payable to the Company;
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b)
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Delivering indirectly to the Company, cash or its equivalent payable to the Company through E*TRADE’s website;
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c)
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Having the Company withhold a portion of the Shares to be issued upon exercise of the Option having a Fair Market Value as of the exercise date equal to the amount of taxes required to be withheld upon such exercise; or
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d)
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Delivering directly to the Company, Shares, other than the Shares issuable upon exercise of the Option, having a Fair Market Value as of the exercise date equal to the amount of taxes required to be withheld upon such exercise. You shall represent and warrant in writing that you are the owner of the Shares so delivered, free and clear of all liens, encumbrances, security interests and restrictions. To the extent that you possess Shares in certificated form, you shall duly endorse in blank all certificates delivered to the Company.
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a)
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If, within two (2) years after a Change of Control, you experience an involuntary termination of employment initiated by the Company for reasons other than Cause, or a termination of employment for Good Reason, the unvested portion of the Option shall immediately vest and the Option shall become immediately exercisable in full and remain exercisable for
one (1) year
beginning on the date of your termination of employment. If the Option is replaced pursuant to subsection (d) below, the protections and rights granted under this subsection (a) shall transfer and apply to such replacement option.
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b)
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If, in the event of a Change of Control described in clause (ii) of Section 21(b) below, and to the extent the Option is not assumed by a successor corporation (or affiliate thereto) or other successor entity or person, or replaced with an award or grant that, solely in the discretionary judgment of the Committee preserves the existing intrinsic value of the Option at the time of the Change of Control, then the Option shall become fully vested and exercisable for such period of time prior to the effective time of the Change of Control as is deemed fair and equitable by the Committee to provide you with the opportunity to participate as a stockholder in the Change of Control transaction, and shall terminate at the effective time of the Change of Control. The Company will provide written notice of of the period of accelerated vesting and exercisability to you, and the exercise of this Option pursuant to such accelerated vesting and exercisability shall be conditioned upon the consummation of the Change of Control and shall be effective only immediately before such consummation.
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c)
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In the discretion of the Committee and notwithstanding subsection (b) above or any other provision, the Option (whether or not exercisable) may be cancelled at the time of the Change of Control in exchange for cash, property or a combination thereof that is determined by the Committee to be at least equal to the excess (if any) of the value of the consideration that would be received in such Change of Control by a holder of the number of Shares remaining subject to the Option (or the Fair Market Value of such number of Shares immediately prior to the Change of Control if the holders of Company common stock will not receive consideration in such Change of Control), over the aggregate Exercise Price under the Option for that number of Shares. For purposes of clarification, if application of the formula in the preceding sentence does not result in a positive number, then this Option is subject to cancellation without consideration. Furthermore, the Committee is under no obligation to treat Options and/or holders of Options uniformly and has the discretionary authority to treat Options and/or holders of Options
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d)
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If in the event of a Change of Control and to the extent that this Option is assumed by any successor corporation, affiliate thereof, person or other entity, or is replaced with awards that, solely in the discretionary judgment of the Committee preserve the existing intrinsic value of this Option at the time of the Change of Control and provide for vesting and settlement terms that are at least as favorable to you as the vesting and payout terms applicable to this Option, then the assumed Option or such substitute therefore shall remain outstanding and be governed by its respective terms.
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a)
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Voluntary
. If you voluntarily terminate your employment, you may exercise the portion of the Option that was vested and exercisable as of the date of termination of your employment at any time until the earlier of (i)
ninety (90) days
after such termination of employment, or (ii) the Expiration Date.
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b)
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Involuntary
. If your employment is terminated involuntarily for any reason other than death, Disability or Cause, you may exercise the portion of the Option that was vested and exercisable as of the date of termination of your employment at any time until the earlier of (i)
one (1) year
after such termination of employment, or (ii) the Expiration Date.
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c)
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Retirement
. Notwithstanding paragraphs (a) and (b) above, if your employment terminates on or after reaching age 60 for any reason other than death or Disability, your termination shall be considered a “retirement” and the following provisions will apply:
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(i)
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If at the time of your retirement you have completed at least fifteen (15) years of service with the Company or an Affiliate, you may exercise the portion of the Option that was vested and exercisable as of the date of your retirement at any time until the earlier of (i)
five (5) years
after the date of your retirement, or (ii) the Expiration Date.
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(ii)
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If at the time of your retirement you have completed fewer than fifteen (15) years of service with the Company or an Affiliate, you may exercise the portion of the Option that was vested and exercisable as of the date of your retirement at any time until the earlier of (i)
one (1) year
after your retirement, or (ii) the Expiration Date.
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d)
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Death
.
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(i)
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Prior to Age 60
. If your employment terminates as a result of your death prior to reaching age 60, the unvested portion of the Option shall immediately vest and become exercisable in full. Thereafter, the Option may be exercised by your beneficiary(ies), or a legatee(s) under your last will, or your personal representative(s) or the distributee(s) of your estate, to the full extent of the Shares covered by the Option that were not previously purchased, until the earlier of (i)
one (1) year
after the date of your death, or (ii) the Expiration Date.
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(ii)
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On or After Age 60
. If your employment terminates as a result of your death on or after you have reached age 60, the unvested portion of your Option shall immediately vest and become exercisable in full. Thereafter, the Option may be exercised by your beneficiary(ies), or a legatee(s) under your last will, or your personal representative(s) or the distributee(s) of your estate, to the full extent of the Shares covered by the Option that were not previously purchased, until the earlier of (i)
five (5) years
after the date of your death, or (ii) the Expiration Date.
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e)
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Disability
.
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(i)
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Prior to Age 60
. If your employment terminates prior to reaching age 60 as a result of your Disability, the unvested portion of the Option shall immediately vest and become exercisable in full. Thereafter, the Option may be exercised by you or by your personal representative(s), to the full extent of the Shares covered by the Option that were not previously purchased, until the earlier of (i)
one (1) year
after your employment terminates due to such Disability, or (ii) the Expiration Date.
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(ii)
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On or After Age 60
. If your employment terminates on or after reaching age 60 as a result of your Disability, the unvested portion of the Option shall immediately vest and become exercisable in full. Thereafter, the Option may be exercised by you or by your personal representative(s), to the full extent of the Shares covered by the Option that were not previously purchased, until the earlier of (i)
five (5) years
after your employment terminates due to such Disability, or (ii) the Expiration Date.
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f)
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Cause
. If your employment is terminated for Cause, or if you are determined to have engaged in conduct during a post-termination exercise period that would constitute Cause or be in violation of Section 10, any unexercised or unvested portion of this Option shall be immediately forfeited without consideration.
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g)
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Change in Duties/Leave of Absence
. The Option shall not be affected by any change of your duties or position or by a temporary leave of absence approved by the Company, so long as you continue to be an employee of the Company or of an Affiliate.
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h)
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Offer Letter
. Notwithstanding the foregoing provisions of this Section 9, any more favorable vesting provisions with respect to your termination of employment set forth in that certain letter agreement, dated as of [•], 2016 (the “Offer Letter”), by and between the Company and you, shall apply to the Option as though set forth herein. In addition, your resignation for Good Reason will be treated as an involuntary termination for purposes of this Section 8.
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a)
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Non-Disclosure of Confidential Information
. You acknowledge that you will receive access or have received access to Confidential Information about the Company or its Affiliates, that this information was obtained or developed by the Company or its Affiliates at great expense and is zealously guarded by the Company and its Affiliates from unauthorized disclosure, and that your possession of this special knowledge is due solely to your employment with the Company or one (1) or more of its Affiliates. In recognition of the foregoing, you will not at any time during employment or following termination of employment for any reason, disclose, use or otherwise make available to any third party, any Confidential Information relating to the Company’s or any Affiliate’s business, products, services, customers, vendors, or suppliers; trade secrets, data, specifications, developments, inventions and research activity; marketing and sales strategies, information and techniques; long and short term plans; existing and prospective client, vendor, supplier and employee lists, contacts and information; financial, personnel and information system information and applications; and any other information concerning the business of the Company or its Affiliates which is not disclosed to the general public or known in the industry, except for disclosure necessary in the course of your duties or with the express written consent of the Company. All Confidential Information, including all copies, notes regarding and replications of such Confidential Information will remain the sole property of the Company or its Affiliate, as applicable, and must be returned to the Company or such Affiliate immediately upon termination of your employment.
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b)
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Return of Property
. Upon termination of employment with the Company or any of its Affiliates, or at any other time at the request of the Company, you shall deliver to a designated Company representative all records, documents, hardware, software and all other property of the Company or its Affiliates and all copies of such property in your possession. You acknowledge and agree that all such materials are the sole property of the Company or its Affiliates and that you will certify in writing to the Company at the time of delivery, whether upon termination or otherwise, that you have complied with this obligation.
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c)
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Non-Solicitation of Existing or Prospective Customers, Vendors and Suppliers
. You specifically acknowledge that the Confidential Information described in Section 10(a) includes confidential data pertaining to existing and prospective customers, vendors and suppliers of the Company or its Affiliates; that such data is a valuable and unique asset of the business of the Company or its Affiliates; and that the success or failure of their businesses depends upon their ability to establish and maintain close and continuing personal contacts and working relationships with such existing and prospective customers, vendors and suppliers and to develop proposals which are specific to such existing and prospective customers, vendors and suppliers. Therefore, during your employment with the Company or any of its Affiliates and for the twelve (12) months following termination of employment for any reason, you agree that you will not, except on behalf of the Company or its Affiliates, or with the Company’s express written consent, solicit, approach, contact or attempt to solicit, approach or contact, either directly or indirectly, on your own behalf or on behalf of any other person or entity, any existing or prospective customers, vendors or suppliers of the Company or its Affiliates with whom you had contact or about whom you gained Confidential Information during your employment with the Company or its Affiliates for the purpose of obtaining business or engaging in any commercial relationship that would be competitive with the “Business of the Company” (as defined below in Section 10(e)(i)) or cause such customer, supplier or vendor to materially change or terminate its business or commercial relationship with the Company or its Affiliates.
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d)
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Non-Solicitation of Employees
. You specifically acknowledge that the Confidential Information described in Section 10(a) also includes confidential data pertaining to employees and agents of the Company or its Affiliates, and you further agree that during your employment with the Company or its Affiliates and for the twelve (12) months following termination of employment for any reason, you will not, directly or indirectly, on your own behalf or on behalf of any other person or entity, solicit, contact, approach, encourage, induce or attempt to solicit, contact, approach, encourage or induce any of the employees or agents of the Company or its Affiliates to terminate their employment or agency with the Company or any of its Affiliates.
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e)
|
Non-Competition
. You covenant and agree that during your employment with the Company or any of its Affiliates and for the twelve (12) months following termination of employment for any reason, you will not, in any geographic market in which you worked on behalf of the Company or any of its Affiliates, or for which you had any sales, marketing, operational, logistical or other management or oversight responsibility, engage
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i)
|
The “Business of the Company” shall mean any business or activity involved in grocery or general merchandise retailing and supply chain logistics, including but not limited to grocery distribution, business-to-business portal, retail support services and third-party logistics, of the type provided by the Company or its Affiliates, or presented in concept to you by the Company or its Affiliates at any time during your employment with the Company or any of its Affiliates.
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ii)
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To “engage in or carry on” shall mean to have ownership in such business (excluding ownership of up to one percent (1%) of the outstanding shares of a publicly-traded company) or to consult, work in, direct or have responsibility for any area of such business, including but not limited to operations, logistics, sales, marketing, finance, recruiting, sourcing, purchasing, information technology or customer service.
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f)
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No Disparaging Statements
. You agree that you will not make any disparaging statements about the Company, its Affiliates, directors, officers, agents, employees, products, pricing policies or services.
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g)
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Remedies for Breach of These Covenants
. Any breach of the covenants in this Section 10 likely will cause irreparable harm to the Company or its Affiliates for which money damages could not reasonably or adequately compensate the Company or its Affiliates. Accordingly, the Company or any of its Affiliates shall be entitled to all forms of injunctive relief (whether temporary, emergency, preliminary, prospective or permanent) to enforce such covenants, in addition to damages and other available remedies, and you consent to the issuance of such an injunction without the necessity of the Company or any such Affiliate posting a bond or, if a court requires a bond to be posted, with a bond of no greater than $500 in principal amount. In the event that injunctive relief or damages are awarded to the Company or any of its Affiliates for any breach by you of this Section 10, you further agree that the Company or such Affiliate shall be entitled to recover its costs and attorneys’ fees necessary to obtain such recovery. In addition, you agree that upon your breach of any covenant in this Section 10, the Option, and any other unexercised options issued under the Plan or any other stock option plans of the Company will immediately terminate and the Company shall have the right to exercise any and all of the rights described above including the provisions articulated in Section 9.
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h)
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Enforceability of These Covenants
. It is further agreed and understood by you and the Company that if any part, term or provision of these Terms and Conditions should be held to be unenforceable, invalid or illegal under any applicable law or rule, the offending term or provision shall be applied to the fullest extent enforceable, valid or lawful under such law or rule, or, if that is not possible, the offending term or provision shall be struck and the remaining provisions of these Terms and Conditions shall not be affected or impaired in any way.
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a)
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Notice of Termination by Company
. Any purported termination of employment of you by the Company (whether for Cause or without Cause) shall be communicated by a Notice of Termination to you. No purported termination of employment of you by the Company shall be effective without a Notice of Termination having been given.
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b)
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Good Reason Notice by You
. Any purported termination of employment by you for Good Reason shall be communicated by a Notice of Termination to the Company or successor. Your termination of employment will not be for Good Reason unless (i) you give the Company written notice of the event or circumstance which you claim is the basis for Good Reason within ninety (90) days of such event or circumstance first occurring, and (ii) the Company is given thirty (30) days from its receipt of such notice within which to cure or resolve the event or circumstance so noticed. If the circumstance is cured or resolved within said thirty (30) days, your termination of employment will not be for Good Reason.
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a)
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Cause
shall have the meaning set forth in the Offer Letter.
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b)
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Change of Control
shall be deemed to have occurred upon any of the following events:
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i)
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the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than fifty percent (50%) of either (A) the then outstanding shares of common stock of the Company, or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors; provided, however, that for purposes of this subsection (i), the following acquisitions shall not constitute a Change of Control: (A) any acquisition directly from the Company, or (B) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company;
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ii)
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the consummation of any merger or other business combination of the Company, sale or lease of all or substantially all of the Company's assets or combination of the foregoing transactions (the "Transactions") other than a Transaction immediately following which the stockholders of the Company and any trustee or fiduciary of any Company employee benefit plan immediately prior to the Transaction own at least sixty percent (60%) of the voting power, directly or indirectly, of (A) the surviving corporation in any such merger or other business combination; (B) the purchaser or lessee of the Company's assets, or (C) both the surviving corporation and the purchaser or lessee in the event of any combination of Transactions; or
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iii)
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within any 24‑month period, the persons who were directors immediately before the beginning of such period (the "Incumbent Directors") shall cease (for any reason other than death) to constitute at least a majority of the Board or the board of directors of a successor to the Company. For this purpose, any director who was not a director at the beginning of such period shall be deemed to be an Incumbent Director if such director was elected to the Board by, or on the recommendation of or with the approval of, at least three‑fourths of the directors who then qualified as Incumbent Directors (so long as such director was not nominated by a person who has expressed an intent to effect a Change of Control or engage in a proxy or other control contest).
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c)
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Change of Control Date
shall mean the date on which a Change of Control occurs.
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d)
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Good Reason
shall (x) prior to the Change of Control Date, have the meaning set forth in the Offer Letter, and (y) on or following the Change of Control Date, mean any one (1) or more of the following events occurring during the two-year period following the Change of Control Date:
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i)
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your annual base salary is reduced below the amount in effect on the Change of Control Date;
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ii)
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your Target Bonus is reduced below the Target Bonus as it existed on the Change of Control Date;
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iii)
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your title is reduced from the title that you had on the Change of Control Date, or your duties and responsibilities are materially and adversely diminished in comparison to the duties and responsibilities that you had on the Change of Control Date other than in a general reduction of the number or scope of personnel for which you are responsible for supervising which reduction occurs in connection with a restructuring or recapitalization of the Company or the division of the Company in which you work;
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iv)
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the program of long term incentive compensation is materially and adversely diminished in comparison to the program of long term incentive compensation as it existed for you on the Change of Control Date (for purposes of this clause (iv), a reduction of fifteen percent (15%) or more of the
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v)
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you are required to be based at a location more than forty-five (45) miles from the location where you were based and performed services on the Change of Control Date;
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e)
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Notice of Termination
shall mean a written notice which shall indicate the specific provision in these Terms and Conditions relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for your termination of employment under the provisions so indicated.
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f)
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Target Bonus
shall mean the target amount of bonus established under the annual bonus plan for you for the year in which the termination of employment occurs. When the context requires, it shall also mean the target amount of bonus established for any earlier or later year.
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