Exhibit 10.2
Form of Change in Control Agreement
[Date]
«First_NameMiddle_Initial» «Last_Name»
«Address»
Dear
«MrMs» «Last_Name»:
You are
presently the «Title» of Nash Finch Company, a Delaware
corporation. The Company considers the establishment and
maintenance of a sound and vital management to be essential to
protecting and enhancing the best interests of the Company and its
stockholders. In this connection, the Company recognizes that, as
is the case with many publicly held corporations, the possibility
of a Change in Control may arise and that such possibility, and the
uncertainty and questions which it may raise among management, may
result in the departure or distraction of management personnel to
the detriment of the Company and its stockholders.
Accordingly, the Board has determined that appropriate steps should
be taken to minimize the risk that Company management will depart
prior to a Change in Control, thereby leaving the Company without
adequate management personnel during such a critical period, and
that appropriate steps also be taken to reinforce and encourage the
continued attention and dedication of members of the
Company’s management to their assigned duties without
distraction in circumstances arising from the possibility of a
Change in Control. In particular, the Board believes it important,
should Nash Finch Company or its stockholders receive a proposal of
transfer of control, that you be able to continue your management
responsibilities and assess and advise the Board whether such
proposal would be in the best interests of Nash Finch Company and
its stockholders and to take other action regarding such proposal
as the Board might determine to be appropriate, without being
influenced by the uncertainties of your own personal
situation.
The
Board recognizes that continuance of your position with the Company
involves a substantial commitment to the Company in terms of your
personal life and professional career and the possibility of
foregoing present and future career opportunities, for which the
Company receives substantial benefits. Therefore, to induce you to
remain in the employ of the Company, this letter agreement, which
has been approved by the Board, sets forth the benefits which the
Company agrees will be provided to you in the event your employment
with the Company is terminated in connection with a Change in
Control under the circumstances described below.
1. Definitions . The
following terms will have the meaning set forth below unless the
context clearly requires otherwise. Terms defined elsewhere in this
Agreement will have the same meaning throughout this
Agreement.
(a) “ Agreement
” means this letter agreement as amended, extended or renewed
from time to time in accordance with its terms.
(b) “ Board ”
means the board of directors of the Parent Corporation duly
qualified and acting at the time in question.
(c) “ Cause ”
means: (i) the willful and continued failure by you to
substantially perform your duties to the Company (other than any
such failure resulting from your Disability or incapacity due to
bodily injury or physical or mental illness) after a demand for
substantial performance is delivered to you by the Company which
specifically identifies the manner in which you have not
substantially performed your duties; or (ii) your conviction
(including a plea of nolo contendere) of a felony or gross
misdemeanor under federal or state law that the Board determines is
injurious to reputation or the business of the Company;
(iii) your commission of any act involving dishonesty, fraud,
gross negligence or other willful misconduct in the performance of
your duties of the Company or (iv) your breach of any
confidentiality, non-compete or non-solicitation covenants you may
have with the Company. For purposes of this definition, no act, or
failure to act, on your part will be considered
“willful” unless done, or omitted to be done, by you in
bad faith and without reasonable belief that your action or
omission was in, or not opposed to, the best interests of the
Company. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board (or a committee
hereof) or based upon the advice of counsel for the Company will be
conclusively presumed to be done, or omitted to be done, by you in
good faith and in the best interests of the Company. It is also
expressly understood that your attention to matters not directly
related to the business of the Company will not provide a basis for
termination for Cause so long as the Board does not expressly
disapprove in writing of your engagement on such activities either
before or within a reasonable period of time after the Board knew
or could reasonably have known that you engaged in those
activities. Notwithstanding the foregoing, you will not be deemed
to have been terminated for Cause unless and until there has been
delivered to you a copy of a resolution duly adopted by the Board
(after reasonable notice to you and an opportunity for you,
together with your counsel, to be heard before the Board), finding
that in the good faith opinion of the Board you were guilty of the
conduct set forth above and specifying the particulars thereof in
detail.
(d) “ Change in
Control ” means: (i) the sale, lease, exchange, or
other transfer of all or substantially all of the assets of the
Parent Corporation (in one transaction or in a series of related
transactions) to a corporation that is not controlled by the Parent
Corporation; (ii) the approval by the stockholders of the Parent
Corporation of any plan or proposal for the liquidation or
dissolution of the Parent Corporation; or (iii) a change in
control of a nature that would be required to be reported (assuming
such event has not been “previously reported”) in
response to Item 5.01 of the Current Report on Form 8-K, as in
effect on the date hereof, pursuant to section 13 or 15(d) of the
Exchange Act, whether or not the Parent Corporation is then subject
to such reporting requirement; provided that, without limitation,
such a Change in Control will be deemed to have occurred at such
time as: (A) any Person is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of thirty percent (30%) or more of
the combined voting power of the Parent Corporation’s
outstanding securities ordinarily having the right to vote at
elections of directors, or (B) individuals elected to the
Board of Directors following nomination for that position by a
majority of the Board cease to constitute a majority thereof
.
(e) “ Code ”
means the Internal Revenue Code of 1986, as amended.
(f) “ Company
” means the Parent Corporation, any Subsidiary and any
Successor.
(g) “ Confidential
Information ” means information which is proprietary to
the Company or proprietary to others and entrusted to the Company,
whether or not trade secrets. It includes information relating to
business plans and to business as conducted or anticipated to be
conducted, and to past or current or anticipated products or
services. It also includes, without limitation, information
concerning research, development, purchasing, accounting, marketing
and selling. All information which you have a reasonable basis to
consider confidential is Confidential Information, whether or not
originated by you and without regard to the manner in which you
obtain access to that and any other proprietary information.
(h) “ Date of
Termination ” following a Change in Control (or prior to
a Change in Control if your termination was either a condition of
the Change in Control or was at the request or insistence of any
Person (other than the Company) related to the Change in Control)
means: (i) if your employment is to be terminated for Disability,
thirty (30) calendar days after Notice of Termination is given
(provided that you have not returned to the performance of your
duties on a full-time basis during such thirty (30)-calendar-day
period); (ii) if your employment is to be terminated by the
Company for Cause or by you for Good Reason, the date specified in
the Notice of Termination; (iii) if your employment is to be
terminated by the Company for any reason other than Cause,
Disability, death or Retirement, the date specified in the Notice
of Termination, which in no event may be a date earlier than ninety
(90) calendar days after the date on which a Notice of
Termination is given, unless an earlier date has been expressly
agreed to by you in writing either in advance of, or after,
receiving such Notice of Termination; or (iv) if your
employment is terminated by reason of death or Retirement, the date
of death or Retirement, respectively. In the case of termination by
the Company of your employment for Cause, if you have not
previously expressly agreed in writing to the termination, then
within thirty (30) calendar days after receipt by you of the
Notice of Termination with respect thereto, you may notify the
Company that a dispute exists concerning the termination, in which
event the Date of Termination will be the date set either by mutual
written agreement of the parties or by the judge or arbitrators in
a proceeding as provided in Section 13 of this Agreement.
During the pendency of any such dispute, the Company will continue
to pay you your full compensation and benefits in effect just prior
to the time the Notice of Termination is given and until the
dispute is resolved in accordance with Section 13 of this
Agreement.
(i) “ Disability
” means a disability as defined in the Company’s
long-term disability plan as in effect immediately prior to the
Change in Control or, in the absence of such a plan, means
permanent and total disability as defined in section 22(e)(3) of
the Code.
(j) “ Exchange Act
” means the Securities Exchange Act of 1934, as
amended.
(k) “ Good Reason
” means:
(i) a material adverse change in your
status or position(s) as an executive of the Company as in effect
immediately prior to the Change in Control, including, without
limitation, any adverse change in your status or position(s) as a
result of a material diminution in your duties or responsibilities
(other than, if applicable, any such change directly attributable
to the fact that the Company is no longer publicly owned) or the
assignment to you of any duties or responsibilities which are
inconsistent with such status or position(s), or any removal of you
from or any failure to reappoint or reelect you to such position(s)
(except in connection with the termination of your employment for
Cause, Disability or Retirement or as a result of your death or by
you other than for Good Reason);
(ii) a reduction by the Company in
your rate of total compensation (including, without limitation,
salary and bonus potential) (or an adverse change in the form or
timing of the payment thereof) as in effect immediately prior to
the Change in Control;
(iii) the failure by the Company to
continue in effect any Plan in which you (and/or your family) are
participating at any time during the ninety (90)-calendar-day
period immediately preceding the Change in Control (or Plans
providing you (and/or your family) with at least substantially
similar benefits) other than as a result of the normal expiration
of any such Plan in accordance with its terms as in effect
immediately prior to the ninety (90)-calendar-day period
immediately preceding the time of the Change in Control, or the
taking of any action, or the failure to act, by the Company which
would adversely affect you (and/or your family’s) continued
participation in any of such Plans on at least as favorable a basis
to you (and/or your family) as is the case on the date of the
Change in Control or which would materially reduce your (and/or
your family’s) benefits in the future under any of such Plans
or deprive you (and/or your family) of any material benefit enjoyed
by you (and/or your family) at the time of the Change in
Control;
(iv) the Company’s requiring
you to be based more than fifty (50) miles from where your
office is located immediately prior to the Change in Control,
except for required travel on the Company’s business, and
then only to the extent substantially consistent with the business
travel obligations which you undertook on behalf of the Company
during the ninety (90)-calendar-day period immediately preceding
the Change in Control (without regard to travel related or in
anticipation of the Change in Control);
(v) the failure by the Company to
obtain from any Successor the assent to this Agreement contemplated
by Section 6 of this Agreement.
(vi) any purported termination by the
Company of your employment which is not properly effected pursuant
to a Notice of Termination and pursuant to any other requirements
of this Agreement, and for purposes of this Agreement, no such
purported termination will be effective; or
(vii) any refusal by the Company to
continue to allow you to attend to matters or engage in activities
not directly related to the business of the Company which, at any
time prior to the Change in Control, you were not expressly
prohibited in writing by the Board from attending to or engaging
in.
(l) “ Highest Monthly
Compensation ” means one-twelfth (1/12) of the highest
amount of your compensation for any twelve (12) consecutive
calendar-month period during the thirty-six (36) consecutive
calendar-month period prior to the month that includes the Date of
Termination. For purposes of this definition,
“compensation” means your base pay plus short term
bonus target.
(m) “ Notice of
Termination ” means a written notice which indicates the
specific termination provision in this Agreement pursuant to which
the notice is given. Any purported termination by the Company or by
you following a Change in Control (or prior to a Change in Control
if your termination was either a condition of the Change in Control
or was at the request or insistence of any Person (other than the
Company) related to the Change in Control) must be communicated by
written Notice of Termination.
(n) “ Parent
Corporation ” means Nash Finch Company and any
Successor.
(o) “ Person
” means and includes any individual, corporation,
partnership, group, association or other “person”, as
such term is used in section 14(d) of the Exchange Act, other than
the Parent Corporation, a wholly-owned subsidiary of the Parent
Corporation or any employee benefit plan(s) sponsored by the Parent
Corporation or a wholly-owned subsidiary of the Parent
Corporation.
(p) “ Plan ”
means any compensation plan (such as a stock option, restricted
stock plan or other equity-based plan), or any employee benefit
plan (such as a thrift, pension, profit sharing, medical, dental,
disability, accident, life insurance, relocation, salary
continuation, expense reimbursements, vacation, fringe benefits,
office and support staff plan or policy) or any other plan,
program, policy or agreement of the Company intended to benefit you
(and/or your family) (including, without limitation, the
Company’s 2000 Stock Incentive Plan, Profit Sharing Plan,
Income Deferral Plan, Deferred Compensation Plan and Supplemental
Executive Retirement Plan).
(q) “ Retirement
” means the day on which you attain the age of sixty-five
(65).
(r) “ Subsidiary
” means any corporation at least a majority of whose
securities having ordinary voting power for the election of
directors is at the time owned by the Company and/or one
(1) or more Subsidiaries.
(s) “ Successor
” means any Person that succeeds to, or has the practical
ability to control (either immediately or with the passage of
time), the Parent Corporation’s business directly, by merger,
consolidation or other form of business combination, or indirectly,
by purchase of the Parent Corporation’s voting securities,
all or
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