FORM OF CONTINUATION OF
EMPLOYMENT AGREEMENT
AGREEMENT between
Flowers Foods, Inc., a Georgia corporation (the “
Company ”), and
(the “ Employee ”), dated as of the
day of
.
WHEREAS, the
Company, on behalf of itself and its shareholders, wishes to
continue to attract and retain well-qualified executive and key
personnel who are an integral part of the management of the Company
or of one or more of its Subsidiaries, such as Employee, and to
assure itself of continuity of management in the event of any
prospective or actual Change in Control (as defined in
Appendix I of this Agreement) of the Company; and
WHEREAS, the
Company wishes to provide the Employee with appropriate protection
with respect to the Employee’s continued employment in the
event of a prospective or actual Change in Control, in exchange for
the Employee agreeing to continue to serve as an executive employee
of the Company or a Subsidiary in the event of a prospective or
actual Change in Control; and
WHEREAS, the
Employee agrees to continue to serve as an executive employee of
the Company or a Subsidiary in the event of a prospective or actual
Change in Control as consideration for the employment rights set
forth herein;
NOW, THEREFORE, in
consideration of the foregoing premises and of the mutual covenants
and conditions set forth herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Employee hereby agree as
follows:
1. Operation
of Agreement .
(a) The
“Effective Date” shall be
.
(b) Certain
capitalized terms shall have the meaning indicated in
Appendix I, which may be amended by the Company as provided in
Section 15(g) below. In addition, the term “Employer”
shall mean either the Company or a Subsidiary, as applicable, which
is the direct employer of the Employee.
2. Coverage
Period . The “Coverage Period” is the period
commencing on the Effective Date and ending on the [
] anniversary of such date; provided, however, that commencing on
the date one year after the Effective Date (the “Renewal
Date”), and on each anniversary of the Renewal Date, the
Coverage Period shall be automatically extended so as to terminate
[
] years from such Renewal Date or Renewal Date anniversary, as the
case may be, unless at least 60 days prior to the Renewal Date
or Renewal Date anniversary, as the case may be, either party shall
give the other party written notice that the Coverage Period shall
not be so extended. Notwithstanding the foregoing, in the event a
Change in Control (as defined in Appendix I) occurs during the
Coverage Period, the Coverage period shall be automatically
extended to terminate on the [
] anniversary of the Change in Control.
3.
Employment Period. Subject to the provisions of
Sections 6 and 7 of this Agreement, and provided (i) that
the Employee is still employed by the Employer immediately
preceding the occurrence of a Change in Control, and (ii) that
this Agreement is in effect as provided in Section 1 above,
the Employer hereby agrees to continue the Employee in its employ,
and the Employee hereby agrees to remain in the employ of the
Employer for the period commencing on the effective date of such
Change in Control (the “Commencement Date”) and ending
on the [
] anniversary of the Commencement Date or if earlier, the
Employee’s attainment of age sixty-five (65) (the
“Employment Period”). The Employee also agrees to
remain in the employ of the Employer in the event of any
anticipated Change in Control, so long as this Agreement is in
effect as provided in Section 2.
(a) During the
Employment Period, the Employee’s position (including status,
offices, titles and reporting requirements, authority, duties and
responsibilities) shall be at least commensurate in all material
respects with those held, exercised and assigned at any time during
the 90-day period immediately preceding the Commencement Date, and
the Employee’s principle place of business shall be located
within a 50 mile radius of the location of said principle place of
business immediately preceding the Commencement Date.
(b) Excluding
periods of vacation and sick leave to which the Employee is
entitled, the Employee agrees during the Employment Period to
devote substantially all of his attention and time during normal
business hours to the business and affairs of the Employer and, to
the extent necessary to discharge the responsibilities assigned to
the Employee hereunder, to use reasonable best efforts to perform
faithfully and efficiently such responsibilities. The Employee may
(i) serve on corporate, civic or charitable boards or
committees, (ii) deliver lectures, fulfill speaking
engagements or teach at educational institutions and
(iii) manage personal investments, so long as such activities
do not interfere with the performance of the Employee’s
responsibilities to the Employer. It is expressly understood and
agreed that to the extent that any such activities have been
conducted by the Employee prior to the Commencement Date, such
prior conduct of activities, and any subsequent conduct of
activities similar in nature and scope, shall not thereafter be
deemed to interfere with the performance of the Employee’s
responsibilities to the Employer.
5.
Compensation. The following provisions apply during
such time as the Employee is employed during the Employment
Period:
(a) Base
Salary. During the Employment Period, the Employee shall
receive a base salary as increased hereunder from time to time
(“Base Salary”) at a rate at least equal to the salary
rate paid to the Employee by the Employer, together with any of its
Affiliates, immediately prior to the Commencement Date. The Base
Salary shall be reviewed periodically and may be increased (but not
decreased) in the course of each such review to reflect increases
in the cost of living and such other increases as shall be
consistent with increases in base salary awarded in the ordinary
course of business to other key executives. Under no circumstances
shall any increase in the Base Salary (i) limit or reduce any
other obligation to the Employee under this Agreement, or
(ii) be later reduced or eliminated, once
effective.
(b) Annual
Bonus and Long-term Incentive Compensation .
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(i)
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In
addition to the Base Salary, the Employee shall be paid, for each
fiscal year ending during the Employment Period, an annual bonus
(an “Annual Bonus”) pursuant to the Company’s
Annual Executive Bonus Plan, or a comparable successor plan, in
cash, the amount of which Annual Bonus shall be based on
substantially the same performance criteria and goals as were in
effect in connection with the Bonus Plan or a comparable successor
plan to said Bonus Plan immediately prior to the Commencement Date.
In no event, however, shall the Employee’s Annual Bonus be
reduced to a level which is less than the average bonus paid by the
Employer with respect to the Employee under the Bonus Plan (or a
comparable successor plan to the Bonus Plan) for the [
] fiscal years of the Employer (or shorter actual period) in which
were paid the highest bonuses during the five said years
immediately preceding the Commencement Date. In the event that the
period for the first annual bonus under said plan has not expired
by the date of the Change in Control, the Employee shall be deemed
to have received the target bonus for said period. Each such Annual
Bonus shall be payable within three months after the end of the
fiscal year for which the Annual Bonus is awarded, unless the
Employee shall otherwise timely elect to defer the receipt of such
Annual Bonus under any deferred compensation plan of the Employer
then in effect.
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(ii)
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For
each fiscal year during the Employment Period, the Employee shall
also receive any long-term incentive compensation to which he is
entitled pursuant to the terms of stock-based awards granted under
the Company’s Equity and Performance Incentive Plan
(“Long-Term Incentive Compensation”), and shall
furthermore continue to receive grants of said types of awards
(other than an extraordinary award) consistent with the prior
practices of the Company as determined in the two fiscal years of
the Company ending immediately prior to the Change in Control (or
shorter actual period).
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(c) Incentive
Savings and Retirement Plans. In addition to the Base Salary
and Annual Bonus and Long-term Incentive Compensation payable as
herein above provided, the Employee shall be entitled to
participate, during the Employment Period, in all incentive,
savings and retirement plans and programs applicable to other key
executives of the Employer in comparable positions, but in no event
shall such plans and programs, in the aggregate, provide the
Employee with compensation, benefits and reward opportunities less
favorable than those provided by the Employer under such
plans
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and programs as
in effect with respect to the Employee at any time during the
90-day period immediately preceding the Commencement
Date.
(d) Welfare
Benefit Plans. During the Employment Period, the Employee
and/or the Employee’s dependents as the case may be, shall be
eligible to participate in and shall receive all benefits under
each welfare benefit plan of the Employer, including, without
limitation, all medical, dental, disability, group life and
accidental death insurance plans and programs of the Employer, as
in effect with respect to the Employee and his dependents at any
time during the 90-day period immediately preceding the
Commencement Date or, if more favorable to the Employee, as in
effect at any time thereafter with respect to other key executives
of the Employer in comparable positions.
(e)
Expenses. During the Employment Period, the Employee shall
be entitled to receive prompt reimbursement for all reasonable
business-related expenses incurred by the Employee in accordance
with the policies and procedures of the Employer as in effect with
respect to the Employee at any time during the 90-day period
immediately preceding the Commencement Date or, if more favorable
to the Employee, as in effect at any time thereafter with respect
to other key executives of the Employer in comparable positions.
All reimbursements under this subsection 5(e) shall be for expenses
incurred by the Employee during the Employee’s lifetime. All
requests for reimbursement shall be submitted no later than
90 days prior to the last day of the calendar year following
the calendar year in which the expense was incurred. In no event
will the amount of expenses reimbursed in one year affect the
amount of expenses eligible for reimbursement, or in kind benefit
to be provided, in any other taxable year.
(f) Fringe
Benefits. During the Employment Period, the Employee shall be
entitled to fringe benefits and perquisites, including travel
accident insurance plans and programs, in accordance with the
policies of the Employer as in effect with respect to the Employee
at any time during the 90-day period immediately preceding the
Commencement Date or, if more favorable to the Employee, as in
effect at any time thereafter with respect to other key executives
of the Employer in comparable positions.
(g) Office and
Support Staff. During the Employment Period, the Employee 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 those provided to the Employee at any time during
the 90-day period immediately preceding the Commencement Date or,
if more favorable to the Employee, as provided at any time
thereafter with respect to other key executives of the Employer in
comparable positions.
(h)
Vacation. During the Employment Period, the Employee shall
be entitled to paid vacation in accordance with the policies of the
Employer as in effect with respect to the Employee at any time
during the 90-day period immediately preceding the Commencement
Date or, if more favorable to the Employee, as in effect at any
time thereafter with respect to other key executives of the
Employer in comparable positions.
6.
Termination. Prior to the Commencement Date, the
employment of the Employee may be terminated at any time by the
Employee or the Employer, with or without cause of any nature, in
accordance with the Employer’s usual policies and practices,
at which time this Agreement shall automatically terminate. The
following provisions relate solely to termination of the
Employee’s employment during the Employment
Period:
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(i)
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Subject to Section 7 below,
this Agreement shall terminate automatically upon the
Employee’s death.
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(ii)
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Subject to Section 7 below, the
Company may terminate this Agreement after having established the
Employee’s Disability (pursuant to the definition of
“Disability” set forth below), by giving to the
Employee written notice of its intention to terminate the
Employee’s employment. In such a case, the Employee’s
employment with the Employer shall terminate effective on the 90th
day after receipt of such notice (the “Disability Effective
Date”), unless within 90 days after such receipt, the
Employee shall have returned to the full-time performance of the
Employee’s duties. For purposes of this Agreement,
“Disability” means disability which, after the
expiration of more
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than 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 Employee or the Employee’s legal representative (such
agreement as to acceptability not to be withheld
unreasonably).
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(b) Cause.
The Employer may terminate the Employee’s employment for
“Cause.” For purposes of this Agreement,
“Cause” means (i) an act or acts of dishonesty,
moral turpitude or willful misconduct taken by the Employee and
intended to result in substantial personal enrichment of the
Employee at the expense of the Company or any Subsidiary or which
have a material adverse impact on the business or reputation of the
Company or any Subsidiary of the Company, or (ii) repeated
violations by the Employee of the Employee’s obligations
under Section 4 of this Agreement which are demonstrably
willful and deliberate on the Employee’s part and which have
a material adverse impact on the business or reputation of the
Company or any Subsidiary of the Company, but specifically
excluding alleged violations which are due to disability or for
“Good Reason” as defined below.
(c) Good
Reason. The Employee’s employment may be terminated by
the Employee for Good Reason. For purposes of this Agreement,
“Good Reason” means:
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(i)
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(A)
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the
Assignment to the Employee of any duties inconsistent in any
material respect with the Employee’s position (including
status, offices, titles and reporting requirements), authority,
duties or responsibilities as contemplated by Section 4 of
this Agreement or
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(B)
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any
other action by the Employer which results in a material
diminishment in such position, authority, duties or
responsibilities, other than action or inaction which is remedied
by the Employer within 30 days after receipt of written notice
thereof given by the Employee;
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(ii)
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any
failure by the Employer to comply with any of the provisions of
Section 5 of this Agreement, other than any failure which is
remedied by the Employer within 30 days after receipt of
written notice thereof given by the Employee;
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(iii)
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the
Employer’s requiring the Employee to be based at any office
or location more than 50 miles away from that at which the Employee
is based at the Commencement Date, except for travel reasonably
required consistent with past practices, in the performance of the
Employee’s responsibilities;
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(iv)
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any
purported termination by the Employer of the Employee’s
employment otherwise than as permitted by this Agreement;
or
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(v)
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any
failure by the Company to comply with and satisfy Section 12(c) of
this Agreement.
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(d) Notice of
Termination. Any termination by the Employer for Cause or by
the Employee for Good Reason shall be communicated by Notice of
Termination to the other party hereto given in accordance with
Section 15(b) of this Agreement. For purposes of this Agreement, a
“Notice of Termination” means a written notice which
(i) indicates the specific termination provision in this
Agreement relied upon, (ii) sets forth in reasonable detail
the facts and circumstances claimed to provide a basis for
termination of the Employee’s employment under the provision
so indicated, and (iii) if the termination date 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).
(e) Date of
Termination. “Date of Termination” means the date
of receipt of the Notice of Termination or any later date as of
which the termination of employment will occur specified therein
(which shall consist of a separation from service within the
meaning of Section 409A of the Internal Revenue Code of 1986,
as amended (the “Code”)), as the case may be. If the
Employee’s employment is terminated by the Employer in breach
of this Agreement, the Date of Termination shall be the date on
which the Employer notifies the Employee of such
termination.
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7.
Obligations of the Company Upon Termination. The
following provisions apply only in the event the Employee is
terminated during the Employment Period. In addition, in the event
that the Employee is a participant in any other compensation
arrangement sponsored by the Company, the terms of the particular
arrangement shall govern the Employee’s rights thereunder in
the event of a separation from employment. All reimbursements under
this Section 7 shall be for expenses incurred by the Employee
during the Employee’s lifetime. All requests for
reimbursement shall be submitted no later than 90 days prior
to the last day of the calendar year following the calendar year in
which the expense was incurred. In no event will the amount of
expenses reimbursed in one year affect the amount of expenses
eligible for reimbursement, or in kind benefit to be provided, in
any other taxable year.
(a) Death.
If the Employee’s employment is terminated by reason of the
Employee’s death, this Agreement shall terminate without
further obligation to the Employee’s legal representatives
under this Agreement other than those payment amounts accrued and
payable hereunder at the date of the Employee’s death.
Anything in this Agreement to the contrary notwithstanding, the
Employee’s family shall be entitled to receive benefits at
least equal to those provided by the Employer to surviving families
of executives of the Employer in the same or comparable positions
under such plans, programs and policies relating to family death
benefits, if any, as in effect at any time during the 90-day period
immediately preceding the Commencement Date or, if more favorable
to the Employee and/or the Employee’s family, as in effect at
the time of Employee’s death with respect to other key
executives of the Employer in comparable positions and their
families.
(b)
Disability. If the Employee’s employment is terminated
by reason of the Employee’s Disability, the Employee shall be
entitled after the Disability Effective Date to receive any amounts
then accrued and payable hereunder and to receive disability and
other benefits at least equal to those provided by the Employer to
disabled employees and/or their families in accordance with such
plans, programs and policies relating to disability, if any, as in
effect with respect to executives of the Employer in the same or
comparable positions at any time during the 90-day period
immediately preceding the Commencement Date or, if more favorable
to the Employee and/or the Employee’s family, as in effect at
the time of the disability termination with respect to other key
executives of the Employer in comparable positions and their
families.
(c) Cause.
If the Employee’s employment shall be terminated for Cause,
the Employer shall pay the Employee his full Base Salary through
the Date of Termination at the rate in effect at the time Notice of
Termination is given and shall provide the Employee, through the
Date of Termination, such welfare benefits, fringe benefits, and
other perquisites as were provided to the Employee immediately
prior to delivery to Employee of the Notice of Termination. Subject
to Section 8 below, the Company shall have no further
obligation to the Employee under this Agreement.
(d) Good
Reason; Other Than for Cause or Disability . If the Employer
shall terminate the Employee’s employment wit
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