letter agreementOther Agreements |
|
|
You are currently viewing: This Other Agreements involves
NASH FINCH CO. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
|
|
|
Search Other Agreements by:
Exhibit 10.4
June 16, 2006
Kathleen E. McDermott
29 East Churchill Drive
Salt Lake City, UT 84103
Dear Ms. McDermott:
This
letter agreement (the “Agreement”) will confirm our understanding
regarding your separation from Nash Finch Company (the “Company”).
SECTION 1
RESIGNATION
The
effective date of your resignation as an executive officer of the Company, as
an officer and director of its Affiliates (as defined in subsection 5.2) and as
an officer and director of the NFC Foundation is February 14, 2006, and
the effective date of your resignation from employment with the Company and its
Affiliates is February 28, 2006 (your “Termination Date”).
Commencing on February 14, 2006, you had no authority to bind the Company.
SECTION 2
PAYMENTS, BENEFITS AND RIGHTS
2.1.
Unpaid Salary and Unused Vacation. The Company has paid you (a) the
amount of all earned and previously unpaid base salary for the period ending on
your Termination Date and (b) an amount equal to the cash equivalent of your
unused accrued vacation as of your Termination Date, and which is in settlement
of any and all vacation that you have accrued, and to which you are entitled
from the Company. You will not accrue or be entitled to any vacation after your
Termination Date.
2.2.
Benefits, Generally.
|
(a) |
|
Cessation of
Benefits. Your active
participation in the employee benefit plans maintained by the Company and its
Affiliates will cease as of your Termination Date, subject to your right to
elect continuation coverage under the Company’s group medical, dental
and vision benefits plans in accordance with the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”). |
|
(b) |
|
Indemnification. You will continue to be eligible for
indemnification pursuant to the existing Indemnification Agreement between
you and the Company dated April 16, 2002. The terms and conditions of
the Indemnification Agreement are in full force and effect and are unchanged
by this Agreement. |
|
(c) |
|
Withholding
With Respect to Restricted Shares. You acknowledge and agree that you are liable for payment of
the applicable withholding taxes of $2,517.68 with respect to the two hundred
ten (210) shares of restricted Company Common Stock that vested on or |
|
|
|
about February 23,
2006, and your ownership of those shares is subject to your payment of that
withholding obligation. |
|
(d) |
|
Eligibility
for Benefits. Except as
otherwise provided in this Agreement with respect to plans or arrangements
specifically identified in this Agreement, you shall be entitled to benefits
after your Termination Date under the employee benefit plans and arrangements
maintained by the Company and its Affiliates, as in effect from time to time,
based on the benefits you earned up to your Termination Date under those
benefit plans and arrangements, and based on the fact that your employment
with the Company ceased on your Termination Date. A schedule of your benefits
under such plans and arrangements is set forth in Exhibit 1 to this
Agreement. |
2.3.
Benefits after Termination. You shall be entitled to compensation,
benefits, payments, and distributions from the Company in accordance with this
Section 2.3.
|
(a) |
|
Severance
Payments. Subject to
the terms of this Agreement, you shall be entitled to Severance Payments (the
“Severance Payments”) as described in this subsection (a): |
|
|
(i) |
|
On the first
regular payday after the Initial Payment Date, you will receive an initial
Severance Payment of $147,500.00 On each regular weekly payday thereafter,
you will receive an additional Severance Payment installment of $5,673.08.
The payments shall continue until the Payment Termination Date. In no event
shall the aggregate gross Severance Payments exceed $295,000. |
|
|
|
|
|
|
|
(ii) |
|
The Severance
Payments shall not be considered compensation or earnings for purposes of any
employee benefit plan or arrangement of the Company and its Affiliates. |
|
(b) |
|
Medical
Benefits. For the
period beginning on your Termination Date, and ending on the earlier of
(i) the Payment Termination Date, or (ii) the date on which your
COBRA continuation coverage period otherwise ends in accordance with COBRA,
you shall be entitled to COBRA continuation coverage under the group medical,
dental and vision benefits plans of the Company and its Affiliates in
accordance with COBRA (provided you properly and timely elect such COBRA
coverage) at a monthly cost equal to the monthly cost applicable to active
employees of the Company. Such period of subsidized COBRA coverage shall be
counted toward, and shall not be in addition to or otherwise extend the
duration of, the maximum COBRA period applicable to you, your spouse or any
of your dependents, and such period of subsidized COBRA coverage shall not in
any way amplify the benefits to which you are entitled under COBRA. With
respect to the COBRA premiums you pay during the period commencing with your
Termination Date and ending on the date this Agreement becomes final and
binding as described in subsection 4.1, the Company shall reimburse you an
amount equal to the difference between the aggregate COBRA premiums you paid
during such period for the COBRA coverage you elected and the aggregate
active employee premiums for the same coverage during such period. |
2
|
|
|
(c) |
|
Life
Insurance. You will be
eligible for life insurance coverage under the Company’s group term
life insurance policy until the one-year anniversary following the
Termination Date or, if earlier, on the date on which you obtain other
employment. The life insurance coverage shall be at the same level as you had
in place on the Termination Date. |
|
(d) |
|
Legal Fees. The Company will reimburse you up to
$5,000 for the reasonable legal fees you incur in connection with the
negotiation of the Agreement. Such reimbursement shall be made as soon as practicable
after the later of the Initial Payment Date or the date on which you have
submitted evidence to the Company of having incurred such fees. |
2.4.
Withholding. All amounts otherwise payable under the Agreement shall be
subject to customary withholding and other employment taxes, and shall be
subject to such other withholding as may be required in accordance with the
terms of this Agreement; provided that reimbursement of your legal fees in
connection with the negotiation of this Agreement, as described in subsection
2.3(d), shall not be subject to withholding.
2.5.
Other Payments. Except as specified in this Section 2, or otherwise
expressly provided in or pursuant to the Agreement, you shall be entitled to no
compensation, benefits or other payments or distributions, and references in
the Executive Release to the release of claims against the Company shall be
deemed to also include reference to the release of claims against all
compensation and benefit plans and arrangements established or maintained by
the Company and its Affiliates.
2.6.
Mitigation, Alienation, and Set-Off.
|
(a) |
|
Should you
obtain employment in a new position that is substantially comparable to your
former position as General Counsel of the Company prior to the first
anniversary of your Termination Date, you shall promptly notify the Company
in writing and the Company’s remaining obligation to make the Severance
Payments described in subsection 2.3(a), above, shall cease. For purposes of
this subsection 2.6(a), a new position is “substantially
comparable” to your former position as General Counsel with the Company
if the annual salary associated with the new position are nearly equivalent
to or greater than your salary at the time of your resignation from
employment with the Company. Neither this subsection 2.6(a) nor any other
provision of this Agreement in any way obligates you to search for or accept
any new position. As a condition of continued receipt of Severance Payments,
the Company may require that you certify that you have not obtained
employment as described in this subsection 2.6(a). |
|
(b) |
|
The Company
shall be entitled to set off against the amounts payable to you under this
Agreement any amounts owed to the Company by you, provided that the Company
provides to you reasonable documentation of such amounts that it asserts are
owed to the Company by you. |
|
(c) |
|
This Agreement
is personal to you and may not be assigned by you without the written consent
of the Company. Your interests under this Agreement are not subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment, or garnishment by creditors of you or your
beneficiaries. |
3
|
|
2.7.
Initial Payment Date. For purposes of this Agreement, the “Initial
Payment Date” shall be the first business day following the later of
(a) the expiration of your right to revoke the execution of this Agreement
in accordance with subsection 2(d) of Exhibit 2 (relating to the Executive
Release) of this Agreement (which period of permitted revocation is sixteen
(16) days from the date of execution of this Agreement, as set forth in
such subsection 2(d)) and in no event earlier than the first business day
following the day on which you have (i) returned to the Company all
property belonging to the Company and its Affiliates in accordance with
subsection 3.1 and (ii) satisfied your withholding obligation in accordance
with subsection 2.2(c) or (b) the six- (6-) month anniversary of your
Termination Date.
2.8.
Payment Termination Date. The “Payment Termination Date”
shall be the earliest to occur of: (a) the date on which you are employed
by a new employer as described in subsection 2.6(a); (b) the date you
receive the 26th weekly Severance Payment installment of $5,673.08 as
described in subsection 2.3(a)(i); (c) the date of your death; or
(d) the date, if any, of any breach by you of the provisions of
Section 3. The occurrence of a Payment Termination Date by reason of a
breach of this Agreement shall be in addition to, and not in lieu of, any other
remedies to which the Company may be entitled by reason of your breach of this
Agreement. Notwithstanding anything in this Agreement to the contrary, if the
Payment Termination Date occurs prior to the date the initial Severance Payment
of $147,500.00 is to be made, that initial Severance Payment shall be reduced
to an amount equal to the product of (i) the number of full weeks between
the Termination Date and the Payment Termination Date and (ii) $5,673.08.
2.9.
Access to Company Computers. You acknowledge that, pursuant to the
Company’s handbook and code of business conduct, the Company’s
e-mail and computer system is the property of the Company. However, within
thirty (30) days after the Executive Release and Waiver attached as
Exhibit 2 becomes effective, the Company will provide you with electronic
copies of the following personal documents from Lotus Notes and the personal
computer that you used that you used during your employment:
|
|
• |
|
Your Lotus
Notes address book, except for those entries that the Company reasonably
determines to be purely business-related; |
|
|
|
|
|
|
|
• |
|
Electronic
copies of personal photos stored in your computer Desktop; |
|
|
|
|
|
|
|
• |
|
E-mail folders
identified with the terms “Christmas,” “Murray,”
“McDermott,” and “passwords,” or substantially
similar terms, except for such information in these folders that the Company
reasonably determines to be purely business-related; and |
|
|
|
|
|
|
|
• |
|
Personal
documents stored on the P Drive and the C Drive and folders identified with
the terms “Kathy,” “McDermott,” “Murray,”
“Katie, “Mary Rose” and “personal,” including
documents that may be found within subfolders under files labeled “my
documents,” except for such documents in these folders that the Company
reasonably determines to be purely business-related. |
Within thirty (30) days
after the Executive Release and Waiver attached as Exhibit 2 becomes
effective, the Company will also provide you
4
with a list of folders
created by you on the P Drive and C Drive and in Lotus Notes. You may, within
twenty (20) days of receiving such list of folders, submit to the Company
a written request for additional documents, and the Company will provide to you
electronic copies of such documents within twenty (20) days of receiving
your written request, if the Company reasonably determines that such documents
are personal. You will not have access to the Company’s email or computer
system on either a supervised or unsupervised basis.
SECTION 3
REPRESENTATIONS AND COVENANTS
3.1.
Return of Company Property. You represent and warrant that you have
(a) removed your personal effects from your office at the Company,
(b) vacated such office, (c) returned to the Company all property of
the Company and its Affiliates, including, without limitation, the Company
laptop computer and BlackBerry that the Company provided for your use while you were
an employee and executive officer of the Company, any keys, credit cards,
passes, files, confidential documents or material, or other property belonging
to the Company or the Affiliates, and (d) returned all writings, files,
records, correspondence, notebooks, notes and other documents and things
(including any copies thereof) containing any trade secrets relating to the
Company or the Affiliates. For purposes of the preceding sentence, the term
“trade secrets” shall have the meaning ascribed to it under the
Minnesota Uniform Trade Secrets Act, Chapter 325C, or, if such act is
repealed, the Uniform Trade Secrets Act (on which the Minnesota statute is
based). You further represent and warrant that (i) prior to your
Termination Date, you have not deleted or altered any documents, files or
information in the Company laptop computer or BlackBerry, or in the
Company’s electronic or other records, or duplicated, downloaded or
otherwise retained any documents, files or other information belonging to the
Company or its Affiliates, other than a routine deletion or alteration in the
ordinary course of business or (ii) after February 13, 2006, you have
not deleted or altered any documents, files or information in the Company
laptop computer or BlackBerry, or duplicated, downloaded or otherwise retained
any documents, files or other information belonging to the Company or its
Affiliates, other than a routine deletion in the ordinary course of business.
This subsection 3.1 shall not require you to return copies of documents that
you provided to your legal counsel; provided that (1) such copies are used
solely in representing you in any governmental investigation of or action
against you; (2) you have delivered to the Company the originals of all
such documents; (3) neither you nor your legal counsel shall use such
copies for any purpose other than for your representation as described above
and except as required by law or legal process; (4) neither you nor your
legal counsel shall provide such copies (or disclose the contents thereof) to
any other person or entity without the Company’s prior written consent;
and (5) you or your counsel either destroy such copies or return them to
the Company at the end of the investigation or related litigation.
3.2.
Assistance with Claims. You agree that, for a reasonable period after
your Termination Date, and continuing until such time as the cases and investigations
listed below are finally concluded, and in any event for a period of not less
than twenty four (24) months after your Termination Date, you shall
reasonably assist the Company and its Affiliates in the defense of any claims
that may be made against the Company and/or its Affiliates, and shall assist
the Company and its Affiliates in the prosecution of any claims that may be
made by the Company or any Affiliate, to the extent that such claims may relate
to services performed by you for the Company or its Affiliates. The
5
Company shall consult with
you, and make reasonable efforts to schedule such assistance so as not to
materially disrupt your business and personal affairs. You agree, unless
precluded by law, to promptly inform the Company in writing if you are asked to
participate (or otherwise become involved) in any lawsuits involving such
claims that may be filed against the Company or any Affiliate. You agree that
you shall not provide consultation or cooperation to any person or entity whose
interests are adverse to the interests of Company or the Affiliates in
defending such litigation, except as otherwise provided by law or legal
process. You also agree, unless precluded by law or by request of a
governmental agency, to promptly inform the Company in writing if you are asked
to assist in any investigation (whether governmental or private) of the Company
or any Affiliate (or their actions), regardless of whether a lawsuit has then
been filed against the Company or any Affiliate with respect to such
investigation. The Company agrees to reimburse you for all of your reasonable
out-of-pocket expenses associated with such assistance to the Company,
including travel expenses, in accordance with the Company’s reimbursement
policy. The cases and investigations referred to in this subsection 3.2 are:
|
(a) |
|
Brennan et al.
v. Nash Finch Company. |
|
|
|
|
|
(b) |
|
Alfred A.
Umberger Trust v. Nash Finch Company, et al. |
|
|
|
|
|
(c) |
|
Any case that
is a consolidation of the cases that are named in (a) and (b) above. |
|
|
|
|
|
(d) |
|
Any
investigation or inquiry conducted by the Securities Exchange Commission, or
other governmental body, with the exception of routine employment charges of
discrimination. |
|
|
|
|
|
(e) |
|
Any disputes
with Roundy’s concerning the Company’s acquisition of certain of
Roundy’s assets in 2005, including but not limited to claims by
Roundy’s against the Company related to the purchase price, and claims
by the Company against Roundy’s related to the acquisition. |
Nothing in this subsection
3.2 shall prevent you from honestly testifying at a legal proceeding in
response to a lawful and properly served subpoena in a proceeding involving the
Company or its Affiliates or from cooperating with any governmental
investigation.
3.3.
Noncompetition and Disclosure. You agree that for the period beginning
on your Termination Date and ending on the twelve (12) month anniversary
of your Termination Date you will not, without the prior written consent of the
Company, alone or in any capacity (other than by way of holding shares of a
publicly traded company in an amount not exceeding five percent (5%) of the
outstanding class or series so traded) with any other person or entity,
directly or indirectly engage in competition with the Company or any Affiliate,
in association with or as an officer, director, employee, principal, agent or
consultant of or to SuperValu, Inc. or Spartan Stores, Inc.; however, the
foregoing restriction shall not prevent you from affiliating with or becoming
employed by a law firm that represents SuperValu, Inc. or Spartan Stores, Inc.,
provided that you do not personally represent or advise SuperValu, Inc. or
Spartan Stores, Inc. prior to the twelve (12) month anniversary of your
Termination Date. You warrant that, in so far as you are aware, you have not
withheld or failed to disclose any material fact concerning matters which you
were dealing with solely on behalf of the Company and its Affiliates prior to
your Termination Date where withholding such
6
material fact would reasonably
be expected to be significantly detrimental to the financial results of the
Company and its Affiliates as a whole and so far as you are aware you are not
in breach of any material term (express or implied) of any agreement between
you and the Company or any Affiliate.
3.4.
Non-Solicitation. You agree that for the period beginning on your
Termination Date and ending on the twelve (12) month anniversary of your
Termination Date, you will not employ, offer to employ, engage as a consultant,
or form an association with any person who is then, or who during the preceding
one (1) year was, an employee of the Company or any Affiliate, nor will
you assist any other person in soliciting for employment or consultation any
person who is then, or who during the preceding one (1) year was, an
employee of the Company or any Affiliate.
3.5.
Confidential Information. You agree that at all times:
|
(a) |
|
To keep secret
and confidential indefinitely, all Confidential Information, and not to
disclose the same, either directly or indirectly, to any other person, firm,
or business entity, or to use it in any way, except (i) as may be
required by the lawful order of a court or agency of competent jurisdiction
or similar legal process, or (ii) as is requested by a governmental
agency in the course of a governmental investigation, or (iii) to the
extent that you have express written authorization from the Chief Executive
Officer of the Company. |
|
(b) |
|
To the extent
that any court or agency seeks to have you disclose Confidential Information,
you shall promptly inform the Company, in writing, and you shall take
reasonable steps to prevent disclosure of Confidential Information until t
|
