UNITED GROCERS, INC., AND SUBSIDIARIES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1 TO FORM 10-Q
(FORM 10-Q/A )
Quarterly report pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For the Quarterly period ended April 2, 1999
Commission File Number 2-60487
United Grocers, Inc.
(Exact name of registrant as specified in its charter)
Oregon 93-0301970
(State or other jurisdiction of (IRS Employer identification No.)
incorporation or organization)
6433 S.E. Lake Road
Milwaukie, Oregon 97222
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (503) 833-1000
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [] No [X].
Indicate the number of shares outstanding for each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at May 1, 1999
Common shares, $5 par value 546,209 shares
1
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Pursuant to Rule 12b-15, promulgated under the Securities Exchange Act
of 1934, the registrant amends the following Item of its Quarterly Report on
Form 10-Q for the quarter ended April 2, 1999, so that, as amended, such Item
reads as set forth herein:
2
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Part II
Item 6. Exhibits and Reports on Form 8-K
(a) 10.E1 Employment Contract between the registrant and
Terrence W. Olsen dated March 25, 1999.*
10.E3 Employment Contract between the registrant and
Mark Tweedie dated March 22, 1999.*
10.E4 Employment Contract between the registrant and
Keith A. Miller dated March 23, 1999.*
Exhibit 27 Financial Data Schedule (incorporated by reference to
Exhibit 27 to the registrant's Form 10-Q for the fiscal quarter
ended April 2, 1999).
(b) Reports on Form 8-K
None.
3
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amended report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: September 16, 1999 UNITED GROCERS, INC.
(Registrant)
By /s/ Mark Tweedie
------------------------------------------
Vice President and Chief Financial Officer
(Principal Accounting Officer)
4
Exhibit 10.E1
EMPLOYMENT CONTRACT
DATED: March 25, 1999, effective as of March 1, 1999
BETWEEN: UNITED GROCERS, INC.,
an Oregon corporation, hereinafter referred to as "Company"
AND: TERRY OLSEN,
hereinafter referred to as "Employee"
RECITALS:
A. The parties desire to provide for employment of Employee by Company,
which for purposes of this Agreement, includes any subsidiary or affiliated
corporation or entity that is at least fifty-one percent (51%) owned directly or
indirectly by Company.
B. Employee desires to be assured of a minimum compensation from Company
for Employee's services over a defined term (unless terminated for cause).
C. Company desires to employ Employee in order to assure continuing
management expertise for Company and to provide reasonable protection of
Company's confidential business information which has and will be developed by
Company.
1. EMPLOYMENT.
1.1 Employment. Company hereby employs Employee as President and Chief
Executive Officer upon the terms and conditions set forth in this Agreement.
Employee accepts such employment upon the terms and conditions set forth in this
Agreement.
1.2 Term. The term of this Agreement shall commence effective as of March
1, 1999, and shall continue for a period of three (3) years from said date,
subject to the termination provisions of paragraph 3.
1.3 Extension. This Agreement shall be automatically extended for an
additional year on each successive March 1, commencing with March 1, 2002,
unless terminated by written notice by either party. The notice of termination
shall be given no sooner than 240 days prior to the expiration of the original
term or any subsequent extension and not less than 180 days prior to the
expiration of the original term or any subsequent extension.
1.4 Duties. Employee accepts employment with the Company on the terms and
conditions set forth in this Agreement, and agrees to devote his full time and
attention to the performance of his duties under this Agreement. Employee shall
be the President and Chief Executive Officer of the Company and agrees to act in
such capacity and perform services normally associated with such positions.
Employee shall perform such specific duties and shall exercise such specific
authority as may be assigned to Employee from time to time by the Board of
Directors. In performing such duties, Employee shall be subject to the direction
and control of the Board of Directors. Employee further agrees that in all
aspects of such employment, Employee shall comply with the policies, standards
and regulations of the Company from time to time established, and shall perform
his duties faithfully, intelligently, to the best of his ability, and in the
best interest of the Company. The Employee may serve as a member of the boards
of directors for businesses or associations other than United Grocers, Inc. or
any of its subsidiaries, provided such activity does not materially interfere
with the services required to be rendered to or on behalf of the Company.
<PAGE>
2. COMPENSATION.
2.1 Base Compensation. In consideration of all services to be rendered by
Employee to the Company, the Company shall pay to Employee base compensation of
Three Hundred Thousand Dollars ($300,000) per year, payable at the same
frequency as all employees are compensated (the "Base Compensation").
Adjustments may be mutually agreed upon from time to time, and such adjustments
will be in writing and signed by both parties hereto and added as an amendment
to this Agreement. If Employee's Base compensation is increased during the term
of this Agreement, the increased amount shall be the Base Compensation for the
remainder of the term and any extension. Base compensation shall not include any
bonuses or incentive compensation payments, if any, which Company, in its sole
discretion, may elect to pay to Employee at some future date.
2.2 In Addition to the Base Compensation. Employee may be entitled to
participate in certain incentive bonus programs which may be implemented by the
Board of Directors for the fiscal year commencing October 1, 1999, and
thereafter, if the Board of Directors decides to implement such incentive bonus
programs for the Company's President.
2.3 Withholding; Other Base Benefits. The Base Compensation and any other
payment or benefit shall be subject to the customary withholding of income taxes
and shall be subject to other employment taxes required with respect to
compensation paid by a corporation to an employee. Base Compensation paid to
Employee shall be in addition to any other contribution made by the Company for
the benefit of Employee to any qualified or non-qualified pension or profit
sharing plan, including, but not limited to, the Pension Plan of United Grocers,
Inc., any supplemental pension or bonus plan for key employees, and the
Company's portion, if any, of the 401(k) plan maintained by the Company for the
benefit of its employees. Employee shall be entitled to participate in Company's
medical and dental insurance plans and any other fringe benefits that are
provided to Company's key employees on a regular basis.
2.4 Expenses. Company shall pay or reimburse all of the reasonable and
necessary expenses incurred by Employee in carrying out his duties under this
Agreement, provided that Employee accounts promptly for such expenses to Company
in the manner prescribed from time to time by Company.
2.5 Disability. For purposes of this paragraph, the terms "disabled" and
"permanently disabled" shall have the same meaning as those terms are used under
the Company's long term disability insurance policy covering Employee. In the
event Employee is disabled then Company shall pay to Employee while he is still
disabled his Base Compensation from the date of such disability through the
later of the remaining term of this Agreement or twelve months after the date of
such disability. The payments by Company under the preceding sentence shall be
reduced by any benefits received by Employee under the Company's short term and
long term disability insurance plans. After the foregoing period, Employee shall
be entitled to such benefits which Employee then qualifies for under Company's
long term disability program which Company may provide for Company's key
executives at the time of such disability. The parties acknowledge that the
Company's disability program for its key employees is currently being reviewed
and agree that once such a plan is established the benefits provided under this
paragraph will be modified to conform with such plan.
2.6 Benefit Inclusions.
2.6.1 Auto or auto allowance.
2.6.2 Annual medical physical.
2.6.3 Country club privileges (initiation fee) and monthly dues.
<PAGE>
2.7 Vacation. Employee shall be entitled to five weeks of paid vacation per
year plus those holidays which are normally recognized by Company during the
year.
2.8 Life Insurance. During the term hereof, Company shall acquire a
$300,000 life insurance policy on the life of Employee if he is insurable at
standard rates. Such insurance shall be payable to whatever beneficiaries
Employee designates or in the absence of such a designation to Employee's
estate. Company shall not be liable to Employee's estate or beneficiaries if
Employee dies before Company acquires the foregoing insurance coverage.
3. TERMINATION.
3.1 Termination by Company (Without Cause). Employee's employment under
this Agreement may be terminated without cause by the Board of Directors by
giving one hundred eighty (180) days' written notice to Employee. Upon the
giving of such notice or at any time thereafter, the Company may elect to (i)
continue to employ Employee for the balance of said 180-day notice period
subject to the provisions of this Agreement or (ii) immediately terminate
Employee provided that the Company pay to the Employee for the balance of said
180-day period his Base Compensation that he normally would have received for
such 180-day period, as if Employee had remained as an employee of the Company.
For purposes of this Agreement, the expiration of the term of this Agreement or
any extension of such term, without renewal, shall be treated as a termination
without cause and the foregoing 180-day period shall commence upon written
notice of termination under Subparagraph 1.3. If the Employee should be
terminated without cause ("cause" hereafter defined), the Company shall pay or
provide to the Employee after such termination, the following:
3.1.1 The Employee's Base Compensation, as described in subparagraph
2.1 above, which compensation shall be payable at the same frequency as all
other employees are compensated over the longer of (i) the remaining term of
this Agreement, (ii) the remaining term of any extension of this Agreement if
this Agreement has been extended as provided in subparagraph 1.3, or (iii) the
foregoing 180-day period after notice of termination.
3.1.2 For the period specified in subparagraph 3.1.1, the medical and
dental insurance, long term disability insurance, and life insurance coverage
described in subparagraphs 2.2, 2.4 and 2.7 to the extent such insurance
coverage can be continued by Company or comparable insurance coverage can be
obtained at a reasonable cost. The coverages provided above may be procured
directly by the Company apart from and outside of the terms of the plans
themselves, provided that the Employee and the Employee's dependents comply with
all of the conditions of the various plans. Employee agrees to cooperate with
Company in acquiring such insurance coverage.
3.2 Termination by Company (For Cause). Employee's employment under this
Agreement may be immediately terminated by the Board of Directors for cause.
Termination "for cause" means that Employee shall be guilty of fraud,
dishonesty, conduct involving moral turpitude connected with the employment of
Employee, or a breach of the provisions of this Agreement, including
specifically a failure to perform the duties described in subparagraph 1.4. If
Employee is terminated for cause, Employee shall be entitled to those vested
retirement benefits as of the date of termination that he qualified for under
the terms of the Company's various retirement plans, both qualified and
non-qualified; however, Employee shall only be entitled to Base Compensation or
any other benefits described in this Agreement up to the date of termination.
3.3 Termination by Employee. The Employee may terminate his employment for
any reason and without cause by giving 60 days prior written notice to the
Company. Upon receipt of such notice, the Company may elect to (i) continue to
employ Employee for all or a portion of said 60-day period, subject to the
provisions of this Agreement or (ii) immediately terminate Employee, provided
that the Company pay to the Employee for said 60-day period his Base
Compensation that he normally would have received for such 60-day period as if
Employee had remained as an employee of the
<PAGE>
Company. If Employee terminates his employment, he shall be
entitled to those vested retirement benefits as of the date of termination that
he qualified for under the terms of the Company's various retirement plans, both
qualified and non-qualified, and Employee shall be entitled to the medical and
dental insurance, long term disability insurance, and life insurance coverage
described in subparagraphs 2.2, 2.4 and 2.7.
3.4 Termination Due to Death or Disability. In the event of termination of
employment due to death or disability of Employee, Base Compensation shall be
prorated and paid through the date of such death or disability. Employee or
Employee's beneficiaries shall be entitled to those vested retirement benefits
as of the date of such termination that employee qualified for under the
Company's various retirement plans, both qualified and non-qualified. All other
benefits provided under this Agreement shall terminate as of the date of such
death or disability except as may be specifically provided otherwise in this
Agreement or the agreements relating to such benefit plans.
4. CONFIDENTIAL INFORMATION.
4.1 Definition. For purposes of this paragraph 4, the term "Confidential
Information: means information, including but not limited to financial,
operational, customer, pricing, and marketing information, which is not
generally known and which is proprietary to Company, including but not limited
to (i) financial and trade secret information about Company or its subsidiaries
or affiliates, and (ii) information relating to the business of Company, its
subsidiaries or affiliates including, without limitation, information about
Company's and its subsidiaries' or affiliates' customers, trading skills,
contacts and know-how and information about the trading, manufacturing and
marketing activities of Company, its subsidiaries, or affiliates. All
information which Employee has a reasonable basis to consider Confidential
Information or which is treated by Company, its subsidiaries or affiliates as
being Confidential Information shall be presumed to be Confidential Information,
whether originated by Employee or by others, and without regard to the manner in
which Employee obtains access to such information, except that it shall not
include:
4.1.1 information in the public domain;
4.1.2 information that becomes part of the public domain through no
fault of Employee;
4.1.3 information in Employee's possession prior to his employment by
Company; and
4.1.4 information otherwise acquired lawfully from parties other than
Company.
4.2 Nondisclosure. Employee will not, either during the term of this
Agreement including any extensions or for a period of two (2) years following
expiration or termination of this Agreement, use or disclose any Confidential
Information to any person not then employed by Company without the prior written
authorization of Company's Board of Directors and will use reasonably prudent
care to safeguard and protect and to prevent the unauthorized disclosure of all
such Confidential Information.
5. NON-COMPETITION. If Employee's employment is terminated pursuant to
subparagraphs 3.2 or 3.3, then Employee agrees that for a period of two (2)
years following termination of this Agreement, he will not directly or
indirectly, alone or as a partner, officer, director or employee, perform
services for any firm or organization engaged in activities in competition with
or similar to those activities which have been or are being conducted by
Company, its subsidiaries, or affiliates in the states of Washington, Oregon,
Idaho or California or in such other geographic areas in which Company is
conducting its business as of the date of termination. If Employee's employment
is terminated pursuant to subparagraphs 3.1 or 3.4, then this non-competition
provision shall not apply to Employee after
<PAGE>
termination. In all events, the provisions of subparagraph 4.2 shall apply to
Employee after his termination.
6. CORPORATE RESTRUCTURING. If Company is acquired by another company, sells
substantially all of its assets, merges, or consolidates with another company in
a transaction in which the Company's current shareholders own less than 51% of
the successor company, or operates a substantial portion of its business through
a joint venture or partnership with another company and Company owns less than
51% of such joint venture or partnership and if Employee's employment under this
Agreement or a similar agreement is terminated by Company, or its successor or
acquiror, without cause prior to Employee's retirement or age 65, whichever is
earlier, then Company agrees that Employee shall be entitled to receive the
benefits under this paragraph 6. Employee acknowledges that in such a sale or
acquisition, Employee's title may be changed and such a change in title will not
be viewed as a termination of Employee's employment so long as his salary,
duties and responsibilities are commensurate with his current duties and
responsibilities. For purposes hereof, any substantial adverse change in
Employee's duties and responsibilities, reduction in Employee's salary and
benefits, or a requirement that Employee move to a location outside of the
Portland Metropolitan area without Employee's consent during the period
specified in this paragraph 6 shall be deemed a termination of Employee's
employment.
6.1 If Employees' employment is terminated without cause as provided in
this paragraph 6, then Company, or its successor or acquiror, shall continue to
pay to Employee an amount equal to his base compensation under this agreement,
including any subsequent increases approved in writing, until Employee attains
the age of 65 or Employee's death whichever is earlier.
6.2 Company and Employee shall enter into a separate Supplemental Executive
Retirement Plan ("SERP") which shall provide that in the event of termination
under this paragraph, Employee shall be paid at retirement a benefit equal to
the benefit which would have been payable to Employee under the Company's
Retirement Plans if Employee's employment had been continued until retirement.
The amount payable under the terms of the SERP would be reduced by any amounts
the Employee actually receives under the Company's Retirement Plans. For
purposes hereof, the Employee's contribution to a ss.401(k) plan shall not be
considered to be a Company Retirement Plan and this paragraph shall not be
construed as requiring the Company to provide benefits equivalent to benefits
related to potential or hypothetical Employee contributions to a ss.401(k) or
similar retirement plan.
6.3 If Employee's employment is terminated without cause as provided in
paragraph 6, then Company shall continue to pay the annual premiums on the life
insurance policy on Employee's life referred to in paragraph 2.7 until Employee
attains the age of 65 or dies. Company shall be entitled to take advantage of
any waiver of premium or similar provision of such policy which may be
available.
6.4 If Employee's employment is terminated without cause as provided in
paragraph 6, then Company shall continue to supply Employee and his spouse until
Employee attains age 65 with medical and dental insurance coverage equivalent to
the medical and dental coverage provided under the Company's medical and dental
plans at the time of Employee's Termination to the extent such coverage can be
continued by Company or comparable insurance coverage can be obtained at a
reasonable cost by Company. Employee agrees to cooperate with company in
acquiring such insurance coverage..
7. APPLICABLE LAW. This Agreement is entered into, under, and shall be governed
for all purposes by the laws of the state of Oregon.
8. SUCCESSORS. This Agreement shall be binding upon and inure to the benefit of
the Company, its successors and assigns (including, without limitation, any
company into or with which the Company may merge, form a joint venture or
consolidate).
<PAGE>
9. AMENDMENTS. No amendment or variation of the terms and conditions of this
Agreement shall be valid unless the same shall be in writing and signed by all
of the parties hereto.
10. REPRESENTATIONS AND WARRANTIES OF EMPLOYEE. Employee represents and warrants
to the Company that there is no employment contract or any other contractual
obligation to which Employee is subject which prevents Employee from entering
into this Agreement or from performing fully Employee's duties under this
Agreement.
11. NO ASSIGNMENT. The Employee's right to receive payments or benefits under
this Agreement shall not be assignable or transferable, whether by pledge,
creation of a security interest or otherwise, other than a transfer by Will or
by the laws of descent or distribution. In the event of any attempted assignment
or transfer contrary to this paragraph, the Company shall have no liability to
pay any amount so attempted to be assigned or transferred. This Agreement shall
inure to the benefit of and be enforceable by the Employee's personal or legal
representatives, heirs, distributees, devisees, and legatees.
12. NO ADEQUATE REMEDY. The parties declare that it is impossible to measure in
money the damages which will accrue to either party by reason of a failure to
perform any of the obligations under this Agreement. Therefore, if either party
shall institute any action or proceeding to enforce the provisions hereof, such
person against who such action or proceeding is brought hereby waives the claim
or defense that such party has an adequate remedy at law, and such person shall
not urge in any such action or proceeding the claim or defense that such party
has an adequate remedy at law.
13. NOTICES. All notices, requests and demands given to or made pursuant hereto
shall, except as otherwise specified herein, be in writing and be delivered or
mailed to any such party at an address to be designated by each of such parties.
Any notice, if mailed properly addressed, postage prepaid, registered or
certified mail, shall be deemed dispatched on the registered date or that
stamped on the certified mail receipt, and shall be deemed received within the
second business day thereafter or when it is actually received, whichever is
sooner.
14. CONSTRUCTION. Where possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
15. WAIVERS. No failure on the part of either party to exercise, and no delay in
exercising, any right or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right or remedy hereunder preclude
any other or further exercise thereof or the exercise of any other right or
remedy granted hereby or by any related document or by law.
16. ARBITRATION. In the event Employee's employment is terminated under
paragraph 3.2 for a failure to perform the duties described in paragraph 1.4,
Employee may request that such determination be reviewed by an arbitrator. If
the arbitrator determines that Employee did not fail to perform the duties
described in paragraph 1.4, then Employee shall be deemed to have been
terminated without cause under paragraph 3.1 and shall be entitled to the
benefits under paragraph 3.1. Unless otherwise agreed, the arbitration shall be
conducted in Portland, Oregon, in accordance with the then-current Commercial
Rules of the American Arbitration Association. The arbitration shall be held
before a single arbitrator. The arbitrator shall be chosen from a panel of
attorneys knowledgeable in the field of business and employment law in
accordance with the then-current Commercial Rules of the American Arbitration
Association. The parties agree to permit discovery proceedings of the type
provided by the Oregon Rules of Civil Procedure both in advance of, and during
recesses of, the arbitration hearings. The parties agree that the arbitrator
shall have no jurisdiction to consider evidence with respect to or render an
award or judgment for punitive damages (or any other amount awarded for the
purpose of imposing a penalty).
<PAGE>
The parties agree that all facts and other information relating to any
arbitration arising under this Agreement shall be kept confidential to the
fullest extent permitted by law. The sole decision for the arbitrator shall be
whether Employee could be terminated with cause for failure to perform the
duties described in paragraph 1.4. The decision of the arbitrator shall be
binding and final and there shall be no right of appeal or reconsideration. The
costs of the arbitrator shall be shared equally by Employee and Company.
17. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
understanding between the parties herein in reference to all matters herein
agreed upon and supersedes any and all prior agreements.
EMPLOYEE: COMPANY:
UNITED GROCERS, INC.
/s/ T.W. Olsen By /s/ James F. Glassel
- -------------------------- --------------------------
Terry Olsen Its Chairman
Exhibit 10.E2
EMPLOYMENT CONTRACT
DATED: March 22, 1999
BETWEEN: UNITED GROCERS, INC.,
an Oregon corporation, hereinafter referred to as "Company"
AND: MARK TWEEDIE,
hereinafter referred to as "Employee"
RECITALS:
A. The parties desire to provide for employment of Employee by Company,
which for purposes of this Agreement, includes any subsidiary or affiliated
corporation or entity that is at least fifty-one percent (51%) owned directly or
indirectly by Company.
B. Employee desires to be assured of a minimum compensation from Company
for Employee's services over a defined term (unless terminated for cause).
C. Company desires to employ Employee in order to assure continuing
management expertise for Company and to provide reasonable protection of
Company's confidential business information which has and will be developed by
Company.
1. EMPLOYMENT.
1.1 Employment. Company hereby employs Employee as Chief Financial Officer
upon the terms and conditions set forth in this Agreement. Employee accepts such
employment upon the terms and conditions set forth in this Agreement.
1.2 Term. The term of this Agreement shall commence upon March 22, 1999,
and shall continue for a period of three (30) years from said date, subject to
the termination provisions of paragraph 3.
1.3 Extension. This Agreement shall be automatically extended for an
additional year on each successive March 22, commencing with March 22, 2002,
unless terminated by written notice by either party. The notice of termination
shall be given no sooner than 240 days prior to the expiration of the original
term or any subsequent extension and not less than 180 days prior to the
expiration of the original term or any subsequent extension.
1.4 Duties. Employee accepts employment with the Company on the terms and
conditions set forth in this Agreement, and agrees to devote his full time and
attention to the performance of his duties under this Agreement. Employee shall
be the Chief Financial Officer of the Company and agrees to act in such capacity
and perform services normally associated with such positions. Employee shall
perform such specific duties and shall exercise such specific authority as may
be assigned to Employee from time to time by the Chief Executive Officer. In
performing such duties, Employee shall be subject to the direction and control
of the Chief Executive Officer. Employee further agrees that in all aspects of
such employment, Employee shall comply with the policies, standards and
regulations of the Company from time to time established, and shall perform his
duties faithfully, intelligently, to the best of his ability, and in the best
interest of the Company. The Employee may serve as a member of the boards of
directors for businesses or associations other than United Grocers, Inc. or any
of its subsidiaries,
<PAGE>
provided such activity does not materially interfere with the services required
to be rendered to or on behalf of the Company.
2. COMPENSATION.
2.1 Base Compensation. In consideration of all services to be rendered by
Employee to the Company, the Company shall pay to Employee base compensation of
One Hundred Fifty Thousand Dollars ($150,000) per year, payable at the same
frequency as all employees are compensated (the "Base Compensation").
Adjustments may be mutually agreed upon from time to time, and such adjustments
will be in writing and signed by both parties hereto and added as an amendment
to this Agreement. If Employee's Base compensation is increased during the term
of this Agreement, the increased amount shall be the Base Compensation for the
remainder of the term and any extension. Base Compensation shall not include any
bonuses or incentive compensation payments, if any, which Company, in its sole
discretion, may elect to pay to Employee at some future date.
2.2 Withholding; Other Base Benefits. The Base Compensation and any other
payment or benefit shall be subject to the customary withholding of income taxes
and shall be subject to other employment taxes required with respect to
compensation paid by a corporation to an employee. Base Compensation paid to
Employee shall be in addition to any other contribution made by the Company for
the benefit of Employee to any qualified or non-qualified pension or profit
sharing plan, including, but not limited to, the Pension Plan of United Grocers,
Inc., any supplemental pension or bonus plan for key employees, and the
Company's portion, if any, of the 401(k) plan maintained by the Company for the
benefit of tis employees. Employee shall be entitled to participate in Company's
medical and dental insurance plans and any other fringe benefits that are
provided to Company's key employees on a regular basis.
2.3 Expenses. Company shall pay or reimburse all of the reasonable and
necessary expenses incurred by Employee in carrying out his duties under this
Agreement, provided that Employee accounts promptly for such expenses to Company
in the manner prescribed from time to time by Company.
2.4 Disability. For purposes of this paragraph, the terms "disabled" and
"permanently disabled" shall have the same meaning as those terms are used under
the Company's long term disability insurance policies. During the first 90 days
during which Employee is disabled or the term of such disability, whichever is
less, Employee shall continue to be paid his Base Compensation less any amounts
paid to Employee under the Company's disability insurance plans. After 90 days
of disability, Employee shall be entitled to such benefits which Employee then
qualifies for under Company's long term disability program which Company may
provide for Company's key executives at the time of such disability. The parties
acknowledge that the company's disability program for its key executives is
currently being reviewed and agree that once such a plan is established the
benefits provided under this paragraph will be modified to conform with such
plan.
2.5 Benefit Inclusions.
2.5.1 Annual medical physical.
2.6 Vacation. Employee shall be entitled to five weeks of paid vacation
per year plus those holidays which are normally recognized by Company during the
year.
2.7 Life Insurance. During the term hereof, Company shall acquire a
$150,000 life insurance policy on the life of Employee if the Employee is
insurable and such coverage can be acquired
<PAGE>
at a reasonable cost. Such insurance shall be payable to whatever beneficiaries
Employee designates or in the absence of such a designation to Employee's
estate. Company shall not be liable to Employee's estate or beneficiaries if
Employee dies before Company acquires the foregoing insurance coverage.
3. TERMINATION.
3.1 Termination by Company (Without Cause). Employee's employment under
this Agreement may be terminated without cause by the Chief Executive Officer by
giving one hundred eighty (180) days' written notice to Employee. Upon the
giving of such notice or at any time thereafter, the Company may elect to (i)
continue to employ Employee for the balance of said 180-day notice period
subject to the provisions of this Agreement or (ii) immediately terminate
Employee provided that the Company pay to the Employee for the balance of said
180-day period his Base Compensation that he normally would have received for
such 180-day period, as if Employee had remained as an employee of the Company.
For purposes of this Agreement, the expiration of the term of this Agreement or
any extension of such term, without renewal, shall be treated as a termination
without cause and the foregoing 180-day period shall commence upon written
notice of termination under Subparagraph 1.3. If the Employee should be
terminated without cause ("cause" hereafter defined), the Company shall pay or
provide to the Employee after such termination, the following:
3.1.1 The Employee's Base Compensation, as described in subparagraph
2.1 above, which compensation shall be payable at the same frequency as all
other employees are compensated over the longer of (i) the remaining term of
this Agreement or 18 months whichever is less, (ii) the remaining term of any
extension of this Agreement if this Agreement has been extended as provided in
subparagraph 1.3, or (iii) the one year period after notice of termination. If
Employee's employment is continued during all or part of the 180-day notice
period as provided in paragraph 3.1, the compensation paid to Employee during
such notice period shall be considered as part of the compensation payable under
this subparagraph 3.1.1 and not in addition to compensation payable under this
subparagraph 3.1.1.
3.1.2 For the period specified in Subparagraph 3.1.1, the medical and
dental insurance, long term disability insurance and life insurance coverage
described in subparagraphs 2.2, 2.4 and 2.7 to the extent such insurance
coverage can be continued by Company or comparable insurance coverage can be
obtained at a reasonable cost by Company. The coverages provided above may be
procured directly by the Company apart from and outside of the terms of the
plans themselves, provided that the Employee and the Employee's dependents
comply with all of the conditions of the various plans. Employee agrees to
cooperate with Company in acquiring such insurance coverage.
3.2 Termination by Company (For Cause). Employee's employment under this
Agreement may be immediately terminated by the Chief Executive Officer for
cause. Termination "for cause" means that Employee shall be guilty of fraud,
dishonesty, conduct involving moral turpitude connected with the employment of
Employee, or a breach of the provisions of this Agreement, including
specifically a failure to perform the duties described in subparagraph 1.4. If
Employee is terminated for cause, Employee shall be entitled to those vested
retirement benefits as of the date of termination that he qualified for under
the terms of the Company's various retirement plans, both qualified and
non-qualified; however, Employee shall only be entitled to Base Compensation or
any other benefits described in this Agreement up to the date of termination.
3.3 Termination by Employee. The Employee may terminate his employment for
any reason and without cause by giving 60 days prior written notice to the
Company. Upon receipt of such notice, the Company may elect to (i) continue to
employ Employee for all or a portion of said 60-day period, subject to the
provisions of this Agreement or (ii) immediately terminate Employee, provided
that the Company pay to the Employee for said 60-day period his Base
Compensation that he normally
<PAGE>
would have received for such 60-day period as if Employee had remained as an
employee of the Company. If Employee terminates his employment, he shall be
entitled to those vested retirement benefits as of the date of termination that
he qualified for under the terms of the Company's various retirement plans, both
qualified and non-qualified, and Employee shall be entitled to the medical and
dental insurance, long term disability insurance, and life insurance coverage
described in subparagraphs 2.2, 2.4 and 2.7 through the date of termination.
3.4 Termination Due to Death or Disability. In the event of termination of
employment due to death or disability of Employee, Base Compensation shall be
prorated and paid through the date of such death or disability. In the event of
death, Employee's beneficiary specified in Exhibit A shall be paid a death
benefit equal to one month's salary (less any applicable withholding, FICA,
Medicare or other taxes) within 30 days of the date of Employee's death or in
the event Employee's estate is designated as a beneficiary within 30 days of the
appointment of Employee's Personal Representative. The foregoing amount shall be
in addition to any insurance payable to Employee's beneficiaries under paragraph
2.7. Employee or Employee's beneficiaries shall be entitled to those vested
retirement benefits as of the date of such termination that employee qualified
for under the Company's various retirement plans, both qualified and
non-qualified. All other benefits provided under this Agreement shall terminate
as of the date of such death or disability except as may be specifically
provided otherwise in this Agreement or the agreements relating to such benefit
plans.
4. CONFIDENTIAL INFORMATION.
4.1 Definition. For purposes of this paragraph 4, the term "Confidential
Information: means information, including but limited to financial, operational,
customer, pricing, and marketing information, which is not generally known and
which is proprietary to Company, including but not limited to (i) financial and
trade secret information about Company or its subsidiaries or affiliates, and
(ii) information relating to the business of Company, its subsidiaries or
affiliates including, without limitation, information about Company's and its
subsidiaries' or affiliates' customers, trading skills, contacts and know-how
and information about the trading, manufacturing and marketing activities of
Company, its subsidiaries, or affiliates. All information which Employee has a
reasonable basis to consider Confidential Information or which is treated by
Company, its subsidiaries or affiliates as being Confidential Information shall
be presumed to be Confidential Information, whether originated by Employee or by
others, and without regard to the manner in which Employee obtains access to
such information, except that it shall not include:
4.1.1 information in the public domain;
4.1.2 information that becomes part of the public domain through no
fault of Employee;
4.1.3 information in Employee's possession prior to his employment by
Company; and
4.1.4 information otherwise acquired lawfully from parties other than
Company.
4.2 Nondisclosure. Employee will not, either during the term of this
Agreement including any extensions or for a period of two (2) years following
expiration or termination of this Agreement, use or disclose any Confidential
Information to any person not then employed by Company without the prior
written authorization of Company's Board of Directors and will use reasonably
prudent care to safeguard and protect and to prevent the unauthorized disclosure
of all such Confidential Information.
<PAGE>
5. NON-COMPETITION. If Employee's employment is terminated pursuant to
subparagraphs 3.2 or 3.3, then Employee agrees that for a period of two (2)
years following termination of this Agreement, he will not directly or
indirectly, alone or as a partner, officer, director or employee, perform
services for any firm or organization engaged in activities in competition with
or similar to those activities which have been or are being conducted by
Company, its subsidiaries, or affiliates in the states of Washington, Oregon,
Idaho or California or in such other geographic areas in which Company is
conducting its business as of the date of termination. If Employee's employment
is terminated pursuant to subparagraphs 3.1 or 3.4, then this non-competition
provision shall not apply to Employee after termination. In all events, the
provisions of subparagraph 4.2 shall apply to Employee after his termination.
6. CORPORATE RESTRUCTURING. If Company is acquired by another company, sells
substantially all of its assets, merges, or consolidates with another company in
a transaction in which the Company's current shareholders own less than 51% of
the successor company, or operates a substantial portion of its business through
a joint venture or partnership with another company and Company owns less than
51% of such joint venture or partnership and if Employee's employment under this
Agreement or a similar agreement is terminated by Company, or its successor or
acquiror, without cause within three years of such acquisition, sale, merger,
consolidation, partnership formation or joint venture formation, then Company
agrees that Employee shall be entitled to receive the benefits under this
paragraph 6. Employee acknowledges that in such a sale or acquisition,
Employee's title may be changed and such a change in title will not be viewed as
a termination of Employee's employment so long as his salary, duties and
responsibilities are commensurate with his current duties and responsibilities.
For purposes hereof, any substantial adverse change in Employee's duties and
responsibilities, reduction in Employee's salary and benefits, or a requirement
that Employee move to a location outside of the Portland Metropolitan area
within such 3 year period without Employee's consent shall be deemed a
termination of Employee's employment.
6.1 If Employees' employment is terminated without cause as provided in
this paragraph 6, then company, or its successor or acquiror, shall continue to
pay to Employee an amount equal to his base compensation under this agreement
including any subsequent increases approved in writing for a period of 18 months
after the date of such termination.
6.2 If Employee is not fully vested under the Company's Retirement Plans in
which Employee is a participant at the time of termination, then Company and
Employee shall enter into a separate Supplemental Executive Retirement Plan
("SERP") which shall provide that in the event of termination under this
paragraph, Employee shall be paid at retirement a benefit equal to the benefit
which would have been payable to Employee under the Company's Retirement Plans
if Employee had been fully vested as of the date of termination. The amount
payable under the terms of the SERP would be reduced by any amounts the Employee
actually receives under the Company's Retirement Plans.
6.3 If Employee's employment is terminated without case as provided in
paragraph 6, then Company shall continue to pay the annual premiums on the life
insurance policy on Employee's life referred to in paragraph 2.7 for a period of
18 months after termination. Company shall be entitled to take advantage of any
waiver of premium or similar provision of such policy which may be available.
6.4 If Employee's employment is terminated without cause as provided in
paragraph 6, then Company shall continue to supply Employee and his spouse with
medical and dental insurance coverage equivalent to the medical and dental
coverage provided under the Company's medical and dental plans at the time of
Employee's Termination for a period of 18 months after termination to the extent
such coverage can be continued by Company or comparable insurance coverage can
be obtained at a
<PAGE>
reasonable cost by Company. Employee agrees to cooperate with Company in
acquiring such insurance coverage.
7. APPLICABLE LAW. This Agreement is entered into, under, and shall be governed
for all purposes by the laws of the state of Oregon.
8. SUCCESSORS. This Agreement shall be binding upon and inure to the benefit of
the Company, its successors and assigns (including, without limitation, any
company into or with which the Company may merge, form a joint venture or
consolidate).
9. AMENDMENTS. No amendment or variation of the terms and conditions of this
Agreement shall be valid unless the same shall be in writing and signed by all
of the parties hereto.
10. REPRESENTATIONS AND WARRANTIES OF EMPLOYEE. Employee represents and warrants
to the Company that there is no employment contract or any other contractual
obligation to which Employee is subject which prevents Employee from entering
into this Agreement or from performing fully Employee's duties under this
Agreement.
11. NO ASSIGNMENT. The Employee's right to receive payments or benefits under
this Agreement shall not be assignable or transferable, whether by pledge,
creation of a security interest or otherwise, other than a transfer by Will or
by the laws of descent or distribution. In the event of any attempted assignment
or transfer contrary to this paragraph, the Company shall have no liability to
pay any amount so attempted to be assigned or transferred. This Agreement shall
inure to the benefit of and be enforceable by the Employee's personal or legal
representatives, heirs, distributees, devisees, and legatees.
12. NO ADEQUATE REMEDY. The parties declare that it is impossible to measure in
money the damages which will accrue to either party by reason of a failure to
perform any of the obligations under this Agreement. Therefore, if either party
shall institute any action or proceeding to enforce the provisions hereof, such
person against who such action or proceeding is brought hereby waives the claim
or defense that such party has an adequate remedy at law, and such person shall
not urge in any such action or proceeding the claim or defense that such party
has an adequate remedy at law.
13. NOTICES. All notices, requests and demands given to or made pursuant hereto
shall, except as otherwise specified herein, be in writing and be delivered or
mailed to any such party at an address to be designated by each of such parties.
Any notice, if mailed properly addressed, postage prepaid, registered or
certified mail, shall be deemed dispatched on the registered date or that
stamped on the certified mail receipt, and shall be deemed received within the
second business day thereafter or when it is actually received, whichever is
sooner.
14. CONSTRUCTION. Where possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
15. WAIVERS. No failure on the part of either party to exercise, and no delay in
exercising, any right or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right or remedy hereunder preclude
any other or further exercise thereof or the exercise of any other right or
remedy granted hereby or by any related document or by law.
<PAGE>
16. ARBITRATION. In the event Employee's employment is terminated under
paragraph 3.2 for a failure to perform the duties described in paragraph 1.4,
Employee may request that such determination be reviewed by an arbitrator. If
the arbitrator determines that Employee did not fail to perform the duties
described in paragraph 1.4, then Employee shall be deemed to have been
terminated without cause under paragraph 3.1 and shall be entitled to the
benefits under paragraph 3.1. Unless otherwise agreed, the arbitration shall be
conducted in Portland, Oregon, in accordance with the then-current Commercial
Rules of the American Arbitration Association. The arbitration shall be held
before a single arbitrator. The arbitrator shall be chosen from a panel of
attorneys knowledgeable in the field of business and employment law in
accordance with the then-current Commercial Rules of the American Arbitration
Association. The parties agree to permit discovery proceedings of the type
provided by the Oregon Rules of Civil Procedure both in advance of, and during
recesses of, the arbitration hearings. The parties agree that the arbitrator
shall have no jurisdiction to consider evidence with respect to or render an
award or judgment for punitive damages (or any other amount awarded for the
purpose of imposing a penalty). The parties agree that all facts and other
information relating to any arbitration arising under this Agreement shall be
kept confidential to the fullest extent permitted by law. The sole decision for
the arbitrator shall be whether Employee could be terminated with cause for
failure to perform the duties described in paragraph 1.4. The decision of the
arbitrator shall be binding and final and there shall be no right of appeal or
reconsideration. The costs of the arbitrator shall be shared equally by Employee
and Company.
17. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
understanding between the parties herein in reference to all matters herein
agreed upon and supersedes any and all prior agreements.
EMPLOYEE: COMPANY:
UNITED GROCERS, INC.
/s/ Mark Tweedie By /s/ T. W. Olsen
- -------------------------- --------------------------
Mark Tweedie T.W. Olsen
Its President and CEO
<PAGE>
EXHIBIT A
In the event of Employee's death, the death benefit of one month's salary
described in paragraph 3.4 shall be paid to the following beneficiary:
LYNNE R. TWEEDIE
14909 S.W. Village Lane
Beaverton, OR 97007
DATED this 22nd day of March, 1999.
/s/ Mark Tweedie
-----------------
Mark Tweedie
Exhibit 10.E3
EMPLOYMENT CONTRACT
DATED: March 23, 1999
BETWEEN: UNITED GROCERS, INC.,
an Oregon corporation, hereinafter referred to as "Company"
AND: KEITH A. MILLER,
hereinafter referred to as "Employee"
RECITALS
A. The parties desire to provide for employment of Employee by Company,
which for purposes of this Agreement, includes any subsidiary or affiliated
corporation or entity that is at least fifty-one percent (51%) owned directly or
indirectly by Company.
B. Employee desires to be assured of a minimum compensation from Company
for Employee's services over a defined term (unless terminated for cause).
C. Company desires to employ Employee in order to assure continuing management
expertise for Company and to provide reasonable protection of Company's
confidential business information which has and will be developed by Company.
1. EMPLOYMENT
1.1 Employment. Company hereby employs Employee as Vice President/Business
Strategy upon the terms and conditions set forth in this Agreement. Employee
accepts such employment upon the terms and conditions set forth in this
Agreement.
1.2 Term. The term of this Agreement shall commence upon March 22, 1999,
and shall continue for a period of three (3) years from said date, subject to
the termination provisions of paragraph 3.
1.3 Extension. This Agreement shall be automatically extended for an
additional year on each successive March 22, commencing with March 22, 2002,
unless terminated by written notice by either party. The notice of termination
shall be given no sooner than 240 days prior to the expiration of the original
term or any subsequent extension and not less than 180 days prior to the
expiration of the original term or any subsequent extension.
1.4 Duties. Employee accepts employment with the Company on the terms and
conditions set forth in this Agreement, and agrees to devote his full time and
attention to the performance of his duties under this Agreement. Employee shall
be the Vice President/Business Strategy of the Company and agrees to act in such
capacity and perform services normally associated with such positions. Employee
shall perform such specific duties and shall exercise such specific authority as
may be assigned to Employee from time to time by the Chief Executive Officer. In
performing such duties, Employee shall be subject to the direction and control
of the Chief Executive Officer. Employee further agrees that in all aspects of
such employment, Employee shall comply with the policies, standards and
regulations of the Company from time to time established, and shall perform his
duties faithfully, intelligently, to the best of his ability, and in the best
interest of the Company. The Employee may serve
<PAGE>
as a member of the boards of directors for businesses or associations other than
United Grocers, Inc. or any of its subsidiaries, provided such activity does not
materially interfere with the services required to be rendered to or on behalf
of the Company.
2. COMPENSATION.
2.1 Base Compensation. In consideration of all services to be rendered by
Employee to the Company, the Company shall pay to Employee base compensation of
One Hundred Forty Thousand Dollars ($140,000) per year, payable at the same
frequency as all employees are compensated (the "Base Compensation").
Adjustments may be mutually agreed upon from time to time, and such adjustments
will be in writing and signed by both parties hereto and added as an amendment
to this Agreement. If Employee's Base compensation is increased during the term
of this Agreement, the increased amount shall be the Base Compensation for the
remainder of the term and any extension. Base compensation shall not include any
bonuses or incentive compensation payments, if any, which Company, in its sole
discretion, may elect to pay to Employee at some future date.
2.2 Withholding; Other Base Benefits. The Base Compensation and any other
payment or benefit shall be subject to the customary withholding of income taxes
and shall be subject to other employment taxes required with respect to
compensation paid by a corporation to an employee. Base Compensation paid to
Employee shall be in addition to any other contribution made by the Company for
the benefit of Employee to any qualified or non-qualified pension or profit
sharing plan, including, but not limited to, the Pension Plan of United Grocers,
Inc., any supplemental pension or bonus plan for key employees, and the
Company's portion, if any, of the 401(k) plan maintained by the Company for the
benefit of its employees. Employee shall be entitled to participate in Company's
medical and dental insurance plans and any other fringe benefits that are
provided to Company's key employees on a regular basis.
2.3 Expenses. Company shall pay or reimburse all of the reasonable and
necessary expenses incurred by Employee in carrying out his duties under this
Agreement, provided that Employee accounts promptly for such expenses to Company
in the manner prescribed from time to time by Company.
2.4 Disability. For purposes of this paragraph, the terms "disabled" and
"permanently disabled" shall have the same meaning as those terms are used under
the Company's long term disability insurance policies. During the first 90 days
during which Employee is disabled or the term of such disability, whichever is
less, Employee shall continue to be paid his Base Compensation less any amounts
paid to Employee under the Company's disability insurance plans. After 90 days
of disability, Employee shall be entitled to such benefits which Employee then
qualifies for under Company's long term disability program which Company may
provide for Company's key employees at the time of such disability. The parties
acknowledge that the company's disability program for its key employees is
currently being reviewed and agree that once such a plan is established the
benefits provided under this paragraph will be modified to conform with such
plan.
2.5 Benefit Inclusions.
2.5.1 Annual medical physical.
2.6 Vacation. Employee shall be entitled to five weeks of paid vacation per
year plus those holidays which are normally recognized by Company during the
year.
<PAGE>
2.7 Life Insurance. During the term hereof, Company shall acquire a
$140,000 life insurance policy on the life of Employee if Employee is insurable
and such coverage can be acquired at a reasonable cost. Such insurance shall be
payable to whatever beneficiaries Employee designates or in the absence of such
a designation to Employee's estate. Company shall not be liable to Employee's
estate or beneficiaries if Employee dies before Company acquires the foregoing
insurance coverage.
3. TERMINATION.
3.1 Termination by Company (Without Cause). Employee's employment under
this Agreement may be terminated without cause by the Chief Executive Officer by
giving one hundred eighty (180) days' written notice to Employee. Upon the
giving of such notice or at any time thereafter, the Company may elect to (i)
continue to employ Employee for the balance of said 180-day notice period
subject to the provisions of this Agreement or (ii) immediately terminate
Employee provided that the Company pay to the Employee for the balance of said
180-day period his Base Compensation that he normally would have received for
such 180-day period, as if Employee had remained as an employee of the Company.
For purposes of this Agreement, the expiration of the term of this Agreement or
any extension of such term, without renewal, shall be treated as a termination
without cause and the foregoing 180-day period shall commence upon written
notice of termination under Subparagraph 1.3. If the Employee should be
terminated without cause ("cause" hereafter defined), the Company shall pay or
provide to the Employee after such termination, the following:
3.1.1 The Employee's Base Compensation, as described in subparagraph
2.1 above, which compensation shall be payable at the same frequency as all
other employees are compensated over the longer of (i) the remaining term of
this Agreement or 18 months whichever is less, (ii) the remaining term of any
extension of this Agreement if this Agreement has been extended as provided in
subparagraph 1.3, or (iii) the one year period after notice of termination. If
Employee's employment is continued during all or part of the 180-day notice
period as provided in paragraph 3.1, the compensation paid to Employee during
such notice period shall be considered as part of the compensation payable under
this subparagraph 3.1.1 and not in addition to compensation payable under
subparagraph 3.1.1.
3.1.2 For the period specified in Subparagraph 3.1.1, the medical and
dental insurance, long term disability insurance and life insurance coverage
described in subparagraphs 2.2, 2.4 and 2.7 to the extent such insurance
coverage can be continued by Company or comparable insurance coverage can be
obtained at a reasonable cost by Company. The coverages provided above may be
procured directly by the Company apart from and outside of the terms of the
plans themselves, provided that the Employee and the Employee's dependents
comply with all of the conditions of the various plans. Employee agrees to
cooperate with Company in acquiring such insurance coverage.
3.2 Termination by Company (For Cause). Employee's employment under this
Agreement may be immediately terminated by the Chief Executive Officer for
cause. Termination "for cause" means that Employee shall be guilty of fraud,
dishonesty, conduct involving moral turpitude connected with the employment of
Employee, or a breach of the provisions of this Agreement, including
specifically a failure to perform the duties described in subparagraph 1.4. If
Employee is terminated for cause, Employee shall be entitled to those vested
retirement benefits as of the date of termination that he qualified for under
the terms of the Company's various retirement plans, both qualified and
non-qualified; however, Employee shall only be entitled to Base Compensation or
any other benefits described in this Agreement up to the date of termination.
3.3 Termination by Employee. The Employee may terminate his employment for
any reason and without cause by giving 60 days prior written notice to the
Company. Upon receipt of such notice, the Company may elect to (i) continue to
employ Employee for all or a portion of said 60-day
<PAGE>
period, subject to the provisions of this Agreement or (ii) immediately
terminate Employee, provided that the Company pay to the Employee for said
60-day period his Base Compensation that he normally would have received for
such 60-day period as if Employee had remained as an employee of the Company. If
Employee terminates his employment, he shall be entitled to those vested
retirement benefits as of the date of termination that he qualified for under
the terms of the Company's various retirement plans, both qualified and
non-qualified, and Employee shall be entitled to the medical and dental
insurance, long term disability insurance, and life insurance coverage described
in subparagraphs 2.2, 2.4 and 2.7 through the date of termination.
3.4 Termination Due to Death or Disability. In the event of termination of
employment due to death or disability of Employee, Base Compensation shall be
prorated and paid through the date of such death or disability. In the event of
death, Employee's beneficiary specified on Exhibit A shall be paid a death
benefit equal to one month's salary (less any applicable withholding, FICA,
Medicare or other taxes) within 30 days of the date of Employee's death or in
the event Employee's estate is designated as a beneficiary within 30 days of the
appointment of Employee's Personal Representative. The foregoing amount shall be
in addition to any insurance payable to Employee's beneficiaries under paragraph
2.7. Employee or Employee's beneficiaries shall be entitled to those vested
retirement benefits as of the date of such termination that employee qualified
for under the Company's various retirement plans, both qualified and
non-qualified. All other benefits provided under this Agreement shall terminate
as of the date of such death or disability except as may be specifically
provided otherwise in this Agreement or the agreements relating to such benefit
plans.
4. CONFIDENTIAL INFORMATION.
4.1 Definition. For purposes of this paragraph 4, the term "Confidential
Information: means information, including but limited to financial, operational,
customer, pricing, and marketing information, which is not generally known and
which is proprietary to Company, including but not limited to (i) financial and
trade secret information about Company or its subsidiaries or affiliates, and
(ii) information relating to the business of Company, its subsidiaries or
affiliates including, without limitation, information about Company's and its
subsidiaries' or affiliates' customers, trading skills, contacts and know-how
and information about the trading, manufacturing and marketing activities of
Company, its subsidiaries, or affiliates. All information which Employee has a
reasonable basis to consider Confidential Information or which is treated by
Company, its subsidiaries or affiliates as being Confidential Information shall
be presumed to be Confidential Information, whether originated by Employee or by
others, and without regard to the manner in which Employee obtains access to
such information, except that it shall not include:
4.1.1 information in the public domain;
4.1.2 information that becomes part of the public domain through no
fault of Employee;
4.1.3 information in Employee's possession prior to his employment by
Company; and
4.1.4 information otherwise acquired lawfully from parties other than
Company.
4.2 Nondisclosure. Employee will not, either during the term of this
Agreement including any extensions or for a period of two (2) years following
expiration or termination of this Agreement, use or disclose any Confidential
Information to any person not then employed by Company without the prior
<PAGE>
written authorization of Company's Board of Directors and will
use reasonably prudent care to safeguard and protect and to prevent the
unauthorized disclosure of all such Confidential Information.
5. NON-COMPETITION. If Employee's employment is terminated pursuant to
subparagraphs 3.2 or 3.3, then Employee agrees that for a period of two (2)
years following termination of this Agreement, he will not directly or
indirectly, alone or as a partner, officer, director or employee, perform
services for any firm or organization engaged in activities in competition with
or similar to those activities which have been or are being conducted by
Company, its subsidiaries, or affiliates in the states of Washington, Oregon,
Idaho or California or in such other geographic areas in which Company is
conducting its business as of the date of termination. If Employee's employment
is terminated pursuant to subparagraphs 3.1 or 3.4, then this non-competition
provision shall not apply to Employee after termination. In all events, the
provisions of subparagraph 4.2 shall apply to Employee after his termination.
6. CORPORATE RESTRUCTURING. If Company is acquired by another company, sells
substantially all of its assets, merges, or consolidates with another company in
a transaction in which the Company's current shareholders own less than 51% of
the successor company, or operates a substantial portion of its business through
a joint venture or partnership with another company and Company owns less than
51% of such joint venture or partnership and if Employee's employment under this
Agreement or a similar agreement is terminated by Company, or its successor or
acquiror, without cause within three years of such acquisition, sale, merger,
consolidation, partnership formation or joint venture formation, then Company
agrees that Employee shall be entitled to receive the benefits under this
paragraph 6. Employee acknowledges that in such a sale or acquisition,
Employee's title may be changed and such a change in title will not be viewed as
a termination of Employee's employment so long as his salary, duties and
responsibilities are commensurate with his current duties and responsibilities.
For purposes hereof, any substantial adverse change in Employee's duties and
responsibilities, reduction in Employee's salary and benefits, or a requirement
that Employee move to a location outside of the Portland Metropolitan area
within such 3 year period without Employee's consent shall be deemed a
termination of Employee's employment.
6.1 If Employees' employment is terminated without cause as provided in
this paragraph 6, then company, or its successor or acquiror, shall continue to
pay to Employee an amount equal to his base compensation under this agreement
including any subsequent increases approved in writing for a period of 18 months
after the date of such termination.
6.2 If Employee is not fully vested under the Company's Retirement Plans in
which Employee is a participant at the time of termination, then Company and
Employee shall enter into a separate Supplemental Executive Retirement Plan
("SERP") which shall provide that in the event of termination under this
paragraph, Employee shall be paid at retirement a benefit equal to the benefit
which would have been payable to Employee under the Company's Retirement Plans
if Employee had been fully vested as of the date of termination. The amount
payable under the terms of the SERP would be reduced by any amounts the Employee
actually receives under the Company's Retirement Plans.
6.3 If Employee's employment is terminated without case as provided in
paragraph 6, then Company shall continue to pay the annual premiums on the life
insurance policy on Employee's life referred to in paragraph 2.7 for a period of
18 months after termination. Company shall be entitled to take advantage of any
waiver of premium or similar provision of such policy which may be available.
6.4 If Employee's employment is terminated without cause as provided in
paragraph 6, then Company shall continue to supply Employee and his spouse with
medical and dental insurance coverage equivalent to the medical and dental
coverage provided under the Company's medical and dental plans at
<PAGE>
the time of Employee's Termination for a period of 18 months after termination
to the extent such coverage can be continued by Company or comparable insurance
coverage can be obtained at a reasonable cost by Company. Employee agrees to
cooperate with Company in acquiring such insurance coverage.
7. APPLICABLE LAW. This Agreement is entered into, under, and shall be governed
for all purposes by the laws of the state of Oregon.
8. SUCCESSORS. This Agreement shall be binding upon and inure to the benefit of
the Company, its successors and assigns (including, without limitation, any
company into or with which the Company may merge, form a joint venture or
consolidate).
9. AMENDMENTS. No amendment or variation of the terms and conditions of this
Agreement shall be valid unless the same shall be in writing and signed by all
of the parties hereto.
10. REPRESENTATIONS AND WARRANTIES OF EMPLOYEE. Employee represents and warrants
to the Company that there is no employment contract or any other contractual
obligation to which Employee is subject which prevents Employee from entering
into this Agreement or from performing fully Employee's duties under this
Agreement.
11. NO ASSIGNMENT. The Employee's right to receive payments or benefits under
this Agreement shall not be assignable or transferable, whether by pledge,
creation of a security interest or otherwise, other than a transfer by Will or
by the laws of descent or distribution. In the event of any attempted assignment
or transfer contrary to this paragraph, the Company shall have no liability to
pay any amount so attempted to be assigned or transferred. This Agreement shall
inure to the benefit of and be enforceable by the Employee's personal or legal
representatives, heirs, distributees, devisees, and legatees.
12. NO ADEQUATE REMEDY. The parties declare that it is impossible to measure in
money the damages which will accrue to either party by reason of a failure to
perform any of the obligations under this Agreement. Therefore, if either party
shall institute any action or proceeding to enforce the provisions hereof, such
person against who such action or proceeding is brought hereby waives the claim
or defense that such party has an adequate remedy at law, and such person shall
not urge in any such action or proceeding the claim or defense that such party
has an adequate remedy at law.
13. NOTICES. All notices, requests and demands given to or made pursuant hereto
shall, except as otherwise specified herein, be in writing and be delivered or
mailed to any such party at an address to be designated by each of such parties.
Any notice, if mailed properly addressed, postage prepaid, registered or
certified mail, shall be deemed dispatched on the registered date or that
stamped on the certified mail receipt, and shall be deemed received within the
second business day thereafter or when it is actually received, whichever is
sooner.
14. CONSTRUCTION. Where possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
15. WAIVERS. No failure on the part of either party to exercise, and no delay in
exercising, any right or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any
<PAGE>
right or remedy hereunder preclude any other or further exercise thereof or the
exercise of anyother right or remedy granted hereby or by any related document
or by law.
16. ARBITRATION. In the event Employee's employment is terminated under
paragraph 3.2 for a failure to perform the duties described in paragraph 1.4,
Employee may request that such determination be reviewed by an arbitrator. If
the arbitrator determines that Employee did not fail to perform the duties
described in paragraph 1.4, then Employee shall be deemed to have been
terminated without cause under paragraph 3.1 and shall be entitled to the
benefits under paragraph 3.1. Unless otherwise agreed, the arbitration shall be
conducted in Portland, Oregon, in accordance with the then-current Commercial
Rules of the American Arbitration Association. The arbitration shall be held
before a single arbitrator. The arbitrator shall be chosen from a panel of
attorneys knowledgeable in the field of business and employment law in
accordance with the then-current Commercial Rules of the American Arbitration
Association. The parties agree to permit discovery proceedings of the type
provided by the Oregon Rules of Civil Procedure both in advance of, and during
recesses of, the arbitration hearings. The parties agree that the arbitrator
shall have no jurisdiction to consider evidence with respect to or render an
award or judgment for punitive damages (or any other amount awarded for the
purposes of imposing a penalty). The parties agree that all facts and other
information relating to any arbitration arising under this Agreement shall be
kept confidential to the fullest extent permitted by law. The sole decision for
the arbitrator shall be whether Employee could be terminated with cause for
failure to perform the duties described in paragraph 1.4. The decision of the
arbitrator shall be binding and final and there shall be no right of appeal or
reconsideration. The costs of the arbitrator shall be shared equally be Employee
and Company.
17. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
understanding between the parties herein in reference to all matters herein
agreed upon and supersedes any and all prior agreements.
EMPLOYEE: COMPANY:
UNITED GROCERS, INC.
/s/ Keith A. Miller By: /s/ T.W. Olsen
- -------------------------- --------------------------
Keith A. Miller Its: President and CEO
<PAGE>
EXHIBIT A
In the event of Employee's death, the death benefit of one month's
salary described n paragraph 3.4 shall be paid to the following beneficiary:
Cindy C. Miller
Name
13234 SE Jordan Ct.
Clackamas, OR 97015
Address
DATED this 23 day of March, 1999.
---- -------
/s/ Keith A. Miller
-------------------
Keith A. Miller
