Change of Control Severance Agreement for Senior Vice Presidents and Group Vice Presidents - Albertson's Inc.
ALBERTSON'S, INC.
CHANGE OF CONTROL SEVERANCE AGREEMENT
FOR SENIOR VICE PRESIDENTS AND GROUP VICE PRESIDENTS
THIS CHANGE OF CONTROL SEVERANCE AGREEMENT (this "Agreement"), dated as
of November 1, 2002, is made and entered by and between Albertsons, Inc., a
Delaware corporation (the "Company"), and _________________ (the "Executive").
WITNESSETH:
WHEREAS, the Executive is a key employee of the Company or one or more
of its Subsidiaries (as defined below) and has made and is expected to continue
to make major contributions to the short- and long-term profitability, growth
and financial strength of the Company;
WHEREAS, the Company recognizes that, as is the case for most publicly
held companies, the possibility of a Change in Control (as defined below) exists
and that such possibility, and the uncertainty it may create among management,
may result in the distraction or departure of management personnel, to the
detriment of the Company and its stockholders;
WHEREAS, the Company desires to assure itself of both present and
future continuity of management and desires to establish certain minimum
severance benefits for certain of its senior executives, including the
Executive, applicable in the event of a Change in Control; and
WHEREAS, the Company wishes to ensure that its senior executives are
not unduly distracted by the circumstances attendant to the possibility of a
Change in Control and to encourage the continued attention and dedication of
such executives, including the Executive, to their assigned duties with the
Company; and
WHEREAS, the Company desires to provide additional inducement for the
Executive to continue to remain in the employ of the Company.
NOW, THEREFORE, the Company and the Executive agree as follows:
1. Certain Defined Terms. In addition to terms defined elsewhere
herein, the following terms have the following meanings when used in this
Agreement with initial capital letters:
(a) "Base Pay" means the Executive's annual base salary rate as in
effect from time to time.
(b) "Board" means the Board of Directors of the Company.
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(c) "Cause" means that, prior to any termination pursuant to Section
3(b), the Executive shall have:
(i) been convicted of a criminal violation involving, in each
case, fraud, embezzlement or theft in connection with his duties or in the
course of his employment with the Company or any Subsidiary;
(ii) committed intentional wrongful damage to property of the
Company or any Subsidiary; or
(iii) committed intentional wrongful disclosure of secret
processes or confidential information of the Company or any Subsidiary.
and any such act shall have been demonstrably and materially harmful to the
Company. For purposes of this Agreement, no act or failure to act on the
part of the Executive shall be deemed "intentional" if it was due primarily
to an error in judgment or negligence, but shall be deemed "intentional"
only if done or omitted to be done by the Executive not in good faith and
without reasonable belief that the Executive's action or omission was in
the best interest of the Company. Notwithstanding the foregoing, the
Executive shall not be deemed to have been terminated for "Cause" hereunder
unless and until there shall have been delivered to the Executive a copy of
a resolution duly adopted by the affirmative vote of not less than three
quarters of the Board then in office at a meeting of the Board called and
held for such purpose, after reasonable notice to the Executive and an
opportunity for the Executive, together with the Executive's counsel (if
the Executive chooses to have counsel present at such meeting), to be heard
before the Board, finding that, in the good faith opinion of the Board, the
Executive had committed an act constituting "Cause" as herein defined and
specifying the particulars thereof in detail. Nothing herein will limit the
right of the Executive or his beneficiaries to contest the validity or
propriety of any such determination.
(d) "Change in Control" means the occurrence during the Term of any of
the following events:
(i) the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person")
of beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of 20% or more of the combined voting power of the
then-outstanding Voting Stock of the Company; provided, however, that:
(1) for purposes of this Section 1(d)(i), the following
acquisitions shall not constitute a Change in Control: (A) any
acquisition of Voting Stock of the Company directly from the Company
that is approved by a majority of the Incumbent Directors, (B) any
acquisition of Voting Stock of the Company by the Company or any
Subsidiary, (C) any acquisition of Voting Stock of the Company by any
employee benefit plan (or related trust) sponsored or maintained by the
Company or any Subsidiary, and (D) any acquisition of Voting Stock of
the Company by any Person pursuant to a Business Combination that
complies with clauses (A), (B) and (C) of Section 1(d)(iii) below;
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(2) if any Person acquires beneficial ownership of 20% or more of
combined voting power of the then-outstanding Voting Stock of the
Company as a result of a transaction described in clause (1)(A) of
Section 1(d)(i) and such Person thereafter becomes the beneficial owner
of any additional shares of Voting Stock of the Company representing 1%
or more of the then-outstanding Voting Stock of the Company, other than
in an acquisition directly from the Company that is approved by a
majority of the Incumbent Directors or other than as a result of a
stock dividend, stock split or similar transaction effected by the
Company in which all holders of Voting Stock are treated equally, such
subsequent acquisition shall be treated as a Change in Control;
(3) a Change in Control will not be deemed to have occurred if a
Person acquires beneficial ownership of 20% or more of the Voting Stock
of the Company as a result of a reduction in the number of shares of
Voting Stock of the Company outstanding unless and until such Person
thereafter becomes the beneficial owner of any additional shares of
Voting Stock of the Company representing 1% or more of the
then-outstanding Voting Stock of the Company, other than as a result of
a stock dividend, stock split or similar transaction effected by the
Company in which all holders of Voting Stock are treated equally; and
(4) if at least a majority of the Incumbent Directors determine in
good faith that a Person has acquired beneficial ownership of 20% or
more of the Voting Stock of the Company inadvertently, and such Person
divests as promptly as practicable a sufficient number of shares so
that such Person beneficially owns less than 20% of the Voting Stock of
the Company, then no Change in Control shall have occurred as a result
of such Person's acquisition; or
(ii) a majority of the Directors are not Incumbent Directors; or
(iii) the consummation of a reorganization, merger or
consolidation, or sale or other disposition of all or substantially all of
the assets of the Company or the acquisition of assets of another
corporation, or other transaction (each, a "Business Combination"), unless,
in each case, immediately following such Business Combination (A) all or
substantially all of the individuals and entities who were the beneficial
owners of Voting Stock of the Company immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 60% of the
combined voting power of the then outstanding shares of Voting Stock of the
entity resulting from such Business Combination (including, without
limitation, an entity which as a result of such transaction owns the
Company or all or substantially all of the Company's assets either directly
or through one or more subsidiaries), (B) no Person (other than the
Company, such entity resulting from such Business Combination, or any
employee benefit plan (or related trust) sponsored or maintained by the
Company, any Subsidiary or such entity resulting from such Business
Combination) beneficially owns, directly or indirectly, 20% or more of the
combined voting power of the then outstanding shares of Voting Stock of the
entity resulting from such Business Combination, and (C) at least a
majority of the members of the Board of Directors of the entity resulting
from such Business Combination were Incumbent Directors at the time of the
execution of the initial agreement or of the action of the Board providing
for such Business Combination; or
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(iv) approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company, except pursuant to a Business
Combination that complies with clauses (A), (B) and (C) of Section
1(d)(iii).
(e) "Employee Benefits" means the perquisites, benefits and service
credit for benefits as provided under any and all employee retirement income and
Welfare Benefit policies, plans, programs or arrangements in which Executive is
entitled to participate, including without limitation any stock option,
performance share, performance unit, stock purchase, stock appreciation,
savings, pension, supplemental executive retirement, or other retirement income
or Welfare Benefit, deferred compensation, incentive compensation, group or
other life, health, medical/hospital or other insurance (whether funded by
actual insurance or self-insured by the Company or a Subsidiary), disability,
salary continuation, expense reimbursement and other employee benefit policies,
plans, programs or arrangements that may now exist or any equivalent successor
policies, plans, programs or arrangements that may be adopted hereafter by the
Company or a Subsidiary, providing perquisites, benefits and service credit for
benefits at least as great in the aggregate as are payable thereunder
immediately prior to a Change in Control.
(f) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(g) "Good Reason" means the occurrence of one or more of the following
events (regardless of whether any other reason, other than Cause, for such
termination exists or has occurred, including without limitation other
employment):
(i) Failure to elect or reelect or otherwise to maintain the
Executive in the office or the position, or a substantially equivalent or
better office or position, of or with the Company and/or a Subsidiary (or
any successor thereto by operation of law of or otherwise), as the case may
be, which the Executive held immediately prior to a Change in Control, or
the removal of the Executive as a Director of the Company and/or a
Subsidiary (or any successor thereto) if the Executive shall have been a
Director of the Company and/or a Subsidiary immediately prior to the Change
in Control;
(ii) Failure of the Company to remedy any of the following within
10 calendar days after receipt by the Company of written notice thereof
from the Executive: (A) A significant adverse change in the nature or scope
of the authorities, powers, functions, responsibilities or duties attached
to the position with the Company and any Subsidiary which the Executive
held immediately prior to the Change in Control, (B) a reduction in the
Executive's Base Pay received from the Company or any Subsidiary, (C) a
reduction in the Executive's Incentive Pay as compared with the Incentive
Pay most recently paid prior to the Change in Control, or (D) the
termination or denial of the Executive's rights to Employee Benefits or a
reduction in the scope or value thereof;
(iii) The liquidation, dissolution, merger, consolidation or
reorganization of the Company or the transfer of all or substantially all
of its business and/or assets, unless the successor or successors (by
liquidation, merger, consolidation, reorganization, transfer or otherwise)
to which all or substantially all of its business and/or assets have been
transferred (by operation of law or otherwise) assumed all duties and
obligations of the Company under this Agreement pursuant to Section 11(a);
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(iv) The Company requires the Executive to have his principal
location of work changed to any location that is in excess of 50 miles from
the location thereof immediately prior to the Change in Control, or
requires the Executive to travel away from his office in the course of
discharging his responsibilities or duties hereunder at least 20% more (in
terms of aggregate days in any calendar year or in any calendar quarter
when annualized for purposes of comparison to any prior year) than was
required of Executive in any of the three full years immediately prior to
the Change in Control without, in either case, his prior written consent;
or
(v) Without limiting the generality or effect of the foregoing,
any material breach of this Agreement by the Company or any successor
thereto which is not remedied by the Company within 10 calendar days after
receipt by the Company of written notice from the Executive of such breach.
(h) "Incentive Pay" means an annual bonus, incentive or other payment
of compensation, in addition to Base Pay, made or to be made in regard to
services rendered in any year or other period pursuant to any bonus, incentive,
profit-sharing, performance, discretionary pay or similar agreement, policy,
plan, program or arrangement (whether or not funded) of the Company or a
Subsidiary, or any successor thereto. "Incentive Pay" does not include any stock
option, stock appreciation, stock purchase, restricted stock or similar plan,
program, arrangement or grant, whether or not provided under an arrangement
described in the preceding sentence.
(i) "Incumbent Directors" means the individuals who, as of the date
hereof, are Directors of the Company and any individual becoming a Director
subsequent to the date hereof whose election, nomination for election by the
Company's shareholders, or appointment, was approved by a vote of at least
two-thirds of the then Incumbent Directors (either by a specific vote or by
approval of the proxy statement of the Company in which such person is named as
a nominee for director, without objection to such nomination); provided,
however, that an individual shall not be an Incumbent Director if such
individual's election or appointment to the Board occurs as a result of an
actual or threatened election contest (as described in Rule 14a-12(c) of the
Exchange Act) with respect to the election or removal of Directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board.
(j) "Retirement Plans" means the benefit plans of the Company that are
intended to be qualified under Section 401(a) of the Internal Revenue Code of
1986, as amended (the "Code") and any supplemental executive retirement benefit
plan or any other plan that is a successor thereto if the Executive was a
participant in such Retirement Plan on the date of the Change in Control.
(k) "Severance Period" means the period of time commencing on the date
of the first occurrence of a Change in Control and continuing until the earlier
of (i) the second anniversary of the occurrence of the Change in Control, or
(ii) the Executive's death; provided, however, that commencing on each
anniversary of the Change in Control, the Severance Period will automatically be
extended for an additional year unless, not later than 90 calendar days prior to
such anniversary date, either the Company or the Executive shall have given
written notice to the other that the Severance Period is not to be so extended.
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(l) "Subsidiary" means an entity in which the Company directly or
indirectly beneficially owns 50% or more of the outstanding Voting Stock.
(m) "Term" means the period commencing as of the date hereof and
expiring on the close of business on December 31, 2005; provided, however, that
(i) commencing on January 1, 2004 and each January 1 thereafter, the term of
this Agreement will automatically be extended for an additional year unless, not
later than September 30 of the immediately preceding year, the Company or the
Executive shall have given notice that it or the Executive, as the case may be,
does not wish to have the Term extended; (ii) if a Change in Control occurs
during the Term, the Term shall expire and this Agreement will terminate on the
last day of the Severance Period; and (iii) subject to Section 3(c), if, prior
to a Change in Control, the Executive ceases for any reason to be an employee of
the Company or any Subsidiary (including termination arising in connection with
the Company ceasing to beneficially own 50% or more of the Voting Stock of a
Subsidiary), or ceases to be an employee at a level previously designated for
the benefits set forth in Annex A hereto, thereupon without further action the
Term shall be deemed to have expired and this Agreement will immediately
terminate and be of no further effect. For purposes of this Section 1(n), the
Executive shall not be deemed to have ceased to be an employee of the Company
and any Subsidiary by reason of the transfer of Executive's employment between
the Company and any Subsidiary, or among any Subsidiaries.
(n) "Termination Date" means the date on which the Executive's
employment is terminated (the effective date of which shall be the date of
termination, or such other date that may be specified by the Executive if the
termination is pursuant to Section 3(b)).
(o) "Voting Stock" means securities entitled to vote generally in the
election of directors.
(p) "Welfare Benefits" means Employee Benefits that are provided under
any "welfare plan" (within the meaning of Section 3(1) of the Employee
Retirement Income Security Act of 1974, as amended) of the Company.
2. Operation of Agreement. This Agreement will be effective and binding
immediately upon its execution, but, anything in this Agreement to the contrary
notwithstanding, except as provided in Section 3(c), this Agreement will not be
operative unless and until a Change in Control occurs. Upon the occurrence of a
Change in Control at any time during the Term, without further action, this
Agreement will become immediately operative.
3. Termination Following a Change in Control. (a) In the event of the
occurrence of a Change in Control, the Executive's employment may be terminated
by the Company or a Subsidiary during the Severance Period and the Executive
will be entitled to the benefits provided by Section 4 unless such termination
is the result of the occurrence of one or more of the following events:
(i) The Executive's death;
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(ii) If the Executive becomes permanently disabled within the
meaning of, and begins actually to receive disability benefits pursuant to,
the long-term disability plan in effect for, or applicable to, Executive
immediately prior to the Change in Control; or
(iii) Cause.
If, during the Severance Period, the Executive's employment is terminated by the
Company or any Subsidiary other than pursuant to Section 3(a)(i), 3(a)(ii) or
3(a)(iii), the Executive will be entitled to the benefits provided by Section 4.
(b) In the event of the occurrence of a Change in Control, the
Executive may terminate employment with the Company and any Subsidiary during
the Severance Period for Good Reason with the right to severance compensation as
provided in Section 4.
(c) Anything in this Agreement to the contrary notwithstanding, if a
Change in Control occurs and not more than twelve months prior to the date on
which the Change in Control occurs, the Executive's employment with the Company
ceases at the previously designated level or is terminated by the Company (or
the Executive terminates his employment for Good Reason), such cessation or
termination of employment will be deemed to be a cessation or termination of
employment after a Change in Control for purposes of this Agreement if the
Executive has reasonably demonstrated that such cessation or termination of
employment (i) was at the request of a third party who has taken steps
reasonably calculated to effect a Change in Control, or (ii) otherwise arose in
connection with or in anticipation of a Change in Control.
(d) A termination by the Company pursuant to Section 3(a) or by the
Executive pursuant to Section 3(b) will not affect any rights that the Executive
may have pursuant to any agreement, policy, plan, program or arrangement of the
Company or Subsidiary providing Employee Benefits, which rights shall be
governed by the terms thereof, except for any rights to severance compensation
to which Executive may be entitled upon termination of employment under any
severance or employment agreement between the Company and the Executive which
rights, to the extent not greater than those provided by this Agreement, shall,
during the Severance Period, be superseded by this Agreement.
4. Severance Compensation. (a) If, following the occurrence of a Change in
Control, the Company or Subsidiary terminates the Executive's employment during
the Severance Period other than pursuant to Section 3(a)(i), 3(a)(ii) or
3(a)(iii), or if the Executive terminates his employment pursuant to Section
3(b), provided that the Executive executes a release substantially in the form
rendered by senior executives of the Company prior to the Change in Control. The
Company will pay to the Executive the amounts described in Annex A within five
business days after the Termination Date and will continue to provide to the
Executive the benefits described on Annex A for the periods described therein.
(b) Without limiting the rights of the Executive at law or in equity,
if the Company fails to make any payment or provide any benefit required to be
made or provided hereunder on a timely basis, the Company will pay interest on
the amount or value thereof at an annualized rate of interest equal to the
"prime rate" as set forth from time to time during the relevant period in The
Wall Street Journal "Money Rates" column, plus 2%. Such interest will be payable
as it accrues on demand. Any change in such prime rate will be effective on and
as of the date of such change.
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(c) Unless otherwise expressly provided by the applicable annual
incentive compensation plan or program, after the occurrence of a Change in
Control, the Company will pay in cash to the Executive a lump sum amount equal
to the value of the Executive's annual bonus for the performance period that
includes the date on which the Change in Control occurred, disregarding any
applicable vesting requirements; provided that such amount will be equal to the
product of the target award percentage under the applicable annual incentive
plan or program in effect immediately prior to the Change in Control times Base
Pay, but prorated to base payment only on the portion of the Executive's service
that had elapsed during the applicable performance period through the Change in
Control. Such payment will be made within five business days after the Change in
Control.
5. Limitation on Payments and Benefits. Notwithstanding any provision of
this Agreement to the contrary, if any amount or benefit to be paid or provided
under this Agreement would be an "Excess Parachute Payment," within the meaning
of Section 280G of the Code, but for the application of this sentence, then the
payments and benefits to be paid or provided under this Agreement will be
reduced to the minimum extent necessary (but in no event to less than zero) so
that no portion of any such payment or benefit, as so reduced, constitutes an
Excess Parachute Payment; provided, however, that the foregoing reduction will
be made only if and to the extent that such reduction would result in an
increase in the aggregate payment and benefits to be provided, determined on an
after-tax basis (taking into account the excise tax imposed pursuant to Section
4999 of the Code, any tax imposed by any comparable provision of state law, and
any applicable federal, state and local income and employment taxes). Whether
requested by the Executive or the Company, the determination of whether any
reduction in such payments or benefits to be provided under this Agreement or
otherwise is required pursuant to the preceding sentence will be made at the
expense of the Company by the Company's independent accountants in effect prior
to the Change in Control. The fact that the Executive's right to payments or
benefits may be reduced by reason of the limitations contained in this Section 5
will not of itself limit or otherwise affect any other rights of the Executive
other than pursuant to this Agreement. In the event that any payment or benefit
intended to be provided under this Agreement or otherwise is required to be
reduced pursuant to this Section 5, the Executive will be entitled to designate
the payments and/or benefits to be so reduced in order to give effect to this
Section 5. The Company will provide the Executive with all information
reasonably requested by the Executive to permit the Executive to make such
designation. In the event that the Executive fails to make such designation
within 10 business days of the Termination Date, the Company may effect such
reduction in any manner it deems appropriate.
6. No Mitigation Obligation. The Company hereby acknowledges that it will
be difficult and may be impossible for the Executive to find reasonably
comparable employment following the Termination Date. Accordingly, the payment
of the severance compensation by the Company to the Executive in accordance with
the terms of this Agreement is hereby acknowledged by the Company to be
reasonable, and the Executive will not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment or otherwise,
nor will any profits, income, earnings or other benefits from any source
whatsoever create any mitigation, offset, reduction or any other obligation on
the part of the Executive hereunder or otherwise, except as expressly provided
in the last sentence of Paragraph 2 of Annex A.
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7. Legal Fees and Expenses. It is the intent of the Company that the
Executive not be required to incur legal fees and the related expenses
associated with the interpretation, enforcement or defense of Executive's rights
under this Agreement by litigation or otherwise because the cost and expense
thereof would substantially detract from the benefits intended to be extended to
the Executive hereunder. Accordingly, if it should appear to the Executive that
the Company has failed to comply with any of its obligations under this
Agreement or in the event that the Company or any other person takes or
threatens to take any action to declare this Agreement void or unenforceable, or
institutes any litigation or other action or proceeding designed to deny, or to
recover from, the Executive the benefits provided or intended to be provided to
the Executive hereunder, the Company irrevocably authorizes the Executive from
time to time to retain counsel of Executive's choice, at the expense of the
Company as hereafter provided, to advise and represent the Executive in
connection with any such interpretation, enforcement or defense, including
without limitation the initiation or defense of any litigation or other legal
action in regard thereto, whether by or against the Company or any Director,
officer, stockholder or other person affiliated with the Company, in any
jurisdiction. Notwithstanding any existing or prior attorney-client relationship
between the Company and such counsel, the Company irrevocably consents to the
Executive's entering into an attorney-client relationship with such counsel, and
in that connection the Company and the Executive agree that a confidential
relationship will exist between the Executive and such counsel. Without respect
to whether the Executive prevails, in whole or in part, in connection with any
of the foregoing, the Company will pay and be solely financially responsible for
any and all attorneys' and related fees and expenses incurred by the Executive
in connection with any of the foregoing; provided that, in regard to such
matters, the Executive has not acted in bad faith or with no colorable claim of
success. Such payments will be made within five business days after delivery of
the Executive's written requests for payment, accompanied by such evidence of
fees and expenses incurred as the Company may reasonably require.
8. Confidentiality; Nonsolicitation; Nondisparagement.
(a) During the Term, the Company agrees that it will disclose to
Executive its confidential or proprietary information (as defined in this
Section 8(a)) to the extent necessary for Executive to carry out his obligations
to the Company. The Executive hereby covenants and agrees that he will not,
without the prior written consent of the Company, during the Term or thereafter
disclose to any person not employed by the Company, or use in connection with
engaging in competition with the Company, any confidential or proprietary
information of the Company. For purposes of this Agreement, the term
"confidential or proprietary information" will include all information of any
nature and in any form that is owned by the Company and that is not publicly
available (other than by Executive's breach of this Section 8(a)) or generally
known to persons engaged in businesses similar or related to those of the
Company. Confidential or proprietary information will include, without
limitation, the Company's financial matters, customers, employees, industry
contracts, strategic business plans, product development (or other proprietary
product data), marketing plans, and all other secrets and all other information
of a confidential or proprietary nature. For purposes of the preceding two
sentences, the term "Company" will also include any Subsidiary (collectively,
the "Restricted Group"). The foregoing obligations imposed by this Section 8(a)
will not apply (i) during the Term, in the course of the business of and for the
benefit of the Company, (ii) if such confidential or proprietary information has
become, through no fault of the Executive, generally known to the public or
(iii) if the Executive is required by law to make disclosure (after giving the
Company notice and an opportunity to contest such requirement).
(b) The Executive hereby covenants and agrees that during the Term and
for one year thereafter Executive will not, without the prior written consent of
the Company, on behalf of Executive or on behalf of any person, firm or company,
directly or indirectly, attempt to influence, persuade or induce, or assist any
other person in so persuading or inducing, any employee of the Restricted Group
to give up, or to not commence, employment or a business relationship with the
Restricted Group.
(c) The Executive hereby covenants and agrees that the Executive will
not make, publish or cause to be made or published any public or private
statement disparaging the Company or its present or former officers, directors
or employees.
(d) Executive and the Company agree that the covenants contained in
this Section 8 are reasonable under the circumstances, and further agree that if
in the opinion of any court of competent jurisdiction any such covenant is not
reasonable in any respect, such court will have the right, power and authority
to excise or modify any provision or provisions of such covenants as to the
court will appear not reasonable and to enforce the remainder of the covenants
as so amended. Executive acknowledges and agrees that the remedy at law
available to the Company for breach of any of his obligations under this Section
8 would be inadequate and that damages flowing from such a breach may not
readily be susceptible to being measured in monetary terms. Accordingly,
Executive acknowledges, consents and agrees that, in addition to any other
rights or remedies that the Company may have at law, in equity or under this
Agreement, upon adequate proof of his violation of any such provision of this
Agreement, the Company will be entitled to immediate injunctive relief and may
obtain a temporary order restraining any threatened or further breach, without
the necessity of proof of actual damage.
9. Employment Rights. Nothing expressed or implied in this Agreement will
create any right or duty on the part of the Company or the Executive to have the
Executive remain in the employment of the Company or any Subsidiary prior to or
following any Change in Control.
10. Withholding of Taxes. The Company may withhold from any amounts payable
under this Agreement all federal, state, city or other taxes as the Company is
required to withhold pursuant to any applicable law, regulation or ruling.
11. Successors and Binding Agreement. (a) The Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation,
reorganization or otherwise) to all or substantially all of the business or
assets of the Company, by agreement in form and substance reasonably
satisfactory to the Executive, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent the Company would be
required to perform if no such succession had taken place. This Agreement will
be binding upon and inure to the benefit of the Company and any successor to the
Company, including without limitation any persons acquiring directly or
indirectly all or substantially all of the business or assets of the Company
whether by purchase, merger, consolidation, reorganization or otherwise (and
such successor shall thereafter be deemed the "Company" for the purposes of this
Agreement), but will not otherwise be assignable, transferable or delegable by
the Company.
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(b) This Agreement will inure to the benefit of and be enforceable by
the Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees and legatees.
(c) This Agreement is personal in nature and neither of the parties
hereto will, without the consent of the other, assign, transfer or delegate this
Agreement or any rights or obligations hereunder except as expressly provided in
Sections 11(a) and 11(b). Without limiting the generality or effect of the
foregoing, the Executive's right to receive payments hereunder will not be
assignable, transferable or delegable, whether by pledge, creation of a security
interest, or otherwise, other than by a transfer by Executive's will or by the
laws of descent and distribution and, in the event of any attempted assignment
or transfer contrary to this Section 11(c), the Company will have no liability
to pay any amount so attempted to be assigned, transferred or delegated.
12. Notices. For all purposes of this Agreement, all communications,
including without limitation notices, consents, requests or approvals, required
or permitted to be given hereunder will be in writing and will be deemed to have
been duly given when hand delivered or dispatched by electronic facsimile
transmission (with receipt thereof orally confirmed), or five business days
after having been mailed by United States registered or certified mail, return
receipt requested, postage prepaid, or three business days after having been
sent by a nationally recognized overnight courier service such as FedEx, UPS, or
Purolator, addressed to the Company (to the attention of the Secretary of the
Company) at its principal executive office and to the Executive at his principal
residence, or to such other address as any party may have furnished to the other
in writing and in accordance herewith, except that notices of changes of address
shall be effective only upon receipt.
13. Governing Law. The validity, interpretation, construction and
performance of this Agreement will be governed by and construed in accordance
with the substantive laws of the State of Delaware, without giving effect to the
principles of conflict of laws of such State.
14. Validity. If any provision of this Agreement or the application of any
provision hereof to any person or circumstance is held invalid, unenforceable or
otherwise illegal, the remainder of this Agreement and the application of such
provision to any other person or circumstance will not be affected, and the
provision so held to be invalid, unenforceable or otherwise illegal will be
reformed to the extent (and only to the extent) necessary to make it
enforceable, valid or legal.
15. Miscellaneous. No provision of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing signed by the Executive and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto or compliance with
any condition or provision of this Agreement to be performed by such other party
will be deemed a waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time. No agreements or representations, oral
or otherwise, expressed or implied with respect to the subject matter hereof
have been made by either party that are not set forth expressly in this
Agreement. References to Sections are to Sections of this Agreement. References
to Paragraphs are to Paragraphs of an Annex to this Agreement. Any reference in
this Agreement to a provision of a statute, rule or regulation will also include
any successor provision thereto.
16. Survival. Notwithstanding any provision of this Agreement to the
contrary, the parties' respective rights and obligations under Sections 3(c), 4,
5, 7 and 8 will survive any termination or expiration of this Agreement or the
termination of the Executive's employment following a Change in Control for any
reason whatsoever.
17. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the date first above written.
ALBERTSONS, INC.
By: ___________________________________
[Name and Title]
___________________________________
[Executive]
<PAGE>
Annex A
Severance Compensation
(1) A lump sum payment in an amount equal to two times the sum of (A) Base
Pay (at the highest rate in effect for any period within three years prior to
the Termination Date), plus (B) Incentive Pay (in an amount equal to the product
of the target award percentage under the applicable Incentive Pay plan or
program in effect immediately prior to the Change in Control times Base Pay).
(2) For a period of 24 months following the Termination Date (the
"Continuation Period"), the Company will arrange to provide the Executive with
Welfare Benefits substantially similar to those that the Executive was receiving
or entitled to receive immediately prior to the Termination Date (or, if
greater, immediately prior to the reduction, termination, or denial described in
Section 1(g)(ii)). If and to the extent that any benefit described in this
Paragraph 2 is not or cannot be paid or provided under any policy, plan, program
or arrangement of the Company or any Subsidiary, as the case may be, then the
Company will itself pay or provide for the payment to the Executive, his
dependents and beneficiaries, of such Employee Benefits along with, in the case
of any benefit described in this Paragraph 2 which is subject to tax because it
is not or cannot be paid or provided under any such policy, plan, program or
arrangement of the Company or any Subsidiary, an additional amount such that
after payment by the Executive, or his dependents or beneficiaries, as the case
may be, of all taxes so imposed, the recipient retains an amount equal to such
taxes. Notwithstanding the foregoing, or any other provision of the Agreement,
for purposes of determining the period of continuation coverage to which the
Executive or any of his dependents is entitled pursuant to Section 4980B of the
Code under the Company's medical, dental and other group health plans, or
successor plans, the Executive's "qualifying event" will be the termination of
the Continuation Period and the Executive will be considered to have remained
actively employed on a full-time basis through that date. Further, for purposes
of the immediately preceding sentence and for any other purpose, including,
without limitation, the calculation of service or age to determine the
Executive's eligibility for benefits under any retiree medical benefits or life
insurance plan or policy, the Executive shall be considered to have remained
actively employed on a full-time basis through the termination of the
Continuation Period. Without otherwise limiting the purposes or effect of
Section 5 or this Paragraph 2, Employee Benefits otherwise receivable by the
Executive pursuant to this Paragraph 2 will be reduced to the extent comparable
welfare benefits are actually received by the Executive from another employer
during the Continuation Period following the Executive's Termination Date, and
any such benefits actually received by the Executive will be reported by the
Executive to the Company.
(3) Outplacement services by a firm selected by the Executive, at the
expense of the Company in an amount up to $10,000.
(4) Reimbursement for relocation expenses on a basis consistent with the
Company's practices for senior executives, in an amount up to $50,000; provided
such executive was relocated at the request of the Company (including but not
limited to as a result of initial hire) within five years of his or her
Termination Date.
A-1