Exhibit 10.31
Execution Version
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement (this “Agreement”) is made and entered into as of September 1, 2021 (the “Effective Date”), by and between Performance Food Group Company, a Delaware corporation (the “Company” and, together with its Affiliates (as defined below) the “Company Group”), and Scott McPherson (“Executive” and, together with the Company, the “Parties”).
RECITALS
WHEREAS, on May 17, 2021, the Company entered into an agreement and plan of merger (the “Merger Agreement”) by and among the Company, Longhorn Merger Sub I, Inc., a Delaware corporation and a direct, wholly owned Subsidiary of Parent (“Merger Sub I XE "Merger Sub I" \t "Preamble" ”), Longhorn Merger Sub II, LLC, a Delaware limited liability company and a direct, wholly owned Subsidiary of Parent (“Merger Sub II XE "Merger Sub II" \t "Preamble" ” and, together with Merger Sub I, “Merger Subs XE "Merger Subs" \t "Preamble" ”), and Core-Mark Holding Company, Inc., a Delaware corporation (“Core-Mark”), which provides that, on the terms and conditions therein, at the First Effective Time (as defined in the Merger Agreement), Merger Sub I shall be merged with and into the Company, with the Company continuing as the surviving corporation in the First Merger and, at the Second Effective Time (as defined in the Merger Agreement), the Surviving Corporation shall be merged with and into Merger Sub II (the “Second Merger” and, together with the First Merger, the “Mergers”), with Merger Sub II continuing as the surviving corporation; and
WHEREAS, in connection with the transactions contemplated by the Merger Agreement (the “Transactions”), the Parties intend that Executive shall commence employment as the Senior Vice President of the Company, Core-Mark President and Chief Executive Officer effective as the closing of the Transactions (such date, the “Employment Commencement Date”), and Executive desires to be employed by the Company Group following the Transactions, subject to the terms and provisions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt of which are hereby acknowledged, the Parties hereto agree as follows:
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(i) Executive shall be eligible to receive an annual cash incentive bonus for each fiscal year of the Company ending during the Term with a target amount equal to 100% of the Base Salary (the “Target Bonus”). The actual amount of the annual cash bonus, if any, payable to Executive in respect of any fiscal year during the Term shall be based on the achievement of performance criteria established by, and may relate to financial and non-financial metrics as determined by, the Board or a committee thereof.
(ii) Any annual cash bonus that becomes payable to Executive under this Section 3(b) shall be paid to Executive, in cash, as soon as practicable following the end of
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the year of the Company to which it relates and, in any event, no later than March 15 of the following year.
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(i) “Affiliate” as applied to any Person, means any other Person directly or indirectly controlling, controlled by, or under common control with, that Person. For the purposes of this definition “control” (including, with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities (the ownership of
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more than 50% of the voting securities of an entity shall for purposes of this definition be deemed to be “control”), by contract or otherwise.
(ii) “Disability” means Executive is unable, due to physical or mental incapacity, to perform his duties to the Company under this Agreement for a period of either (A) 90 consecutive days or (B) 180 days in any 365 day period.
(iii) “Person” means any individual, corporation, partnership, limited liability company, joint venture, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.
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(i) solicit, contact, or attempt to solicit or contact, for the benefit of Executive or any Competitive Business, or divert, entice or otherwise take away any Person who is, at the time of such solicitation, or was, within the then immediately preceding twelve (12) month period ending on the last day of Executive’s employment with, or services to, the Company Group, a Business Relation, or cause such Business Relation to reduce or adversely change the terms of their dealings with the Company Group. A “Business Relation” means any customer, prospective customer, vendor or manufacturer of the Company Group or any other Person who otherwise provides business, patronage or orders to the Company Group and, in each case, with whom or with which Executive had contact during Executive’s employment or about whom Executive obtained Confidential Information.
(ii) whether on behalf of Executive or any other Person, (A) solicit, recruit, induce, lure or attempt to hire away or engage any individual who is, or within the then immediately preceding twelve (12) month period was, an employee of or consultant to the Company Group (a “Restricted Person”), (B) solicit or encourage any Restricted Person to (x) terminate such Restricted Person’s employment with or service to the Company Group or (y) breach any restrictive covenant between such Restricted Person and the Company Group or (3) hire, employ or engage any Restricted Person; provided, that non-targeted, general, solicitations to the public shall be deemed not to breach this Section 6(e); provided, further, that Executive may not hire or engage any Restricted Person who responds to such general solicitations.
(f) Intellectual Property. All copyrights, trademarks, trade names, servicemarks, patents and other intangible or intellectual property rights that may be invented, conceived, developed or enhanced during Executive’s employment with the Company Group (whether prior to or after the Effective Date) that either (i) relate to the business of the Company Group or (ii) result from any work performed by Executive for the Company Group, shall be the sole property of the Company or such Affiliate, as the case may be, and Executive hereby waives any right or interest that Executive may otherwise have in respect thereof. Upon request of the Company Group, Executive shall execute, acknowledge and deliver any assignment or other instrument or document reasonably necessary or appropriate to give effect to this Section 6(d) and do all other acts and things reasonably necessary to enable the Company or such Affiliate, as the case may be, to exploit the same or to obtain patents or similar protection with respect thereto.
(g) Non-Disparagement. Executive agrees that, at all times after Executive’s employment with the Company Group, Executive shall not make critical, negative or disparaging remarks about the Company Group that could reasonably be expected to result in material harm to the Company Group, including, but not limited to, comments about any of their respective products, services, management, business or employment practices; provided, that, nothing in this paragraph shall prevent Executive from asserting his legal rights before an administrative agency
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or court of law, or from responding fully and accurately to any question, inquiry or request for information when required by applicable law or legal process.
(h) Modification. The parties agree and acknowledge that the duration, scope and geographic area of the covenants described in this Section 6 are fair, reasonable and necessary in order to protect the goodwill and other legitimate interests of the Company Group, that adequate consideration has been received by Executive for such obligations, and that these obligations do not prevent Executive from earning a livelihood. If, however, for any reason any arbitrator or court of competent jurisdiction determines that the restrictions in this Section 6 are not reasonable, that consideration is inadequate or that Executive has been prevented unlawfully from earning a livelihood, such restrictions shall be interpreted, modified or rewritten to include as much of the duration, scope and geographic area identified in this Section 6 as shall render such restrictions valid and enforceable.
(i) Remedies for Breach.
(i) The Parties agree that the restrictive covenants contained in this Agreement are severable and separate, and the unenforceability of any specific covenant herein shall not affect the validity of any other covenant set forth herein. Executive acknowledges that the Company shall suffer irreparable harm as a result of a breach of such restrictive covenants by Executive for which an adequate monetary remedy does not exist and a remedy at law may prove to be inadequate. Accordingly, in the event of any actual or threatened material breach by Executive of any provision of this Section 6, the Company shall, in addition to any other remedies permitted by law, be entitled to seek to obtain remedies in equity, including, without limitation, specific performance, injunctive relief, a temporary restraining order, and/or a permanent injunction in any court of competent jurisdiction (each, an “Equitable Remedy”), to prevent or otherwise restrain a material breach of this Section 6, without the necessity of proving damages, posting a bond or other security. Such relief shall be in addition to and not in substitution of any other remedies available to the Company. The existence of any claim or cause of action of Executive against the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of said covenants.
(ii) Notwithstanding anything in this Agreement to the contrary, and subject to the Company’s ability to obtain an Equitable Remedy, if the Board determines in good faith that Executive has committed a material breach of this Section 6 or of any other non-solicitation, confidentiality or similar agreement between Executive and the Company Group (“Covenant Breach”), then, if Executive is then-employed by the Company, the Board may immediately suspend Executive from employment with the Company with pay and benefits. If the Board ultimately determines in good faith that Executive has committed a Covenant Breach, then (1) if Executive is then employed by the Company, Executive’s employment may be immediately terminated by the Board for Cause and (2) if Executive’s employment previously terminated pursuant to Section 5(b) of this Agreement, the payments and providing any benefits to Executive pursuant to Section 5(b) of this Agreement, other than the Accrued Rights (the “Severance Payments”) shall immediately cease.
(j) Permitted Disclosures. Pursuant to 18 U.S.C. §1833(b), Executive shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade
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secret of the Company that (i) is made (A) in confidence to a Federal, State, or local government official, either directly or indirectly, or to Executive’s attorney, and (B) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. If Executive files a lawsuit for retaliation by the Company Group for reporting a suspected violation of law, Executive may disclose the trade secret to Executive’s attorney and use the trade secret information in the court proceeding, if Executive (1) files any document containing the trade secret under seal, and (2) does not disclose the trade secret, except pursuant to court order. Nothing in this Agreement is intended to conflict with 18 U.S.C. §1833(b) or create liability for disclosures of trade secrets that are expressly allowed by such section. Further, nothing in this Agreement or any other agreement that Executive has with the Company Group shall prohibit or restrict Executive from (a) making any voluntary disclosure of information or documents concerning possible violations of law to any governmental agency or legislative body, or any self-regulatory organization, in each case, without advance notice to the Company Group or (b) providing truthful testimony or access to Confidential Information in response to a valid subpoena, court order, regulatory request, or other legal process; provided, however, that, before making any such disclosure under this Section 6(j)(b) Executive shall give the Company written notice of Executive’s intended disclosure and afford the Company a reasonable opportunity to protect its interests.
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To the Company:
Performance Food Group Company
12500 West Creek Parkway
Richmond, Virginia 23238
Attention: General Counsel
Email: Brent.King@pfgc.com
With a copy to (which shall not constitute notice):
Skadden, Arps, Slate, Meagher & Flom LLP
1440 New York Ave, NW
Washington, DC 20005-2111
Attention: Jeremy D. London
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Fax: (202) 661-8299
Email: Jeremy.London@skadden.com
To Executive:
At the address shown in the Company Group’s personnel records.
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IN WITNESS WHEREOF AND INTENDING TO BE LEGALLY BOUND THEREBY, the parties hereto have executed and delivered this Agreement as of the year and date first above written.
PERFORMANCE FOOD GROUP COMPANY
By: __/s/ A. Brent King__________________
Name: A. Brent King
Title: Senior Vice President, General Counsel
and Secretary
EXECUTIVE
___/s/ Scott McPherson_________________
Scott McPherson
[Signature Page to Employment Agreement]
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Exhibit A
Form of General Release of Claims
This General Release of Claims (this “Agreement”) is entered into by and between Performance Food Group Company., a Delaware corporation (the “Company”), and Scott McPherson (“Executive”) on the below-indicated date.
WHEREAS, Executive, and the Company entered into an Executive Employment Agreement dated as of September 1, 2021 (the “Employment Agreement”), that provides Executive certain severance and other benefits under the Performance Food Group Company Executive Severance Plan (the “Executive Severance Plan”) in the event of certain terminations of Executive’s employment;
WHEREAS, Executive’s employment has so terminated; and
WHEREAS, pursuant to Section 5(b) of the Employment Agreement and Article IV of the Executive Severance Plan, a condition precedent to Executive’s entitlement to certain severance and other benefits thereunder is his agreement to this Agreement.
NOW, THEREFORE, in consideration of the severance and other benefits provided under Section 5(b) of the Employment Agreement and Article IV of the Executive Severance Plan, the sufficiency of which Executive hereby acknowledges, Executive agrees as follows:
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Exhibit 10.31
Execution Version
IN WITNESS WHEREOF AND INTENDING TO BE LEGALLY BOUND THEREBY, the parties hereto have executed and delivered this Agreement as of the date written below.
PERFORMANCE FOOD GROUP COMPANY
By: ________________________________
Name:
Title:
EXECUTIVE
____________________________________
Scott McPherson
[Signature Page to Release Agreement]
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