SENIOR MANAGEMENT
SEVERANCE PAY AGREEMENT
This Severance Pay Agreement (the "Agreement") is entered
into this 9th day of February, 1994, by and between KASH N' KARRY
FOOD STORES, INC., a Delaware corporation (the "Company"), and
the person executing this Agreement as key employee (the "Key
Employee"). To induce the Key Employee to remain in the employ
of the Company, to reward the Key Employee's continued loyalty
and valuable efforts, and to provide security to the Key Employee
in the event of a change in control of the Company, and in
consideration of their mutual covenants and other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and the Key Employee agree as
follows:
1. Definitions.
As used in this Agreement and unless the context
otherwise plainly requires, the terms defined in this paragraph
shall have the meanings ascribed to them and shall include the
plural as well as the singular number.
1.1 "Agreement" means this Severance Pay Agreement, as
originally executed and as from time to time amended or
supplemented.
1.2 "Annual Compensation" means the total amounts paid
or projected to be paid by the Company to the Key Employee
(determined without regard to this Plan) for services rendered to
the Company during the Applicable Plan Year of the Company,
including, but not limited to, base salary and target bonuses;
but excluding (a) any amount that is not includable in the Key
Employee's gross income by reason of sections 125, 132,
402(a)(8), 402(h), or 403(b) of the Internal Revenue Code; (b)
any short term or long term disability payment whether paid by
the Company or any third party under a program sponsored by the
Company; and (c) any automobile allowance paid by the Company.
In determining Annual Compensation, the target bonus means the
target bonus payable to the Key Employee for the Applicable Plan
Year under the Company's Management Incentive Plan (or any
successor Plan) computed as if the Company and the Key Employee
achieve 100% of their targeted goals for the Applicable Plan
Year. Provided, further, if the Key Employee becomes entitled to
a Benefit under this Agreement prior to the Company's
determination of target bonus goals for the Applicable Plan Year,
then the Key Employee's and the Company's target bonus goals for
the Company's preceding fiscal year will be deemed still in
effect for the Applicable Plan Year, and the Key Employee's
target bonus, for purposes of this Agreement, will be computed as
if the Company and the Key Employee achieved 100% of the
preceding fiscal year's goals, notwithstanding the Company's and
the Key Employee's actual performance in the preceding year.
1.3 "Applicable Period" means the period beginning 92
days prior to a Change in Control and ending 365 days after a
Change in Control.
1.4 "Applicable Plan Year" means the Plan Year in
which occurs the Involuntary Termination of employment, or the
termination of the Plan, as applicable, whichever results in the
Key Employee's entitlement to the Benefit under Paragraph 3.1.
1.5 "Beneficiary" means the Person or Persons
designated by the Key Employee in Schedule A to this Agreement to
receive the remaining unpaid Benefit, if any, payable by reason
of the Key Employee's death after the date of the Key Employee's
entitlement to the Benefit, but before payment of the Benefit.
The Key Employee may change the designated Beneficiary at any
time and from time to time, without the consent of any previous
Beneficiary, by executing a new Schedule A and delivering it to
the Plan Administrator prior to the Key Employee's death. The
last Beneficiary designated by the Key Employee in a Schedule A
duly executed by the Key Employee and timely delivered to the
Plan Administrator shall receive the remaining Benefit. If no
Beneficiary is properly designated by the Key Employee in
accordance with the provisions of this subparagraph 1.5, then the
Key Employee's estate shall be deemed the Beneficiary.
1.6 "Benefit" means an amount equal to the Key
Employee's Annual Compensation.
1.7 "Change in Control" means the date that any of the
following events first occurs:
(a) any person (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act
of 1934 (hereafter referred to as the "Exchange Act")),
other than (i) Green Equity Investors, L. P. ("GEI"),
or The Fulcrum III Limited Partnership or The Second
Fulcrum III Limited Partnership (collectively referred
to as the "Fulcrum Partnerships"), or (ii) any Person,
including, but not limited to, the partners of GEI or
either Fulcrum Partnership, to whom GEI or either
Fulcrum Partnership is required to transfer any of its
securities as determined in accordance with its
respective partnership agreement), becomes the
"beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of
the Company representing fifty percent (50%) or more of
the combined voting power of the Company's then
outstanding securities in any transaction or
transactions other than by reason of an initial public
offering by the Company of voting securities (or
securities convertible into, or exchangeable for,
voting securities or any other instrument that grants
rights to acquire voting securities);
(b) individuals who constitute the Company's
Board of Directors as of the date that this Agreement
is executed by the parties (hereafter referred to as
the "Incumbent Board") cease for any reason to
constitute at least two-thirds thereof; provided,
however, any individual becoming a director subsequent
to the date hereof whose election, or nomination for
election by the Company's stockholders, was approved by
a vote of at least two-thirds of the directors
comprising the Incumbent Board shall be, for purposes
of this subparagraph 1.7(b), considered as though such
individual were a member of the Incumbent Board;
provided, however, that any decrease in the number of
Directors on the Incumbent Board, or any resignation or
removal of a member of the Incumbent Board will not be
deemed a Change in Control if approved by a vote of at
least two-thirds of the Directors of the Incumbent
Board; provided, further, the Incumbent Board will be
deemed to be reconstituted for purposes of this
subparagraph 1.7(b) each time a two-thirds vote
approves a change;
(c) the merger, consolidation, share
exchange, or other reorganization of the Company, with
or into one or more entities, as a result of which less
than fifty percent (50%) of the outstanding voting
securities of the surviving or resulting entity are, or
are to be, owned by former holders of voting securities
of the Company as determined immediately before such
event;
(d) the sale of all or substantially all of
the Company's business, or assets, or both, to a Person
that is not a Subsidiary of the Company; or
(e) approval by the Company's shareholders
or Board of Directors of an agreement the consummation
of which would result in the occurrence of any event
described under subparagraphs (a) through (d),
inclusive, of this subparagraph 1.7.
1.8 "Company" means Kash n' Karry Food Stores, Inc., a
Delaware corporation, and any Successor Company.
1.9 "For Cause" means if (a) the Key Employee is
convicted of a criminal violation involving fraud or dishonesty
with respect to the Company or Successor Company; (b) the Key
Employee commits an act of gross dishonesty or intentional
wrongdoing that results in a substantial economic harm, including
any contingent liability or loss, to the Company or Successor
Company; (c) the Key Employee dies; or (d) the Key Employee is
absent without leave from work for any reason not considered by
the Company's senior management as Company business or is unable
to perform a majority of the Key Employee's duties for a
continuous period of six (6) months.
1.10 "Internal Revenue Code" means the Internal
Revenue Code of 1986, as in effect on the date that this
Agreement is executed by the parties.
1.11 "Involuntarily Terminated" or "Involuntary
Termination" means the Company's or Successor Company's
termination of the Key Employee's employment for any reason other
than For Cause or if the Key Employee voluntarily terminates
employment with the Company immediately following a deemed
termination (as hereafter defined). For purposes of this
subparagraph 1.11, a deemed termination occurs if:
(a) There is a significant diminution in the
scope of the Key Employee's authority;
(b) The Key Employee is assigned duties
materially different from the Key Employee's duties as of the
date of this Agreement;
(c) There is a more than 10% reduction in
the Key Employee's base salary; provided, however, a more than
10% reduction in the Key Employee's base salary will not be
deemed a termination if the percentage reduction is part of a
uniformly applied percentage salary reduction affecting all
senior management, including the Chief Executive Officer of the
Company; or,
(d) The Key Employee is required to
relocate his day-to-day place of business more than fifty (50)
miles from the Key Employee's current residence in order to
continue employment, and the Company or Successor Company fails
to pay or reimburse promptly the Key Employee for all reasonable
costs incurred or actual economic losses sustained by the Key
Employee as a result of such relocation (and for this purpose the
failure to pay or reimburse promptly any Key Employee for any
expenses or losses arising from a relocation incurred during the
Applicable Period shall also be deemed to be an Involuntary
Termination that occurs within the Applicable Period).
Notwithstanding anything in this paragraph 1.11 to the contrary,
the events described above in subparagraphs (a) through (d) will
not be deemed a termination of employment unless and until the
Key Employee objects to the event, and the Key Employee will have
up to 365 days after the occurrence of the event in which to note
his objection in writing, and if such objection in writing is
made, then the termination will be deemed to have occurred as of
the date of receipt of the objection by the Company.
1.12 "Key Employee" means the individual who signs this
Agreement, who is a highly compensated employee or a member of a
select management group of the Company, and who has been selected
by the Company's chief executive officer to be eligible for the
Benefit provided by the Plan.
1.13 "Person" means one or more of the individuals or
entities set forth in section 7701(a)(1) of the Internal Revenue
Code.
1.14 "Plan" means this Severance Pay Agreement.
1.15 "Plan Administrator" means the Company, unless the
Company designates a different person as Plan Administrator.
1.16 "Plan Year" means the fiscal year of the Company,
as it may change from time to time. Currently, the Company's
fiscal year period ends on the Sunday nearest July 31 of each
year. If the Company changes its fiscal year, and that change
results in a Plan Year of less than 52 weeks, then the Plan Year
referred to in this Agreement shall mean the last preceding
fiscal year of the Company containing at least 52 weeks.
1.17 "Subsidiary" means any corporation or other entity
a majority or more of whose outstanding voting stock or voting
power is beneficially owned directly or indirectly by the
Company.
1.18 "Successor Company" means after a Change in
Control any Person that owns all or a substantial portion of the
Company's business or assets, and any Person that has an
ownership interest in the Company.
2. Employment. Unless otherwise agreed by the Company,
the Key Employee agrees to devote his full time and attention to
the business and affairs of the Company and to use his best
efforts to provide satisfactory services to the Company.
3. Benefit.
3.1 Entitlement to Benefit. If, during the Applicable
Period, the Key Employee's employment with the Company or
Successor Company is Involuntarily Terminated, or the Plan is
terminated by the Company or Successor Company, then the Benefit
shall accrue and shall be paid by the Company (or the Successor
Company, as applicable) to the Key Employee or to the Key
Employee's Beneficiary, as the case may be, in accordance with
the terms of Paragraph 3.2. If the Key Employee's entitlement to
a Benefit does not accrue during the Applicable Period, then this
Agreement shall terminate upon the expiration of the Applicable
Period.
3.2 Payment of Benefit. The Benefit amount, if any,
less all deductions required by law, shall be paid by the Company
(or the Successor Company, as applicable) to the Key Employee or
Beneficiary, as the case may be, in a single lump sum payment not
later than seven (7) days after the later of the date of the Key
Employee's Involuntary Termination, or the date of the
termination of the Agreement, as applicable, and payment shall,
in the discretion of the Company (or Successor Company), either
be made to the Key Employee or Beneficiary, as applicable, by
hand delivery at the office of the Company or delivery in
accordance with the provisions of subparagraph 11.5 of this
Agreement. Notwithstanding any contrary provisions of this
Agreement, the Benefit accrued shall not be paid until the Key
Employee terminates employment with the Company or Successor
Company, as applicable.
4. Termination or Amendment of Agreement.
4.1 Termination of Agreement. This Agreement shall
terminate upon the date that any of the following events first
occurs:
(a) cessation of the Company's business;
(b) approval by the Company's shareholders or
directors to dissolve or liquidate the Company;
(c) upon the date that the Company breaches any
obligation imposed on it under this Agreement (including, but not
limited to, adopting an amendment in violation of subparagraph
4.2 of this Agreement) or under any other deferred compensation
agreement between the Company and the Key Employee, including,
but not limited to, failing to pay all or any portion of any
benefits required to be paid to the Key Employee under this
Agreement, or any other deferred compensation agreement with the
Key Employee, but only if such employee first delivers written
notice by certified or registered mail of such breach to the
Company pursuant to subparagraph 11.5, and the Company fails to
cure such breach during the period that terminates twenty (20)
days after the date such notice is delivered to the Company; or
(d) the decision of the Company to terminate the
Plan at any time, with or without cause; or,
(e) the failure of any Successor Company to
assume expressly the obligations of this Agreement.
Notwithstanding the foregoing, this Agreement shall remain
in full force and effect and shall survive any termination until
the Key Employee's entire Benefit, if any, accrued under
subparagraph 3.1 of this Agreement as of the date that causes the
Agreement's termination, less all deductions required by law, is
distributed to the Key Employee in accordance with the provisions
of subparagraphs 3.1 and 3.2 of this Agreement.
4.2 Amendment of Agreement. Except as otherwise
provided under this Agreement, the Company may terminate, amend
or supplement this Agreement, at any time prior to the beginning
of the Applicable Period with or without the consent of the Key
Employee. The Company shall deliver a copy of the amendment to
the Key Employee. Provided, however, notwithstanding the
foregoing, during the Applicable Period, the Company shall not
amend this Agreement to: (a) reduce the amount of, or alter the
time, method, or form of distributing, the Benefit payable
pursuant to this Agreement determined as of the date immediately
prior to the date of such amendment; (b) shorten the Applicable
Period; or (c) limit the circumstances under which a Change in
Control may occur or a Key Employee may be entitled to the
Benefit payable pursuant to this Agreement.
5. Funding. The Plan shall be "unfunded" for purposes of
federal income taxation and for purposes of the Employee
Retirement Income Security Act of 1974, as amended, as that term
is interpreted, from time to time, for such purposes; provided,
however, the Company may obtain life insurance, disability
insurance, or both, to informally fund its obligations hereunder,
and the Company shall be the owner and beneficiary of the policy
or policies. The Key Employee shall submit to medical
examinations, supply information, and execute documents as may be
required by the insurance company or companies. Neither the Key
Employee, nor the Plan, shall be deemed to have any right, title,
or interest in or to any specific assets of the Company,
including any insurance policies or the proceeds therefrom, and
any such policies shall not in any way be considered to be
security for the performance of the obligations under this
Agreement. Nothing contained in this Agreement and no action
taken pursuant to its provisions shall create or be construed to
create a trust of any kind or a fiduciary relationship between
the Company and the Key Employee or the Beneficiary. Any funds
that may be invested to meet the provisions of this Agreement
shall continue for all purposes to be a part of the general funds
of the Company. To the extent any person acquires a right to
receive payments from the Company under this Agreement, that
right will be no more secure than the right of an general
unsecured creditor of the Company. The Benefit payable under
this Agreement, if the conditions of Paragraph 3.1 are met,
constitutes a mere promise by the Company to make payments in the
future.
6. Non-Assignability. The Key Employee or Beneficiary
shall not have any right to commute, encumber, transfer, convey,
or dispose of the right to the Benefit payable under this
Agreement. The Benefit and the right to it are not subject in
any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment, or garnishment by
creditors of the Key Employee or Beneficiary. Except to the
extent contrary to applicable law, the Benefit under this
Agreement is not transferable by operation of law if the Key
Employee or Beneficiary becomes insolvent or bankrupt. Any
attempt by the Key Employee or Beneficiary to commute, encumber,
transfer, convey, or dispose of the right to the Benefit payable
under this Agreement, shall be void and ineffectual.
7. Participation in Other Plans. Nothing contained in
this Agreement shall be construed to alter, abridge, or affect
the rights and privileges of the Key Employee to participate in
and be covered by any employee plans that the Company now has or
may hereafter adopt. Any payment under this Plan shall be
independent of, and in addition to, those payable under any other
plan or agreement that may be in effect with respect to the Key
Employee.
8. Employment Rights. This Agreement shall not be deemed
to constitute a contract of employment between the Company and
the Key Employee and shall create no right of the Key Employee to
continue in the Company's employ, nor shall this Agreement
restrict the right of the Company to discharge the Key Employee
or to terminate the Key Employee's employment.
9. Plan Administration.
9.1 Plan Administrator. This Agreement and the Plan
shall be administered by the Plan Administrator. The Plan
Administrator shall make all determinations as to the right of
the Key Employee or the Beneficiary, as applicable, to receive
the Benefit provided by this Agreement.
9.2 Claims Procedure. If a Benefit under this Agree-
ment is not paid to the Key Employee or the Beneficiary, as
applicable, and such person feels entitled to it, such person
shall make a claim in writing to the Plan Administrator. If the
claim is denied, in whole or in part, the Plan Administrator
shall inform the claimant in writing within 45 days setting forth
the reasons for denial in layman's terms, with specific reference
to the provisions of this Agreement upon which the denial is
based, and with a description of the review procedures set forth
in subparagraph 9.3.
9.3 Review Procedure. If a claim for the Benefit
under this Agreement is denied, the claimant may, within 60 days
after the denial, submit to the Plan Administrator, in writing,
such information that will, in the claimant's opinion, support
the claimant's right to the Benefit. If the Plan Administrator,
after reviewing the information submitted by the claimant,
determines that the claimant is not entitled to the Benefit
claimed, the Plan Administrator shall afford the claimant or his
representative a reasonable opportunity to appear personally
before the Plan Administrator, to submit oral or written
comments, and to review any documents pertinent to the Plan
Administrator's decision. The Plan Administrator shall render
its final decision, in writing, within 60 days after the
appearance, with the specific reasons therefor.
10. Expenses. All costs and expenses of administering the
Plan shall be paid by the Company.
11. Miscellaneous.
11.1 Binding Effect. This Agreement shall be binding
on the legal representatives, successors, heirs, and assignees of
the Company and the Key Employee; provided, further, unless the
context clearly provides otherwise, any reference to, or duty or
obligation imposed on, the Company shall also be deemed to refer
to, and be the binding duty and obligation of, the Successor
Company.
11.2 Governing Law. This Agreement has been negotiated
and prepared in the State of Florida, and the validity,
construction, and enforcement of this Agreement shall be governed
by, and construed in accordance with, the laws of Florida
(excluding its choice of law provisions if such laws would result
in the application of laws of a jurisdiction other than Florida).
Each party consents and agrees that Tampa, Hillsborough County,
Florida, shall be the proper, exclusive, and convenient venue for
any legal proceeding in federal or state court relating to this
Agreement, and each party to this Agreement waives any defense,
whether asserted by motion or by pleading, that Tampa,
Hillsborough County, Florida, is an improper or inconvenient
venue.
11.3 Entire Agreement. This instrument contains the
final, complete, and exclusive expression of the parties' under-
standing and agreement concerning the transactions contemplated
by this Agreement and supersedes any prior or contemporaneous
agreement or representation, oral or written, by either of them.
Any vagueness or ambiguity in the meaning of this Agreement shall
be interpreted in a manner most favorable to the Key Employee.
11.4 Descriptive Headings. The titles preceding the
text of the paragraphs and subparagraphs of this Agreement are
inserted solely for convenience of reference and shall neither
constitute a part of this Agreement nor affect its meaning,
interpretation, or effect.
11.5 Notices. Any notice, communication, or payment of
Benefit required or permitted to be sent by either party under
this Agreement shall be made in writing and shall be deemed
delivered when presented by hand delivery or when deposited in a
United States postal service office or letter box for mailing by
first class mail or certified mail, return receipt requested
(whether or not the return receipt is subsequently received),
postage prepaid and addressed to the appropriate party as fol-
lows:
If to the Company:
Executive Vice President-Administration
Kash n' Karry Food Stores, Inc.
P.O. Box 11675
Tampa, Florida 33680
If to the Key Employee:
The address set forth in Schedule A
or at such other addresses as either party may designate in
writing to the other party.
11.6 Gender. Throughout this Agreement, except where
the context otherwise requires, the masculine gender shall be
deemed to include the feminine and the neuter and the singular
number shall be deemed to include the plural and vice-versa.
11.7 Attorneys' Fees. If any suit or action shall be
instituted to enforce or to interpret this Agreement, the
prevailing party shall be entitled to recover from the non-
prevailing party all costs, and reasonable attorneys' fees,
expended as part of such suit, action, or appeal thereof.
IN WITNESS WHEREOF, the Company and the Key Employee have
executed this Agreement this 9th day of February, 1994.
ATTEST: KASH N' KARRY FOOD STORES, INC.
/s/ Raymond P. Springer By: /s/ Ronald J. Floto
Executive Vice President Its: CEO
(Corporate Seal)
"COMPANY"
WITNESSES:
_________________________ ______________________________
_________________________
"Key Employee"
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SCHEDULE A
Beneficiary Designation Form
1. I hereby designate ___________________________________
as my Beneficiary to receive the Benefit remaining unpaid on the
date of my death, and if ____________________________ is not then
living, then I designate ______________________ to be my
secondary Beneficiary.
2. My current residence address and telephone number for
purposes of giving notice under subparagraph 11.5 of the
Agreement is:
_________________________
Street
_________________________
City, State, and Zip Code
_________________________
Telephone Number
Dated this _____ day of _____________, 1994.
WITNESSES:
__________________________ _________________________
__________________________
"Key Employee"
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