EXHIBIT 10G
EMPLOYMENT AGREEMENT
(AS AMENDED BY AMENDMENT NO. 1)
DATED: August 27, 1991
BETWEEN: FRED MEYER, INC.
3800 SE 22nd Avenue
Portland, OR 97242 "Company"
AND: ROBERT G. MILLER
4375 South Shore Boulevard
Lake Oswego, OR 97035 "Employee"
The parties agree as follows:
1. General.
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This Agreement sets forth the terms upon which
Employee shall be employed by the Company. Notwithstanding the
foregoing, the Company may terminate the Employee's employment
at any time, and Employee's employment hereunder will be
considered "at will," subject to the Company's providing the
benefits hereinafter specified in accordance with the terms
hereof.
2. Employment.
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Employee shall be employed by Company on a full-time
basis to perform duties as Chief Executive Officer and Chairman
of the Board of the Company.
3. Compensation and Disability Benefits.
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3.1 Salary. For services performed during the term
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of Employee's employment with the Company, the Company shall
pay Employee an annual salary (prorated for any portion of a
year), payable in equal periodic installments not less than
monthly, of $500,000, subject to annual review by the
Compensation Committee of the Board of Directors of the
Company.
3.2 Bonus. Employee will be eligible to participate
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in the Company's bonus plan on the same basis as other
executives. Employee's bonuses for the Company's 1994 fiscal
year and for fiscal years thereafter will be up to 100 percent
of his annual salary, to be determined upon the achievement of
financial objectives approved in advance by the Company's Board
of Directors.
3.3 Insurance/Profit Sharing. Employee shall be
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entitled to participate as an executive officer in all existing
Company insurance, profit sharing and other benefit plans in
which executive officers may participate, including the
Company's Excess Deferral Plan, on the same basis as other
executive officers of the Company.
3.4 Long Term Disability Benefits. The Company will
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provide to Employee the long term disability benefits described
in Appendix A to this Agreement. This benefit is in addition
to benefits under any group plan purchased by the Employee. In
the event of Total Disability as defined in Appendix A,
Employee's salary provided for in Paragraph 3.1, above, will be
continued during the elimination period.
3.5 Retiree Medical Benefits. After termination of
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Employee's employment for any reason after reaching age 55, the
Company will pay Employee or his present spouse if she survives
him, as applicable, a medical supplement to the extent
determined as follows:
(a) The supplement shall compensate
for the premium value to Employee of
medical coverage comparable to that
provided under the Company's program
applicable to retirees generally (the Fred
Meyer Plan) during any period in which the
following applies:
(1) Neither Employee nor
his surviving spouse is eligible
for coverage under the Fred Meyer
Plan.
(2) Neither Employee nor
his surviving spouse is eligible
under a plan of a successor
employer for medical benefits
that are reasonably comparable to
benefits under the Fred Meyer
Plan.
(3) Employee is at least 55
years old.
(b) The supplement shall not exceed
the smallest of the following amounts, as
applicable, reduced by the employee cost
applicable at the time under the Fred Meyer
Plan (references to Employee shall include
his present spouse):
(1) The cost of COBRA
continuation coverage available
from the Company that Employee
could have received by timely
election.
(2) The cost to Employee for
coverage if Employee had timely
exercised all available conversion
rights under the Company's medical
program for active employees.
(3) The cost to Employee of the
coverage actually in effect for
Employee from time to time to the
extent the coverage is reasonably
comparable to coverage under the Fred
Meyer Plan at the time.
(c) The supplement shall be paid only
with respect to benefits Employee would
have received under the Fred Meyer Plan if
Employee had terminated when eligible under
that Plan.
(d) The supplement shall be paid in
cash to Employee or his surviving spouse
or, at the Company's election, by direct
payment of the appropriate portion of the
cost of coverage. The amount paid shall
constitute compensation income to Employee
or his surviving spouse, shall be reported
on IRS form W-2 and any applicable state
form, and shall be subject to all
applicable state and federal withholding as
non-qualified deferred compensation.
4. Severance.
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4.1 In the event Employee is terminated by the
Company for any reason other than for "cause," death or
permanent disability, employee shall be entitled to payment of
two years of compensation at Employees last determined salary
(payable on the Company's normal payroll dates and without
interest).
4.2 "Cause" is defined for the purposes of this
Agreement as (a) embezzlement or fraud against the Company; (b)
conviction of a felony which in the judgment of the Board of
Directors of the Company adversely affects the business or
reputation of the Company; (c) conduct in wanton and knowing
disregard of corporate policy; or (d) willful and continuous
failure, in the judgment of the Board of Directors, to perform
substantially the reasonably assigned duties with the Company
after written notice and reasonable opportunity to perform.
5. Pension and Benefits.
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5.1 Normal Retirement Benefit. Employee's normal
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retirement benefit shall be a pension starting at the end of
the first month after age 62 and continuing for Employee's life
equal to $10,805 per month. The benefit shall be reduced by 5
percent for each year by which Employee's total completed years
of employment is less than 14, as shown on the following
Schedule:
Accrued Benefit
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Completed Years Employment Pension Amount
of Employment Year End per month at 62
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2 8/31/93 $ 4,322
3 8/31/94 4,862
4 8/31/95 5,402
5 8/31/96 5,943
6 8/31/97 6,483
7 8/31/98 7,023
8 8/31/99 7,564
9 8/31/00 8,104
10 8/31/01 8,644
11 8/31/02 9,184
12 8/31/03 9,724
13 8/31/04 10,265
14 8/31/05 10,805
5.2 Early Retirement Benefit. If employment is
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terminated by Employee or Company for any reason before normal
retirement date, Employee may elect to receive the accrued
normal retirement benefit starting at the end of any month
after age 55. If benefits start before the end of the first
month after age 62, the amount from the Schedule in 5.1 shall
be reduced 5/12 of one percent for each month by which the
benefit starts early.
5.3 Spouse's Death Benefit. If Employee dies
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leaving a surviving spouse to whom he is now married, the
spouse shall receive a monthly pension for her life as follows:
(a) If Employee had retired and was
receiving benefits or dies during the first
month for which benefits were to be paid,
one half of Employee's monthly benefit
shall continue to the spouse.
(b) If (a) does not apply, the spouse
may elect to start a benefit as of the end
of any month after the later of the date of
death or the date Employee would have
reached age 55. The benefit shall be one
half of the amount Employee would have
received if he had terminated just before
death and elected to start benefits at the
date benefits start to the spouse.
5.4 Additional Benefit. Retirement and Spouse's
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death benefit under 5.1 through 5.3 shall be in addition to and
shall not reduce or be reduced by any benefits under the
Supplemental Income Plan, the Excess Deferral Plan, the Profit
Sharing Plan or any other plan maintained by the Company or an
affiliate.
6. Miscellaneous Benefits.
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6.1 Club Membership. The Company shall pay the cost
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of one club membership for Employee during the term of
Employee's employment with the Company.
6.2 Automobile. The Company will provide an
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automobile for Employee's use while he is employed by the
Company. The Company will also pay all operating expenses
associated with the automobile.
6.3 Vacation. Employee will be entitled to five
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weeks of vacation annually.
6.4 Medical Expenses. Beginning on the date
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Employee commences employment with the Company, the Company
will provide reimbursement for medical expenses of Employee and
his dependents under the Company's medical reimbursement plan,
without any waiting or qualification period and without
exclusions for any existing conditions.
7. Successors and Assigns; Entire Agreement.
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7.1 The rights and benefits of Employee under this
Agreement are personal to him and, except as may be set forth
herein, may not be transferred or assigned voluntarily or
involuntarily.
7.2 This Agreement shall be binding on the Company,
its successors and assigns, including any person acquiring
control of the Company's business and operations.
7.3 This Agreement contains the entire agreement and
understanding by and between the Employee and the Company with
respect to the employment of Employee and the payments provided
for in this Agreement shall be in lieu of any other claims of
Employee relating to his employment or benefits, including
claims relating to termination of employment.
8. Applicable Law.
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This Agreement shall be construed in accordance with
the laws of the State of Oregon.
AGREEMENT DATED AUGUST 27, 1991 EXECUTED AS FOLLOWS:
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FRED MEYER, INC.
By KENNETH THRASHER, SR. V.P.
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ROBERT G. MILLER
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Robert G. Miller
AMENDMENT NO. 1 DATED AUGUST 1, 1994 EXECUTED AS FOLLOWS:
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FRED MEYER, INC.
By ROGER A. COOKE
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Executed: July 14, 1994
ROBERT G. MILLER
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Robert G. Miller
Executed: July 19, 1994