EXHIBIT 10.18
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is being made and
executed as of August 14, 1996, by and between SPARTAN STORES, INC., a
Michigan corporation, with principal offices located at 850 - 76th Street,
S.W., Grand Rapids, Michigan 49518 ("Company") and JAMES B. MEYER, of 4529
Hidden Ridge Drive, Hudsonville, Michigan 49426 ("Meyer").
RECITAL OF FACTS
The Company has employed Meyer as its President and Chief
Operating Officer. Meyer has been appointed to the Company's Board of
Directors and has been serving as a member of the board of directors of the
Company's subsidiaries. In addition, the Company anticipates that upon the
retirement in July 1997 of Mr. Patrick M. Quinn, the Company's Chief
Executive Officer, the Company will employ Meyer as the Company's Chief
Executive Officer.
Meyer possesses unique expertise and knowledge concerning the
Company's business planning, marketing efforts, suppliers, customers,
business practices and policies as well as significant managerial and
administrative skills regarding the Company's business. The Company
desires to retain this expertise, knowledge and managerial skill.
Therefore, the Company and Meyer desire that Meyer will continue to provide
future services as an employee for which he will continue to be compensated
as provided in this Agreement.
The Company and Meyer are desirous of reducing to writing their
understanding relative to Meyer's employment as President and Chief
Operating Officer, and the anticipated employment of Meyer as President and
Chief Executive Officer, for the Company and its subsidiaries.
Accordingly, the Company and Meyer have agreed to the following terms and
conditions:
1. PREVIOUS AGREEMENTS. This Agreement is being made and
executed by the Company and Meyer pursuant to a resolution adopted
unanimously by the Company's Board of Directors. This Agreement supersedes
and is controlling with regard to any previous agreement between the
Company and Meyer, whether oral or written.
2. EMPLOYMENT. The Company agrees to continue to employ Meyer
and Meyer agrees to accept continued employment from the Company as
President and Chief Operating Officer and, if so appointed by the Company's
Board of Directors, as President and Chief Executive Officer, of the
Company and its subsidiaries upon the terms and conditions set forth in
this Agreement.
3. TERM OF EMPLOYMENT. The term of Meyer's employment under
this Agreement shall begin as of August 14, 1996, and shall continue until
the employment is terminated as provided herein or until this Agreement is
terminated by mutual written agreement of the Company and Meyer.
4. DUTIES.
a. PRESIDENT AND CHIEF OPERATING OFFICER. Until his
employment as President and Chief Executive Officer, Meyer shall
perform the duties and exercise the powers of President and Chief
Operating Officer of, and shall have supervision and control
over, and responsibility for, all aspects of the business,
activities and affairs of the Company and its subsidiaries. As
such, Meyer shall report only to the Board of Directors and the
Company's Chief Executive Officer and his powers and authority
shall be superior to those of any other officer or employee of
the Company or of any subsidiary except the Chief Executive
Officer.
b. PRESIDENT AND CHIEF EXECUTIVE OFFICER. Upon his
employment as President and Chief Executive Officer, Meyer shall
perform the duties and exercise the powers of President and Chief
Executive Officer of, and shall have supervision and control
over, and responsibility for, all aspects of the business,
activities and affairs of the Company and its subsidiaries.
Meyer shall report only to the Board of Directors and his powers
and authority shall be superior to those of any other officer or
employee of the Company or any subsidiary.
c. DIRECTOR. Meyer shall, subject to his election as
such, serve also as a director of the Company and its
subsidiaries during his employment.
d. OTHER DUTIES AND RESPONSIBILITIES. Meyer shall perform
such other duties and have such other responsibilities as may be
required from time to time by the Board of Directors and as may
be consistent with the Company's Articles of Incorporation,
Bylaws, policies and rules and regulations.
e. PERFORMANCE OF DUTIES. Meyer agrees to perform all
duties called for under this Agreement and to the best of his
ability to devote his time, energies and skills exclusively to
such duties during the term of his employment. Meyer's
employment on this exclusive basis is with the understanding that
he may have business investments and participate in business
ventures which may, from time to time, require minor portions of
his time, but shall not interfere with his duties under this
Agreement. In addition, he shall be free to make speeches, write
articles and participate in public debate and discussions in and
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by means of any medium of communication so long as such
activities are not done in a manner inconsistent with his
obligations contained in this Agreement, subject to the approval
of the Board of Directors.
5. COMPENSATION. In consideration of Meyer performing the
duties required of him under this Agreement, the Company shall pay to Meyer
the following compensation during his employment under this Agreement:
a. BASE SALARY. The Company shall pay Meyer a base annual
salary payable in equal weekly payments. The annual salary for
each fiscal year shall be as the Company's Board of Directors and
Meyer agree as reflected in Schedule A entitled "Compensation
Schedule," which is attached to this Agreement and made a part of
this Agreement.
b. BONUS. From time to time, the Board of Directors, at
its discretion, may declare and cause the payment of a bonus to
Meyer pursuant to any bonus plan adopted by the Board of
Directors or by any other action of the Board of Directors.
6. ACCRUED COMPENSATION. In the event during the term of this
Agreement Meyer should die or Meyer's employment shall have terminated for
any reason, no later than thirty (30) days following the date of death or
termination the Company shall (i) pay to Meyer or his designated
beneficiary, as the case may be, any unpaid base annual salary accrued
through the date of death or termination, any bonus accrued through the
date of death or termination under the terms of the applicable bonus plan,
and any unused vacation or sick pay earned to the date of death or
termination of employment, and (ii) cause to be paid to Meyer or his
designated beneficiary, as the case may be, an amount equal to the cash
surrender value of any split-dollar life insurance policies that the
Company has obtained for Meyer that is allocable to the portion paid by
Meyer.
7. SEVERANCE PAY.
a. SEVERANCE PAYMENT. If the Company terminates Meyer's
employment for any reason other than Meyer's death, Meyer's
Permanent Disability or "Cause" (as defined in Section 18 of this
Agreement), or if Meyer terminates his employment for "Good
Reason" (as defined in Section 7(b) of this Agreement), then the
Company will make the severance payments in this paragraph. The
severance payments will consist of the following: (i) the
Company will continue to pay for a period of one year after the
effective date of termination Meyer's then current salary; (ii)
the Company will continue Meyer's life, health, accident and
dental insurance benefits for the one year severance pay period
(which continuation would not reduce the period for which Meyer
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and eligible dependents may be eligible for continuation at
Meyer's expense under COBRA); (iii) all options to acquire any
shares of Company stock that are held by Meyer will immediately
vest and become exercisable for a period of ninety days after
termination to the extent by their terms they are not then vested
or exercisable; (iv) all risks of forfeiture applicable to any
restricted stock granted to Meyer will then lapse and no longer
apply; (v) the determination of Meyer's Company pension benefits
shall include the payment of the salary amounts payable under
this Section 7; and, (vi) the Company will purchase and transfer
to Meyer the automobile then furnished to him under Section 11 of
this Agreement.
If the Company shall have terminated Meyer's employment
due to Meyer's death or Permanent Disability or for Cause, or if
Meyer shall have terminated his employment with the Company for
any reason other than "Good Reason," then the Company shall not
be required under this Section 7 or otherwise to pay to Meyer any
severance pay or continue or grant any benefits except any
benefits as may be provided in the event of such termination
under any pension or welfare benefit, bonus or stock plan
generally applicable to Company associates or officers then in
effect for the Company.
If Meyer dies after becoming entitled to receive
severance payments under this paragraph, the balance of such
payments shall be made to such beneficiaries as he shall have
directed in writing or, in the absence of such designation, to
his spouse.
b. GOOD REASON. For purposes of this paragraph, Meyer
will be deemed to have terminated his employment for "Good
Reason" if, without his express written consent: the Company
shall have assigned to him duties substantially inconsistent with
his positions, duties, responsibilities and status, or a change
occurs in his reporting responsibilities, titles or office, in
effect as of the effective date of this Agreement; or his salary,
bonus award opportunities or other benefits shall have been
reduced or curtailed in any material respect; or the Company
shall have failed to obtain the agreement of any successor of the
Company to assume and perform this Agreement; or the Company
shall have failed to fulfill any of its material obligations
under this Agreement; provided, however, that Meyer shall not be
entitled to terminate his employment for Good Reason unless he
has first given the Board of Directors notice of his intent to do
so and the Company has had a reasonable opportunity to correct
the occurrence constituting Good Reason and has failed to do so.
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c. EMPLOYMENT. Meyer shall not be required to mitigate
the severance pay and benefits payable to him under this Section
7 by seeking other employment, nor will the severance pay and
benefits be reduced due to any other employment following his
termination that complies with the applicable provisions of
Section 19 of this Agreement.
8. EXPENSES. The Company shall pay directly or reimburse Meyer
for all ordinary and necessary business expenses incurred by Meyer in
performing his duties under this Agreement. Those expenses shall include,
but not be limited to, expenses incurred for entertainment, travel, meals,
lodging and the like incurred by him in the interest of the Company, as
well as any seminars, conventions or meetings and any other expenses
contemplated by this Agreement. Such expenses shall be paid or reimbursed
promptly upon the Company receiving written evidence of that from Meyer
unless Meyer is unable to obtain such written evidence of that in which
latter event the Company shall pay such expenses upon verbal notification
and verification received from Meyer. At its option, the Company shall be
permitted to require and Meyer shall complete the filling out of an
itemized statement reflecting all travel, lodging and other legitimate
reasonable expenses incurred by Meyer under this Agreement in a form and
substance consistent with the Company's standard policy.
9. OFFICE FACILITIES. The Company shall furnish Meyer with an
office, stenographic help, supplies, equipment and such other facilities
and services suitable to his position and adequate for the performance of
his duties as determined within the discretion of the Company.
10. MEMBERSHIP IN ORGANIZATIONS, ETC. The Company shall
continue to maintain and pay for the licensing and memberships of Meyer
with and in all licensing or regulatory authorities or agencies,
organizations, societies or other professional groups of or with which
Meyer was a member or licensed on the date of the execution of this
Agreement in addition to any others upon which the Company and Meyer
mutually agree.
11. AUTOMOBILE. During the term of this Agreement, the Company
shall furnish Meyer the unlimited use of an automobile of a type determined
by the Company. The Company may replace such automobile with a new
automobile at any time during the term of this Agreement. The Company
shall pay for all expenses relating to the use, including gasoline,
maintenance, insurance, repair and operation of, and any purchase or rental
payments attributable to, the automobile. Meyer shall pay expenses for
gasoline for the personal use of the automobile, and, in addition, the
value of any personal use of the automobile shall be reported as wages paid
to Meyer. Meyer shall endeavor to keep a written record of any expenses
that he may pay and furnish them to the Company for reimbursement when
available upon written request of the Company. The Company shall pay
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directly such expense, or reimburse Meyer for such expenses promptly upon
receipt of notification of them by Meyer. Meyer shall have the option to
purchase any such automobile on the terms and conditions set forth in the
contract or lease covering such automobile.
12. OTHER INSURANCE AND BENEFITS. The Company shall maintain at
its expense any life, health, accident and dental insurance maintained by
the Company for Meyer as of the effective date of this Agreement and such
other insurance, health or other benefits that the Company provides
generally to its officers, unless the Board of Directors determines
otherwise. The Company will provide membership, including initiation and
monthly fees, for one country club and one social or athletic club located
in the Grand Rapids area, each as selected from time to time by Meyer.
13. SICK PAY AND DISABILITY BENEFITS. During each twelve-month
period during the term of this Agreement, Meyer shall be entitled to such
sick days with pay or such other benefit relating to sick days as provided
in the Company's sick pay policy. The Company shall provide and pay for
disability insurance benefits under the separate disability insurance
policy for Meyer in effect as of the date of this Agreement, or any greater
benefits as may be provided otherwise under the Company's policy relating
to such benefits.
14. VACATIONS. During each twelve-month period during the term
of this Agreement, Meyer shall be entitled to at least four (4) weeks or
such greater amount of paid vacation time consistent with Company policy.
15. FEES, ETC. All fees, honorariums, compensation or other
things of value received or realized as a result of sales made or the
rendition of services by Meyer under this Agreement shall belong to and be
paid and delivered by Meyer to the Company, except for fees received by
Meyer for serving upon boards of directors or boards of trustees, and
except that Meyer may accept business gifts, travel and event expenses and
fees, and other similar benefits from vendors and others consistent with
past practices of the Company applicable to such benefits for officers.
16. PARTICIPATION IN OTHER EMPLOYEE-BENEFIT PLANS. Nothing in
this Agreement shall in any manner modify, impair or affect the existing or
future rights or interest of Meyer so long as he is employed by the Company
under this Agreement: (a) to receive any employee-benefits to which he
would otherwise be entitled, or (b) as a participant in any incentive
profit-sharing or bonus plan of the Company or in any pension plan of the
Company or ESOP or any cafeteria plan or other such welfare benefit plan,
applicable generally to salaried employees. It is understood and agreed by
the Company and Meyer that the rights and interest of Meyer to any
employee-benefits or as a participant or beneficiary in or under any or all
such welfare benefit plans respectively shall continue in full force and
effect unimpaired so long as he is employed by the Company under this
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Agreement. Further, Meyer shall have the right at any time after the date
of this Agreement to become a participant or beneficiary under or pursuant
to any such welfare benefit plans, if eligible. Meyer shall be a
participant in the Company's Supplemental Executive Retirement Plan, as it
may be amended, or any similar successor or other plan applicable to
Company officers to restore benefits that may be reduced or limited under
law.
17. TRADE SECRETS, ETC. Except as is authorized by the Board of
Directors or when in the sound business judgment of Meyer he believes the
sharing of information with a non-competitor company may be beneficial to
the Company and is consistent with company policy as fixed by Meyer and the
Board of Directors, from time to time, Meyer shall not directly or
indirectly disclose to any other person, firm, entity or corporation, any
confidential information or trade secrets of any nature, including but not
limited to:
a. Present and projected sales figures and other financial
information and details of the Company;
b. Production techniques;
c. Process information;
d. Marketing and sales knowledge, programs and
information;
e. Customer lists and suppliers;
f. Any other plans concerning the present or future
business or manufacturing process or expertise of the Company.
Meyer agrees to surrender to the Company all information, files,
memoranda, customer lists, forms and other records or materials relating
to the Company and its business, whether acquired prior or subsequent to
the date of this Agreement, it being agreed that all such items are, and
are to remain, the exclusive property of the Company. Further, following
termination of Meyer's employment, Meyer agrees not to disclose to any
person, firm, entity or corporation any of the confidential information or
trade secrets of the Company.
18. TERMINATION. Mr. Meyer's employment may be terminated by
Company or Meyer as follows:
a. By Meyer, for any reason whatsoever, giving Company
ninety (90) days prior written notice of his intent to terminate
employment; or
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b. By Company, at will and for any reason whatsoever, by
giving Meyer ninety (90) days prior written notice of Company's
intent to terminate Meyer's employment, or pay in lieu of notice
(in addition to any severance pay owing under Section 7 of this
Agreement);
c. By Company, for any commission by Meyer of any act of
fraud, dishonesty in connection with Company duties or
obligations, willful misconduct, or willful neglect of or gross
negligence in the performance of his duties with material adverse
effect on the Company ("Cause"); or
d. By Company, in the event of the death or Permanent
Disability of Meyer. The term "Permanent Disability" means
Meyer's inability to substantially perform his job duties due to
a disability for a continuous period of 6 months or more; or
e. By Company, by giving Meyer 30 days prior written
notice of the Company's intent to termination the event of the
dissolution, liquidation, discontinuance of business or
bankruptcy of, or the general assignment for the benefit of
creditors by, the Company.
The "date of termination" for purposes of this Agreement shall be
the date upon which the notice period expires for purposes of subparagraphs
(a), (b) and (e) or the date upon which any of the events listed occurs for
purposes of subparagraphs (c) and (d).
19. NON-COMPETITION. During the term of this Agreement and for
twelve (12) months following the date of termination of his employment,
Meyer agrees not to compete directly or indirectly with the Company in the
same or similar business of the Company. Meyer's obligations not to
compete shall prohibit direct or indirect competitive activity in any
states in which the Company or any of its subsidiaries are doing business
as of the date of termination. This Section 19 shall not prohibit Meyer
from owning any stock in any company listed on any national or regional
securities exchange or traded on NASDAQ in a number not greater than 1% of
the outstanding shares of the company.
"Competition" for the purpose of this Agreement shall include,
but not be limited to:
a. Canvassing, soliciting or accepting any business from
any present, future or past customer of the Company in lines or
products currently being made or supplied by the Company;
b. Requesting or advising any past, future or present
customer or supplier of the Company to withdraw, curtail or
cancel his or its business with the Company;
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c. Disclosing to any competitor the names of the past,
future or present customers or suppliers of the Company or any of
its business practices, policies or trade secrets and the like;
d. Becoming an owner, shareholder, director, partner,
officer, agent, representative or employee of a competing
business; or
e. Furnishing of any services or advice to a competing
business in any capacity whatsoever.
The Company and Meyer agree that the restrictions as set forth in
this paragraph are reasonable in light of the nature of the Company's
business and Meyer's position. However, should any court of competent
jurisdiction determine that any of these restrictions are unenforceable as
written, then the parties agree that such restriction shall, without
further acts of the parties, be modified or amended to conform to the
judgment of the court as to what would be enforceable, with the
restrictions of this paragraph to be then limited in accordance with such
judgment.
In the event of any breach of this paragraph by Meyer, the
Company shall be entitled to injunctive relief or such other relief to
which it is entitled by law, as well as any damages sustained, together
with any actual attorneys' fees and costs incurred as a result of such
breach.
20. MISCELLANEOUS PROVISIONS.
a. COMPLIANCE WITH CODE, ETC. It is intended and
understood by the Company and Meyer that this Agreement complies
with the provisions of the Internal Revenue Code and Regulations
in effect at the time of its execution. If, at a later date, the
laws of the United States or of the State of Michigan are
construed in such a way as to make this Agreement in whole or in
part void and of no effect, then this Agreement will be given
effect in such manner as will best carry out the purposes and
intentions of the Company and Meyer.
b. BOARD'S POWERS AND LIABILITIES. The Board of Directors
shall have full power and authority to interpret, construe, and
administer this Agreement. The Board's reasonable
interpretations and construction of it, and action under it,
shall be binding and conclusive on all persons for all purposes.
No member of the Board shall be liable to any person for any
action taken or omitted in connection with the interpretation,
construction and administration of this Agreement.
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c. CONSOLIDATION OR MERGER. In the event of any
consolidation or merger of the Company into or with another
corporation or other entity or the sale of all or substantially
all of the assets of the Company to another corporation or other
entity, such corporation or other entity shall assume this
Agreement and become obligated to perform all of the terms and
conditions of it. Meyer's obligations under this Agreement shall
continue in favor of such corporation or other entity.
d. PROHIBITION AGAINST ASSIGNMENT. Meyer agrees on behalf
of himself and of his personal representative and administrators,
heirs, devisees, and any other person or persons claiming any
benefits under him by virtue of this Agreement that this
Agreement and the rights, interests, and benefits under it shall
not be assigned, transferred, pledged, or hypothecated in any way
by Meyer or any personal representative, administrator, heir,
devisee, or other person claiming under Meyer by virtue of this
Agreement and shall not be subject to execution, attachment, or
similar process. Any attempted assignment, transfer, pledge or
hypothecation, or other disposition of this Agreement or of such
rights, interests, and benefits contrary to the foregoing
provisions, or the levy of any attachment or similar process
thereupon, shall be null and void and without effect.
e. SEVERABILITY. If any provision of this Agreement shall
be construed to be illegal or invalid, it shall not affect the
legality or validity of any of the other provisions of this
Agreement. Such illegal or invalid provision shall be deemed
stricken and deleted to the same extent and effect as if never
set forth above. All other provisions shall continue in force
and effect.
f. MODIFICATION OR AMENDMENT. No modification or
amendment of this Agreement shall be effective unless in writing
and signed by Meyer and the Chairman of the Board of the Company
acting on behalf of the Board.
g. WAIVER. No waiver of any term, condition or
requirement of this Agreement on one occasion shall not operate
as a waiver on any other occasion, nor shall any failure to
enforce any provision of this Agreement operate as a waiver of
such provision or any other provision of this Agreement.
h. EFFECTIVE DATE. The effective date of this Agreement
shall be as of August 14, 1996.
i. MICHIGAN LAW. This Agreement shall be governed by and
interpreted in accordance with the statutory, decisional and
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other law of the State of Michigan, regardless of conflicts of
law principles. The parties agree that the Circuit Court for the
County of Kent, State of Michigan, shall have jurisdiction to
hear the determine any and all disputes relating to the
interpretation or application of this Agreement.
j. BINDING EFFECT. This Agreement shall be binding upon
the parties, their heirs, legal representatives, successors and
assigns.
k. ATTORNEY FEES. Either party shall be entitled to
recover its reasonable attorney fees incurred in an action to
enforce this Agreement, in the event of a material breach by the
other party.
This Agreement has been executed by the Company and Meyer on this
11th day of December, 1996, in Grand Rapids, Michigan.
SPARTAN STORES, INC.
By: /S/DONALD J. KOOP
Donald J. Koop
Its Chairman
/S/JAMES B. MEYER
James B. Meyer
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