EXHIBIT 10.1
PERFORMANCE FOOD GROUP COMPANY
SENIOR MANAGEMENT SEVERANCE PLAN
I. PLAN PURPOSE
Performance Food Group Company (the "Company") hereby adopts this Senior
Management Severance Plan (the "Plan"). The purpose of the Plan is to provide
transition and severance benefits, as well as payments for a non-competition
agreement, to eligible associates solely in the event of a company-initiated,
non-misconduct separation from the Company.
II. PLAN INTERPRETATION
The Plan is intended to be a "top hat" plan, that is, an unfunded plan
maintained by the Company to provide transition and severance benefits, as well
as payments for a non-competition agreement, for a select group of management or
highly compensated employees, as that term is defined in Title I of the Employee
Retirement Income Security Act of 1974 ("ERISA"), and the Plan shall be
interpreted and administered consistent with the top hat provisions of Title I
of ERISA.
III. PLAN ELIGIBILITY
An associate who works for (i) the Company or (ii) any one of the Company's U.S.
based subsidiaries or affiliates which are participating in this Plan with the
permission of the Plan Administrator (as defined in Section V below) (any such
entity referred to as an "Employer"), shall be eligible to participate in the
Plan during such times as the associate satisfies both of the following:
1. The associate holds a position with the Employer with a title of
Vice President or Corporate Director or above.
2. The associate is a member of a "select group of management or
highly compensated employees", within the meaning of Title I of
ERISA, as determined by the Plan Administrator.
Eligible associates shall commence participation in the Plan as of the date the
Employer provides the associate with written notification of the Employer's
intent to initiate the termination of the associate's employment based on
factors other than termination for Cause (as defined herein).
IV. PLAN SPECIFICS
Eligible associates who have been provided with the notice of termination as
specified in Article III above (hereafter referred to as "Participant(s)") may
be offered pursuant to this Plan:
1. Transition Pay
Eligible Participants may be granted a transition period at the discretion of
the Plan Administrator (the "Transition Period") during which they will remain
employed by the Employer and will be eligible to receive their then-current base
salary compensation and benefits to assist with the transition of
responsibilities. The Transition Period will commence on the date stated as the
Transition Period start date in the written notification by the Employer to the
Participant of the intent to sever the employment relationship. The Transition
Period will be calculated on a calendar year basis (365/366 days), inclusive of
the date stated in the written notification according to the schedule set forth
below.
If the Plan Administrator grants a Participant a Transition Period, the
Participant will be entitled to Transition Pay for the period set forth in the
table below based on the Eligible Participant's title immediately prior to the
commencement of the Transition Period and may be provided with office space at
the discretion of PFG management.
Transition Period (Weeks)
less than more than or more than
5 Yrs equal to 5 Yrs 10 Yrs
- ------------------ --------------------------------------------------- ------------ -------------- -------------
Tier 5 Currently including titles of OPCO Level CFO, 4 weeks 8 weeks 12 weeks
SVP, EVP and VP Corp. Level Functional Directors
- ------------------ --------------------------------------------------- ------------ ------------- -------------
Tier 4 Currently including titles of OPCO/Branch 8 weeks 12 weeks 18 weeks
Presidents, Plant and General Managers, Division
Level VP, and Regional CFO
- ------------------ --------------------------------------------------- ------------ ------------- -------------
Tier 3 Currently including titles of Corporate VP, Corp. 8 weeks 12 weeks 18 weeks
Treasurer, Corp. Controller, Division Level EVP,
SVP and CFO, and Division VP
- ------------------ --------------------------------------------------- ------------ ------------- -------------
Tier 2 Currently including titles of Division President 8 weeks 12 weeks 18 weeks
and CEOs, and Corporate Level SVP
- ------------------ --------------------------------------------------- ------------ ------------- -------------
Tier 1 Currently including titles of Chief Executive 8 weeks 12 weeks 18 weeks
Officer, President, and COO
- ------------------ --------------------------------------------------- ------------ ------------- -------------
The Participant's continued employment during the Transition Period and receipt
of transition payments are contingent upon his/her execution of a Transition
Confidentiality and Non-Compete Agreement and General Release (hereafter
"Transition Agreement") covering all claims, known or unknown, arising from the
date of hire through the commencement of the Transition Period.
2
2. Severance Pay
After receiving his/her regular ongoing base salary compensation and benefits
during the Transition Period if granted by the Plan Administrator, the
Participant will, if qualified, receive severance payments (subject to
applicable withholdings) on their regular payroll basis based on his/her: (a)
base salary as of the commencement of the Transition Period or termination date,
as applicable, (b) position, and (c) years of service with the Employer
according to the following schedule ("Severance Payment(s)"):
Base Salary (Weeks)
less than more than or more than
2 Yrs 2-5 Yrs equal to 5 Yrs 10 Yrs
- -------------------------------------- ---------------- ----------------- ----------------- ----------------
Tier 5 4 weeks 7 weeks 14 weeks 21 weeks
- -------------------------------------- ---------------- ----------------- ----------------- ----------------
Tier 4 7 weeks 14 weeks 29 weeks 43 weeks
- -------------------------------------- ---------------- ----------------- ----------------- ----------------
Tier 3 14 weeks 29 weeks 50 weeks 71 weeks
- -------------------------------------- ---------------- ----------------- ----------------- ----------------
Tier 2 17 weeks 34 weeks 60 weeks 83 weeks
- -------------------------------------- ---------------- ----------------- ----------------- ----------------
Tier 1 20 weeks 39 weeks 69 weeks 93 weeks
- -------------------------------------- ---------------- ----------------- ----------------- ----------------
Severance Payments under this Plan and the above schedule will be limited to:
The amount of the Participant's base salary on a daily basis using
365/366 as the denominator multiplied by a fraction, the numerator of
which is the applicable number of days from the table above.
The receipt of Severance Payment is conditioned upon the Participant signing the
Non-Compete Agreement and General Release or Post-Transition and Non-Compete
Agreement and General Release, as applicable (hereafter "Severance Period
Agreement"). The Participant will be presented with the Severance Period
Agreement at the end of the Transition Period or at the date of Participant's
termination of employment if no Transition Period is granted.
3. Annual Incentive Plans
The Participant will receive the components of any applicable senior management
bonus program prorated through the commencement of the Transition Period or the
date of Participant's termination of employment if no Transition Period is
granted. This portion of the incentive will be based on actual payout results.
The bonus, if earned, will be paid at the time earned incentives are paid to
continuing executive associates.
Following the commencement of the Transition Period, or Participant's
termination of employment if no Transition Period is granted, eligible
Participants will not receive any further opportunity to participate in any
portion of any senior management bonus program for the current or prospective
fiscal year. Additionally, no other incentive plan payments will be made from
the senior management bonus program nor any other incentive plan as part of this
Plan. Eligible Participants will not be entitled to any other benefits following
the Transition Period or Participant's termination of employment if no
Transition Period is granted.
3
4. Long-Term Incentive Plans
This Plan does not provide any separate terms for the administration and
determination of eligibility or payments under the Company's long-term incentive
plans, including any stock options or restricted stock. The underlying
agreements and the actual provisions of those long-term plans will govern any
payment or vesting.
5. Termination Upon Death
This Plan and any and all benefits provided under this Plan shall continue in
the event of the death of a Participant at any time while receiving benefits
under the Plan.
V. ADMINISTRATION
The Company will pay for the benefits provided by this Plan from the general
assets of the Company under the circumstances set forth herein.
This Plan will be administered by the Chairman and CEO and the National VP,
Human Resources of the Company (or their designees) or the Chairman of the
Company's Compensation Committee in the event that the Participant is designated
by the Board of Directors as a reporting person under Section 16 of the
Securities Exchange Act of 1934, as amended, or in the event that the National
VP, Human Resources is involved as a potential participant (hereafter
collectively "Plan Administrator").
The Plan Administrator has complete and sole discretion and authority to
interpret the terms of the Plan and has sole discretion and authority to
determine questions of eligibility and amount of Transition Payments, if any,
and Severance Payments and any other benefits contemplated herein, if any, due
under the Plan.
The Company reserves the right to modify and/or discontinue this Plan. Any
modification or termination of the Plan will be communicated to all eligible
associates.
In the event a claimant believes he or she is entitled to benefits under the
Plan that have not been provided, the Associate must make a written claim for
benefits with the Plan Administrator. The Plan Administrator will advise the
claimant within ninety (90) days of receiving the claim, whether that claim will
be accepted or denied. If denied, the claimant may request that the decision be
reviewed by filing an appeal with the Plan Administrator within sixty (60) days
of receiving the denial of claim. If the appeal is denied, the claimant will be
given a written explanation of the reasons for the denial within sixty (60) days
of the filing of the claimant's appeal. In certain circumstances, it may take
longer to make a decision regarding the appeal. If it takes longer than sixty
(60) days to make a decision on the appeal, the claimant will be notified of the
need for additional time. In no event will the additional time exceed one
hundred twenty (120) days from receipt of the request for review. If the
claimant disagrees with the final decision on appeal, the claimant may exercise
his or her right to bring legal action.
4
The Company reserves the right to discontinue payments under this Plan if a
Participant is terminated for Cause (as defined below) during the Transition
Period, if any, or if Participant at any time violates any confidentiality,
non-competition or non-solicitation agreement between Participant and any
Employer, as determined in the Plan Administrator's sole discretion. Any such
determination shall be final and binding on a Participant. "Cause" shall mean
(i) a felony conviction of a Participant or the failure of a Participant to
contest prosecution for a felony, (ii) a Participant's willful misconduct or
dishonesty, which is directly and materially harmful to the business or
reputation of the Company or any subsidiary or affiliate, (iii) the engaging by
the Participant in conduct which is demonstrably injurious to the Company,
monetarily or otherwise, (iv) a material failure on the part of a Participant to
meet performance standards or objectives established by the Participant's
supervisor(s), (v) a material breach or violation of the Company's employee
policies, or (vi) any act, omission or failure to act by the Participant which
the Plan Administrator determines, in its sole discretion, constitutes Cause.
For purposes of this paragraph, no act, or failure to act, on the Participant's
part shall be considered "willful" unless done, or omitted to be done, by the
Participant not in good faith and without reasonable belief that the
Participant's action or omission was in the best interest of the Company.
VI. EXCLUSION
This Plan will not provide any benefits in the event of a transaction involving
a spinoff, corporate sale, sale of assets or a legal or organizational
restructuring of one or more subsidiaries, segments or divisions of the Company,
including any Employer, or for intercompany transfers within the Company and its
subsidiaries. In the event that a Participant receives benefits pursuant to an
Agreement for Key Executives between the Company and the Participant, the
Participant shall not be entitled to any benefits pursuant to this Plan.
VII. EMPLOYMENT AGREEMENTS
Any Severance Payments payable pursuant to this Plan shall be reduced by any
amounts payable pursuant to an employment or similar agreement between Employer
and the Participant upon Participant's termination of employment.
VIII. PLAN YEAR
The Plan operates on a calendar year basis until amended or terminated by the
Company.
5
SENIOR MANAGEMENT SEVERANCE PAY
ATTACHMENT A
The following legal entities or segments have adopted this Plan as an Employer
as that term is used in the Plan for purposes of determining eligibility.
Performance Food Group Company
Fresh Express Inc.
Customized Distribution
Broadline Distribution
6