EXHIBIT 10.11
SEPARATION AGREEMENT
AGREEMENT between Flowers Foods, Inc., a Georgia corporation
(the "Company"), and _______________ (the "Employee"), dated as of the ____ day
of __________ ______.
WHEREAS, the Company, on behalf of itself and its
shareholders, wishes to continue to attract and retain well-qualified executive
and key personnel who are an integral part of the management of the Company or
of one or more of its Subsidiaries, such as Employee, and to assure itself of
continuity of management in the event of any prospective or actual Change in
Control (as defined in Appendix I of this Agreement) of the Company; and
WHEREAS, the Company wishes to provide the Employee with
appropriate protection with respect to the Employee's continued employment in
the event of a prospective or actual Change in Control, in exchange for the
Employee agreeing to continue to serve as an executive employee of the Company
or a Subsidiary in the event of a prospective or actual Change in Control; and
WHEREAS, the Employee agrees to continue to serve as an
executive employee of the Company or a Subsidiary in the event of a prospective
or actual Change in Control as consideration for the employment rights set forth
herein;
NOW, THEREFORE, in consideration of the foregoing premises and
of the mutual covenants and conditions set forth herein and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Employee hereby agree as follows:
1. Operation of Agreement.
(a) The "Effective Date" shall be ______________.
(b) Certain capitalized terms shall have the meaning indicated in Appendix
I, which may be amended by the Company as provided in Section 15(g)
below. In addition, the term "Employer" shall mean either the Company
or a Subsidiary, as applicable, which is the direct employer of the
Employee.
2. Coverage Period. The "Coverage Period" is the period commencing on the
Effective Date and ending on the ______ anniversary of such date; provided,
however, that commencing on the date one year after the Effective Date (the
"Renewal Date"), and on each anniversary of the Renewal Date, the Coverage
Period shall be automatically extended so as to terminate _____ years from
such Renewal Date or Renewal Date anniversary, as the case may be, unless
at least 60 days prior to the Renewal Date or Renewal Date anniversary, as
the case may be, either party shall give the other party written notice
that the Coverage Period shall not be so extended. Notwithstanding the
foregoing, in the event a Change in Control (as defined in Appendix I)
occurs during the Coverage Period, the Coverage period shall be
automatically extended to terminate on the _____ anniversary of the Change
in Control.
3. Employment Period. Subject to the provisions of Sections 6 and 7 of this
Agreement, and provided (i) that the Employee is still employed by the
Employer immediately preceding the occurrence of a Change in Control, and
(ii) that this Agreement is in effect as provided in Section 1 above, the
Employer hereby agrees to continue the Employee in its employ, and the
Employee hereby agrees to remain in the employ of the Employer for the
period commencing on the effective date of such Change in Control (the
"Commencement Date") and ending on the ______ anniversary of the
Commencement Date or if earlier, the Employee's attainment of age
sixty-five (65) (the "Employment Period"). The Employee also agrees to
remain in the employ of the Employer in the event of any anticipated Change
in Control, so long as this Agreement is in effect as provided in Section
2.
4. Position and Duties.
(a) During the Employment Period, the Employee's position (including
status, offices, titles and reporting requirements, authority, duties
and responsibilities) shall be at least commensurate in all material
respects with those held, exercised and assigned at any time during
the 90-day period immediately preceding the Commencement Date, and the
Employee's principle place of business shall be located within a 50
mile radius of the location of said principle place of business
immediately preceding the Commencement Date.
(b) Excluding periods of vacation and sick leave to which the Employee is
entitled, the Employee agrees during the Employment Period to devote
substantially all of his attention and time during normal business
hours to the business and affairs of the Employer and, to the extent
necessary to discharge the responsibilities assigned to the Employee
hereunder, to use reasonable best efforts to perform faithfully and
efficiently such responsibilities. The Employee may (i) serve on
corporate, civic or charitable boards or committees, (ii) deliver
lectures, fulfill speaking engagements or teach at educational
institutions and (iii) manage personal investments, so long as such
activities do not interfere with the performance of the Employee's
responsibilities to the Employer. It is expressly understood and
agreed that to the extent that any such activities have been conducted
by the Employee prior to the Commencement Date, such prior conduct of
activities, and any subsequent conduct of activities similar in nature
and scope, shall not thereafter be deemed to interfere with the
performance of the Employee's responsibilities to the Employer.
5. Compensation. The following provisions apply during such time as the
Employee is employed during the Employment Period:
(a) Base Salary. During the Employment Period, the Employee shall receive
a base salary as increased hereunder from time to time ("Base Salary")
at a rate at least equal to the salary rate paid to the Employee by
the Employer, together with any of its Affiliates, immediately prior
to the Commencement Date. The Base Salary shall be reviewed
periodically and may be increased (but not decreased) in the course of
each such review to reflect increases in the cost of living and such
other increases as shall be consistent with increases in base salary
awarded in the ordinary course of
2
business to other key executives. Under no circumstances shall any
increase in the Base Salary (i) limit or reduce any other obligation
to the Employee under this Agreement, or (ii) be later reduced or
eliminated, once effective.
(b) Annual Bonus and Long-term Incentive Compensation.
(i) In addition to the Base Salary, the Employee shall be paid, for
each fiscal year ending during the Employment Period, an annual
bonus (an "Annual Bonus") pursuant to the Company's Annual
Executive Bonus Plan, or a comparable successor plan, in cash,
the amount of which Annual Bonus shall be based on substantially
the same performance criteria and goals as were in effect in
connection with the Bonus Plan or a comparable successor plan to
said Bonus Plan immediately prior to the Commencement Date. In no
event, however, shall the Employee's Annual Bonus be reduced to a
level which is less than the average bonus paid by the Employer
with respect to the Employee under the Bonus Plan (or a
comparable successor plan to the Bonus Plan) for the three fiscal
years of the Employer (or shorter actual period) in which were
paid the highest bonuses during the five said years immediately
preceding the Commencement Date. In the event that the period for
the first annual bonus under said plan has not expired by the
date of the Change in Control, the Employee shall be deemed to
have received the target bonus for said period. Each such Annual
Bonus shall be payable within three months after the end of the
fiscal year for which the Annual Bonus is awarded, unless the
Employee shall otherwise timely elect to defer the receipt of
such Annual Bonus under any deferred compensation plan of the
Employer then in effect.
(ii) For each fiscal year during the Employment Period, the Employee
shall also receive any long-term incentive compensation to which
he is entitled pursuant to the terms of stock-based awards
granted under the Company's Equity and Performance Incentive Plan
("Long-Term Incentive Compensation"), and shall furthermore
continue to receive grants of said types of awards (other than an
extraordinary award) consistent with the prior practices of the
Company as determined in the two fiscal years of the Company
ending immediately prior to the Change in Control (or shorter
actual period).
(c) Incentive Savings and Retirement Plans. In addition to the Base Salary
and Annual Bonus and Long-term Incentive Compensation payable as
herein above provided, the Employee shall be entitled to participate,
during the Employment period, in all incentive, savings and retirement
plans and programs applicable to other key executives of the Employer
in comparable positions, but in no event shall such plans and
programs, in the aggregate, provide the Employee with compensation,
benefits and reward opportunities less favorable than those provided
by the Employer under such plans and programs as in effect with
respect to the Employee at any time during the 90-day period
immediately preceding the Commencement Date.
3
(d) Welfare Benefit Plans. During the Employment Period, the Employee
and/or the Employee's dependents as the case may be, shall be eligible
to participate in and shall receive all benefits under each welfare
benefit plan of the Employer, including, without limitation, all
medical, dental, disability, group life, accidental death and travel
accident insurance plans and programs of the Employer, as in effect
with respect to the Employee and his dependents at any time during the
90-day period immediately preceding the Commencement Date or, if more
favorable to the Employee, as in effect at any time thereafter with
respect to other key executives of the Employer in comparable
positions.
(e) Expenses. During the Employment Period, the Employee shall be entitled
to receive prompt reimbursement for all reasonable business-related
expenses incurred by the Employee in accordance with the policies and
procedures of the Employer as in effect with respect to the Employee
at any time during the 90-day period immediately preceding the
Commencement Date or, if more favorable to the Employee, as in effect
at any time thereafter with respect to other key executives of the
Employer in comparable positions.
(f) Fringe Benefits. During the Employment Period, the Employee shall be
entitled to fringe benefits and perquisites in accordance with the
policies of the Employer as in effect with respect to the Employee at
any time during the 90-day period immediately preceding the
Commencement Date or, if more favorable to the Employee, as in effect
at any time thereafter with respect to other key executives of the
Employer in comparable positions.
(g) Office and Support Staff. During the Employment Period, the Employee
shall be entitled to an office or offices of a size and with
furnishings and other appointments, and to secretarial and other
assistance, at least equal to those provided to the Employee at any
time during the 90-day period immediately preceding the Commencement
Date or, if more favorable to the Employee, as provided at any time
thereafter with respect to other key executives of the Employer in
comparable positions.
(h) Vacation. During the Employment Period, the Employee shall be entitled
to paid vacation in accordance with the policies of the Employer as in
effect with respect to the Employee at any time during the 90-day
period immediately preceding the Commencement Date or, if more
favorable to the Employee, as in effect at any time thereafter with
respect to other key executives of the Employer in comparable
positions.
6. Termination. Prior to the Commencement Date, the employment of the Employee
may be terminated at any time by the Employee or the Employer, with or
without cause of any nature, in accordance with the Employer's usual
policies and practices, at which time this Agreement shall automatically
terminate. The following provisions relate solely to termination of the
Employee's employment during the Employment Period:
(a) Death or Disability.
4
(i) Subject to Section 7 below, this Agreement shall terminate
automatically upon the Employee's death.
(ii) Subject to Section 7 below, the Company may terminate this
Agreement after having established the Employee's Disability
(pursuant to the definition of "Disability" set forth below), by
giving to the Employee written notice of its intention to
terminate the Employee's employment. In such a case, the
Employee's employment with the Employer shall terminate effective
on the 90th day after receipt of such notice (the "Disability
Effective Date"), unless within 90 days after such receipt, the
Employee shall have returned to the full-time performance of the
Employee's duties. For purposes of this Agreement, "Disability"
means disability which, after the expiration of more than 26
weeks after its commencement, is determined to be total and
permanent by a physician selected by the Company or its insurers
and acceptable to the Employee or the Employee's legal
representative (such agreement as to acceptability not to be
withheld unreasonably).
(b) Cause. The Employer may terminate the Employee's employment for
"Cause." For purposes of this Agreement, "Cause" means (i) an act or
acts of dishonesty, moral turpitude or willful misconduct taken by the
Employee and intended to result in substantial personal enrichment of
the Employee at the expense of the Company or any Subsidiary or which
have a material adverse impact on the business or reputation of the
Company or any Subsidiary of the Company, or (ii) repeated violations
by the Employee of the Employee's obligations under Section 4 of this
Agreement which are demonstrably willful and deliberate on the
Employee's part and which have a material adverse impact on the
business or reputation of the Company or any Subsidiary of the
Company, but specifically excluding alleged violations which are due
to disability or for "Good Reason" as defined below.
(c) Good Reason. The Employee's employment may be terminated by the
Employee for Good Reason. For purposes of this Agreement, "Good
Reason" means:
(i) (A) the Assignment to the Employee of any duties inconsistent in
any material respect with the Employee's position (including
status, offices, titles and reporting requirements),
authority, duties or responsibilities as contemplated by
Section 4 of this Agreement or
(B) any other action by the Employer which results in a material
diminishment in such position, authority, duties or
responsibilities, other than action or inaction which is
remedied by the Employer within 30 days after receipt of
written notice thereof given by the Employee;
5
(ii) any failure by the Employer to comply with any of the provisions
of Section 5 of this Agreement, other than any failure which is
remedied by the Employer within 30 days after receipt of written
notice thereof given by the Employee;
(iii) the Employer's requiring the Employee to be based at any office
or location more than 50 miles away from that at which the
Employee is based at the Commencement Date, except for travel
reasonably required consistent with past practices, in the
performance of the Employee's responsibilities;
(iv) any purported termination by the Employer of the Employee's
employment otherwise than as permitted by this Agreement; or
(v) any failure by the Company to comply with and satisfy Section
12(c) of this Agreement.
(d) Notice of Termination. Any termination by the Employer for Cause or by
the Employee for Good Reason shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section
15(b) of this Agreement. For purposes of this Agreement, a "Notice of
Termination" means a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) sets forth
in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Employee's employment under the provision
so indicated, and (iii) if the termination date is other than the date
of receipt of such notice, specifies the termination date (which date
shall be not more than 15 days after the giving of such notice).
(e) Date of Termination. "Date of Termination" means the date of receipt
of the Notice of Termination or any later date as of which the
termination of employment will occur specified therein, as the case
may be. If the Employee's employment is terminated by the Employer in
breach of this Agreement, the Date of Termination shall be the date on
which the Employer notifies the Employee of such termination.
7. Obligations of the Company Upon Termination. The following provisions apply
only in the event the Employee is terminated during the Employment Period.
In addition, in the event that the Employee is a participant in any other
compensation arrangement sponsored by the Company, the terms of the
particular arrangement shall govern the Employee's rights thereunder in the
event of a separation from employment.
(a) Death. If the Employee's employment is terminated by reason of the
Employee's death, this Agreement shall terminate without further
obligation to the Employee's legal representatives under this
Agreement other than those payment amounts accrued and payable
hereunder at the date of the Employee's death. Anything in this
Agreement to the contrary notwithstanding, the Employee's family shall
be entitled to receive benefits at least equal to those provided by
the Employer to surviving families of executives of the Employer in
the same or comparable positions under such plans, programs and
policies relating to family death benefits,
6
if any, as in effect at any time during the 90-day period immediately
preceding the Commencement Date or, if more favorable to the Employee
and/or the Employee's family, as in effect at the time of Employee's
death with respect to other key executives of the Employer in
comparable positions and their families.
(b) Disability. If the Employee's employment is terminated by reason of
the Employee's Disability, the Employee shall be entitled after the
Disability Effective Date to receive any amounts then accrued and
payable hereunder and to receive disability and other benefits at
least equal to those provided by the Employer to disabled employees
and/or their families in accordance with such plans, programs and
policies relating to disability, if any, as in effect with respect to
executives of the Employer in the same or comparable positions at any
time during the 90-day period immediately preceding the Commencement
Date or, if more favorable to the Employee and/or the Employee's
family, as in effect at the time of the disability termination with
respect to other key executives of the Employer in comparable
positions and their families.
(c) Cause. If the Employee's employment shall be terminated for Cause, the
Employer shall pay the Employee his full Base Salary through the Date
of Termination at the rate in effect at the time Notice of Termination
is given and shall provide the Employee, through the Date of
Termination, such welfare benefits, fringe benefits, and other
perquisites as were provided to the Employee immediately prior to
delivery to Employee of the Notice of Termination. Subject to Section
8 below, the Company shall have no further obligation to the Employee
under this Agreement.
(d) Good-Reason; Other Than for Cause or Disability. If the Employer shall
terminate the Employee's employment with the Employer other than for
Cause or Disability, or the employment of the Employee with the
Employer shall be terminated by the Employee for Good Reason,
(i) the Employer shall pay to the Employee in a lump sum in cash
within 30 days after the Date of Termination (except that if the
Employee is a "Specified Employee" as said term is defined in
Section 409A of the Internal Revenue Code of 1986, as amended
(the "Code"), and to the extent deemed necessary by the Company
in order to comply with said Code section, said payment shall not
be made prior to the date which is six (6) months after his or
her separation from service, or if earlier, the Employee's death)
the aggregate of the following amounts:
(A) if not theretofore paid, the Employee's Base salary
through the Date of Termination at the rate in effect
on the Date of Termination or, if higher, at the rate
in effect immediately prior to the Commencement Date;
and
(B) _____ times the sum of (x) the Employee's annual
Base Salary at the rate in effect at the time Notice
of Termination
7
was given or, if higher, the rate in effect
immediately prior to the Commencement Date and (y) a
bonus equivalent equal to the Base Salary as
determined in (x) above multiplied by the Target
Bonus Percentage most recently applied to him for
said purpose; provided, however, that the amount paid
shall represent a period no longer than the period
between the Date of Termination and the Employee's
attainment of age sixty-five (65) and shall be
prorated on a monthly basis, if necessary;
(ii) the Employer shall, promptly upon submission by the Employee of
supporting documentation, pay or reimburse to the Employee any
business-related costs and expenses (including already accrued
moving and relocation expenses) paid or incurred by the Employee
on or before the Date of Termination or within 30 days after the
Date of Termination which would have been payable under Section
5(e) if the Employee's employment had not terminated;
(iii) until the first anniversary of the Employee's Date of Termination
(such number of months remaining until such first anniversary is
hereinafter sometimes referred to as the "Unexpired Term"), the
Employer shall continue benefits (or equivalent coverage) to the
Employee and/or the Employee's family at least equal to those
which would have been provided to them in accordance with the
plans, programs and policies described in Sections 5(d) and 5(f)
of this Agreement if the Employee's employment had not been
terminated, if and as in effect at any time during the 90-day
period immediately preceding the Commencement Date or, if more
favorable to the Employee, as in effect from time to time during
the Unexpired Term with respect to other key executives of the
Employer in comparable positions and their families; provided,
however, to the extent that said benefits do not constitute
"reimbursement arrangements" within the meaning of Proposed
Treasury Regulation 1.409A-1(b)(9)(iv)(A) or any successor
provision, the Employer shall pay to the Executive, at the time
provided in subsection (i) above, in a lump sum, an amount equal
to the Employer's reasonable determination of the present value
of the continuation of said benefits for said period in lieu of
continuing said benefits; and
(iv) upon request by the Employee at any time within one year
following the Date of Termination, the Employer shall pay any
reasonable expenses incurred by the Employee in relocating
Employee and his dependents to any chosen location within the 48
contiguous United States which is more than 50 miles from the
Employee's residence on the Date of Termination, except to the
extent (if any) that the expenses of such relocation have been or
will be reimbursed by a new employer of Employee. Relocation
expenses which shall be reimbursed pursuant to this paragraph
include (1) all closing costs and brokerage or commission fees
incurred by the Employee in connection with the sale of his home,
and (2) all costs of moving household goods and
8
personal effects to the new location (including costs of packing
and unpacking, and insurance for up to $100,000 coverage). In
addition, upon the written request of the Employee, the Employer
shall make an offer to purchase the Employee's home for cash in
an amount equal to the greater of (A) the reasonably estimated
value of Employee's home six months prior to the occurrence of
the Change in Control or (B) the reasonably estimated value on
the Date of Termination (the greater of such values is
hereinafter referred to as the "Established Value"). For purposes
of determining the Established Value, the Employer and the
Employee shall each, at the Employer's expense, engage real
estate appraisers who are certified to evaluate professionally
the reasonably estimated values of the home as set forth above.
The Established Value shall include the land, buildings,
improvements, and designated items of personal property (limited
to carpeting and draperies) which the Employee plans to leave
behind when he or she moves. Upon completion of the two
appraisals the two will be averaged to determine the Established
Value. If, however, the lower of the two appraisals varies by
more than 10% from the higher appraisal, a third appraisal will
be made at the Employer's expense by an appraiser to be chosen
mutually by the first two appraisers, and the average of all
three appraisals will constitute the Established Value. The
Employer will then offer in writing to purchase the home at the
Established Value. The Employee will have 60 days from the date
of the offer within which to accept the offer. The Employee will
have, at his option, up to 60 days from his acceptance of the
offer within which to close the sale and vacate the property.
Additionally, the Employer shall pay the Employee such additional
amount as is necessary in order to compensate the Employee for
any taxes which become payable with respect to the expenses
reimbursed as described in this subparagraph (iv), so that the
covered relocation expenses are fully reimbursed on an after-tax
basis.
8. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit
the Employee's continuing or future participation in any benefit, bonus,
incentive or other plan or program provided by the Employer for which the
Employee may qualify, nor shall anything herein limit or otherwise affect
such rights as the Employee may have under any other agreements with the
Company or any of its Subsidiaries. Amounts which are vested benefits or
which the Employee is otherwise entitled to receive under any plan or
program of the Company or any of its Subsidiaries at or subsequent to the
date of Termination shall be in accordance with such plan or program.
9. Full Settlement. The Company's or Employer's obligation to make the payment
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances including, without
limitation, any set-off, counterclaim, recoupment, defense (except as
provided in this Agreement) or other right which the Company or Employer
may have against the Employee or others. In no event shall the Employee be
obligated to seek other employment by way of mitigation of the amounts
payable to the Employee under any of the provisions of this Agreement, nor
shall
9
re-employment of the Employee elsewhere in any way affect or offset the
amounts payable pursuant to this Agreement, except as provided in Section
11 (b) below.
The Company agrees to pay, to the full extent permitted by law, all
legal fees and expenses which the Employee may incur as a result of any contest,
in which the Employee is successful in whole or in part, by the Company or
others of the validity or enforceability of, or liability under, any provision
of this Agreement or any guarantee of performance thereof, plus in each case
interest on the total unpaid amount determined to be payable under this
Agreement, payable at rates of interest equal to the Company's borrowing rate
under its senior bank credit facility (or its equivalent), as determined by the
Compensation Committee acting in good faith, on the first business day in each
such quarter which rate shall be expressed as a daily interest rate.
10. Tax Gross-Up for Payments by the Company.
(a) If a Change in Control of the Company occurs, and any payment or
benefit provided by the Company or any of its Subsidiaries to or for
the benefit of the Employee, whether paid or payable or provided or to
be provided pursuant to the terms of this Agreement or otherwise
pursuant to or by reason of any other agreement, policy, plan, program
or arrangement, including without limitation any stock option,
performance share, performance unit, stock appreciation right,
restricted stock award, executive incentive award, or similar right,
or the lapse or termination of any restriction on, or the vesting or
exercisability of, any of the foregoing (a "Payment"), would be
subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended (the "Code") (or any successor
provision) by reason of being considered "contingent on a change in
ownership or control" of the Company, within the meaning of Section
280G of the Code (or any successor provision) or to any similar excise
or penalty tax imposed by state or local law, or any interest or
penalties with respect to that tax (that tax or those taxes, together
with any interest and penalties, may be referred to as the "Excise
Tax"), then, if the Employee complies with the requirements of the
policy contained in this Section 10, the Employee will be entitled to
receive an additional payment or payments (collectively, a "Gross-Up
Payment"). The Gross-Up Payment will be in an amount such that, after
payment by the Employee of all taxes (including any interest or
penalties imposed with respect to those taxes), including any Excise
Tax imposed upon the Gross-Up Payment, the Employee retains an amount
of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payment.
(b) Subject to the provisions of subparagraph (f) below, all
determinations required to be made under this policy, including
whether an Excise Tax is payable by the Employee and the amount of
that Excise Tax and whether a Gross-Up Payment is required to be paid
by the Company to the Employee and the amount of that Gross-Up
Payment, if any, will be made by a nationally recognized accounting
firm (the "Accounting Firm") selected by the Employee in his sole
discretion. The Employee will direct the Accounting Firm to submit its
determination and detailed supporting calculations to both the Company
and the Employee within thirty (30) calendar days after the Employee's
receipt of the first Payment upon or following the
10
Change in Control, and any other time or times as may be requested by
the Company or the Employee. If the Accounting Firm determines that
any Excise Tax is payable by the Employee, the Company will pay the
required Gross-Up Payment to the Employee within five (5) business
days after receipt of the determination and calculations with respect
to any Payment to the Employee; provided, however, that this and all
other payments under this Section 10 are subject to any requirement
for a delay in said payment(s) pursuant to Section 409A of the Code.
If the Accounting Firm determines that no Excise Tax is payable by the
Employee, it will, at the same time as it makes that determination,
furnish the Company and the Employee an opinion that the Employee has
substantial authority not to report any Excise Tax on his federal,
state or local income or other tax return. As a result of the
uncertainty in the application of Section 4999 of the Code (or any
successor provision) and the possibility of similar uncertainty
regarding applicable state or local tax law at the time of any
determination by the Accounting Firm, it is possible that Gross-Up
Payments which will not have been made by the Company should have been
made (an "Underpayment"), consistent with the calculations required to
be made under this policy. If the Company exhausts or fails to pursue
its remedies pursuant to subparagraph (f) and the Employee
subsequently is required to make a payment of any Excise Tax, the
Employee will direct the Accounting Firm to determine the amount of
the Underpayment that has occurred and to submit its determination and
detailed supporting calculations to both the Company and the Employee
as promptly as possible. Any such Underpayment will be promptly paid
by the Company to, or for the benefit of, the Employee within five (5)
business days after receipt of the determination and calculations.
(c) The Company and the Employee will each provide the Accounting Firm
access to and copies of any books, records and documents in the
possession of the Company or the Employee, as the case may be,
reasonably requested by the Accounting Firm, and otherwise cooperate
with the Accounting Firm in connection with the preparation and
issuance of the determinations and calculations contemplated by
subparagraph (b). Any determination by the Accounting Firm as to the
amount of the Gross-Up Payment will be binding upon the Company and
the Employee.
(d) The federal, state and local income or other tax returns filed by the
Employee will be prepared and filed on a consistent basis with the
determination of the Accounting Firm with respect to the Excise Tax
payable by the Employee. The Employee will make proper payment of the
amount of any Excise Payment, and at the request of the Company,
provide to the Company true and correct copies (with any amendments)
of his federal income tax return as filed with the Internal Revenue
Service and corresponding state and local tax returns, if relevant, as
filed with the applicable taxing authority, and those other documents
reasonably requested by the Company, evidencing that payment. If prior
to the filing of the Employee's federal income tax return, or
corresponding state or local tax return, if relevant, the Accounting
firm determines that the amount of the Gross-Up Payment should be
reduced, the Employee shall within five (5) business days pay to the
Company the amount of that reduction.
11
(e) The reasonable fees and expenses of the Accounting Firm for its
services in connection with the determinations and calculations
contemplated by subparagraph (b) will be borne by the Company to the
extent they are reasonable by industry standards. If those fees and
expenses are initially paid by the Employee, the Company will
reimburse the Employee the full amount of those fees and expenses
within five (5) business days after receipt from the Employee of a
statement for them and reasonable evidence of his payment of them.
(f) The Employee will notify the Company in writing of any claim by the
Internal Revenue Service or any other taxing authority that, if
successful, would require the payment by the Company of a Gross-Up
Payment. That notification will be given as promptly as practicable
but no later than ten (10) business days after the Employee actually
receives notice of that claim and the Employee will further apprise
the Company of the nature of that claim and the date on which that
claim is requested to be paid (in each case, to the extent known by
the Employee). The Employee will not pay that claim prior to the
earlier of (i) the expiration of the thirty (30) calendar-day period
following the date on which he gives that notice to the Company and
(ii) the date that any payment of an amount with respect to that claim
is due. If the Company notifies the Employee in writing prior to the
expiration of that period that it desires to contest the claim, the
Employee will:
(i) provide the Company with any written records or documents in his
possession relating to that claim reasonably requested by the
Company;
(ii) take that action in connection with contesting the claim as the
Company reasonably requests in writing from time to time,
including without limitation accepting legal representation with
respect to that claim by an attorney competent in respect of the
subject matter and reasonably selected by the Company;
(iii) cooperate with the Company in good faith in order effectively to
contest that claim; and
(iv) permit the Company to participate in any proceedings related to
that claim; provided, however, that the Company will bear and pay
directly all costs and expenses (including interest and
penalties) incurred in connection with that contest and will
indemnify and hold harmless the Employee, on an after-tax basis,
for and against any Excise Tax or income tax, including interest
and penalties with respect to the Excise Tax, imposed as a result
of that representation and payment of costs and expenses. Without
limiting the foregoing provisions of this subparagraph (f), the
Company will control all proceedings taken in connection with the
contest of any claim contemplated by this subparagraph (f) and,
at its sole option, may pursue or forego any and all
administrative appeals, proceedings, hearings and conferences
with the taxing authority in respect of that claim (provided,
however, that the Employee may participate in them at his own
cost and expense) and may, at its option, either direct the
Employee to pay the tax claimed and sue for a
12
refund or contest the claim in any permissible manner, and the
Employee will prosecute that contest to a determination before
any administrative tribunal, in a court of initial jurisdiction
and in one or more appellate courts, as the Company will
determine; provided, however, that if the Company directs the
Employee to pay the tax claimed and sue for a refund, the Company
will advance the amount of that payment to the Employee on an
interest-free basis and will indemnify and hold harmless the
Employee, on an after-tax basis, from any Excise Tax or income or
other tax, including interest or penalties with respect to the
Excise Tax, imposed with respect to that advance; and provided
further, however, that any extension of the statute of
limitations relating to payment of taxes for the taxable year of
the Employee with respect to which the contested amount is
claimed to be due is limited solely to that contested amount.
Furthermore, the Company's control of any contested claim will be
limited to issues with respect to which a Gross-Up Payment would
be payable pursuant to this policy and the Employee will be
entitled to settle or contest, as the case may be, any other
issue raised by the Internal Revenue Service or any other taxing
authority.
11. Confidential Information; Noncompetition.
(a) The Employee shall hold in a fiduciary capacity for the benefit of the
Company any and all secret or confidential information, knowledge or
data relating to the Company or any of its Affiliates and their
respective businesses, which (i) was obtained by the Employee during
the Employment Period or during the Employee's prior employment by the
Company or any of its Affiliates and (ii) is not public knowledge
(other than by acts by the Employee or his representatives in
violation of this Agreement). After termination of the Employee's
employment with the Company, the Employee shall not, without the prior
written consent of the Company, communicate or divulge any such
information, knowledge or data to anyone other than the Company and
those designated by it, unless required by legal process.
(b) The Employee covenants and agrees with Company, its successors and
assigns, that during the period of ______ years commencing on his Date
of Termination, he shall not engage directly or indirectly, or advance
or lend any money to, or make or hold any investment (other than
non-controlling ownership of securities in publicly held corporations)
in or encourage participation by any member of his family, in any
business (other than a subsidiary or affiliate of Company) which is
competitive with the business or activities conducted by the Employee
on behalf of the Company, in those market areas and in those areas of
responsibility in which he has transacted business or conducted
himself on behalf of Company prior to or at the time of execution of
this Agreement. In the event that the Employee breaches this covenant,
he will forfeit any and all payments or benefits to which he is
otherwise entitled hereunder and which he has not received as of the
date of commencement of such competition.
12. Successors.
13
(a) This Agreement is personal to the Employee and without the prior
written consent of the Company the benefits accrued and payable
hereunder shall not be assignable by the Employee otherwise than by
will or the laws of descent and distribution. This Agreement shall
inure to the benefit of and be enforceable by the Employee's legal
representatives.
(b) This Agreement shall inure to the benefit of and be binding upon the
Company and its successors.
(c) In the event of a Change in Control of the Company, any Parent Company
or Successor (as such terms are defined in Appendix I hereof) shall,
(i) in the case of a Successor, by an agreement in form and substance
reasonably satisfactory to the Employee, expressly assume and agree to
perform this Agreement and, (ii) in the case of a Parent Company, by
an agreement in form and substance reasonably satisfactory to the
Employee, guarantee and agree to cause the performance of this
Agreement, in each case, in the same manner and to the same extent as
the Company would be required to perform if no Change in Control had
taken place.
13. Coordination of Benefits. Notwithstanding any contrary provision of this
Agreement, any amounts paid to Employee pursuant to any other plan or
agreement on the part of the Company or a Subsidiary which provides
severance compensation to the Employee under the circumstances which would
result in payments under this Agreement, the Company's Severance Policy
shall reduce pro tanto the amounts payable to Employee pursuant to this
Agreement.
14. Indemnification. During the Coverage Period, and thereafter with respect to
any act occurring within said Coverage Period, the Company agrees to
continue in force any indemnification agreements or obligations which are
in effect as of the Effective Date, and which would provide indemnification
to Employee, including any such provisions of the Company's Articles of
Incorporation or By-laws.
15. Miscellaneous.
(a) This Agreement shall be governed by and construed in accordance with
the laws of the State of Georgia, without reference to principles of
conflict of laws. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect. This Agreement
may not be amended or modified otherwise than by a written agreement
executed by the parties hereto or their respective successors and
legal representatives.
(b) All notices and other communications hereunder shall be in writing and
shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed
as follows:
If to the Employee:
------------------------------
------------------------------
------------------------------
14
If to the Company:
Flowers Foods, Inc.
1919 Flowers Circle
Thomasville, Georgia 31757
Attention: Secretary
with additional copy to the General
Counsel
or to such other address as either party shall have furnished to the
other in writing in accordance herewith. Notice and communications
shall be effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision
of this Agreement.
(d) The Company may withhold from any amounts payable under this Agreement
such federal, state or local taxes as shall be required to be withheld
pursuant to any applicable law or regulation.
(e) This Agreement contains the entire understanding of the Company and
the Employee with respect to the subject matter hereof, and supersedes
any prior agreement between the Company and the Employee with respect
to said subject matter.
(f) The Employee and the Company and any other Employer acknowledge that
the employment of the Employee by the Employer is "at will," and,
prior to the Commencement Date, may be terminated by either the
Employee or the Employer at any time with or without cause of any
nature.
(g) The terms "Change in Control," "Parent Company," "Subsidiary," and
"Successor" are defined in Appendix I hereto, which is incorporated by
reference herein. Said definitions may be amended unilaterally by the
Company, which shall notify the Employee in writing of any such change
and provide the Employee with a current Appendix I.
(h) The terms of this Agreement are confidential, and not to be disclosed
by the Employee other than to Employee's attorney, accountant, or
spouse.
IN WITNESS WHEREOF, the Employee has hereunto set his hand, and the
Company has caused these presents to be executed in its name on its behalf, all
as of the day and year first above written.
FLOWERS FOODS, INC.
By:
----------------------------------------
Title:
-------------------------------------
EMPLOYEE
- ---------------------------------
15
APPENDIX I
DEFINITIONS OF CERTAIN TERMS
1. Change in Control--means the occurrence of any one or more of the following
events, subject to the provisions of subsection (g) hereof:
(a) The Company merges into itself, or is merged or consolidated with
another entity, and as a result of such merger or consolidation, less
than 51% of the voting power of the then-outstanding voting securities
of the surviving or resulting entity immediately after such
transaction are directly or indirectly beneficially owned in the
aggregate by the former shareholders of the Company immediately prior
to such transaction;
(b) all or substantially all the assets accounted for on the consolidated
balance sheet of the Company are sold or transferred to one or more
entities or persons, and as a result of such sale or transfer, less
than 51% of the voting power of the then-outstanding voting securities
of such entity or person immediately after such sale or transfer is
directly or indirectly beneficially held in the aggregate by the
former shareholders of the Company immediately prior to such
transaction or series of transactions;
(c) a person, within the meaning of Sections 3(a)(9) or 13(d)(3) (as in
effect on the effective date of this Agreement) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), becomes the
beneficial owner (as defined in Rule 13d-3 of the Securities and
Exchange Commission pursuant to the Exchange Act) of (1) 15% or more,
but less than 35%, of the voting power of the then-outstanding voting
securities of the Company without prior approval of the Board of
Directors, or (2) 35% or more of the voting power of the
then-outstanding voting securities of the Company; provided, however,
that the foregoing does not apply to any such acquisition that is made
by (i) any subsidiary; (ii) any employee benefit plan of the Company
or any subsidiary; or (iii) any person or group of which employees of
the Company or of any subsidiary control a greater than 25% interest,
unless the Compensation Committee determines that such person or group
is making a "hostile acquisition"; or (iv) any person or group of
which the Company is an affiliate;
(d) a majority of the members of the Board of Directors are not Continuing
Directors, where a "Continuing Director" is any member of the Board of
Directors who (1) was a member of the Board of Directors on the
effective date of this Agreement or (2) was nominated for election or
elected to the Board of Directors with the affirmative vote of a
majority of the Continuing Directors who were members of the Board of
Directors at the time of such nomination or election; or
(e) the Board of Directors determines that (1) any particular actual or
proposed merger, consolidation, reorganization, sale or transfer of
assets, accumulation of shares of the Company or other transaction or
event or series of transactions or events will, or is likely to, if
carried out, result in a Change in Control falling within
16
subsections (a), (b), (c) or (d) of this definition and (2) it is in
the best interests of the Company and its shareholders, and will serve
the intended purposes of this definition, if such actual or proposed
transaction constitutes a Change in Control.
(f) an event described in subsections (a) through (e) above occurs with
respect to the Employer, if it is not also the Company.
(g) Notwithstanding the foregoing provisions hereof:
(1) if any such merger, consolidation, reorganization, sale or
transfer of assets, or tender offer or other transaction or event
or series of transactions or events mentioned in subsection (e)
of this definition shall be abandoned, or any such accumulations
of shares shall be dispersed or otherwise resolved, the Board of
Directors may, by notice to the affected parties, nullify the
effect thereof, but without prejudice to any action that may have
been taken prior to such nullification; and
(2) unless otherwise determined in a specific case by the Board of
Directors, a "Change in Control" shall not be deemed to have
occurred for purposes of subsection (c) of this definition solely
because (i) the Company, (ii) a subsidiary or (iii) any the
Company-sponsored employee stock ownership plan or any other
employee benefit plan of the Company or any subsidiary either
files or becomes obligated to file a report or a proxy statement
under or in response to Schedule 13D, Schedule 14D-1, Form 8-K or
Schedule 14A (or any successor schedule, form or report or item
therein) under the Exchange Act disclosing beneficial ownership
by it of shares of the then-outstanding voting securities of the
Company, whether in excess of 20% or otherwise, or because the
Company reports that a change in control of the Company has
occurred or will occur in the future by reason of such beneficial
ownership.
2. The term "Parent Company" shall mean a corporation or corporations of which
the Company becomes a direct or indirect subsidiary, or a corporation or
corporations, or unincorporated entity or entities, which indirectly
control the Company by controlling the greatest amount of equity (by vote)
of the Company.
3. The term "Subsidiary" shall mean a corporation or other business entity at
least 50% of whose stock (or other applicable capital interest) is owned
directly or indirectly by the Company.
4. The term "Successor" shall mean another corporation or unincorporated
entity or group of corporations or unincorporated entities which acquires
all or substantially all of the assets.
17