Severance Agreement

Form of Continuation Agreement

Change in Control Agreement

 

 

 

 
 
                          FORM OF SEPARATION AGREEMENT
 
 
                  AGREEMENT between Flowers Foods, Inc., a Georgia corporation
(the "Company"), and ______________ (the "Employee"), dated as of the __ day of
_____, 2001.
 
                  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 Section 2 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. In addition, the term "Employer"
                  shall mean either the Company or a Subsidiary, as applicable,
                  which is the direct employer of the Employee.
 
         (c)               The "Coverage Period" is the period commencing on the
                  Effective Date and ending on the second 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 two 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 below) occurs during the
                  Coverage Period, the Coverage period shall be automatically
                  extended to terminate on the second anniversary of the Change
                  in Control.
 
 
<PAGE>
 
2.                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 subsections
                  (a), (b), (c) or (d) of this Section 2, and (2) it is in the
                  best interests of the Company and its shareholders, and will
                  serve the intended purposes of this Section 2, if such actual
                  or proposed transaction constitutes a Change in Control.
 
 
                                       2
<PAGE>
 
         (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 of this
                  Section 2:
 
                  (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 Section 2
                           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 Section 2 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.
 
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
         second 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 1.
 
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
 
 
                                       3
<PAGE>
 
                  Commencement Date, and the Employee's principle place of
                  business shall be located within a 30 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
                  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
 
 
                                       4
<PAGE>
 
                           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.
 
         (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.
 
 
                                       5
<PAGE>
 
         (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.
 
                  (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).
 
 
                                       6
<PAGE>
 
         (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
 
                                    (A)      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;
 
                  (ii)              any failure by the Company to comply with
                           any of the provisions of Section 5 of this Agreement,
                           other than any failure which is remedied by the
                           Company 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 30 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
 
 
                                       7
<PAGE>
 
                  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
                  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:
 
         (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, 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
 
                                       8
<PAGE>
 
                  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 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 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; and
 
                                    (C)      in the case of vested compensation
                                             previously deferred by the
                                             Employee, all amounts, if any, of
                                             such compensation previously
                                             deferred and not yet paid by the
                                             Company;
 
                  (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
 
 
                                       9
<PAGE>
 
                           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; 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 30 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 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.
 
 
                                       10
<PAGE>
 
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 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 re-employment of the Employee elsewhere in any way
         affect or offset the amounts payable pursuant to this Agreement.
 
         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 or as a result of any
contest by the Employee, which is successful in whole or in part, against the
amount of any reduction pursuant to Section 10 of this Agreement, 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
 
 
                                       11
<PAGE>
 
                  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
                  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. 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
 
 
 
                                       12
<PAGE>
 
                  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.
 
         (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;
 
 
                                       13
<PAGE>
 
                  (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 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.
 
 
                                       14
<PAGE>
 
11.               Confidential Information. 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.
 
12.               Successors.
 
         (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
 
 
 
                                       15
<PAGE>
 
                  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:
 
                           ----------------
                           ----------------
                           ----------------
 
                           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.
 
         (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 "Parent Company," "Subsidiary," and
                  "Successor" are defined in Appendix I hereto, which is
                  incorporated by reference herein.
 
 
                                       16
<PAGE>
 
 
                  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
 
 
---------------------------
 
 
 
                                       17
<PAGE>
 
                                   APPENDIX I
 
                          DEFINITIONS OF CERTAIN TERMS
 
 
 
         (1)      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.
 
         (2)      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.
 
         (3)      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
 
 
                                       18
 
</TEXT>
</DOCUMENT>

 

EX-10.8 2 g17744exv10w8.htm EX-10.8

EXHIBIT 10.8

FORM OF CONTINUATION OF EMPLOYMENT 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.

 

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     (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 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 [                    ] 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

2

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and programs as in effect with respect to the Employee at any time during the 90-day period immediately preceding the Commencement Date.

     (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 and accidental death 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. All reimbursements under this subsection 5(e) shall be for expenses incurred by the Employee during the Employee’s lifetime. All requests for reimbursement shall be submitted no later than 90 days prior to the last day of the calendar year following the calendar year in which the expense was incurred. In no event will the amount of expenses reimbursed in one year affect the amount of expenses eligible for reimbursement, or in kind benefit to be provided, in any other taxable year.

     (f) Fringe Benefits. During the Employment Period, the Employee shall be entitled to fringe benefits and perquisites, including travel accident insurance plans and programs, 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.

 

(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

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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;

 

 

(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 (which shall consist of a separation from service within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”)), 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.

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          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. All reimbursements under this Section 7 shall be for expenses incurred by the Employee during the Employee’s lifetime. All requests for reimbursement shall be submitted no later than 90 days prior to the last day of the calendar year following the calendar year in which the expense was incurred. In no event will the amount of expenses reimbursed in one year affect the amount of expenses eligible for reimbursement, or in kind benefit to be provided, in any other taxable year.

     (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, 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 Code, said payment shall not be made prior to the date which is six (6) months after his or her Date of Termination, 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)

 

the sum of (x) (i) [                    ] times the Employee’s annual Base Salary at the rate in effect at the time Notice of Termination was given or, if higher, the rate in effect immediately prior to the Commencement Date less (ii) the amount of Base Salary already paid to the Employee during the Employment Period and (y) a bonus equivalent equal to the Base Salary as of the time determined in (x) above multiplied by the Target Bonus Percentage most recently applied to him for said purpose with respect to any calendar year during the Employment Period for which the Employee has not already earned a bonus; provided, however, that the amount paid shall represent a period no longer than the period between

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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 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)

 

for the Unexpired Term, the Employer shall either continue benefits (or equivalent coverage) (other than disability benefits) to the Employee and/or the Employee’s family or reimburse Employee for the cost of obtaining coverage for 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 Section 5(d) 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;

 

 

 

 

 

(iv)

 

for the Unexpired Term, the Employer shall reimburse Employee for the cost of obtaining coverage for 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 Section 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. The Employer shall pay to or reimburse the Employee for such amounts (x) for the first six (6) months of the Unexpired Term, in a lump sum in cash within 30 days after the date which is six (6) months after the Employee’s Date of Termination, or if earlier, the Employee’s death and (y) for the last six (6) months of the Unexpired Term, on a monthly basis; and

 

 

 

 

 

(v)

 

upon request by the Employee at any time subsequent to his Date of Termination but within the Unexpired Term, 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 personal effects to the new location (including costs of packing and unpacking, and insurance for up to $100,000 coverage). 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 (v), so that the covered relocation expenses are fully reimbursed on an after-tax basis. The Employer shall pay to or reimburse the Employee for such relocation expenses in a lump sum in cash within 30 days after the receipt by Employer of the request (except that if the Employee is a “Specified Employee” as said term is defined in Section 409A of Code, said payment shall not be made prior to the date which is six (6) months after his or her Date of Termination, or if earlier, the Employee’s death).

          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.

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          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 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 (i) if the payment or payments to be made pursuant to this Agreement are less than 310% of the “base amount” (as defined in Section 280G of the Code), then such payment or payments shall be reduced to equal 299% of the base amount, and (ii) if the payment or payments to be made pursuant to this Agreement equal 310% or more of the base amount, and 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 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

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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.

     (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

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expense) and may, at its option, either direct the Employee to pay the tax claimed and sue for a 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.

     (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

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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:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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.

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     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

 

 

 

 

 

 

 

 

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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 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,

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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.

          5. The term “Unexpired Term” shall mean the period, if any, remaining from the Date of Termination until the first to occur of (A) the first anniversary of the Date of Termination or (B) the end of the Employment Period.

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EX-10.1 2 d309434dex101.htm FLOWERS FOODS, INC. CHANGE OF CONTROL PLAN

Exhibit 10.1

FLOWERS FOODS, INC.

CHANGE OF CONTROL PLAN

Effective February 23, 2012

ARTICLE I - INTRODUCTION

The Board of Directors of Flowers Foods, Inc. (“Flowers”) (the “Company”) adopted the Flowers, Inc. Severance Pay and Change of Control Plan (the “Plan”), effective as of February 23, 2012.

The Plan is designed to (a) provide severance protection to certain Employees of the Company who are expected to make substantial contributions to the success of the Company and thereby provide for stability and continuity of operations and (b) enable certain Employees to make career decisions without regard to the time pressure and financial uncertainty which may result from a proposed or threatened Change of Control (as defined herein) transaction, encourage such Employees to remain employees of the Company and its Subsidiaries notwithstanding the outcome of any such proposed transaction.

ARTICLE II - ESTABLISHMENT OF THE PLAN

Section 2.1.    Applicability of Plan. The benefits provided by this Plan shall be available to all Employees who, at or after the Effective Date, meet the eligibility requirements of Article IV hereof.

Section 2.2.    Contractual Right to Benefits. Subject to the provisions of Article IX hereof, this Plan establishes and vests in each Participant a contractual right to the benefits to which he or she is entitled hereunder, enforceable by the Participant against the Company on the terms and subject to the conditions hereof.

ARTICLE III - DEFINITIONS AND CONSTRUCTION

Affiliate” means, with respect to any person, any entity, directly or indirectly, controlled by, controlling or under common control with such person.

Base Pay” of a Participant means the Participant’s annual base salary rate as in effect on the Termination Date from the Participant’s Employer; provided, however, that any reductions in Base Pay following the date of a Change of Control will not be taken into account when determining Base Pay hereunder; and further provided, any reduction in Base Pay that occurs prior to a Change of Control but which the Participant reasonably demonstrates (i) was at the request of a third party who effectuates a Change of Control or (ii) otherwise occurred in connection with or in anticipation of a Change of Control which has been threatened or proposed and which actually occurs, shall not be taken into account when determining Base Pay hereunder, it being agreed that any such reduction taken following shareholder approval of a transaction which if consummated would constitute a Change of Control, shall be deemed to be in anticipation of a Change of Control provided such transaction is actually consummated.

Board” means the Board of Directors of Flowers Foods, Inc.

 

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Cause” means:

(a)        any willful or negligent material violation of any applicable securities laws (including the Sarbanes-Oxley Act of 2002);

(b)        any act of fraud, intentional misrepresentation, embezzlement, acts of dishonesty, misappropriation or conversion of any asset or business opportunity of the Company;

(c)        conviction of, or entering into a plea of nolo contendere to, a felony;

(d)        an intentional, repeated or continuing violation of any of the Company’s policies or procedures that occurs or continues after the Company has given notice to the Participant that he or she has materially violated a Company policy or procedure;

(e)        any breach of a written covenant or agreement with the Company, including the terms of this Plan (other than a failure to perform Participant’s duties with the Company resulting from the Participant’s incapacity due to physical or mental illness or from the assignment to the Participant of duties that would constitute Good Reason), which is material and which is not cured within thirty (30) days after written notice thereof from the Company to the Participant;

(f)        abuse of alcohol or drugs; or

(g)        failure to reasonably cooperate in a governmental or Board investigation.

For purposes of this Plan, the Participant shall not be deemed to have been terminated for Cause under clauses (a) through (g) hereunder unless there is an affirmative vote of a super majority (75% or more) of the independent directors of the Board to terminate the Participant for Cause and the Participant receives a Notice of Termination setting forth the grounds for the termination at least fifteen (15) calendar days prior to the specified Termination Date. The Board shall meet at least once with the Participant (and his/her legal counsel if the Participant desires) prior to termination to attempt to resolve in its sole discretion the grounds for termination for Cause.

Change of Control” means the consummation of any Change of Control of Flowers of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as determined by the Board, in its sole discretion; provided that, without limitation, such a Change of Control shall be deemed to have occurred if:

(a)        any “Person” (as such term is defined in Sections 13(d) or 14(d)(2) of the Exchange Act; hereafter, a “Person”) is on the date hereof or becomes the beneficial owner, directly or indirectly, of securities of Flowers representing 35% or more of the combined voting power of the then outstanding Voting Stock of Flowers; provided, however, that for purposes of this Section (a), the following acquisitions shall not constitute a Change of Control:

 

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(i)        (A) any acquisition of Voting Stock of Flowers directly from Flowers that is approved by a majority of those persons serving as directors of the Company on the date of this Plan (the “Original Directors”) or their Successors (as defined below), (B) any acquisition of Voting Stock of Flowers by Flowers, or any Subsidiary, and (C) any acquisition of Voting Stock of Flowers by the trustee or other fiduciary holding securities under any employee benefit plan (or related trust) sponsored or maintained by Flowers, or any Subsidiary (the term “Successors” shall mean those directors whose election or nomination for election by shareholders has been approved by the vote of at least two-thirds of the Original Directors and previously qualified Successors serving as directors of Flowers as the case may be, at the time of such election or nomination for election);

(ii)        if any Person is or becomes the beneficial owner of 35% or more of the combined voting power of the then-outstanding Voting Stock of Flowers as a result of a transaction described in clause (A) of this Section (a)(i) above and such Person thereafter becomes the beneficial owner of any additional shares of Voting Stock of Flowers representing 1% or more of the then-outstanding Voting Stock of Flowers other than in an acquisition directly from Flowers that is approved by a majority of the Original Directors or their Successors or other than as a result of a stock dividend, stock split or similar transaction effected by Flowers in which all holders of Voting Stock of Flowers are treated equally, such subsequent acquisition shall be treated as a Change of Control;

(iii)        a Change of Control will not be deemed to have occurred if a Person is or becomes the beneficial owner of 35% or more of the Voting Stock of Flowers as a result of a reduction in the number of shares of Voting Stock of Flowers outstanding pursuant to a transaction or series of transactions that is approved by a majority of the Original Directors or their Successors unless and until such Person thereafter becomes the beneficial owner of any additional shares of Voting Stock of Flowers representing 1% or more of the then-outstanding Voting Stock of Flowers other than as a result of a stock dividend, stock split or similar transaction effected by Flowers in which all holders of Voting Stock are treated equally; or

(iv)        if at least a majority of the Original Directors or their Successors determine in good faith that a Person has acquired beneficial ownership of 35% or more of the Voting Stock of Flowers inadvertently, and such Person divests as promptly as practicable but no later than the date, if any, set by the Original Directors or their Successors a sufficient number of shares so that such Person beneficially owns less than 35% of the Voting Stock of Flowers then no Change of Control shall have occurred as a result of such Person’s acquisition.

(b)        Flowers consummates a merger or consolidation in which shareholders of Flowers immediately prior to entering into such agreement will beneficially own immediately after the effective time of the merger or consolidation securities of Flowers or any surviving or new corporation, as the case may be, having less than 60% of the “voting power” of Flowers or any surviving or new corporation, as the case may be, including “voting power” exercisable on a contingent or deferred basis as well as immediately exercisable “voting power,” excluding any merger or combination of a wholly owned Subsidiary into Flowers, or of Flowers into a wholly owned Subsidiary; or

 

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(c)        Flowers consummates a sale, lease, exchange or other transfer or disposition of all or substantially all of its assets to any Person other than to a wholly owned Subsidiary, but not including (i) a mortgage or pledge of assets granted in connection with a financing or (ii) a spin-off or sale of assets if Flowers continues in existence and its common shares are listed on a national securities exchange, quoted on the automated quotation system of a national securities association or traded in the over-the-counter market; or

(d)        the Original Directors and/or their Successors as defined above in Section (a)(1)(A) of this definition do not constitute a majority of the whole Board as the case may be; or

(e)        approval by the shareholders of Flowers of a complete liquidation or dissolution of Flowers as the case may be.

Code” means the Internal Revenue Code of 1986, as amended.

Company” or “Flowers” means Flowers Foods, Inc., a Georgia corporation, any successor thereto as provided in Article VIII hereof.

Disability” means a Participant’s inability to perform the duties required of the Participant in his or her position with the Company on a full-time basis for a period of six (6) consecutive months because of physical or mental illness or other physical or mental disability or incapacity.

Effective Date” means February 23, 2012.

Employee” means a full-time salaried employee of an Employer.

ERISA” means Employee Retirement Income Security Act of 1974, as amended from time to time.

Employer” means the Company, any Subsidiary or any Affiliate which employs a Participant or any person or entity that has adopted this Plan pursuant to Article VIII hereof and set forth on Schedule Chereof.

Excise Tax” means the excise tax imposed by Section 4999 of the Code (or any successor provision thereto) or to any similar tax imposed by state or local law, or any interest or penalties with respect to such tax.

Good Reason” means, during the Protection Period:

(a)        a material diminution in the Participant’s duties, responsibilities or authority from that which exists on the Change of Control date (For the avoidance of doubt, a change in title or reporting alone does not constitute “Good Reason” under this Section (a).);

(b)        a material reduction by the Company of a Participant’s base salary;

 

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(c)        a material reduction by the Company of a Participant’s target bonus opportunity;

(d)        a material reduction in long-term incentives from the year prior to the Change of Control, as measured by grant date economic values determined by a third-party compensation firm chosen by the Company and using generally accepted methodologies, which may include annualizing prior year long-term incentive grants over more than one year and ignoring prior special retention or sign-on grants;

(e)        a material failure of the successor entity to cover the Participant under the savings and retirement plans provided to similarly situated executives;

(f)        the relocation of the Company’s principal executive offices more than fifty (50) miles from their current location, if at the time of a Change of Control the Participant is based at the Company’s principal executive offices, or the requirement of the Participant to be based at a location more than fifty (50) miles from the Participant’s location as of the Change of Control;

(g)        any purported termination by the Employer of the Participant’s employment upon the occurrence of a Change of Control except as permitted by this Plan; or

(h)        any failure by Flowers to comply with and satisfy Sections 8.1 and/or 9.1 of the Plan.

Before a termination by a Participant will constitute termination for Good Reason, the Participant must give the Company a Notice of Termination within thirty (30) calendar days following the occurrence of the event that constitutes Good Reason. For a Participant terminated prior to and in anticipation of a Change of Control during the Protection Period, the event that constitutes Good Reason is the consummation of the transaction. Failure to provide such Notice of Termination within such 30-day period shall be conclusive proof that the Participant shall not have Good Reason to terminate employment.

Good Reason shall exist only if (i) the Employer fails to remedy the event or events constituting Good Reason within thirty (30) calendar days after receipt of the Notice of Termination from the Participant and (ii) the Participant terminates his or her employment within ninety (90) days of the Participant receiving notice of the existence of any event or condition described in clauses (a) through (h) above.

Key Employee” means a key employee as defined in Section 416(i) of the Code (without regard to paragraph (5) thereof) of an Employer.

Notice of Termination” means (i) a written notice of termination by the Company to the Participant provided to the Participant no less than fifteen (15) calendar days prior to the specified Termination Date or (ii) a written notice of termination for Good Reason by the Participant to the Company provided to the Company in accordance with the terms set forth in this Article III in the definition with “Good Reason”, in either case, setting forth in reasonable detail the specific reason for termination and the facts and circumstances claimed to provide a basis for termination of employment under the provision indicated and the specified Termination Date.

 

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Participant” means an Employee who meets the eligibility requirements of Article IV hereof and is set forth in Schedule B, other than an Employee who, after becoming a Participant, has entered into an employment, severance or other similar agreement with the Company (other than a stock option, restricted stock, supplemental retirement, deferred compensation or similar plan or agreement or other form of participation document entered into pursuant to an Employer-sponsored plan which may contain provisions operative on a termination of the Participant’s employment or may incidentally refer to accelerated vesting or accelerated payment upon a Change of Control (as defined in such separate plan or document)).

Plan” means this Flowers Foods, Inc. Change of Control Plan, as may be amended from time to time.

Plan Administrator” means the Compensation Committee of the Board.

Protection Period” means for all Participants, the period of time commencing on the date of the first occurrence of a Change of Control and continuing until the second anniversary of the first occurrence of the Change of Control and the six (6) month period prior to such Change of Control date if a Participant is terminated without Cause or terminates for Good Reason and in either case such termination (i) was requested by the third party that effectuates the Change of Control, or (ii) occurs in connection with or in anticipation of a Change of Control, it being agreed that any such action taken following shareholder approval of a transaction which if consummated would constitute a Change of Control shall be deemed to be in anticipation of a Change of Control provided such transaction is actually consummated.

Separation from Service” has the meaning ascribed to such phrase in the Treasury Regulation Section 409A-1(h) Guidance.

Severance Payment” or “Severance Payments” means the payment or payments of severance compensation described in Article V hereof.

Subsidiary” means a corporation, partnership, joint venture, unincorporated association or other entity in which the Company has a direct or indirect majority ownership or other equity interest, or such other ownership interest amount determined by this Plan or the Plan Administrator.

Termination Date” means the date of the Participant’s Separation from Service.

Voting Stock” means securities entitled to vote generally in the election of directors.

409A Guidance” means Section 409A of the Code, including regulations or any other formal guidance issued by the Secretary of the Treasury and the Internal Revenue Service with respect thereto.

 

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ARTICLE IV - ELIGIBILITY

Section 4.1.    Participation. Each person who is an Employee, who is designated by the Compensation Committee to be a Participant in this Plan and who is set forth on Schedule B, shall be a Participant commencing on the date established by the Compensation Committee.

Section 4.2.    Duration of Participation. A Participant shall cease to be a Participant and shall have no rights hereunder, without further action, when (a) he or she ceases to be an Employee, unless such Participant is then entitled to payment of a Severance Payment as provided in Article V hereof or (b) prior to a Change of Control, the Compensation Committee designates a Participant to be ineligible to continue to participate in this Plan as a result of a change in the Participant’s job title or duties. A Participant entitled to a Severance Payment shall remain a Participant in this Plan until the full amount of the Severance Payment has been paid to the Participant.

ARTICLE V - SEVERANCE PAYMENTS

Section 5.1.    Right to Severance Payment After a Change of Control.

(a)        Subject to Section 5.2, a Participant shall be entitled to receive from the Company Severance Payments in the amount provided in Section 5.1(b) based generally on the multiples set forth in the payment guidelines described on Schedule A, payable as described in Section 5.1(c), if during the Protection Period, (i) the Employer shall terminate Participant’s employment with the Employers without Cause and for reasons other than death or Disability or (ii) the Participant shall terminate employment with his/her Employer for Good Reason.

(b)        The amount of Severance Payments under this Section 5.1(b) shall equal the sum of (i) the Participant’s Base Pay multiplied by the factor set forth on Schedule B for the Participant and (ii) the amount of the Participant’s target award under the incentive bonus opportunity for the year in which the Termination Date occurs multiplied by the factor set forth on Schedule B for the Participant. In addition, such Participant will be entitled to receive as Severance Payments (1) the lump sum amount equal to eighteen (18) times the monthly premium amount calculated as if the Participant had continued participation in the Company’s medical plan for the eighteen (18) month statutory COBRA period based on the Participant’s coverage election in effect on his Termination Date; provided that the period of coverage actually enjoyed by the Participant under such plan after terminating employment shall count against such plan’s obligation to provide continuation coverage pursuant to COBRA, (2) and receipt of outplacement services at the Company’s cost up to a maximum not to exceed $25,000 for a period of one (1) year following the Participant’s Termination Date.

(c)        Subject to the following sentence, the cash Severance Payments to which a Participant is entitled under this Section 5.1 shall be paid to the Participant by the Company in cash and in full as soon as practicable (but in all events within sixty (60) days) after the Participant’s Termination Date (or, if later the date the applicable revocation period for the release required in Section 5.2 has expired). Notwithstanding the foregoing, if the Participant is a Key Employee, then if the Severance Payments are considered to be a “deferral of compensation” (as such phrase is defined for purposes of Section 409A of the Code), the

 

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Severance Payment to which a Participant is entitled under this Section 5.1 shall be paid to the Participant by the Company in cash and in full, on the first day of the seventh month after the Participant’s Separation from Service. If a Participant entitled to Severance Payments under this Section 5.1 should die before all amounts payable to him or her have been paid, such unpaid amounts shall be paid as soon as practicable following the Participant’s death to the Participant’s spouse, if living, otherwise to the personal representative of the Participant’s estate.

Section 5.2.    Release. Notwithstanding anything to the contrary contained in this Plan, a Participant shall not be entitled to receive any Severance Payment hereunder unless and until he or she has signed and returned to the Company a release (the “Release”) by the deadline established by the Plan Administrator (which shall be no later than forty-five (45) calendar days after the Participant’s Termination Date) and the period during which the Participant may revoke the Release, if any, has elapsed. The Release, which shall be signed by the Participant no earlier than the Participant’s Termination Date, shall be a written document, in a form prescribed by the Company, intended to create a binding agreement by a Participant to release any claim that the Participant has or may have against the Company and certain related entities and individuals, that arise on or before the date on which Participant signs the Release, including, without limitation, any claims under the federal Age Discrimination in Employment Act. The Release shall also include confidentiality and non-disparagement covenants.

Section 5.3.    Breach. The Company’s payment obligations and the Participant’s participation rights under Sections 5.1 shall cease in the event the Participant breaches any of the covenants contained in the Plan or the Release. Any such cessation of payment shall not reduce any monetary damages that may be available to the Company as a result of such breach.

Section 5.4.    No Mitigation Obligation. The Participant shall not be required to mitigate damages or the amount of his or her Severance Payment by seeking other employment or otherwise, nor shall the amount of such payment be reduced by any compensation earned by the Participant as a result of employment after the termination of his or her employment by an Employer.

Section 5.5.    Payment of Pre-termination Compensation. Notwithstanding anything to the contrary in this Plan, the Participant shall also be entitled to an amount equal to the Participant’s unpaid Base Pay, unreimbursed business expenses, accrued but unpaid leave and all other items earned by and owed to the Participant through and including the Termination Date and such amount shall be paid in cash to the Participant in a single lump sum in accordance with Section 5.1(c) of this Plan. Such payment shall constitute full satisfaction for these amounts owed to the Participant.

Section 5.6.    Parachute Payments. If the aggregate “present value” (as determined under Section 280G of the Code) of the “parachute payments” (as defined under Section 280G(b)(2) of the Code) to be paid or provided under this Plan or any other plan or agreement between the Participant and an Employer equals or exceeds 300% of the Participant’s “base amount” (as defined in Section 280G(b)(3)) and is determined to be subject to the Excise Tax, then the payments and benefits to be paid or provided under this Plan shall be set to be equal to the Reduced Amount. The “Reduced Amount” shall be either (x) the largest portion of the payments and benefits that would result in no portion of the payments and benefits being subject to the

 

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Excise Tax, or (y) the entire payments and benefits, whichever amount, after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in Participant’s receipt, on an after-tax basis, of the greater amount of the payments and benefits notwithstanding that all or some portion of the payments and benefits may be subject to the Excise Tax.

If any payments to be made or benefits to be provided to a Participant are subject to reduction pursuant to the preceding paragraph, then such payments or benefits shall be reduced, to the extent required pursuant to the terms of the Plan, in the following order (i) the payments that are payable in cash that are valued at full value under Treasury Regulation Section 1.280G-1, Q&A 24(a) shall be reduced (if necessary, to zero), with amounts that are payable last reduced first; (ii) payments and benefits due in respect of any equity valued at full value under Treasury Regulation Section 1.280G-1, Q&A 24(a), with the highest values reduced first (as such values are determined under Treasury Regulation Section 1.280G, Q&A 24); (iii) the payments that are payable in cash that are valued at less than full value under Treasury Regulation Section 1.280G-1, Q&A 24, with amounts that are payable last reduced first; (iv) payments and benefits due in respect of any equity valued at less than full value under Treasury Regulation Section 1.280G-1, Q&A 24, with the highest values reduced first (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24)); and (v) all other non-cash benefits not otherwise described in clauses (ii) or (iv) shall be next reduced pro-rata.

ARTICLE VI – POST-EMPLOYMENT COVENANTS

Section 6.1.    Restrictive Covenants.

(a)        Non-Disclosure.

(i)        Covenant of Confidentiality.    Except as permitted by the Company, Participant shall not at any time during or after employment with the Company divulge, furnish, or make accessible to anyone or use in any way other than in the Company Business, any confidential, proprietary, or secret knowledge or information of the Company that Participant has acquired or shall acquire about the Company or its customers, whether developed by Participant or by others, concerning (i) any trade secrets, (ii) any confidential, proprietary or secret designs, programs, processes, formulae, plans, devices, or material (whether or not patented or patentable) directly or indirectly useful in any aspect of the business of the Company, (iii) any customer or supplier lists of the Company, (iv) any confidential, proprietary, or secret information relating to the business of any customer of the Company, (v) any confidential, proprietary, or secret development or research work of the Company, (vi) any strategic or other business, marketing, or sales plans of the Company, (vii) any financial data or plans respecting the Company, or (viii) any other confidential or proprietary information or secret aspects of the business of the Company or the Company’s customers (collectively “Confidential Information”). This Confidential Information is the sole and exclusive property of the Company (or its customers, if applicable), constitutes a unique and valuable asset of the Company, and represents a substantial investment of time and expense by the Company, and that any disclosure or other use of such Confidential Information other than for the sole benefit of the Company would be wrongful and would cause irreparable harm to the

 

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Company. The foregoing obligations of confidentiality shall not apply to any knowledge or information that (i) is now or subsequently becomes generally publicly known, other than as a direct or indirect result of the breach of the Plan by Participant, (ii) is independently made available to Participant in good faith by a third party who has not violated a confidential relationship with the Company, or (iii) is required to be disclosed by law or legal process.

(ii)        No Use of Confidential Information of Others.    Participant shall not bring or make use of or disclose any confidential information or documents, including trade secrets, of prior employers in carrying out Participant’s duties for the Company. The performance by Participant of Participant’s job duties, including, but not limited to, Participant’s compliance with the provisions of the Plan, shall not conflict with or result in any breach of, or constitute a default under, any other agreement or instrument by which Participant is bound.

(b)        Trade Secret Protection.

(i)        Definition.    As used in the Plan, the term “Inventions, Ideas, and Expression of Ideas” means any and all new or useful discovery, improvement, technical development, or invention, whether or not patentable, and all related know how, designs, trademarks, formulae, processes, creations, manufacturing techniques, trade secrets, ideas, software, or other copyrightable or patentable works.

(ii)        Disclosure of Prior Inventions.    Participant shall identify on Exhibit A all Inventions, Ideas, and Expressions of Ideas relating in any way to the Company’s business or demonstrably anticipated research and development that were made by Participant prior to employment with the Company (“Prior Inventions, Ideas, and Expressions of Ideas”). Participant shall not incorporate, or permit to be incorporated, such Prior Inventions, Ideas, and Expressions of Ideas in any Company Inventions without the Company’s prior written consent.

(iii)        Ownership of Company Inventions; Copyrights.    Participant shall promptly disclose and describe to the Company, and shall assign to the Company or its designee, Participant’s entire right, title, and interest in and to all Inventions, Ideas, and Expressions of Ideas, including any associated intellectual property rights, that Participant may solely or jointly conceive, develop, or reduce to practice during the period of employment with the Company and any future inventions as described in Section 6.1(b)(iv) of the Plan (“Company Inventions”). All original works of authorship that are made by Participant (solely or jointly with others) within the scope of employment and that are protectable by copyrights shall be considered to be “works made for hire” as that term is defined in the United States Copyright Act (17 USCA § 101). To the extent that any such works are not so considered a “work made for hire” under applicable law or copyrightable subject matter, then such works will be deemed, upon creation, to be assigned to the Company automatically without further compensation or action by either the Company or the Participant, and Participant shall assign such works to the Company.

 

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(iv)        Future Inventions.    Company Inventions or Confidential Information relating to Participant’s activities while working for the Company and conceived or made by Participant, alone or with others, within one (1) year after termination of employment may have been conceived in significant part while the Participant was employed by the Company. Accordingly, such post employment inventions and proprietary information shall be presumed to have been conceived during employment with the Company and are to be assigned to the Company automatically without further compensation or action by either the Company or the Participant, and Participant is deemed to assign such works to the Company.

(v)        Cooperation in Perfecting Rights to Inventions.    Participant shall perform, during and after employment, all acts deemed necessary or desirable by the Company to permit and assist it, at its expense, in obtaining and enforcing the full benefits, enjoyment, rights, and title throughout the world in the Inventions, Ideas, and Expressions of Ideas hereby assigned to the Company. Such acts may include, but are not limited to, execution of documents and assistance or cooperation in the registration and enforcement of applicable patents, copyrights or other legal proceedings. In the event that the Company is unable for any reason to secure Participant’s signature to any document required to apply for or execute any patent, copyright, or other applications with respect to any Inventions, Ideas, and Expressions of Ideas (including improvements, renewals, extensions, continuations, divisions or continuations in part thereof), Participant is deemed to irrevocably designate and appoint the Company and its duly authorized officers and agents as Participant’s agents and attorneys in fact to act for and on Participant’s behalf and instead of Participant, to execute and file any such application and to do all other lawfully permitted acts to further the prosecution and issuance of patents, copyrights, or other rights thereon with the same legal force and effect as if executed by Participant.

(vi)        Disclosure.    Participant is hereby notified that the provisions of this Section 6.1 do not apply to any invention for which no equipment, supplies, facility, or trade secret information of the Company was used and which was developed entirely on Participant’s own time and (1) which does not relate (a) directly to the business of the Company or (b) to the Company’s actual or demonstrably anticipated research or development, or (2) which does not result from any work performed by Participant for the Company.

(c)        Non-Compete.    During the Restricted Period, Participant shall not, within the Territory, on Participant’s own account or for the benefit of any person, corporation, partnership, trust, joint venture, sole proprietorship, association, cooperative, or other entity, (1) provide Services, whether with or without compensation for such Services, for any entity that competes, directly or indirectly, with the Company Business (“Competing Business”), (2) own, operate, or control, or participate in the ownership, operation, or control of, a Competing Business, or (3) provide financing (equity or debt) or advice to any Competing Business; provided, however, that nothing contained herein shall prevent the purchase or ownership by Participant of less than three (3%) percent of the outstanding equity securities of any class of securities of a company registered under Section 12 of the Securities and Exchange Act of 1934, as amended. “Company Business” is defined as manufacturing, distributing, marketing, and selling baked goods through

 

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grocery chains, restaurants, and other retail and wholesale outlets. The “Restricted Period” is defined as the period of Participant’s coverage under the Plan and for a period of one (1) year following the termination of Participant’s employment with the Company for any reason. The “Territory” is defined as the Continental United States, which the Participant agrees is the geographic area in which the Company does business, including but not limited to Georgia. “Services” is defined as providing executive-level management and strategic guidance for the overall day-today operations of the business and implementing the policies of the governing board.

(d)        Non-Solicitation of Customers. For a period of two years following the termination of Participant’s employment, Participant shall not, directly or indirectly, attempt to influence, solicit, recruit, encourage, persuade, or induce, or assist any other person in so persuading or inducing any customer, vendor, or contractor of the Company to leave the service of or terminate a business relationship with the Company; provided, however, that this restriction shall only apply to individuals or entities with whom the Participant had direct dealings, or that Participant’s direct subordinates had direct dealings, in the two (2) year period before the termination of Participant’s employment.

(e)        Non-Solicitation of Employees. For a period of two years following the termination of Participant’s employment, Participant shall not directly or indirectly, attempt to disrupt, damage, impair, or interfere with the Company’s Business by raiding any of the Company’s employees or soliciting any of them to resign from their employment by the Company, or by disrupting the relationship between the Company and any of its consultants, agents, representatives, or vendors. This covenant is necessary to enable the Company to maintain a stable workforce and remain in business.

(f)        Non-Disparagement. Participant shall not publish, utter, broadcast, or otherwise communicate any information, misinformation, comments, opinions, remarks, articles, letters, or any other form of communication, whether written or oral, regardless of its believed truth, to any person or entity (including, without limitation, any of the Company’s customers, prospective customers, suppliers, and competitors, and any industry trade group, or any prospective employer or business associate of Participant) which is adverse to, reflects unfavorably upon, or tends to disparage the Company, the products, prospects, character, integrity, or financial condition of the Company, or any shareholder, officer, director, or employee of the Company.

(g)        Enforcement and Construction.

(i)        Communication of Contents of the Plan.    While employed by the Company and for one (1) year thereafter, Participant will communicate the contents of this Section 6.1 of the Plan to any person, firm, association, partnership, corporation or other entity that Participant intends to be employed by, associated with, or represent.

(ii)        Contractual Rights.    This Plan establishes and vests in the Participant a contractual right to benefits to which he is entitled hereunder provided all eligibility requirements are met. This Plan also establishes and vests in the Company contractual rights with respect to the Participant set forth in this Plan to which the Company is entitled hereunder. Consideration for these contractual rights is provided by each of the Company and the Participant in the form of potential benefits and employment services, respectively.

 

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(iii)        Severable Provisions.    The provisions of the Plan, including specifically the provisions of this Section 6.1, are severable and the invalidity of any one or more provisions shall not affect the validity of any other provision. In the event that a court of competent jurisdiction shall determine that any provision of the Plan or the application thereof is unenforceable in whole or in part because of the duration or scope thereof, said court in making such determination shall have the power to reduce the duration and scope of such provision to the extent necessary to make it enforceable, and that the Plan in its reduced form shall be valid and enforceable to the full extent permitted by law.

(iv)        Tolling.    If it shall be judicially determined that Participant has violated any restriction in this Section 6.1, then the period applicable to each obligation that Participant shall have been determined to have violated shall automatically be extended by a period of time equal in length to the period during which such violation(s) occurred.

(v)        Third-Party Beneficiaries.    The restrictive covenants set forth in this Section 6.1 are expressly intended to inure to the benefit of any subsequent owners, parents, or other entities which may own or control the assets of the Company and such entities are expressly identified as third-party beneficiaries of the Plan.

ARTICLE VII - OTHER RIGHTS AND BENEFITS NOT AFFECTED

Section 7.1.    Other Benefits. Except as provided in Section 5.6, neither the provisions of this Plan nor the Severance Payments provided for hereunder shall reduce or increase any amounts otherwise payable, or in any other way affect a Participant’s rights as an employee of an Employer, whether existing now or hereafter, under any benefit, incentive, retirement, stock option, stock bonus, stock purchase or employment agreement, plan (other than this Plan), program or arrangement (collectively, the “Other Plans”), except to the extent specifically provided under such Other Plans.

Section 7.2.    Certain Limitations. This Plan does not constitute a contract of employment or impose on any Participant, the Company or any other Employer any obligation to retain any Participant as an employee or in any other capacity, to change or not change the status, terms or conditions of any Participant’s employment, or to change or not change the Employer’s policies regarding termination of employment.

ARTICLE VIII - SUCCESSORS

Section 8.1.    Company’s Successor. Without limiting the obligations of any person or entity under applicable law, the Company shall require any successor or assignee, whether direct or indirect, by purchase, merger, consolidation or otherwise, to all or substantially all the business or assets of the Company, expressly and unconditionally to assume and agree to perform the Company’s obligations under this Plan, in the same manner and to the same extent that the Company would be required to perform if no such succession or assignment had taken place. In such event, the term “Company,” as used in this Plan, shall mean the Company as hereinbefore defined and any successor or assignee to the business or assets which by reason hereof becomes bound by the terms and provisions of this Plan.

 

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Section 8.2.    Participant’s Successor.

(a)        This Plan shall inure to the benefit of and be enforceable by the Participant’s personal or legal representatives, executors, administrators, successors, heirs, distributees and/or legatees.

(b)        The rights under this Plan are personal in nature and neither the Company nor any Participant shall, without the consent of the other, assign, transfer or delegate any rights or obligations hereunder except as expressly provided in this Article VIII. Without limiting the generality of the foregoing, the Participant’s right to receive a Severance Payment hereunder shall not be assignable, transferable or delegable, whether by pledge, creation of a security interest or otherwise, other than by a transfer by his or her will or by the laws of descent and distribution and, in the event of any attempted assignment or transfer contrary to this Section 8.2(b), the Company shall have no liability to pay any amount so attempted to be assigned, transferred or delegated.

ARTICLE IX - AMENDMENT AND TERMINATION

Section 9.1.    Amendment. Subject to Section 9.2, this Plan may be amended by the Compensation Committee or terminated in any respect by resolution adopted by a majority of the members of the Compensation Committee. However, if a Change of Control occurs, notwithstanding the foregoing, during the Protection Period that follows such Change of Control or following such Protection Period with respect to all Participants receiving Severance Payments attributable to terminations of employment that occurred during the Protection Period, no amendment or termination shall be effective unless, (a) in the case of amendments or terminations adopted during the Protection Period, such amendment or termination is consented to by all Participants, and (b) in the case of amendments or terminations adopted after the Protection Period, such amendment or termination is consented to by all Participants who are receiving Severance Payments attributable to terminations of employment that occurred during the Protection Period.

Section 9.2.    Effect of Amendment or Termination. A proper amendment of this Plan automatically shall effect a corresponding amendment to all Participants’ rights hereunder provided, however, if such amendment has the effect of reducing a Participant’s Severance Payments or the opportunity for Severance Payments, then such amendment shall not be effective until twelve (12) months after the amendment is adopted and notice is given by the Company to the Participant in accordance with Section 11.4. A proper termination of this Plan automatically shall effect a termination of all Participants’ rights and benefits hereunder without further action; provided, however, no termination shall be effective until twelve (12) months after the termination amendment is adopted and notice is given by the Company to the Participant in accordance with Section 11.4; and in any event, no termination shall reduce or terminate any Participant’s right to receive, or continue to receive, any Severance Payments that became payable prior to the date of such termination of the Plan.

 

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ARTICLE X - ADMINISTRATION OF PLAN

Section 10.1.    Administration.

(a)        The Plan shall be administered by the Plan Administrator. The Plan Administrator shall have discretion to interpret where necessary all provisions of the Plan (including, without limitation, by supplying omissions from, correcting deficiencies in, or resolving inconsistencies or ambiguities in, the language of the Plan), to make factual findings with respect to any issue arising under the Plan, to determine the rights and status under the Plan of Participants or other persons, to resolve questions (including factual questions) or disputes arising under the Plan and to make any determinations with respect to the benefits payable under the Plan and the persons entitled thereto as may be necessary for the purposes of the Plan. Without limiting the generality of the foregoing, the Plan Administrator is hereby granted the authority (i) to determine whether a particular employee is a Participant, and (ii) to determine if a person is entitled to benefits hereunder and, if so, the amount and duration of such benefits. The Plan Administrator’s determination of the rights of any person hereunder shall be final and binding on all persons, subject only to the provisions of Section 10.4 hereof. Notwithstanding the foregoing, it is intended that in the event of litigation arising from a claim for benefits under Section 5.2, a reviewing court shall review de novo the Plan Administrator’s determinations with respect to such claim, and the Plan Administrator’s determinations shall not be given deference.

(b)        The Plan Administrator may delegate any of its administrative duties, including, without limitation, duties with respect to the processing, review, investigation, approval and payment of benefits, to a named administrator or administrators.

Section 10.2.    Regulations. The Plan Administrator shall promulgate any rules and regulations it deems necessary in order to carry out the purposes of the Plan or to interpret the provisions of the Plan;provided, however, that no rule, regulation or interpretation shall be contrary to the provisions of the Plan or the 409A Guidance. The rules, regulations and interpretations made by the Plan Administrator shall, subject only to the provisions of Section 10.4 hereof, be final and binding on all persons.

Section 10.3.    Section 409A. To the extent applicable, it is intended that this Plan comply with the 409 Guidance. This Plan shall be administered in a manner consistent with this intent. All payments under this Plan shall be treated as separate payments. To the extent this Plan contains payments which are subject to Section 409A (as opposed to exempt from Section 409A), the Participant’s rights to such payments are not subject to anticipation, alienation, sale, transfer, pledge, encumbrance, attachment or garnishment and, where applicable, may only be transferred by will or the laws of descent and distribution. If Participant’s termination of employment hereunder does not constitute a “separation from service” within the meaning of the Section 409A Guidance, then any amounts payable hereunder on account of a termination of Participant’s employment and which are subject to the Section 409A Guidance shall not be paid until Participant has experienced a “separation from service” within the meaning of the Section 409A Guidance.

 

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Section 10.4.   Claims Procedures.

(a)        The Plan Administrator shall determine the rights of any person to any benefit hereunder. Any person who believes that he or she has not received the benefit to which he or she is entitled under the Plan must file a claim in writing with the Plan Administrator specifying the basis for his or her claim and the facts upon which he or she relies in making such a claim.

(b)        The Plan Administrator will notify the claimant of its decision regarding his or her claim within a reasonable period of time, but not later than ninety (90) days following the date on which the claim is filed, unless special circumstances require a longer period for adjudication and the claimant is notified in writing of the reasons for an extension of time prior to the end of the initial 90-day period and the date by which the Plan Administrator expects to make the final decision. In no event will the Plan Administrator be given an extension for processing the claim beyond one hundred eighty (180) days after the date on which the claim is first filed with the Plan Administrator.

(c)        If such a claim is denied, the Plan Administrator’s notice will be in writing, will be written in a manner calculated to be understood by the claimant and will contain the following information:

(i)         The specific reason(s) for the denial;

(ii)         A specific reference to the pertinent Plan provision(s) on which the denial is based;

(iii)        A description of additional information or material necessary for the claimant to perfect his or her claim, if any, and an explanation of why such information or material is necessary; and

(iv)        An explanation of the Plan’s claim review procedure and the applicable time limits under such procedure and a statement as to the claimant’s right to bring a civil action under ERISA after all of the Plan’s review procedures have been satisfied.

If additional information is needed, the claimant shall be provided at least forty-five (45) days within which to provide the information and any otherwise applicable time period for making a determination shall be suspended during the period the information is being obtained.

Within sixty (60) days after receipt of a denial of a claim, the claimant must file with the Plan Administrator, a written request for review of such claim. If a request for review is not filed within such 60-day period, the claimant shall be deemed to have acquiesced in the original decision of the Plan Administrator on his or her claim. If a request for review is filed, the Plan Administrator shall conduct a full and fair review of the claim. The claimant will be provided, upon request and free of charge, reasonable access to and copies of all documents and information relevant to the claim for benefits. The claimant may submit issues and comments in writing, and the review must take into account all information submitted by the claimant regardless of whether it was reviewed as part of the initial determination. The decision by the Plan Administrator with respect to the review must be given within sixty (60) days after receipt of the request for review, unless circumstances warrant an extension of time not to exceed an

 

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additional sixty (60) days. If this occurs, written notice of the extension will be furnished to the claimant before the end of the initial 60-day period, indicating the special circumstances requiring the extension and the date by which the Plan Administrator expects to make the final decision. The decision shall be written in a manner calculated to be understood by the claimant, and it shall include

(A)        The specific reason(s) for the denial;

(B)        A reference to the specific Plan provision(s) on which the denial is based;

(C)        A statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of all information relevant to the claimant’s claim for benefits; and

(D)        A statement describing any voluntary appeal procedures offered by the Plan and a statement of the claimant’s right to bring a civil action under ERISA.

The Plan Administrator’s decision on review shall be, to the extent permitted by applicable law, final and binding on all interested persons.

ARTICLE XI - MISCELLANEOUS

Section 11.1.   Legal Fees and Expenses. It is the intent of the Company that Participants not be required to incur any expenses associated with the enforcement of rights under Section 5.1 of this Plan because the cost and expense thereof would substantially detract from the benefits intended to be extended to Participants hereunder. Accordingly, if any Employer has failed to comply with any of its obligations under Section 5.1 of this Plan or in the event that any Employer, or any other person takes any action to declare Section 5.1 of this Plan void or unenforceable, or institutes any litigation designed to deny, or to recover from, a Participant the benefits intended to be provided to the Participant under Section 5.1 of this Plan, each Employer irrevocably authorizes the Participant from time to time to retain counsel of his or her choice, at the expense of the Company, as hereafter provided, to represent the Participant in connection with the initiation or defense of any legal action, whether by or against any Employer, in any jurisdiction. The Company shall pay or cause to be paid and shall be solely responsible for any and all reasonable attorneys’ fees and expenses incurred by the Participant in enforcing his or her rights under Section 5.1 of this Plan individually (but not as a representative of any class) as a result of any Employer’s failure to perform under Section 5.1 of this Plan or as a result of any Employer or any person contesting the validity or enforceability of Section 5.1 of this Plan. Any payment made by the Company pursuant to this Section 11.1 shall be for expenses incurred by the Participant during his or her lifetime and such payment shall be made no later than the last day of the calendar year following the calendar year in which the Participant incurs the expense. In no event will the amount of expenses so paid by the Company in one year affect the amount of expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year. In no event will the Company reimburse any expense under this Section 11.1 any earlier than the first day of the seventh month following the Participant’s Termination Date.

 

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Section 11.2.   Withholding of Taxes. The Employer may withhold from any amounts payable under this Plan all foreign, federal, provincial, state, city or other taxes as shall be required pursuant to any law or government regulation or ruling.

Section 11.3.   Remedy at Law. Neither the Company nor any Participant will have an adequate remedy at law for breach by the other of any of the agreements contained herein and, in the event of any such breach, the Company and each Participant shall be entitled to a decree of specific performance, both temporary and permanent injunction relief (to the extent permitted by law), mandamus or other appropriate remedies to enforce performance of this Plan without the necessity of posting a bond or proving actual damages.

Section 11.4.   Notices. For all purposes of this Plan, all communications, including without limitation notices, consents, requests or approvals provided for herein, shall be in writing and shall be deemed to have been duly given when hand delivered or five (5) business days after having been mailed by registered or certified mail, return receipt requested, postage prepaid, addressed to the Company (to the attention of the Secretary of the Company), at its principal office and to any Participant at his or her principal residence as shown in the relevant records of the Employer, or to such other address as any party may have furnished to the other in writing and in accordance herewith, except that notices of change of address shall be effective only upon receipt.

Section 11.5.   Governing Law. This Plan shall be administered, construed and enforced according to the laws of the State of Georgia to the extent they are not preempted by the ERISA. In the event of a claim, the choice of forum is State or Federal court located in the State of Georgia.

Section 11.6.   Severability. If a provision of this Plan shall be held illegal or invalid, the illegality or invalidity shall not affect the remaining parts of this Plan and this Plan shall be construed and enforced as if the illegal or invalid provision had not been included.

Section 11.7.   Headings. The headings are intended only for convenience in finding the subject matter and do not constitute part of the text of this Plan and shall not be considered in the interpretation of this Plan.

 

 

 

COMPANY:

 

 

FLOWERS FOODS, INC.

Date: February 23, 2012

 

 

By:

 

/s/ R. Steve Kinsey

 

 

Title:

 

Executive Vice President and

 

 

 

Chief Financial Officer

 

 

 

 

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