Exhibit 10.1
(NASH FINCH COMPANY LOGO) [c11018c1101800.gif]
November 29, 2006
Mr. Robert B. Dimond
8700 Portico Lane
Longmont, CO 80503
Dear Bob:
This letter follows and supersedes my earlier letters to you. We are pleased to
offer you the position of Executive Vice President, Chief Financial Officer of
Nash Finch Company (the “Company”), effective on a date to be mutually agreed
upon by you and the Company (“Commencement Date”). The terms of this offer and
your election as an Executive Officer of the Company have been reviewed by the
compensation committee of the board of directors.
The following summarizes the terms of the offer. To the extent that this offer
letter refers to a Company plan, policy or agreement, the terms of that plan,
policy or agreement will control and are incorporated into this offer letter.
Nash Finch Company retains the right to modify, amend or terminate any Company
plan, policy or agreement, consistent with the terms of those plans, policies
and/or agreements.

1.   Base salary at the annual rate of $375,000. Your base salary is subject to
review by the Compensation Committee of the Board and may be adjusted from time
to time by the Compensation Committee.

2.   For work to be performed in 2007 and beyond, you will be eligible to be
paid a bonus under the terms of the Executive Incentive Program of an amount
equal to 60% of your base salary. The bonus will be payable in cash with an
option to receive up to 100% of it in unrestricted stock. If you hold this stock
for a period of two years, you will receive an additional 15% in restricted
stock. Your bonus for future fiscal years will be determined by the Compensation
Committee on the basis of performance against goals for those years. You will
not participate in the Executive Incentive Program for 2006.

3.   You will be granted an award of thirty-seven thousand five hundred (37,500)
performance units denominated as restricted stock units as of your Commencement
Date (the “Time-Vesting RSUs”). These units will be subject to restrictions on
transfer prior to vesting, and will be forfeited if the Company terminates your
employment for cause or if you quit your employment prior to vesting. These
units will immediately vest in full upon a change in control of the Company as
that term is defined in the Change of Control Agreement referenced in
Paragraph 10 of this Agreement, or if your employment ends because of
disability, death or if your employment is terminated by the Company without
cause. These units shall vest in three (3) equal amounts on the first three
anniversaries of your Commencement Date, provided that you are employed on each
vesting date and after vesting

 

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Mr. Robert B. Dimond
November 29, 2006
Page 2

    will be paid out in the form of one share of Nash Finch common stock for
each unit. Dividend equivalents paid on the units prior to vesting will be
deemed reinvested in additional units and will be subject to forfeiture on the
same terms as the underlying units themselves. Other terms and conditions of the
award will be specified by the Compensation Committee in the applicable award
agreement, consistent with the requirements of the 2000 Stock Incentive Plan.

4.   You will be granted an award of thirty-seven thousand five hundred (37,500)
performance units denominated as restricted stock units as of your Commencement
Date (the “Time-Vesting RSUs”). These units will be subject to restrictions on
transfer prior to vesting, and will be forfeited if your employment with the
Company ends for reasons other than death or disability prior to vesting. The
units will vest on the fifth anniversary of the date of grant and after vesting
will be paid out in the form of one share of Nash Finch common stock for each
unit. Dividend equivalents paid on the units prior to vesting will be deemed
reinvested in additional units and will be subject to forfeiture on the same
terms as the underlying units themselves. If your employment is terminated by
the company for reasons other than cause prior to the vesting date, a pro rata
portion of the shares will vest as of the date your employment ends (“vested
portion”). The vested portion of the shares shall be set by multiplying the
37,500 units by a fraction, the numerator of which shall be the number of whole
months after your employment commenced until your termination date, and the
denominator of which shall be 60. Other terms and conditions of the award will
be specified by the Compensation Committee in the applicable award agreement,
consistent with the requirements of the 2000 Stock Incentive Plan.

5.   Nash Finch has implemented an executive long term incentive compensation
program which was modified by the Compensation Committee in 2006. Based on this
plan as amended, your long term incentive plan bonus opportunity will be set in
an amount equal to 60% of your base salary. You will be granted Performance
Units equivalent to this amount for 2006, so long as you commence employment
with the Company in 2006. According to the terms of the plan, these units will
vest at the end of the 36 month period commencing on January 1, 2006
(“Measurement Period”). Because the grant will not be made at the commencement
of the Measurement Period, the Settlement Share Amount payable to you following
vesting will be multiplied by a fraction, the numerator of which shall be the
number of whole months after your employment commenced until the end of the
Measurement Period, and the denominator of which shall be 36. These Performance
Units will be payable in Nash Finch common stock or cash, with the specific
payouts determined by company performance and Nash Finch stock price. We
anticipate that eligible officers will receive a grant of Performance Units
annually.

6.   After you and the Company agree upon the date of your relocation to
Minneapolis and, upon your execution of a relocation agreement, the Company will
reimburse you for your necessary and reasonable relocation expenses, including
the cost of renting an apartment through July 31, 2007. The Company will also
reimburse you for the reasonable costs associated with making two trips home per
month between your hire date and the date of your relocation or July 31, 2007,
whichever first occurs. The Company agrees to gross up amounts received for
relocation expenses (with the exception of certain miscellaneous

 

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Mr. Robert B. Dimond
November 29, 2006
Page 3
expense) to cover the net income tax effect to you of the reimbursement of such
expenses. Prior to that time, you will be reimbursed for agreed-upon travel
and/or housing expenses.

7.   You will receive a relocation bonus of $125,000.00 during your second week
of employment. You will need to sign a re-pay agreement to receive the
relocation bonus — agreeing to remain employed for at least one year following
your receipt of the payment.

8.   You will receive a sign on bonus of $187,500.00 on March 15, 2007. You will
need to sign a re-pay agreement to receive the sign-on bonus — agreeing to
remain employed for at least one year following your receipt of the payment.

9.   If your employment is terminated by the Company, other than (a) for cause
or (b) by reason of a change in control (in which case the terms of the change
in control agreement would govern), the Company will agree to provide you with
24 months of base salary, paid over a 24-month/104-week period (“severance
period”) on regularly scheduled paydays, as severance compensation. If you
exercise your rights under COBRA during the severance period, your cost for
COBRA benefits will be set at the rate paid by active associates for the same
level of benefits. The consideration for the Company’s agreement to make such
payments would be your release of claims you might then have against the
Company. The Company’s obligation to make payments during the severance period
will end on the earlier of (a) your acceptance of regular full time employment;
or (b) the second anniversary of the date your employment with the Company
ended. Provided, however, that if you receive compensation from your new
employer (“new compensation”) of an amount less than the base salary paid
pursuant to this paragraph, the Company will make severance payments to you in
an amount equal to the difference between the base pay under this paragraph and
your new compensation until the second anniversary of the date your employment
with the Company ended. Payments pursuant to this Paragraph shall not be
considered compensation or earnings for purposes of any employee benefit plan or
arrangement of the Company and its Affiliates.

10.   You will be provided with a Change In Control Agreement commensurate with
your level which will provide certain benefits for twenty four months following
a qualifying change in control event.

11.   You will be eligible for participation in the Nash Finch Supplemental
Executive Retirement Plan and Income Deferral Plan.

12.   The Company will maintain term life insurance on your behalf with a death
benefit of at least $1,000,000. You will be responsible for any income tax
consequences of the company’s provision of this benefit to you.

13.   You will be eligible to participate in other benefit plans, practices and
policies of the Company in accordance with their terms. If you elect health and
dental insurance, you will be eligible for these plans following a 30-day
waiting period after your effective start date.

14.   You will be eligible for four weeks of paid vacation during your first
full year of employment and in subsequent years of employment.

 

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Mr. Robert B. Dimond
November 29, 2006
Page 4

15.   As consideration for the payments provided in this Agreement (which are
hereby acknowledged by you as providing you with additional and sufficient
benefit to support the following covenant), you agree that without the prior
written consent of the Company, during your employment and for a period of
twenty four months after the termination of your employment for any reason, you
will not alone or in any capacity (other than by way of holding shares listed on
a stock exchange in a number not exceeding five percent of the outstanding class
or series so listed) with any other person or entity:

     (a) directly or indirectly engage in the business of the wholesale
distribution of food and related products, in competition with the Company or
any Subsidiary, in association with or as an officer, director, employee,
principal, agent or consultant of SUPERVALU, INC., Spartan Stores, Inc.,
Merchants Distributors, Inc., Laurel Grocery Company, L.L.C. or any of their
respective subsidiaries, affiliates or successors, as and where such business of
the Company or any Subsidiary may then be conducted; provided, however, that
this clause (a) shall not apply after a Change in Control; or
     (b) in any way interfere or attempt to interfere with the business of the
Company or any Subsidiary whether by way of interfering with or disrupting the
Company’s or any Subsidiary’s relationships with any of its or their current or
potential vendors, suppliers, distributors or customers, or by doing or saying
anything to disparage or cause injury to the business, reputation, management,
employees, officers or directors or products or services of the Company or any
Subsidiary; or
     (c) directly or indirectly, solicit for employment, employ or attempt to
employ any employee of the Company or any Subsidiary
The obligations contained in Paragraph 15 of this Agreement shall survive the
termination or expiration of your employment with the Company and shall be fully
enforceable thereafter.
On behalf of the Company, I am excited to offer you employment with Nash Finch
and look forward to a mutually rewarding relationship.
Very truly yours,
 
Alec Covington
Chief Executive Officer
I have read the foregoing letter and hereby agree to all the terms and
conditions thereof.

         
Date:
       
 
       
 
      Robert B. Dimond