exv10w4



 







Exhibit 10.4




June 16, 2006




Kathleen E. McDermott

29 East Churchill Drive

Salt Lake City, UT 84103




Dear Ms. McDermott:




     This letter agreement (the “Agreement”) will confirm our understanding regarding your
separation from Nash Finch Company (the “Company”).



SECTION 1

RESIGNATION 




     The effective date of your resignation as an executive officer of the Company, as an officer
and director of its Affiliates (as defined in subsection 5.2) and as an officer and director of the
NFC Foundation is February 14, 2006, and the effective date of your resignation from employment
with the Company and its Affiliates is February 28, 2006 (your “Termination Date”). Commencing on
February 14, 2006, you had no authority to bind the Company.



SECTION 2

PAYMENTS, BENEFITS AND RIGHTS




     2.1. Unpaid Salary and Unused Vacation. The Company has paid you (a) the amount of
all earned and previously unpaid base salary for the period ending on your Termination Date and (b)
an amount equal to the cash equivalent of your unused accrued vacation as of your Termination Date,
and which is in settlement of any and all vacation that you have accrued, and to which you are
entitled from the Company. You will not accrue or be entitled to any vacation after your
Termination Date.



     2.2. Benefits, Generally.




	(a)	 	Cessation of Benefits. Your active participation in the employee benefit plans
maintained by the Company and its Affiliates will cease as of your Termination Date, subject
to your right to elect continuation coverage under the Company’s group medical, dental and
vision benefits plans in accordance with the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended (“COBRA”).






	(b)	 	Indemnification. You will continue to be eligible for indemnification pursuant to
the existing Indemnification Agreement between you and the Company dated April 16, 2002. The
terms and conditions of the Indemnification Agreement are in full force and effect and are
unchanged by this Agreement.






	(c)	 	Withholding With Respect to Restricted Shares. You acknowledge and agree that you
are liable for payment of the applicable withholding taxes of $2,517.68 with respect to the
two hundred ten (210) shares of restricted Company Common Stock that vested on or




 









 






	 	 	about February 23, 2006, and your ownership of those shares is subject to your payment of
that withholding obligation.






	(d)	 	Eligibility for Benefits. Except as otherwise provided in this Agreement with
respect to plans or arrangements specifically identified in this Agreement, you shall be
entitled to benefits after your Termination Date under the employee benefit plans and
arrangements maintained by the Company and its Affiliates, as in effect from time to time,
based on the benefits you earned up to your Termination Date under those benefit plans and
arrangements, and based on the fact that your employment with the Company ceased on your
Termination Date. A schedule of your benefits under such plans and arrangements is set forth
in Exhibit 1 to this Agreement.





     2.3. Benefits after Termination. You shall be entitled to compensation, benefits,
payments, and distributions from the Company in accordance with this Section 2.3.




	(a)	 	Severance Payments. Subject to the terms of this Agreement, you shall be entitled to
Severance Payments (the “Severance Payments”) as described in this subsection (a):






	 	(i)	 	On the first regular payday after the Initial Payment Date, you will receive an
initial Severance Payment of $147,500.00 On each regular weekly payday thereafter, you
will receive an additional Severance Payment installment of $5,673.08. The payments
shall continue until the Payment Termination Date. In no event shall the aggregate
gross Severance Payments exceed $295,000.
	 
	 	(ii)	 	The Severance Payments shall not be considered compensation or earnings for
purposes of any employee benefit plan or arrangement of the Company and its Affiliates.






	(b)	 	Medical Benefits. For the period beginning on your Termination Date, and ending on
the earlier of (i) the Payment Termination Date, or (ii) the date on which your COBRA
continuation coverage period otherwise ends in accordance with COBRA, you shall be entitled to
COBRA continuation coverage under the group medical, dental and vision benefits plans of the
Company and its Affiliates in accordance with COBRA (provided you properly and timely elect
such COBRA coverage) at a monthly cost equal to the monthly cost applicable to active
employees of the Company. Such period of subsidized COBRA coverage shall be counted toward,
and shall not be in addition to or otherwise extend the duration of, the maximum COBRA period
applicable to you, your spouse or any of your dependents, and such period of subsidized COBRA
coverage shall not in any way amplify the benefits to which you are entitled under COBRA.
With respect to the COBRA premiums you pay during the period commencing with your Termination
Date and ending on the date this Agreement becomes final and binding as described in
subsection 4.1, the Company shall reimburse you an amount equal to the difference between the
aggregate COBRA premiums you paid during such period for the COBRA coverage you elected and
the aggregate active employee premiums for the same coverage during such period.




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	(c)	 	Life Insurance. You will be eligible for life insurance coverage under the Company’s
group term life insurance policy until the one-year anniversary following the Termination Date
or, if earlier, on the date on which you obtain other employment. The life insurance coverage
shall be at the same level as you had in place on the Termination Date.






	(d)	 	Legal Fees. The Company will reimburse you up to $5,000 for the reasonable legal
fees you incur in connection with the negotiation of the Agreement. Such reimbursement shall
be made as soon as practicable after the later of the Initial Payment Date or the date on
which you have submitted evidence to the Company of having incurred such fees.





     2.4. Withholding. All amounts otherwise payable under the Agreement shall be subject
to customary withholding and other employment taxes, and shall be subject to such other withholding
as may be required in accordance with the terms of this Agreement; provided that reimbursement of
your legal fees in connection with the negotiation of this Agreement, as described in subsection
2.3(d), shall not be subject to withholding.



     2.5. Other Payments. Except as specified in this Section 2, or otherwise expressly
provided in or pursuant to the Agreement, you shall be entitled to no compensation, benefits or
other payments or distributions, and references in the Executive Release to the release of claims
against the Company shall be deemed to also include reference to the release of claims against all
compensation and benefit plans and arrangements established or maintained by the Company and its
Affiliates.



     2.6. Mitigation, Alienation, and Set-Off.




	(a)	 	Should you obtain employment in a new position that is substantially comparable to your
former position as General Counsel of the Company prior to the first anniversary of your
Termination Date, you shall promptly notify the Company in writing and the Company’s remaining
obligation to make the Severance Payments described in subsection 2.3(a), above, shall cease.
For purposes of this subsection 2.6(a), a new position is “substantially comparable” to your
former position as General Counsel with the Company if the annual salary associated with the
new position are nearly equivalent to or greater than your salary at the time of your
resignation from employment with the Company. Neither this subsection 2.6(a) nor any other
provision of this Agreement in any way obligates you to search for or accept any new position.
As a condition of continued receipt of Severance Payments, the Company may require that you
certify that you have not obtained employment as described in this subsection 2.6(a).






	(b)	 	The Company shall be entitled to set off against the amounts payable to you under this
Agreement any amounts owed to the Company by you, provided that the Company provides to you
reasonable documentation of such amounts that it asserts are owed to the Company by you.






	(c)	 	This Agreement is personal to you and may not be assigned by you without the written consent
of the Company. Your interests under this Agreement are not subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors of you or your beneficiaries.




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     2.7. Initial Payment Date. For purposes of this Agreement, the “Initial Payment Date”
shall be the first business day following the later of (a) the expiration of your right to revoke
the execution of this Agreement in accordance with subsection 2(d) of Exhibit 2 (relating to the
Executive Release) of this Agreement (which period of permitted revocation is sixteen (16) days
from the date of execution of this Agreement, as set forth in such subsection 2(d)) and in no event
earlier than the first business day following the day on which you have (i) returned to the Company
all property belonging to the Company and its Affiliates in accordance with subsection 3.1 and (ii)
satisfied your withholding obligation in accordance with subsection 2.2(c) or (b) the six- (6-)
month anniversary of your Termination Date.



     2.8. Payment Termination Date. The “Payment Termination Date” shall be the earliest
to occur of: (a) the date on which you are employed by a new employer as described in subsection
2.6(a); (b) the date you receive the 26th weekly Severance Payment installment of
$5,673.08 as described in subsection 2.3(a)(i); (c) the date of your death; or (d) the date, if
any, of any breach by you of the provisions of Section 3. The occurrence of a Payment Termination
Date by reason of a breach of this Agreement shall be in addition to, and not in lieu of, any other
remedies to which the Company may be entitled by reason of your breach of this Agreement.
Notwithstanding anything in this Agreement to the contrary, if the Payment Termination Date occurs
prior to the date the initial Severance Payment of $147,500.00 is to be made, that initial
Severance Payment shall be reduced to an amount equal to the product of (i) the number of full
weeks between the Termination Date and the Payment Termination Date and (ii) $5,673.08.



     2.9. Access to Company Computers. You acknowledge that, pursuant to the Company’s
handbook and code of business conduct, the Company’s e-mail and computer system is the property of
the Company. However, within thirty (30) days after the Executive Release and Waiver attached as
Exhibit 2 becomes effective, the Company will provide you with electronic copies of the following
personal documents from Lotus Notes and the personal computer that you used that you used during
your employment:




	 	•	 	Your Lotus Notes address book, except for those entries that the Company
reasonably determines to be purely business-related;
	 
	 	•	 	Electronic copies of personal photos stored in your computer Desktop;
	 
	 	•	 	E-mail folders identified with the terms “Christmas,” “Murray,” “McDermott,” and
“passwords,” or substantially similar terms, except for such information in these
folders that the Company reasonably determines to be purely business-related; and
	 
	 	•	 	Personal documents stored on the P Drive and the C Drive and folders identified
with the terms “Kathy,” “McDermott,” “Murray,” “Katie, “Mary Rose” and “personal,”
including documents that may be found within subfolders under files labeled “my
documents,” except for such documents in these folders that the Company reasonably
determines to be purely business-related.




Within thirty (30) days after the Executive Release and Waiver attached as Exhibit 2 becomes
effective, the Company will also provide you




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with a
list of folders created by you on the P Drive and C Drive and in Lotus Notes. You may, within twenty (20) days of receiving such list of
folders, submit to the Company a written request for additional documents, and the Company will
provide to you electronic copies of such documents within twenty (20) days of receiving your
written request, if the Company reasonably determines that such documents are personal. You will
not have access to the Company’s email or computer system on either a supervised or unsupervised
basis.




SECTION 3

REPRESENTATIONS AND COVENANTS




     3.1. Return of Company Property. You represent and warrant that you have (a) removed
your personal effects from your office at the Company, (b) vacated such office, (c) returned to the
Company all property of the Company and its Affiliates, including, without limitation, the Company
laptop computer and BlackBerry that the Company provided for your use while you were an
employee and executive officer of the Company, any keys, credit cards, passes, files, confidential
documents or material, or other property belonging to the Company or the Affiliates, and (d)
returned all writings, files, records, correspondence, notebooks, notes and other documents and
things (including any copies thereof) containing any trade secrets relating to the Company or the
Affiliates. For purposes of the preceding sentence, the term “trade secrets” shall have the
meaning ascribed to it under the Minnesota Uniform Trade Secrets Act, Chapter 325C, or, if such act
is repealed, the Uniform Trade Secrets Act (on which the Minnesota statute is based). You further
represent and warrant that (i) prior to your Termination Date, you have not deleted or altered any
documents, files or information in the Company laptop computer or BlackBerry, or in the Company’s
electronic or other records, or duplicated, downloaded or otherwise retained any documents, files
or other information belonging to the Company or its Affiliates, other than a routine deletion or
alteration in the ordinary course of business or (ii) after February 13, 2006, you have not deleted
or altered any documents, files or information in the Company laptop computer or BlackBerry, or
duplicated, downloaded or otherwise retained any documents, files or other information belonging to
the Company or its Affiliates, other than a routine deletion in the ordinary course of business.
This subsection 3.1 shall not require you to return copies of documents that you provided to your
legal counsel; provided that (1) such copies are used solely in representing you in any
governmental investigation of or action against you; (2) you have delivered to the Company the
originals of all such documents; (3) neither you nor your legal counsel shall use such copies for
any purpose other than for your representation as described above and except as required by law or
legal process; (4) neither you nor your legal counsel shall provide such copies (or disclose the
contents thereof) to any other person or entity without the Company’s prior written consent; and
(5) you or your counsel either destroy such copies or return them to the Company at the end of the
investigation or related litigation.



     3.2. Assistance with Claims. You agree that, for a reasonable period after your
Termination Date, and continuing until such time as the cases and investigations listed below are
finally concluded, and in any event for a period of not less than twenty four (24) months after
your Termination Date, you shall reasonably assist the Company and its Affiliates in the defense of
any claims that may be made against the Company and/or its Affiliates, and shall assist the Company
and its Affiliates in the prosecution of any claims that may be made by the Company or any
Affiliate, to the extent that such claims may relate to services performed by you for the Company
or its Affiliates. The



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Company
shall consult with you, and make reasonable efforts to schedule such assistance so as not to materially disrupt your business and personal affairs.
You agree, unless precluded by law, to promptly inform the Company in writing if you are asked to
participate (or otherwise become involved) in any lawsuits involving such claims that may be filed
against the Company or any Affiliate. You agree that you shall not provide consultation or
cooperation to any person or entity whose interests are adverse to the interests of Company or the
Affiliates in defending such litigation, except as otherwise provided by law or legal process. You
also agree, unless precluded by law or by request of a governmental agency, to promptly inform the
Company in writing if you are asked to assist in any investigation (whether governmental or
private) of the Company or any Affiliate (or their actions), regardless of whether a lawsuit has
then been filed against the Company or any Affiliate with respect to such investigation. The
Company agrees to reimburse you for all of your reasonable out-of-pocket expenses associated with
such assistance to the Company, including travel expenses, in accordance with the Company’s
reimbursement policy. The cases and investigations referred to in this subsection 3.2 are:




	(a)	 	Brennan et al. v. Nash Finch Company.
	 
	(b)	 	Alfred A. Umberger Trust v. Nash Finch Company, et al.
	 
	(c)	 	Any case that is a consolidation of the cases that are named in (a) and (b) above.
	 
	(d)	 	Any investigation or inquiry conducted by the Securities Exchange Commission, or other
governmental body, with the exception of routine employment charges of discrimination.
	 
	(e)	 	Any disputes with Roundy’s concerning the Company’s acquisition of certain of Roundy’s assets
in 2005, including but not limited to claims by Roundy’s against the Company related to the
purchase price, and claims by the Company against Roundy’s related to the acquisition.




Nothing in this subsection 3.2 shall prevent you from honestly testifying at a legal proceeding in
response to a lawful and properly served subpoena in a proceeding involving the Company or its
Affiliates or from cooperating with any governmental investigation.




     3.3. Noncompetition and Disclosure. You agree that for the period beginning on your
Termination Date and ending on the twelve (12) month anniversary of your Termination Date you will
not, without the prior written consent of the Company, alone or in any capacity (other than by way
of holding shares of a publicly traded company in an amount not exceeding five percent (5%) of the
outstanding class or series so traded) with any other person or entity, directly or indirectly
engage in competition with the Company or any Affiliate, in association with or as an officer,
director, employee, principal, agent or consultant of or to SuperValu, Inc. or Spartan Stores,
Inc.; however, the foregoing restriction shall not prevent you from affiliating with or becoming
employed by a law firm that represents SuperValu, Inc. or Spartan Stores, Inc., provided that you
do not personally represent or advise SuperValu, Inc. or Spartan Stores, Inc. prior to the twelve
(12) month anniversary of your Termination Date. You warrant that, in so far as you are aware, you
have not withheld or failed to disclose any material fact concerning matters which you were dealing
with solely on behalf of the Company and its Affiliates prior to your Termination Date where
withholding such



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material
fact would reasonably be expected to be significantly detrimental to the financial results of the Company and its Affiliates as a
whole and so far as you are aware you are not in breach of any material term (express or implied)
of any agreement between you and the Company or any Affiliate.



     3.4. Non-Solicitation. You agree that for the period beginning on your Termination
Date and ending on the twelve (12) month anniversary of your Termination Date, you will not employ,
offer to employ, engage as a consultant, or form an association with any person who is then, or who
during the preceding one (1) year was, an employee of the Company or any Affiliate, nor will you
assist any other person in soliciting for employment or consultation any person who is then, or who
during the preceding one (1) year was, an employee of the Company or any Affiliate.



     3.5. Confidential Information. You agree that at all times:




	(a)	 	To keep secret and confidential indefinitely, all Confidential Information, and not to
disclose the same, either directly or indirectly, to any other person, firm, or business
entity, or to use it in any way, except (i) as may be required by the lawful order of a court
or agency of competent jurisdiction or similar legal process, or (ii) as is requested by a
governmental agency in the course of a governmental investigation, or (iii) to the extent that
you have express written authorization from the Chief Executive Officer of the Company.






	(b)	 	To the extent that any court or agency seeks to have you disclose Confidential Information,
you shall promptly inform the Company, in writing, and you shall take reasonable steps to
prevent disclosure of Confidential Information until the Company has been informed of such
requested disclosure, and the Company has an opportunity to respond to such court or agency.
To the extent that you obtain information on behalf of the Company or any of the Affiliates
that may be subject to attorney-client privilege as to the Company’s attorneys, you shall take
reasonable steps to maintain the confidentiality of such information and to preserve such
privilege.






	(c)	 	Nothing in the foregoing provisions of this subsection 3.5 shall be construed so as to
prevent you from using, in connection with your employment for yourself or an employer other
than the Company or any of the Affiliates, knowledge which was acquired by you during the
course of your employment with the Company and the Affiliates, and which is generally known to
persons of your experience in other companies in the same industry.






	(d)	 	This subsection 3.5 shall not be construed to unreasonably restrict your ability to disclose
confidential information in an arbitration proceeding or a court proceeding in connection with
the assertion of, or defense against any claim of breach of this Agreement. If there is a
dispute between the Company and you as to whether information may be disclosed in accordance
with this subsection (d), the matter shall be submitted to the tribunal for decision.
Further, nothing in this subsection 3.5 shall prohibit you from disclosing Confidential
Information to your own legal counsel as you deem appropriate and necessary in the context of
the attorney-client relationship.




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	(e)	 	For purposes of this Agreement, the term “Confidential Information” shall include all
non-public information (including, without limitation, information regarding litigation and
pending litigation) concerning the Company and the Affiliates which was acquired by or
disclosed to you during the course of your employment with the Company, or during the course
of your consultation with the Company following your Date of Termination (regardless of
whether consultation is pursuant to subsection 3.2), and which the Company itself treated as
sensitive and confidential information. For purposes of this Agreement, the term
“Confidential Information” shall also include all non-public information concerning any other
company that was shared with the Company or an Affiliate subject to an agreement to maintain
the confidentiality of such information.





     3.6. Disparagement. You agree that you will not make any statement or disclosure
(whether orally or in writing, including electronically) that disparages the Company or its
Affiliates (or its or their employees, officers or directors) and is intended or reasonably likely
to result in harm to the Company or its Affiliates (or its or their employees, officers or
directors); provided that this subsection 3.6 shall in no way restrict your ability to testify
truthfully as a witness or cooperate fully in any governmental investigation, your compliance with
other legal obligations, your assertion of or defense against any claim of breach of this Agreement
(including the Exhibits thereto and the referenced plans and arrangements), or your statements or
disclosures to officers or directors of the Company or its Affiliates, and (b) shall not require
you to make false statements or disclosures. The Company agrees that it shall not via a press
release make any statement that disparages you; provided that the Company’s officers, directors,
employees and agents shall at all times remain free to provide truthful testimony or other
information to governmental agencies or in the course of any investigations, litigation or other
legal proceedings. Upon this Agreement becoming final and binding as described in subsection 4.1,
the Company shall instruct its officers and directors verbally (but not necessarily in writing)
that they are prohibited from making disparaging statements about you to the press or in any other
public forum (subject to their remaining free to provide truthful testimony and other information
as described above).



     3.7. Effect of Covenants. Nothing in this Section 3 shall be construed to adversely
affect the rights that the Company would possess in the absence of the provisions of such Section.
For the avoidance of doubt, it is recited here that the provisions of this Section 3 shall be
subject to any applicable state bar requirements.



SECTION 4

RELEASE OF CLAIMS




     4.1. Waiver and Release. As part of this Agreement, and in consideration of the
additional payments provided to you in accordance with this Agreement, you are required to execute
the Executive Release and Waiver, in the form set forth as Exhibit 2 of this Agreement, which is
attached to and forms a part of this Agreement (the “Executive Release”). This Agreement
(including all Exhibits to this Agreement), and the commitments and obligations of all parties
hereunder:



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	(a)	 	shall become final and binding immediately following the expiration of your right to revoke
the execution of this Agreement in accordance with subsection 2(d) of Exhibit 2 (the Executive
Release);
	 
	(b)	 	shall not become final and binding until the expiration of such right to revoke; and
	 
	(c)	 	shall not become final and binding if you revoke such execution.





     4.2. Benefits under Retention Letter and Change in Control Letter. You acknowledge
and agree that you are not entitled to any benefits, and have no rights, under either the retention
letter agreement between you and the Company dated September 15, 2005 (the “Retention Agreement”)
or the change in control letter agreement between you and the Company dated January 13, 2003 (the
“Change in Control Agreement”).



SECTION 5

MISCELLANEOUS




     5.1. Amendment. This Agreement may be amended or canceled only by mutual agreement of
the parties in writing without the consent of any other person. So long as you live, no person,
other than the parties hereto, shall have any rights under or interest in this Agreement or the
subject matter hereof.



     5.2. Successors and Affiliates. This Agreement shall be binding on, and inure to the
benefit of, the Company and its successors and assigns and any person acquiring, whether by merger,
consolidation, purchase of assets or otherwise, all or substantially all of the Company’s assets
and business. For purposes of this Agreement, the term “Affiliate” means (a) any corporation,
partnership, joint venture or other entity which, as of your Termination Date, owns, directly or
indirectly, at least fifty percent (50%) of the voting power of all classes of stock of the Company
(or any successor to the Company) entitled to vote; and (b) any corporation, partnership, joint
venture or other entity in which, as of your Termination Date, at least a fifty percent (50%)
voting or profits interest is owned, directly or indirectly, by the Company, by any entity that is
a successor to the Company, or by any entity that is an Affiliate by reason of clause (a) next
above.



     5.3. Effect of Breach. You acknowledge that the Company would be irreparably injured
by your violation of the covenants of Section 3, and you agree that the Company and its Affiliates,
in addition to any other remedies available to it for such breach or threatened breach, shall be
entitled to a preliminary injunction, temporary restraining order, or other equivalent relief,
restraining you from any actual or threatened breach of the covenants in Section 3. If a bond is
required to be posted in order for the Company to secure an injunction or other equitable remedy,
the parties agree that said bond need not be more than a nominal sum. In the event that you have
breached any covenant in this Agreement, you shall forfeit all Severance Payments for periods after
the date of such breach and your right to receive subsidized COBRA continuation coverage (but you
shall not forfeit your right to receive COBRA continuation coverage at your expense in accordance
with COBRA).





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     5.4. Waiver of Breach. The waiver by the Company (or the Affiliates) of a breach of
any provision of this Agreement by you shall not operate as or be deemed a waiver of any subsequent
breach by the Company. Continuation of benefits hereunder by the Company following a breach
by you of any provision of this Agreement shall not preclude the Company from thereafter exercising
any right that it may otherwise independently have to terminate said benefits based upon the same
violation.



     5.5. Severability. The invalidity or unenforceability of any provision of this
Agreement will not affect the validity or enforceability of any other provision of this Agreement,
and this Agreement will be construed as if such invalid or unenforceable provision were omitted
(but only to the extent that such provision cannot be appropriately reformed or modified);
provided, however, that if one or more provisions of Section 3, Section 4, or the Executive Release
is invalid or unenforceable, the Company may, in its sole discretion, elect to have the entire
Agreement treated as invalid and unenforceable.



     5.6. Other Agreements. Except as otherwise specifically provided in this Agreement,
this instrument constitutes the entire agreement between you and the Company and supersedes all
prior agreements and understandings, written or oral, including, without limitation, the Change in
Control Agreement, the Retention Agreement, and any other employment agreements that may have been
made by and between you and the Company or its predecessors or Affiliates. As of your Termination
Date, all rights, duties and obligations of both you and the Company pursuant to the Change in
Control Agreement and Retention Letter terminated.



     5.7. Notices. Notices and all other communications provided for in this Agreement
shall be in writing and shall be delivered personally or sent by registered or certified mail,
return receipt requested, postage prepaid, or sent by facsimile or prepaid overnight courier to the
parties at the addresses set forth below (or such other addresses as shall be specified by the
parties by like notice). Such notices, demands, claims and other communications shall be deemed
given:




	(a)	 	in the case of delivery by overnight service with guaranteed next day delivery, the next day
or the day designated for delivery;






	(b)	 	in the case of certified or registered U.S. mail, five (5) days after deposit in the U.S.
mail; or






	(c)	 	in the case of facsimile, the date upon which the transmitting party received confirmation of
receipt by facsimile, telephone or otherwise;




provided, however, that in no event shall any such communications be deemed to be given later than
the date they are actually received. Communications that are to be delivered by the U.S. mail or
by overnight service are to be delivered to the addresses set forth below:




to the Company:



Nash Finch Company

7600 France Avenue South

Edina, MN 55435




or to you:




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Kathleen E. McDermott

29 East Churchill Drive

Salt Lake City, UT 84103



All notices to the Company shall be directed to the attention of the Secretary and General Counsel
of the Company. Each party, by written notice furnished to the other party, may modify the
applicable delivery address, except that notice of change of address shall be effective only upon
receipt.




     5.8. Disputes. Any controversy or claim arising out of or relating to this Agreement
(or the breach thereof) shall be settled in the federal courts of Minnesota if the prerequisites
for diversity jurisdiction are met. If the federal courts do not have jurisdiction over the
dispute, the controversy shall be resolved in the state courts of Minnesota.



     5.9. Governing Law. This Agreement shall be construed in accordance with the laws of
the State of Minnesota, without regard to the conflict of law provisions of any state.



     5.10. Exhibits, Other Documents. Except as otherwise expressly provided in this
Agreement, or except where the context clearly requires otherwise, all references in this Agreement
to “the Agreement” or “this Agreement” shall be deemed to include references to each of the
Exhibits to this Agreement. To the extent that the terms of this Agreement (including the Exhibits
to this Agreement) provide that your rights or obligations set forth in this Agreement (including
the Exhibits to this Agreement) are to be determined under, or are to be subject to, the terms of
any other plan or other document, this Agreement (including the Exhibits to this Agreement) shall
be deemed to incorporate by reference such plan or other document.



     5.11. Counterparts. This Agreement may be executed in more than one counterpart, but
all of which together will constitute one and the same agreement.



     5.12. Definitions. Capitalized terms in this Agreement shall be defined as set forth
in this Agreement.



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     If you accept the terms of this Agreement, please indicate your acceptance by signing and
returning a copy of this letter to the undersigned, along with a signed and notarized copy of
Exhibit 2 (Executive Release).



Very truly yours,

NASH FINCH COMPANY




	 	 	 	 	 
	By:

	 	/s/ Alec C. Covington	 	 
	 

	 	 

	 	 
	Its: President & CEO	 	 
	 
	 	 	 	 
	Accepted and agreed to this

30th day of June, 2006.	 	 
	 
	 	 	 	 
	/s/ Kathleen E. McDermott	 	 
	 	 	 
	Kathleen E. McDermott	 	 






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EXHIBIT 1

SCHEDULE OF BENEFITS



This Schedule describes the benefits referenced in subsection 2.2(d) of the separation agreement
between Kathleen E. McDermott (the “Executive”) and Nash Finch Company (the “Company”) dated June
16, 2006 (the “Separation Agreement”). This schedule is subject to the terms of the applicable
benefit plans.





	1.	 	The Executive has received all bonus amounts and payments to which she is entitled under the
Nash Finch Company 2005 Executive Incentive Program (the “EIP”), and is entitled to no
payments under the EIP for fiscal year 2005 or fiscal year 2006.






	2.	 	All performance unit awards previously granted to the Executive under the Nash Finch Company
Long-Term Incentive Program Utilizing Performance Unit Awards for any performance period that
includes 2005 or 2006 were canceled as of the Termination Date.






	3.	 	The Executive is scheduled to vest in two hundred ten (210) shares of restricted stock as of
February 23, 2006, subject to payment by her of the applicable payroll tax withholding of
$2,517.08. All other unvested restricted stock awards previously granted to the Executive
were canceled as of the Termination Date.






	4.	 	For plan year 2005, the Executive is eligible to receive a Company matching contribution to
her account in the Nash Finch Company Profit Sharing Plan (the “Profit Sharing Plan”) in an
amount equal to fifty percent (50%) of the lesser of (i) her contributions (other than
“catch-up contributions”) to the Profit Sharing Plan for the 2005 plan year, or (ii) six
percent (6%) of her eligible earnings for Plan purposes for the 2005 plan year. For plan year
2005, the Executive is also eligible to receive a profit sharing contribution to her account
in the Profit Sharing Plan. The Executive is not eligible to receive a Company matching
contribution or a profit sharing contribution to her account in the Profit Sharing Plan with
respect to plan year 2006 or any plan year thereafter.






	5.	 	The Executive did not vest in any portion of her account balance under the Nash Finch Company
Supplemental Executive Retirement Plan (“SERP”), and the Executive will not receive a
distribution under the SERP.






	6.	 	The Executive will be entitled to the following distributions under the Nash Finch Company
Income Deferral Plan (“IDP”) and Deferred Compensation Plan (“DCP”). The Executive’s IDP
account balance was $171,147.30 as of February 28, 2006 (the “Valuation Date”), and such
amount has been paid. The Executive’s DCP account balance was $$36,261.52 as of the Valuation
Date, and such amount and any contributions to the account made after the Valuation Date, will
be distributed as soon as practicable after the six-month anniversary of the Executive’s
Termination Date.






	7.	 	The Executive shall not be eligible for any long term disability coverage or benefits after
her Termination Date except to the extent that the Executive is entitled by law to convert, at
her own expense, the group disability policy coverage to an individual policy after the
Termination Date.




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	8.	 	The Executive has been paid all accrued/unused vacation.
	 
	9.	 	The Executive is eligible for COBRA coverage under the arrangements listed below for the same
levels of coverage as the Executive had in place on the Termination Date. The cost of such
coverage to be made available to the Executive during the one- (1-) year period following the
Termination Date pursuant to the Separation Agreement is to be the same as the cost paid by
active employees for the same level of coverage. The current cost to employees is listed
below next to the type of coverage the Executive elected. The cost of coverage for employees
and the levels of coverage available may be revised by the Company from time to time, which
will result in a corresponding revision in the Executive’s cost.
	 
	 	 	Medical — child weekly cost $16.73
	 
	 	 	Dental — employee plus child weekly cost $2.36
	 
	 	 	Vision — employee plus child weekly cost $2.21
	 
	10.	 	The Executive will be eligible for life insurance coverage under the Company’s group term
life insurance policy until the one-year anniversary following the Termination Date or, if
earlier, on the date on which she obtains other employment. The life insurance coverage shall
be at the same level as the Executive had in place on the Termination Date. The current
employee monthly cost for such coverage is $0. The cost of coverage for employees and the
levels of coverage available may be revised by the Company from time to time, which will
result in a corresponding revision in the Executive’s cost.




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EXHIBIT 2

EXECUTIVE RELEASE AND WAIVER




     1. This document is attached to, is incorporated into, and forms a part of, the separation
agreement dated June 16, 2006 (the “Agreement”) by and between Kathleen E. McDermott (the
“Executive”) and Nash Finch Company (the “Company”). The Executive, on behalf of herself and the
other Executive Releasors, releases and forever discharges the Company and the other Company
Releasees from any and all Claims which the Executive now has or claims, or might hereafter have or
claim (or the other Executive Releasors may have, to the extent that it is derived from a Claim
which the Executive may have), against the Company Releasees based upon or arising out of any
matter or thing whatsoever, occurring or arising on or before the date of this Release and Waiver,
to the extent that the Claim arises out of or relates to the Executive’s employment by the Company
and its Affiliates (including her service as an executive officer of the Company and its
Affiliates) and/or the Executive’s termination or resignation therefrom. However, nothing in this
Release and Waiver shall constitute a release of any Claims of the Executive (or other Executive
Releasors) that may arise under the Agreement, or under the Indemnification Agreement dated April
16, 2002, or release any claims that may not lawfully be released.


For purposes of this Release and Waiver, the terms set forth below shall have the following
meanings:





	(a)	 	The term “Agreement” shall include the Agreement and the Exhibits thereto, and including the
plans and arrangements under which the Executive is entitled to benefits in accordance with
the Agreement and the Exhibits.






	(b)	 	The term “Claims” shall include any and all rights, claims, demands, debts, dues, sums of
money, accounts, attorneys’ fees, complaints, judgments, executions, actions and causes of
action of any nature whatsoever, cognizable at law or equity (except for claims arising out of
the Agreement), and Claims arising under (or alleged to have arisen under) (i) the Age
Discrimination in Employment Act of 1967, as amended; (ii) Title VII of the Civil Rights Act
of 1964, as amended; (iii) The Civil Rights Act of 1991; (iv) Section 1981 through 1988 of
Title 42 of the United States Code, as amended; (v) the Employee Retirement Income Security
Act of 1974, as amended; (vi) The Immigration Reform Control Act, as amended; (vii) The
Americans with Disabilities Act of 1990, as amended; (viii) The National Labor Relations Act,
as amended; (ix) The Fair Labor Standards Act, as amended; (x) The Occupational Safety and
Health Act, as amended; (xi) The Family and Medical Leave Act of 1993; (xii) the Minnesota
Human Rights Act; (xiii) any state antidiscrimination law; (xiv) any state wage and hour law;
(xv) any other local, state or federal law, regulation or ordinance; (xvi) any public policy,
contract, tort, or common law; or (xvii) any allegation for costs, fees, or other expenses
including attorneys’ fees incurred in these matters. The term “Claims” shall not include any
claims for attorneys fees that the Executive may assert pursuant to this Agreement or the
April 16, 2002 Indemnification Agreement.






	(c)	 	The term “Company Releasees” shall include the Company and its Affiliates (as defined in the
Agreement), and their officers, directors, 




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	 	 	trustees, members, representatives, agents, employees, shareholders, partners, attorneys, assigns, administrators and
fiduciaries under any employee benefit plan of the Company and its Affiliates, and insurers,
and their predecessors and successors.






	(d)	 	The term “Executive Releasors” shall include the Executive and her family, heirs, executors,
representatives, agents, insurers, administrators, successors, assigns, and any other person
claiming through the Executive.





     2. The following provisions are applicable to and made a part of the Agreement and this
Release and Waiver:




	(a)	 	By this Release and Waiver, the Executive Releasors do not release or waive any right or
claim which they may have under the Age Discrimination in Employment Act, as amended by the
Older Workers Benefit Protection Act, which arises after the date of execution of this Release
and Waiver.






	(b)	 	In exchange for this Release and Waiver, the Executive hereby acknowledges that she has
received separate consideration beyond that to which she is otherwise entitled under the
Company’s policy or applicable law.






	(c)	 	The Company hereby expressly advises the Executive to consult with an attorney of her
choosing prior to executing this Release and Waiver.






	(d)	 	The Executive has twenty-one (21) days from the date of presentment to consider whether or
not to execute this Release and Waiver. In the event of such execution, the Executive has a
further period of sixteen (16) days from the date of said execution in which to revoke said
execution. This Release and Waiver will not become effective until expiration of such
revocation period.






	(e)	 	This Release and Waiver, and the commitments and obligations of all parties under the
Agreement:






	 	(i)	 	shall become final and binding immediately following the expiration of the
Executive’s right to revoke the execution of this Release and Waiver in accordance with
subsection 2(d) of this Exhibit 2;
	 
	 	(ii)	 	shall not become final and binding until the expiration of such right to
revoke; and
	 
	 	(iii)	 	shall not become final and binding if the Executive revokes such execution.




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     3. The Executive hereby acknowledges that she has carefully read and understands the terms of
the Agreement and this Release and Waiver and each of her rights as set forth therein.



	 	 	 	 	 
	 

	 	/s/ Kathleen E. McDermott
 

Kathleen E. McDermott
	 	 
	 
	 	 	 	 
	 

	 	Date: June 29, 2006	 	 






	 	 	 	 	 
	State of Utah
	 	 	 	 
	County of Salt Lake
	 	 	 	 
	 
	 	 	 	 
	Subscribed Before Me This
	 	 	 	 
	 
	 	 	 	 
	29th Day of June, 2006.
	 	 	 	 
	 
	 	 	 	 
	/s/ Kathleen L. Moroney

	 	[Seal]	 	 
	 
	 	 	 	 
	Notary Public
	 	 	 	 







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