Document:

sptn-ex104_6.htm

 

EXHIBIT 10.4

[Execution]

AMENDMENT NO. 3 TO
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

AMENDMENT NO. 3 TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT, dated as of November 21, 2017 (this “Amendment No. 3”), by and among SpartanNash Company, a Michigan corporation, formerly known as Spartan Stores, Inc. (“Parent”), Spartan Stores Distribution, LLC, a Michigan limited liability company (“Stores Distribution”), Market Development, LLC, a Michigan limited liability company (“MDC”), SpartanNash Associates, LLC, a Michigan limited liability company (“Associates”), Family Fare, LLC, a Michigan limited liability company (“Family Fare”), MSFC, LLC, a Michigan limited liability company (“MSFC”), Seaway Food Town, Inc., a Michigan corporation (“Seaway”), The Pharm of Michigan, Inc., a Michigan corporation (“Pharm”), Valley Farm Distributing Co., an Ohio corporation (“Valley Farm”), Gruber’s Real Estate, LLC, a Michigan limited liability company (“Gruber RE”), Prevo’s Family Markets, Inc., a Michigan corporation (“Prevo”), Custer Pharmacy, Inc., a Michigan corporation (“Custer”), Spartan Properties Management, Inc. (formerly known as Buckeye Real Estate Management Co.), an Ohio corporation (“SPM”), Spartan Stores Fuel, LLC, a Michigan limited liability company (“Spartan Fuel”), Nash-Finch Company, a Delaware corporation, as surviving corporation of the merger with SS Delaware, Inc. (“Nash-Finch”), Pique Brands, Inc., a Delaware corporation, formerly known as Nash Brothers Trading Company, a Delaware corporation (“Pique”), T.J. Morris Company, a Georgia corporation (“T.J. Morris”), Super Food Services, Inc., a Delaware corporation (“Super Food”), U Save Foods, Inc., a Nebraska corporation (“U Save”), Hinky Dinky Supermarkets, Inc., a Nebraska corporation (“Hinky Dinky”), GTL Truck Lines, Inc., a Nebraska corporation (“GTL”), Erickson’s Diversified Corporation, a Wisconsin corporation (“Erickson’s”), MDV SpartanNash, LLC, a Delaware limited liability company (“MDV”, and together with Parent, Stores Distribution, MDC, Associates, Family Fare, MSFC, Seaway, Pharm, Valley Farm, Gruber RE, Prevo, Custer, SPM, Spartan Fuel, Nash-Finch, Pique, T.J. Morris, Super Food, U Save, Hinky Dinky, GTL and Erickson’s, each individually a “Borrower” and collectively, “Borrowers”) and any Person that at any time becomes a party to the Loan Agreement as a guarantor (each individually a “Guarantor” and collectively, “Guarantors”), the parties to the Loan Agreement (as hereinafter defined) from time to time as lenders (each individually, a “Lender” and collectively, “Lenders”) and Wells Fargo Capital Finance, LLC, a Delaware limited liability company, in its capacity as agent for Lenders (in such capacity, “Administrative Agent”).

W I T N E S S E T H :

WHEREAS, Borrowers and Guarantors have entered into financing arrangements with Agent and Lenders pursuant to which Lenders (or Administrative Agent on behalf of Lenders) have made and may make loans and advances and provide other financial accommodations to Borrowers as set forth in the Amended and Restated Loan and Security Agreement, dated as of November 19, 2013, by and among Borrowers, Guarantors, Agent and Lenders, as amended by Amendment No. 1 to Amended and Restated Loan and Security Agreement, dated January 9, 2015, and Amendment No. 2 to Amended and Restated Loan and Security Agreement, dated 

	

	
 
	
 

 

 

December 20, 2016 (as the same now exists and is amended and supplemented pursuant hereto and may hereafter be further amended, modified, supplemented, extended, renewed, restated or replaced, the “Loan Agreement”) and the other Financing Agreements; and

WHEREAS, Borrowers and Guarantors have requested that Administrative Agent and Lenders agree to certain amendments to the Loan Agreement, and Administrative Agent and Lenders are willing to agree to such amendments, subject to the terms and conditions herein; and

WHEREAS, by this Amendment No. 3, Borrowers, Guarantors, Administrative Agent and Lenders desire and intend to evidence such amendments;

NOW THEREFORE, in consideration of the foregoing, the mutual agreements and covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.Definitions.

(a)Additional Definitions.  The Loan Agreement and the other Financing Agreements are hereby amended to include, in addition and not in limitation, each of the following definitions:

(i)“Amendment No. 3” shall mean Amendment No. 3 to Amended and Restated Loan and Security Agreement, dated as of November 21, 2017, by and among Borrowers, Guarantors, Administrative Agent and Lenders, as amended, modified, supplemented, extended, renewed, restated or replaced.  

(ii)“Investment Grade” means ratings of BBB- and Baa3 or better by Standard & Poor’s Rating Group and Moody’s Investors Service, Inc., respectively, of long-term non-enhanced senior unsecured debt.

(b)Amendments to Definitions.

(i)The definition of “Eligible Accounts” set forth in the Loan Agreement is hereby amended by deleting clause (m) thereof in its entirety and replacing it with the following:

“(m) (i) the aggregate amount of such Accounts owing by a single Account Debtor that is not an Investment Grade Account Debtor do not constitute more than twenty (20%) percent of the aggregate amount of all otherwise Eligible Accounts and Eligible Military Receivables of Borrowers, and (ii) the aggregate amount of such Accounts owing by a single Investment Grade Account Debtor do not constitute more than twenty-five (25%) percent of the aggregate amount of all otherwise Eligible Accounts and Eligible Military Receivables of Borrowers (but, in each case, the portion of such Accounts not in excess of the applicable percentages may be deemed Eligible Accounts);”

	

	
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(ii)The definition of “Eligible Military Receivables” set forth in the Loan Agreement is hereby amended by deleting each of clauses (g) and (n) thereof in its entirety and replacing the respective clause with the following:

“(g)  Military Receivables which are owed by any Affiliate of any Borrower or Guarantor;”

“(n)  (i) Military Receivables due from an Account Debtor and its Affiliates that is not an Investment Grade Account Debtor, the aggregate of which Military Receivables and Non-Military Receivables due from such Account Debtor and its Affiliates represents more than twenty (20%) percent of all then outstanding Military Receivables and Non-Military Receivables owed to the Borrowers and (ii) Military Receivables due from a single Investment Grade Account Debtor and its Affiliates, the aggregate of which Military Receivables and Non-Military Receivables due from such Account Debtor and its Affiliates represents more than twenty-five (25%) percent of all then outstanding Military Receivables and Non-Military Receivables owed to the Borrowers (but, in each case, the portion of such Military Receivables of Borrowers not in excess of the applicable percentages may be deemed Eligible Military Receivables);”

(c)Interpretation.  For purposes of this Amendment No. 3, unless otherwise defined herein, all capitalized terms used herein shall have the respective meanings assigned to such terms in the Loan Agreement. 

2.Representations and Warranties.  Each Borrower and Guarantor hereby represents and warrants to Administrative Agent and Lenders the following (which shall survive the execution and delivery of this Amendment No. 3), the truth and accuracy of which are a continuing condition of the making of Loans and providing Letter of Credit Accommodations to Borrowers:

(a)This Amendment No. 3 and each other agreement or instrument to be executed and delivered by the Borrowers and Guarantors pursuant hereto have been duly authorized, executed and delivered by all necessary action on the part of each of the Borrowers and Guarantors which is a party hereto and thereto and, if necessary, their respective stockholders, members and managers and is in full force and effect as of the date hereof, as the case may be, and the agreements and obligations of each of the Borrowers and Guarantors, as the case may be, contained herein and therein, constitute the legal, valid and binding obligations of each of the Borrowers and Guarantors, respectively, enforceable against them in accordance with their terms, except as enforceability is limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting generally the enforcement of creditors’ rights and except to the extent that availability of the remedy of specific performance or injunctive relief is subject to the discretion of the court before which any proceeding therefor may be brought.

(b)The execution, delivery and performance of this Amendment No. 3 (a) are all within each Borrower’s and Guarantor’s corporate or limited liability company powers and (b) 

	

	
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are not in contravention of law or the terms of any Borrower’s or Guarantor’s certificate or articles of incorporation, by laws, or other organizational documentation, or any indenture, agreement or undertaking to which any Borrower or Guarantor is a party or by which any Borrower or Guarantor or its property are bound.

(c)All of the representations and warranties set forth in the Loan Agreement and the other Financing Agreements are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the date hereof, as if made on the date hereof, except to the extent any such representation or warranty is made as of a specified date, in which case such representation or warranty shall have been true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) as of such date.

(d)Each Borrower and each Guarantor, as debtor, grantor, pledgor, guarantor, assignor, or in any other similar capacity in which such Borrower or Guarantor grants liens or security interests in its property or otherwise acts as accommodation party or guarantor, as the case may be, hereby (i) ratifies and reaffirms all of its payment and performance obligations, contingent or otherwise, under each of the Financing Agreements to which it is a party (after giving effect hereto) and (ii) to the extent such Borrower or Guarantor granted liens on or security interests in any of its property pursuant to any such Financing Agreement as security for or otherwise guaranteed the Obligations under or with respect to the Financing Agreements, ratifies and reaffirms such guarantee and grant of security interests and liens and confirms and agrees that such security interests and liens hereafter secure all of the Obligations as amended hereby.

(e)No Default or Event of Default exists or has occurred and is continuing as of the date of this Amendment No. 3, or would result after giving effect thereto.

3.Condition Precedent.  The amendments contained herein shall only be effective upon the satisfaction of each of the following conditions precedent in a manner satisfactory to Administrative Agent:

(a)receipt by Administrative Agent of counterparts of this Amendment No. 3, duly authorized, executed and delivered by the parties hereto (including all Lenders required for the amendments provided for herein); 

(b)receipt by Administrative Agent of a true and correct copy of any consent, waiver or approval (if any) to or of this Amendment No. 3, which any Borrower is required to obtain from any other Person; and 

(c)no Default or Event of Default shall exist or have occurred and be continuing as of the date of this Amendment No. 3, or would result after giving effect thereto. 

4.Effect of this Amendment.  Except as expressly amended pursuant hereto, no other changes or modifications to the Financing Agreements are intended or implied, and, in all other respects, the Financing Agreements are hereby specifically ratified, restated and confirmed by all 

	

	
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parties hereto as of the effective date hereof.  To the extent that any provision of the Loan Agreement or any of the other Financing Agreements are inconsistent with the provisions of this Amendment No. 3, the provisions of this Amendment No. 3 shall control.  By executing this Amendment No. 3, each Borrower and each Guarantor is deemed to execute the Loan Agreement and to be bound by the terms and conditions thereof.

5.Further Assurances.  Borrowers and Guarantors shall execute and deliver such additional documents and take such additional action as may be reasonably requested by Administrative Agent to effectuate the provisions and purposes of this Amendment No. 3.

6.Governing Law.  The validity, interpretation and enforcement of this Amendment No. 3 and the other Financing Agreements (except as otherwise provided therein) and any dispute arising out of the relationship between the parties hereto, whether in contract, tort, equity or otherwise, shall be governed by the internal laws of the State of Illinois but excluding any principles of conflicts of law or other rule of law that would cause the application of the law of any jurisdiction other than the laws of the State of Illinois.

7.Binding Effect.  This Amendment No. 3 shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns.

8.Headings.  The headings listed herein are for convenience only and do not constitute matters to be construed in interpreting this Amendment No. 3.

9.Counterparts.  This Amendment No. 3 may be executed in any number of counterparts, each of which shall be an original, but all of which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of this Amendment No. 3 by telefacsimile or other electronic method of transmission shall have the same force and effect as the delivery of an original executed counterpart of this Amendment No. 3.  Any party delivering an executed counterpart of this Amendment No. 3 by telefacsimile or other electronic method of transmission shall also deliver an original executed counterpart, but the failure to do so shall not affect the validity, enforceability or binding effect of such agreement.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

	

	
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3 to be duly executed and delivered by their authorized officers as of the day and year first above written.

		
	
ADMINISTRATIVE AGENT

WELLS FARGO CAPITAL FINANCE, LLC, as Administrative Agent

By:__________________________________

Title:________________________________

 

 

 

 

 

 

 

 

 

 
	
BORROWERS

SPARTANNASH COMPANY, formerly known as Spartan Stores, Inc.

By: /s/Mark E. Shamber 

Title: Executive Vice President and CFO

	
 
	
 
	
[Signature Page to Amendment No. 3 (Spartan)]

 

 

		
	
 

 

 

 

 

 

 

 
	
SPARTAN STORES DISTRIBUTION, LLC
MARKET DEVELOPMENT, LLC
SPARTANNASH ASSOCIATES, LLC
FAMILY FARE, LLC
MSFC, LLC
SEAWAY FOOD TOWN, INC.
THE PHARM OF MICHIGAN, INC.
VALLEY FARM DISTRIBUTING CO.
GRUBER’S REAL ESTATE, LLC
PREVO’S FAMILY MARKETS, INC.
CUSTER PHARMACY, INC.
SPARTAN PROPERTIES MANAGEMENT, INC.
SPARTAN STORES FUEL, LLC

By: /s/Mark E. Shamber

Title: Executive Vice President and CFO

 

NASH-FINCH COMPANY

PIQUE BRANDS, INC. 

T.J. MORRIS COMPANY 

SUPER FOOD SERVICES, INC. 

U SAVE FOODS, INC. 

HINKY DINKY SUPERMARKETS, INC. 

GTL TRUCK LINES, INC. 

ERICKSON’S DIVERSIFIED CORPORATION 

MDV SPARTANNASH, LLC

 

By: /s/Mark E. Shamber

Title: Executive Vice President and CFO

	

	
 

	
 
	
 
	
[Signature Page to Amendment No. 3 (Spartan)]

 

 

		
	
 

	
LENDERS

WELLS FARGO CAPITAL FINANCE, LLC, as a Lender

By:__________________________________

Title:________________________________

 

	
 
	
 
	
[Signature Page to Amendment No. 3 (Spartan)]

 

 

BANK OF AMERICA, N.A.,
as a Lender

 

By:

Name:

Title:

 

	
	
[Signature Page to Amendment No. 3 (Spartan)]

 

 

PNC BANK, NATIONAL ASSOCIATION,
as a Lender

 

By:

Name:

Title:

 

	
	
[Signature Page to Amendment No. 3 (Spartan)]

 

 

BMO HARRIS BANK N.A.,
as a Lender

 

By:

Name:

Title:

 

	
	
[Signature Page to Amendment No. 3 (Spartan)]

 

 

FIFTH THIRD BANK,
as a Lender

 

By:

Name:

Title:

 

	
	
[Signature Page to Amendment No. 3 (Spartan)]

 

 

JPMORGAN CHASE BANK, N.A.,
as a Lender

 

By:

Name:

Title:

 

	
	
[Signature Page to Amendment No. 3 (Spartan)]

 

 

CITIZENS BUSINESS CAPITAL, A DIVISION OF CITIZENS BANK, N.A.,
as a Lender

 

By:

Name:

Title:

 

	
	
[Signature Page to Amendment No. 3 (Spartan)]

 

 

MUFG UNION BANK, N.A., as a Lender

 

By:

Name:

Title:

 

	
	
[Signature Page to Amendment No. 3 (Spartan)]

 

 

U.S. BANK NATIONAL ASSOCIATION,
as a Lender

 

By:

Name:

Title:

 

 

[Signature Page to Amendment No. 3 (Spartan)]sptn-ex1016_67.htm

EXHIBIT 10.16

SCHEDULE TO NOTES IN FORM OF EMPLOYMENT AGREEMENT

 

	
 
	
 
	
 

	
Note 1

(Name)
	
  
	
Note 2

(Title)

	
 
	
 

	
Dennis Eidson
	
  
	
President and Chief Executive Officer

	
 
	
 

	
David M. Staples
	
  
	
Executive Vice President and Chief Financial Officer

	
 
	
 

	
Theodore Adornato
	
  
	
Executive Vice President, Retail Operations

	
 
	
 

Explanatory note: this form of agreement includes amendments as of May 17, 2012.

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made by SPARTAN STORES, INC., a Michigan corporation (the “Company”), and             [NOTE 1]                     (“Executive”). The parties agree as follows:

1. Effective Date and Term. This Agreement will take effect as of December 19, 2008 (“Effective Date”), and will remain in effect during Executive’s employment with the Company and thereafter as to those provisions that expressly state that they will remain in effect after termination of Executive’s employment.

2. Employment. Executive will serve as the Company’s             [NOTE 2]                    , [for all officers except the Chief Executive Officer: “or in such other positions as an officer of Spartan Stores, Inc. (“Officer”)”] and such additional positions with the Company or an Affiliate as may be assigned by the Company (the “Employment”). Executive will perform the duties assigned from time to time to Executive’s position. The Employment will be full time and Executive’s entire business time and efforts will be devoted to the Employment, except as otherwise provided by written Company policy. Executive agrees to comply with Company policies, including but not limited to any applicable Company policy requiring Executive to own shares of common stock in the Company. As used in this Agreement, the term “Affiliate” includes any organization controlling, controlled by or under common control with the Company.

 

3. Term of Employment. The term of the Employment will be indefinite and will continue until terminated pursuant to this Agreement.

4. Compensation. Executive will be compensated during the Employment as follows:

(a) Salary. The Executive’s salary as of the Effective Date is $             per year (or a pro-rated weekly amount for any partial year), subject to normal payroll deductions and payable in accordance with the Company’s normal payroll practices. Executive’s salary will be reviewed annually by the Company and subject to the limitations in Section 5(b)(i) may be adjusted to reflect Company determinations of Executive’s performance, Company performance, or business or economic conditions.

(b) Bonus. Executive will be eligible to participate in any bonus programs designated by the Company from time to time for [“Officers occupying positions at the same level as Executive’s position” or, in the case of the Chief Executive Officer, “senior executive Officers”] in accordance with the terms of such programs, which are subject to change from time to time in the Company’s discretion.

(c) Benefits. Executive will be eligible to participate in fringe benefit programs covering the Company’s salaried employees as a group, and in any programs applicable under Company policy to [“Officers occupying positions at the same level as Executive’s position” or, in the case of the Chief Executive Officer, “senior executive Officers”]. The terms of applicable insurance policies and benefit plans in effect from time to time will govern with regard to specific issues of coverage and benefit eligibility. All benefit programs are subject to change from time to time in the Company’s discretion.

(d) Business Expenses. The Company will reimburse Executive for reasonable ordinary and necessary business expenses that are specifically authorized or authorized by Company policy, subject to Executive’s prompt submission of proper documentation for tax and accounting purposes. Such expenses shall be reimbursed within thirty (30) days after Executive requests reimbursement, but in no event later than two and one-half (2  1/2) months after the end of the year in which the expense is incurred.

 

	
 
	
5.
	
Termination of Employment.

(a) Termination Without Severance Pay. Executive shall not be entitled to any further compensation from the Company or any Affiliate after termination of the Employment as permitted by this Section 5(a), except (A) unpaid salary installments through the end of the week in which the Employment terminates, and (B) any vested benefits accrued before the termination of Employment under the terms of any written Company policy or benefit program.

 

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i. Death. The Employment will terminate automatically upon Executive’s death.

ii. Disability. If Executive is unable to perform Executive’s duties under this Agreement due to physical or mental disability for a continuous period of one hundred eighty (180) days or longer and Executive is eligible for benefits under the Company’s long-term disability insurance policy (“long-term disability benefits”), the Company may terminate the Employment under this Section 5(a)(ii). If the Company terminates the Employment as the result of Executive’s inability to perform Executive’s duties for less than one hundred eighty (180) days due to a disability, the termination of Employment will be deemed to be pursuant to Section 5(b)(ii) below.

iii. Termination by Company for Cause. The Company may terminate the Employment for “Cause,” defined as Executive’s: (A) breach of any provision of Sections 7, 8, or 9 of this Agreement; (B) willful continued failure to perform or willful poor performance of duties (other than due to disability) after warning and reasonable opportunity to meet reasonable required performance standards; (C) gross negligence causing or placing the Company at risk of significant damage or harm; (D) misappropriation of or intentional damage to Company property; (E) conviction of a felony (other than negligent vehicular homicide); or (F) intentional act or omission that Executive knows or should know is significantly detrimental to the interests of the Company.

If the Company becomes aware after termination of the Employment other than for Cause that Executive engaged before the termination of Employment in willful misconduct constituting Cause, the Company may recharacterize Executive’s termination as having been for Cause.

iv. Discretionary Termination by Executive. Executive may terminate the Employment at will, with at least thirty (30) days advance written notice. If Executive gives such notice of termination, the Company may (but need not) relieve Executive of some or all of Executive’s responsibilities for part or all of such notice period, provided that Executive’s pay and benefits are continued for the lesser of thirty (30) days or the remaining period of the Employment.

(b) Termination With Severance Pay. Executive shall not be entitled to any further compensation from the Company or any Affiliate after termination of the Employment as permitted by this Section 5(b), except (A) unpaid salary installments through the end of the week in which the Employment terminates, (B) any vested benefits accrued before the termination of Employment under the terms of any written Company policy or benefit program, and (C) any Severance Pay to which Executive is entitled under this Section 5(b).

i. Termination by Executive for Good Reason. Executive may terminate the Employment for “Good Reason” if and only if the Company materially breaches the Company’s obligations to Executive under this Agreement, or materially reduces Executive’s salary other than an economic or

 

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business motivated reduction accompanied by proportionate reductions in the salaries of all other Officers. Executive may not resign for Good Reason unless (A) Executive notifies the Company’s [“Chief Executive Officer” or, in the case of the Chief Executive Officer terminating Employment, the “Secretary”] in writing, within thirty (30) days after the act or omission in question, asserting that the act or omission in question constitutes Good Reason and explaining why, (B) the Company fails, within thirty (30) days after the notification, to take all reasonable steps to cure the breach, and (C) Executive resigns by written notice within thirty (30) days after expiration of the thirty (30) day period under Section 5(b)(i)(B). If Executive terminates the Employment for Good Reason, Executive will be entitled to Severance Pay as provided in and subject to Section 6. Executive’s failure to object to a material breach as provided above will not waive Executive’s right to resign with Good Reason after following the above procedure with regard to any subsequent material breach.

ii. Discretionary Termination by Company. The Company may terminate the Employment at will, but if the Company does so Executive will be entitled to Severance Pay as provided in and subject to Section 6. Any termination of Executive’s Employment by the Company under Section 5(a) that is found not to meet the standards of such Section will be considered to have been a termination under Section 5(b)(ii).

6. Severance Pay. The Company will pay and provide Executive with the payments and benefit continuation provided in this Section 6 (“Severance Pay”) upon Executive’s “separation from service” as that term is defined by Section 409A of the Internal Revenue Code (the “Code”), if Executive’s Employment is terminated as provided in Section 5(b) and the Executive contemporaneously or subsequently experiences a separation from service.

(a) Amount and Duration of Severance Pay. Subject to the other provisions of this Section, Severance Pay will consist of:

i. Cash Payment. A lump sum cash payment equal to fifty-two (52) weeks of Executive’s salary as of the date on which Executive’s separation from service occurs, payable as provided in Section 6(b), except that if the separation from service occurs during 2008 payment will be made by (A) continuing Executive’s then-current salary installments (in accordance with the Company’s normal pay practice) through December 31, 2008, and (B) payment to Executive as provided in Section 6(b) of a lump sum cash payment in an amount equal to the difference between fifty-two (52) weeks of Executive’s salary and the amount of salary continuation paid under (A). The lump sum cash payment will be considered wages allocated equally to each of the weeks covered by the payment for purposes of any applicable unemployment compensation or workers compensation laws, and any applicable disability insurance program, but will not be considered to extend Executive’s employment beyond the date of Executive’s separation from service under any Company qualified retirement plan or other Company benefit plan or program.

 

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ii. Health Coverage Reimbursement. Reimbursement to Executive by the Company of the COBRA continuation coverage premiums incurred and paid by Executive to continue Executive’s then current employee and dependent health, dental, and prescription drug coverage for fifty-two (52) weeks after the date of termination of the Employment, provided that (A) Executive elects and remains eligible for COBRA continuation coverage, (B) Executive continues to pay the normal employee contribution for such coverage, and (C) that the Company’s obligation to provide coverage will end if Executive becomes eligible for comparable coverage from a new employer. Reimbursement for each monthly premium paid by Executive will be made not later than thirty (30) days after Executive requests reimbursement, but in no event later than the end of the second year after that in which the Executive’s separation from service occurs. Reimbursements under this Section 6(a)(ii) will be reported as part of Executive’s W-2 compensation and will be subject to Federal income tax withholding.

iii. Outplacement Assistance. Up to $10,000 of outplacement assistance from an outplacement assistance firm selected by Executive and approved by the Company (whose approval shall not be unreasonably withheld). All costs under this Section 6(a)(iii) must be incurred during the period beginning with the date of Executive’s separation from service and ending not later than the last day of the year following that in which the Executive’s separation from service occurs, and will be paid not later than sixty (60) days after the expense is incurred and billed to the Company.

(b) Payment Terms. Any salary continuation payments for 2008 under Section 6(a)(i) will be made on the Company’s normal pay date for each payment. The lump sum cash payment under Section 6(a)(i) will be made on the Company’s first normal pay date after the release provided for in Section 6(c)(iii) becomes effective and after any 2008 salary continuation payments have been made, or earlier if required by this Section 6(b). In any event, no payments will be made under this Section until the Company’s first regular pay date after Executive has signed the release provided for in Section 6(c)(iii) and any revocation period provided for in the release has expired. In no event will the latest date for (A) signing of the release, and (B) expiration of any revocation period in the release, and (C) the completion of payments under Section 6(a)(i), be deferred beyond the fifteenth (15th) day of the third (3rd) month after the end of the year in which the Executive’s separation from service occurs.

Example: If Executive were terminated on November 1, 2008, salary continuation payments would be made for the balance of 2008, and the balance of fifty-two (52) weeks salary would be paid on the first payroll date in 2009, provided that no payments would be made until the release is signed and becomes effective, and provided further that all payments must be made at latest by March 15, 2009.

The Executive will receive the payments called for by Section 6(a)(i) notwithstanding any other earnings that Executive may have, and subject to offset only as provided in Section 6(d). If Executive dies before all payments under Section 6(a) have been made, any 2008 salary continuation under Section 6(a)(i) will continue for the remainder of

 

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2008 and such payments and any lump sum cash payment will be paid to Executive’s designated beneficiary (or Executive’s estate if Executive fails to designate a beneficiary), and health coverage continuation under Section 6(a)(ii) will continue for Executive’s eligible dependants for the remainder of the fifty-two (52) week period subject to the conditions in Sections 6(a)(ii)(A) and (B). If Executive becomes eligible for long-term disability benefits, no further payments will be made under Section 6(a)(i) after the date that Executive is eligible to begin receiving such disability benefits.

(c) Conditions to Severance Pay. To be eligible for Severance Pay, Executive must meet the following conditions: (i) Executive must comply with Executive’s obligations under this Agreement that continue after termination of the Employment; (ii) Executive must not claim unemployment compensation for any week for which Executive receives payment under Section 6(a)(i) above; (iii) Executive must promptly sign and continue to honor a release, in form acceptable to the Company, of any and all claims arising out of or relating to Executive’s Employment or its termination and that Executive might otherwise have against the Company, the Company’s Affiliates, any of their officers, directors, employees and agents, provided that the release will not waive Executive’s right to any payments due under this Section or Section 5, or any right of Executive to liability insurance coverage under any liability insurance policy or to indemnification under the Company’s Articles of Incorporation or Bylaws or any written indemnification agreement; (iv) Executive must reaffirm in writing upon request by Company Executive’s obligations under Sections 7, 8 and 9 of this Agreement; (v) Executive must resign upon written request by Company from all positions with or representing the Company or any Affiliate, including but not limited to membership on boards of directors; and (vi) Executive must provide the Company for a period of ninety (90) days after the Employment termination date with consulting services regarding matters within the scope of Executive’s former duties, upon request by [“the Company’s Chief Executive Officer” or, in the case of the Chief Executive Officer, “the Company”]; Executive will only be required to provide those services by telephone at Executive’s reasonable convenience and without substantial interference with Executive’s other activities or commitments.

(d) Offsets to Severance Pay. The Severance Pay due to Executive under Section 6(a)(i) will be reduced (but not below 0) by: (i) any disability benefits to which Executive will be entitled for any portion of the fifty-two (52) week period covered by Section 6(a)(i) under any disability insurance policy or program of the Company or any Affiliate (including but not limited to worker’s disability compensation); (ii) any severance pay payable to Executive under any other agreement or Company policy; (iii) any payment due to Executive under the Federal Worker Adjustment and Retraining Notification Act or any comparable state statute or local ordinance; and (iv) any amount owing by Executive to the Company that the Company is legally entitled to set off against the Severance Pay under applicable law.

 

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7.
	
Loyalty and Confidentiality; Certain Property and Information.

(a) Loyalty and Confidentiality. Executive will be loyal to the Company during the Employment and will forever hold in strictest confidence, and not use or disclose, any information regarding techniques, processes, developmental or experimental work, trade secrets, customer or prospect names or information, or proprietary or confidential information relating to the current or planned products, services, sales, pricing, costs, employees or business of the Company or any Affiliate, except as disclosure or use may be required in connection with Executive’s work for the Company or any Affiliate or as may be compelled pursuant to court order or subpoena. Executive will also keep the terms of this Agreement confidential. The Executive’s commitment not to use or disclose information does not apply to information that becomes publicly known without any breach of this Agreement by Executive.

(b) Certain Property and Information. Upon termination of the Employment, Executive will deliver to the Company any and all property owned or leased by the Company or any Affiliate and any and all materials and information (in whatever form) relating to the business of the Company or any Affiliate, including without limitation all customer lists and information, financial information, business notes, business plans, documents, keys, credit cards and other Company-provided equipment. All Company property will be returned promptly and in good condition except for normal wear.

Executive’s commitments in this Section will continue in effect after termination of the Employment. The parties agree that any breach of Executive’s covenants in this Section would cause the Company irreparable harm, and that injunctive relief would be appropriate.

8. Ideas, Concepts, Inventions and Other Intellectual Property. All business ideas and concepts and all inventions, improvements, developments and other intellectual property made or conceived by Executive, either solely or in collaboration with others, during the Employment, whether or not during working hours, and relating to the business or any aspect of the business of the Company or any Affiliate or to any business or product the Company or any Affiliate is actively planning to enter or develop, shall become and remain the exclusive property of the Company, and the Company’s successors and assigns. Executive shall disclose promptly in writing to the Company all such inventions, improvements, developments and other intellectual property, and will cooperate in confirming, protecting, and obtaining legal protection of the Company’s ownership rights. Executive’s commitments in this Section will continue in effect after termination of the Employment as to ideas, concepts, inventions, improvements and developments and other intellectual property made or conceived in whole or in part before the date the Employment terminates. The parties agree that any breach of Executive’s covenants in this Section would cause the Company irreparable harm, and that injunctive relief would be appropriate.

Executive represents and warrants that there are no ideas, concepts, inventions, improvements, developments or other intellectual property that Executive invented or conceived before becoming employed by the Company to which Executive, or any assignee of Executive, now claims title, and that would be covered by this Section if made or conceived by Employee during the Employment.

 

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9.
	
Covenant Not to Compete.

(a) Executive’s Commitments. During the Employment Executive will not do or prepare to do, and for twelve (12) months after any termination of the Employment Executive will not do, any of the following:

i. directly or indirectly compete with the Company or any Affiliate; or

ii. be employed by, perform services for, advise or assist, own any interest in or loan or otherwise provide funds to, any other business that is engaged (or seeking Executive’s services with a view to becoming engaged) in any Competitive Business (as defined below); or

iii. solicit or suggest, or provide assistance to anyone else seeking to solicit or suggest, that any person having or contemplating a Covered Relationship (as defined below) with the Company or an Affiliate refrain from entering into or terminate the Covered Relationship, or enter into any similar relationship with anyone else instead of the Company or the Affiliate.

This Section 9 does not prohibit Executive from owning not more than two percent (2%) of any class of securities of a publicly traded entity, provided that Executive does not engage in other activity prohibited by this Section 9.

Executive’s commitments in this Section will continue in effect after termination of the Employment for the twelve (12) month period set forth above. The parties agree that any breach of Executive’s commitments in this Section would cause the Company irreparable harm, and that injunctive relief would be appropriate.

 

	
 
	
(b)
	
Definitions. As used in this Section 9:

 

	
 
	
i.
	
“Competitive Business” means a business that

 

	
 
	
(A)
	
owns, or

 

	
 
	
(B)
	
operates, or

 

	
 
	
(C)
	
sells or supplies products similar to or that substitute for products supplied by the Company to,

any Covered Operation (as defined below) that is located in any state of the United States in which the Company owns, operates, sells or supplies products to, any Covered Operation; and

ii. “Covered Operation” means any grocery store, grocery superstore, mass merchandiser, wholesale club, supermarket, limited assortment store, convenience store, drug store, pharmacy or any other store that offers grocery or food products separate or in combination with pharmaceutical products, general merchandise or other nonfood products, or any grocery or convenience store product distribution facility; and

 

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iii. “Covered Relationship” means a customer relationship, a vendor relationship, an employment relationship, or any other contractual or independent contractor relationship.

10. Amendment and Waiver. No provisions of this Agreement may be amended, modified, waived or discharged unless the waiver, modification, or discharge is authorized by the Company’s Board of Directors, or a committee of the Board of Directors, and is agreed to in a writing signed by Executive and by the Chief Executive Officer [in the case of the Chief Executive Officer, “an authorized Officer”] of the Company. No waiver by either party at any time of any breach or non-performance of this Agreement by the other party shall be deemed a waiver of any prior or subsequent breach or non-performance.

11. 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, which will remain in full force and effect. If a court of competent jurisdiction ever determines that any provision of this Agreement (including, but not limited to, all or any part of the non-competition covenant in this Agreement) is unenforceable as written, the parties intend that the provision shall be deemed narrowed or revised in that jurisdiction (as to geographic scope, duration, or any other matter) to the extent necessary to allow enforcement of the provision. The revision shall thereafter govern in that jurisdiction, subject only to any allowable appeals of that court decision.

12. Entire Agreement. No agreements or representations, oral or otherwise, express or implied, with respect to Executive’s Employment with the Company or any of the subjects covered by this Agreement have been made by either party that are not set forth expressly in this Agreement and the Executive Severance Agreement between Executive and the Company (“Executive Severance Agreement”), and this Agreement supersedes any pre-existing employment agreements and any other agreements on the subjects covered by this Agreement, except the Executive Severance Agreement.

 

	
 
	
13.
	
Non-Contravention. Executive represents and warrants that:

(a) No Restrictive Agreement. Executive is not a party to or bound by any agreement that purports to prevent or restrict Executive from: (A) engaging in the Employment that Executive has been offered by the Company; (B) inducing any person to become an employee of the Company; (C) using any information and expertise that Executive possesses (other than information constituting a trade secret of another person under applicable law) for the benefit of the Company; or (D) performing any obligation under this Agreement.

(b) No Abuse of Confidential Information or Trade Secrets. Executive will not use in the course of Executive’s Employment with the Company, or disclose to the Company or its personnel, any information belonging to any other person that is subject to any confidentiality agreement with or constitutes a trade secret of another person.

 

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14.
	
Dispute Resolution.

(a) Arbitration. The Company and Executive agree that except as provided in Section 14(b) the sole and exclusive method for resolving any dispute between them arising out of or relating to this Agreement shall be arbitration under the procedures set forth in this Section, except that nothing in this Section prohibits a party from seeking preliminary or permanent judicial injunctive relief, or from seeking judicial enforcement of the arbitration award. The arbitrator shall be selected pursuant to the Rules for Commercial Arbitration of the American Arbitration Association. The arbitrator shall hold a hearing at which both parties may appear, with or without counsel, and present evidence and argument. Pre-hearing discovery shall be allowed in the discretion of and to the extent deemed appropriate by the arbitrator, and the arbitrator shall have subpoena power. The procedural rules for an arbitration hearing under this Section shall be the rules of the American Arbitration Association for Commercial Arbitration hearings and any rules as the arbitrator may determine. The hearing shall be completed within ninety (90) days after the arbitrator has been selected and the arbitrator shall issue a written decision within sixty (60) days after the close of the hearing. The hearing shall be held in Grand Rapids, Michigan. The award of the arbitrator shall be final and binding and may be enforced by and certified as a judgment of the Circuit Court for Kent County, Michigan or any other court of competent jurisdiction. One-half of the fees and expenses of the arbitrator shall be paid by the Company and one-half by Executive. The attorney fees and expenses incurred by the parties shall be paid by each party. Notwithstanding the foregoing, however, the Company will reimburse the Executive for Executive’s portion of the arbitrator’s fees and expenses, and the Executive’s reasonable attorney fees and expenses incurred in connection with the arbitration proceeding, if the Executive substantially prevails in the arbitration proceeding or, if the Executive prevails in part, then the Company will reimburse a proportionate part of such fees and expenses, with such proportion to represent the approximate portion of such fees and expenses relating to the issues on which the Executive prevailed. The decision as to whether the Executive has substantially prevailed, or prevailed in part, and on the amount to be reimbursed to the Executive under the standards in this Section, will be made by the arbitrator. Reimbursement of attorney fees and expenses called for by this Section must be made within sixty (60) days after receipt by the Company of the arbitrator’s award, but in no event after the last day of the year following that in which the expense being reimbursed was incurred.

(b) Section 14(a) shall be inapplicable to a dispute arising out of or relating to Sections 7, 8 or 9 of this Agreement.

15. Assignability. This Agreement contemplates personal services by Executive, and Executive may not transfer or assign Executive’s rights or obligations under this Agreement, except that Executive may designate beneficiaries for Severance Pay in the event of Executive’s death, and may designate beneficiaries for benefits as allowed by the Company’s benefit programs. This Agreement may be assigned by the Company to any subsidiary or parent

 

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corporation or a division of that corporation, but the Company shall remain liable for any Severance Pay due under this Agreement and not paid by any assignee. The Company is not required to assign this Agreement but if the Agreement is assigned as provided above, Executive will be given notice and this Agreement will continue in effect.

16. Notices. Notices to a party under this Agreement must be personally delivered or sent by certified mail (return receipt requested) and will be deemed given upon post office delivery or attempted delivery to the recipient’s last known address. Notices to the Company must be sent to the attention of [“the Company’s Chief Executive Officer” or, if the Chief Executive Officer is giving notice, “the Company’s Secretary”].

17. Governing Law. The validity, interpretation, and construction of this Agreement are to be governed by Michigan laws, without regard to choice of law rules. The parties agree that any judicial action involving a dispute arising under this Agreement will be filed, heard and decided in either Kent County Circuit Court or the U.S. District Court for the Western District of Michigan. The parties agree that they will subject themselves to the personal jurisdiction and venue of either court, regardless of where Executive or the Company may be located at the time any action may be commenced. The parties agree that Kent County is a mutually convenient forum and that each of the parties conducts business in Kent County.

18. Counterparts. This Agreement may be signed in original or by fax in counterparts, each of which shall be deemed an original, and together the counterparts shall constitute one complete document.

19. Section 409A. This Agreement is intended to be exempt from Section 409A of the Code partially as a short-term deferral as that term is understood under Treasury Regulations Section 1.409A-1(b)(4) and partially as an involuntary separation pay plan as that term is understood under Treasury Regulation 1.409A-1(b)(9) and shall be interpreted and operated consistently with those intentions. Notwithstanding any other provision to the contrary, the total payments under this Agreement, other than the lump sum cash payment under Section 6(a)(i), are limited to the 409A Limit to avoid the application of Section 409A of the Code to this Agreement. “409A Limit” means the lesser of (1) two times Executive’s annualized compensation as determined under Section 409A of the Code; or (2) two times the maximum amount that may be taken into account under a qualified retirement plan under Section 401(a)(17) of the Code for the year in which Executive experiences a separation from service ($460,000 for 2008, as adjusted for future years). If the benefits under this Agreement are required to be limited by the Section 409A Limit, the first benefit to be limited will be reimbursements otherwise called for by Section 14. If further limitation is required, the remaining benefits under this Agreement, disregarding the lump sum cash payment under Section 6(a)(i), shall be limited pro rata until the benefits payable under the Agreement do not exceed the 409A Limit.

[The Agreements with Mr. Eidson and Mr. Staples only contain the following additional provision, and subsequent sections are re-numbered accordingly:

 

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Sarbanes-Oxley Act Compliance. If obligated to reimburse the Company under Section 304(a) of the Sarbanes-Oxley Act of 2002, Executive will promptly reimburse the Company for any profit, any bonus or other incentive-based or equity-based compensation, or any other sums as required by Section 304(a), within thirty (30) days of the earlier of becoming aware of such obligation or receiving written notice of such obligation from the Company.]

 

	
 
	
20.
	
Coordination of This Agreement With Executive Severance Agreement.

(a) Circumstances Under Which Section 9 of This Agreement Will Lapse. If there is a termination of Executive’s Employment entitling Executive to Severance Benefits under Section 3 of the Executive Severance Agreement, then Section 9 of this Agreement (“Covenant Not to Compete”) will lapse and become void and of no further effect on the date of such termination of Employment.

(b) Coordination of Severance Pay Under This Agreement and Severance Benefits Under Executive Severance Agreement. If Executive receives Severance Benefits under Section 3 of the Executive Severance Agreement, Executive will not be entitled to Severance Pay under this Agreement. If Executive becomes entitled to receive Severance Benefits under Section 3 of the Executive Severance Agreement after receiving Severance Pay under this Agreement, the amount of Severance Benefits to which Executive is entitled under Section 3 of the Executive Severance Agreement will be reduced by the amount of Severance Pay received by Executive under this Agreement.

The parties have signed this Employment Agreement as of the Effective Date in Section 1.

 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
SPARTAN STORES, INC.
	
 
	
 

	
 
	
 
	
 
	
 

	
By:
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
[Name of Executive]

	
Its:
	
 
	
 
	
 
	
 
	
 
	
“Executive”

	
 
	
 
	
“Company”
	
 
	
 
	
 
	
 

 

- 12 -

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