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INDIANAPOLIS -- Having put itself on the block late last year, Marsh Supermarkets now is apparently aiming to sweeten the pot by cutting $28 million from the amount executives would receive if the company succeeds in finding a buyer.
The reduction would be realized by terminating Marsh's supplemental executive retirement plans; and in the event the regional chain isn't sold, the change would reduce executive payouts from the retirement plans by $5.4 million.
The retailer said it also plans additional steps to further reduce compensation and other expenses in the coming year, to enhance shareholder value, including shortening the employment agreements for chairman and c.e.o. Don Marsh and two other executives, Lawrence Butt and William L. Marsh, to three years from five years.
In a statement, Marsh said the actions are part of its previously announced plans to pursue strategic alternatives. The company estimates that as a result of the actions, the total after-tax cost of amounts payable to executives in the event of a change in control of the company would be reduced by approximately $28 million.
The company also said in a recent report on Form 8-K that it terminated its deferred compensation plan in accordance with recent changes to federal tax law.
Meanwhile, Minneapolis-based Nash Finch Co. filed a federal lawsuit against Marsh, alleging that the chain reneged on a contract to purchase $60 million in grocery products from the company, according to a report from the Indianapolis Business Journal.
The lawsuit says Marsh bought just $28 million in goods under the four-year-old contract and notified Nash Finch this spring it would place no more orders. It's not clear why Marsh ceased buying from Nash Finch, the Indianapolis Business Journal report said.
Marsh originally signed the supply agreement with Milwaukee-based Roundy's. The contract transferred to Nash Finch this spring when it bought Roundy's distribution facilities in Westville, Ind., and Lima, Ohio, and two retail stores for $225 million.