DICK'S SUPERMARKETS, INC.
June 16, 2001
Xxxxxx X. Xxxxxxxx
0000 Xxxx Xxxxxxx 000
Xxxxxxxxxxx, XX 00000-0000
Re: Employment Agreement
Dear Xxx:
We are pleased to offer you continued employment as the President of Dick's
Supermarkets, Inc. (the "Company") on the following terms:
1. Your employment with the Company is hereby being reaffirmed as of the
date hereof in the position set forth above, and your employment under this
agreement shall continue for a period of one year from the date hereof. The
initial term of this agreement may be extended by mutual written agreement
between you and the Company entered into at least thirty (30) days prior to the
otherwise scheduled initial termination date. Any such extension shall be on
such terms and conditions as you and the Company shall mutually agree. Your
employment during the initial term of this agreement may not be terminated by
the Company or you under any circumstances, although the Company may request
that you no longer actively perform your duties hereunder as long as it
continues to pay you your salary, the first guaranteed bonus amount and the
other benefits provided below for the remainder of the otherwise scheduled
initial term.
2. You will continue to have the same duties and responsibilities as
President of the Company with respect to its supermarkets and bakery and
delicatessen manufacturing facility operations as are consistent with past
practice, subject only to your reporting obligations to, and the reasonable
directions and requests of, the President and CEO of Fresh Brands, Inc. (and his
designees).
3. You agree to devote your full business time and attention, and your
best efforts, to the Company's business and performing your duties and
responsibilities as President thereof, as well as to such other additional
duties and responsibilities for the Company, Xxxxxxx Sav-O Stores, Inc., Fresh
Brands, Inc. or its affiliates as may be assigned to you from time to time by
the President and CEO of Fresh Brands, Inc. (or his designees).
4. During the initial term, you will be compensated at an annual base
salary equal to $150,000, payable in accordance with the Company's standard
payroll policies in existence from time to time. Your base salary will be
reviewed at the end of 2001 by the Board of Directors of Fresh Brands, Inc. in
accordance with its standard policy for year-end officer salary review. As a
result, your base salary may be increased after such review, but may not be
decreased.
5. You will be entitled to receive a "guaranteed" bonus of $15,000 paid on
or before December 31, 2001. Additionally, you will be entitled to another
"guaranteed" bonus of $25,000 paid at the end of your initial employment term;
provided, that you are then still actively involved in performing your duties
hereunder. You may also receive an additional discretionary bonus of up to
$20,000 paid on or before the end of your initial employment term, as may be
determined in the discretion of the CEO or Board of Directors of Fresh Brands,
Inc., if and to the extent you are successful in achieving the integration goals
and objectives mutually determined by you and the President and CEO of Fresh
Brands, Inc. and if and to the extent you are successful in achieving the
financial performance and other goals and objectives mutually determined by you
and the President and CEO of Fresh Brands, Inc. Prior to December 1, 2001, you
and the President and CEO of Fresh Brands, Inc. will enter into good faith
negotiations to replace the guaranteed and discretionary bonus payments to you
described above due after December 31, 2001 with a mutually agreeable
performance based plan. In the absence of being able to reach agreement on such
a plan, the bonus payments outlined above will remain in full effect.
6. In addition, tomorrow, you will receive a grant of stock options to
acquire 30,000 shares of Fresh Brands, Inc. common stock under its 2001 stock
option plan, subject to the standard terms and conditions of all such stock
option grants made to senior executive officers of Xxxxxxx Sav-O Stores, Inc.
(e.g., exercise price equal to today's closing sale price of Fresh Brand's
stock, pro-rata vesting over a three year period, ten-year option term, subject
to earlier termination upon employment termination (then vested options expire
three-months after termination)) and your execution of Xxxxxxx'x standard stock
option agreement evidencing the same. Nothing herein shall supersede the terms
and conditions of such stock option agreement.
7. You may also continue to participate in the other benefit plans which
the Company from time to time makes available to its senior level employees
hereafter, but in no event providing less benefits, taken as a whole, than as
previously provided to you (but without taking into account any benefits
previously accorded to you with respect to a company car or your prior life
insurance arrangements). Additionally, after your employment is terminated, the
Company will continue to provide you with health insurance coverage for the
three-year period following termination. The first 18 months of such coverage
shall be paid for by the Company and the remaining 18 months of coverage would
be paid for by you.
8. Your noncompetition agreement set forth in Section 5.14 of the Stock
Purchase Agreement dated as of April 17, 2001 is hereby incorporated by
reference and (only if longer than the five-year post-closing noncompetition
term set forth in such agreement) shall extend for a period of two years after
your employment termination date. Nothing herein shall supersede your
noncompetition agreement set forth in the Stock Purchase Agreement.
9. This agreement represents the only obligations of the Company to you,
and the only rights of you against the Company, in connection with your
employment with and by the Company or relating to compensation for services to
be provided by you to the Company, and all other agreements or understandings,
whether written or oral, shall be null and void with no further obligation or
liability by the Company to you. Nothing herein shall supersede the general
release you provided to the Company dated as of this date.
10. This agreement, and your compliance with its terms and conditions
(other than as a result of your death or disability), is a material term and
condition to, and is a principal basis upon which, Fresh Brands, Inc. and
Xxxxxxx Sav-O Stores, Inc. are causing its affiliate to enter into the Stock
Purchase Agreement.
We look forward to a mutually beneficial long-term relationship with you.
Please accept employment with the Company under the terms outlined above by
signing this letter agreement below and returning it to me.
Very truly yours,
Dick's Supermarket, Inc.
By: /s/ Xxxxxx X. Xxxx
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Xxxxxx X. Xxxx
Chairman
I accept this offer of employment and agree to be bound by all of
the terms and conditions set forth above, all as of the date above.
/s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
