EXHIBIT 10(au)
AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment to Employment Agreement ("Amendment") is entered into
between Xxxxx Supermarkets, Inc. (the "Company"), and Xxx X. Xxxxx (the
"Executive").
RECITALS
A. The Company and the Executive entered into an Employment Agreement
dated August 3, 1999 (the "Employment Agreement").
B. Under the Employment Agreement, the Executive is entitled to a
"Salary Continuation Benefit" for five years upon employment termination under
certain circumstances (the "Salary Continuation Benefit").
C. In addition, to the extent the Salary Continuation Benefit or any
other compensation exposes the Executive to excise tax liability under Sections
280G and 4999 of the Internal Revenue Code, the Employment Agreement provides
that the Company must pay additional amounts to the Executive to make the
Executive whole with respect to that excise tax liability (the "Gross Up
Obligation").
D. The Company has made available to the Executive a special payout of
the Executive's benefits under the Xxxxx Supermarkets, Inc. 1999 Senior
Executive Supplemental Retirement Plan (the "SERP"), conditioned in part upon
the amendment of the Employment Agreement.
E. To prevent the Salary Continuation Benefit and the Gross Up
Obligation from impeding possible corporate transactions for the benefit of the
Company and its shareholders, and to provide for the special payout of the
Executive's SERP benefits, the Company and the Executive amend the Employment
Agreement as provided in this Amendment.
AMENDMENT
Effective December 30, 2005, the Employment Agreement is amended as
follows:
1. Section 5.7(d) of the Employment Agreement is amended to read as
follows:
(d) Upon termination of Executive's employment for any reason,
the Company shall convey to Executive without charge the portrait of
his father hanging in the lobby of the corporate offices of the
Company.
2. Section 7.1 of the Employment Agreement is amended to read as
follows:
7.1 TERMINATION DUE TO DEATH. If the Executive dies during the
Term, this Agreement shall terminate as of the date of the Executive's
death and the Executive's benefits shall be determined in accordance
with the survivor's benefits,
insurance and other applicable programs of the Company then in effect.
Within fifteen (15) days of the Executive's death, the Company shall
pay the Executive's designee or his estate (a) that portion of his Base
Salary which shall have been earned through the termination date and
(b) a bonus in an amount determined by multiplying the bonus or other
incentive or conditional cash compensation received by the Executive
with respect to or during the Company's last completed fiscal year by a
fraction, the numerator of which is the number of days elapsed in the
Company's current fiscal year through the termination date and the
denominator of which is 365. In addition, the Company shall pay to the
Executive's estate or his designee the Salary Continuation Benefit (as
defined in Section 8.7) for a period equal to three (3) years from the
termination date. If the Executive is survived by his spouse, the
Company shall also provide the spouse with Lifetime Medical Benefits
(as defined in Section 8.4).
3. Section 7.2 of the Employment Agreement is amended to read as
follows:
7.2 TERMINATION DUE TO DISABILITY. If the Executive suffers a
Disability (as defined in Section 8.2) during the Term, the Company
shall have the right to terminate this Agreement by giving the
Executive Notice of Termination which has attached to it a copy of the
medical opinion that forms the basis of the determination of
Disability. The Executive's employment shall terminate at the close of
business on the last day of the Notice Period (as defined in Section
8.6).
Upon the termination of this Agreement because of Disability,
the Company shall pay the Executive within fifteen (15) business days
of the termination date (a) that portion of his Base Salary, at the
rate then in effect as provided, which shall have been earned through
the termination date and (b) a bonus in an amount determined by
multiplying the bonus or other incentive or conditional cash
compensation received by the Executive with respect to or during the
Company's last completed fiscal year by a fraction, the numerator of
which is the number of days elapsed in the Company's current fiscal
year through the termination date and the denominator of which is 365.
In addition, the Company shall pay to the Executive the Salary
Continuation Benefit for a period equal to three (3) years from the
termination date. The Company shall also provide the Executive and his
spouse with Lifetime Medical Benefits. The Executive shall also be
entitled to receive any applicable disability insurance benefits
resulting from any insurance or other employee benefit programs of the
Company.
4. Section 7.4 of the Employment Agreement is amended to read as
follows:
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7.4 TERMINATION BY THE COMPANY WITHOUT "CAUSE" OR BY THE
EXECUTIVE FOR "GOOD REASON." At any time during the Term, the Board of
Directors of the Company may terminate this Agreement without Cause by
giving the Executive a Notice of Termination, and the Executive's
employment by the Company shall terminate at the close of business on
the last day of the Notice Period.
At any time during the Term, the Executive may terminate this
Agreement with "Good Reason" by giving the Company a Notice of
Termination which describes the actions, events or beliefs that form
the basis of the Executive's action. The Executive's employment shall
terminate at the close of business on the last day of the Notice
Period.
Within five (5) business days after such termination date, the
Company shall pay to the Executive (a) that portion of his Base Salary
which shall have been earned through the termination date and (b) a
bonus in an amount determined by multiplying the bonus or other
incentive or conditional cash compensation received by the Executive
with respect to or during the Company's last completed fiscal year by a
fraction, the numerator of which is the number of days elapsed in the
Company's current fiscal year through the termination date and the
denominator of which is 365. The Company shall pay to the Executive the
Salary Continuation Benefit for a period equal to three (3) years from
the termination date. The Company shall provide the Executive with
life, medical, dental, accident and disability insurance coverage for
the period of time that the Salary Continuation Benefit is in place at
the same coverage levels that are in effect as of the termination date.
In lieu of the foregoing insurance coverage benefits, the Company may
pay the Executive an amount equal to the Executive's cost of obtaining
comparable coverage. The Company shall also provide the Executive and
his spouse with Lifetime Medical Benefits. The Company shall continue
to pay all premiums due on the split-dollar life insurance policies in
effect on the life of the Executive for three (3) years from the
termination date after which time the Company shall distribute such
policies to the Executive without requiring the Executive to repay any
premiums paid by the Company. The Company shall also pay to Executive
for each of such three (3) years a grossed up bonus to reimburse
Executive for any taxes payable by him with respect to his portion of
the premiums and bonus. The Company shall also transfer to the
Executive, free of any encumbrance, the automobile and all
appurtenances thereto referred to in Section 5.7(a) for no
consideration; provided that the Executive pays any transfer taxes
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and agrees to be solely responsible for insurance and the cost of
insurance after the date of transfer.
5. Section 9 of the Employment Agreement is amended to read as follows:
9. EXCESS PARACHUTE PAYMENT PROVISIONS
9.1 COMPENSATION LIMITATION. Anything in this Agreement to the
contrary notwithstanding, no payment or distribution by the Company to
or for the benefit of the Executive of the Salary Continuation Benefit
or any other amount in the nature of compensation (whether paid or
payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise) (a "Payment") will be paid that would be
subject to the excise tax or denial of deduction imposed by Sections
280G and 4999 of the Code (an "Excess Parachute Payment").
9.2 ADJUSTMENT PROCEDURE. In the event that the Company
determines that any Payment would constitute an Excess Parachute
Payment, the Company will provide to the Executive, within thirty (30)
days after the Executive's employment termination date, an opinion of a
nationally recognized certified public accounting firm mutually
selected by the Company and the Executive (the "Accounting Firm") that
the Executive will be considered to have received Excess Parachute
Payments if the Executive were to receive the full amounts described
pursuant to this Agreement or otherwise and setting forth with
particularity the smallest amount by the which the Payments would have
to be reduced to avoid the imposition of any excise tax or the denial
of any deduction pursuant to Code Sections 280G and 4999. The Payments
shall be adjusted, in the order of priority designated by the Executive
in written instructions, to the minimum extent necessary so that none
of the Payments, in the opinion of the Accounting Firm, would
constitute an Excess Parachute Payment. Any determination by the
Accounting Firm shall be binding upon the Company and the Executive.
All fees and expenses of the Accounting Firm shall be borne by the
Company.
6. Except to the extent altered by this Amendment, the terms of the
Employment Agreement shall remain effective.
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IN WITNESS WHEREOF, the Company and the Executive have executed this
Amendment on the dates indicated below.
EXECUTIVE XXXXX SUPERMARKETS, INC.
/S/ XXX X. XXXXX By: /s/ XXXXXXX X. XXXXXXXXX
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Xxxxxxx X. Xxxxxxxxx
Senior Vice President, Chief
Financial Officer and Treasurer
Date: December 28, 2005 Date: December 29, 2005
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