EXHIBIT 10.32
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made effective August 1,
2002, by and between STATER BROS. MARKETS, a California corporation, hereinafter
referred to as "Employer" and Xxx X. Xxx, hereinafter referred to as "Employee".
Employer and Employee are sometime herein referred to as "party" or collective
as "parties".
RECITALS
This Agreement is made with reference to the following facts:
A. Employer desires to employ Employee in the capacity of Group
Senior Vice President - Retail Operations.
B. Employee is willing to accept employment with Employer in the
capacity of Group Senior Vice President - Retail Operations upon the terms and
conditions hereinafter set forth.
NOW, THEREFORE, the parties hereby agree as follows:
1. Employment. Employer hereby employs Employee and Employee
hereby accepts employment with Employer as Employer's Group Senior Vice
President - Retail Operations.
2. Term. The term of this Agreement shall commence on the date
hereof and shall continue for a period of three (3) years, provided that the
term shall automatically continue for an additional three (3) years unless
sooner terminated as provided in Paragraph 8. Additionally the term of this
Agreement shall be renewed for a period of three (3) years, if such renewal is
accepted by Employee in writing, upon a Change of Control as defined below.
Change of Control shall mean and include any of the following:
(a) The purchase or other acquisition by any person,
entity or group of persons, within the meaning of
Section 13(d) or 14(d) of the Securities Exchange Act
of 1934 ("Act"), or any comparable successor
provisions, of beneficial ownership (within the
meaning of Rule 13 D-3 promulgated under the Act) of
fifty percent (50%) or more of either the outstanding
shares of common stock or the combined voting power
of Employer's then outstanding voting securities
entitled to vote generally;
(b) The approval by the stockholder of Employer of a
reorganization, merger, or consolidation, in each
case, with respect to which persons who were
stockholders of Employer or Employer's parent
immediately prior to such reorganization, merger or
consolidation do not, immediately thereafter, own
more than fifty percent (50%) of the combined voting
power entitled to vote generally in the election of
directors of the reorganized, merged or consolidated
Employer's or its parent's then outstanding
securities;
(c) The sale of fifty percent (50%) or more of the assets
of the Employer.
3. Duties. Employee shall assume and perform such
responsibilities and duties as may be ordinarily performed by a Group Senior
Vice President - Retail Operations, and/or such other duties as may be assigned
by the President and Chief Executive Officer of Employer. Such duties shall be
principally performed at Employer's headquarters located at 00000 Xxxxxx Xxxx
in Colton, California, and as required in the performance of his duties from
time to time at Employer's retail operations in its
market area. Except as provided above, without his written consent, Employee
shall not be required to perform his duties at a location outside of a thirty
(30) mile radius from the existing Employer's headquarters.
4. Compensation.
4.1 Salary. Employee shall be entitled to a basic salary
in an amount determined by Employer's President, Chief Executive Officer or its
Board of Directors. Employee's basic salary may be increased on August 1 of each
year during the term of this Agreement in an amount, if any, determined by
Employer's President, Chief Executive Officer or its Board of Directors.
4.2 Bonus. In addition to Employee's basic salary,
Employee shall be entitled to receive such incentive and performance bonuses as
may have been earned by Employee but not yet paid by Employer as of the date of
this Agreement. In addition, Employee shall be entitled to receive from Employer
such incentive and performance bonuses as may be consistent with Employer's
bonus policy for senior officers as the same may exist from time to time, but
not less than that which would have been earned under the terms of Employer's
bonus policy for senior officers existing as of the date of this Agreement.
4.3 Additional Benefits.
4.3.1 Business Expenses. Employee shall be
entitled to reimbursement for reasonable and necessary expenses incurred by
Employee in the performance of his duties; provided, however, all such expenses
shall be substantiated and in accordance with reasonable standards established
from time to time by Employer's Board of Directors.
4.3.2 Company Car. Throughout the term of
this Agreement, Employee shall be entitled to the exclusive use of a company car
of at least the same type and quality as that furnished to Employee as of the
date of this Agreement. Employer shall replace such company car from time to
time with new vehicles, such that the company car provided to Employee shall at
no time be older than two (2) years. All expenses of maintenance, operation and
insurance shall be paid by Employer or reimbursed by Employer to Employee.
4.3.3 Benefits Generally Offered. In addition
to any other compensation or benefits to be received by Employee pursuant to the
terms of this Agreement, Employee shall be entitled to participate, to the
extent allowable in accordance with his status, in all employee benefits offered
from time to time by Employer to its senior officers, including, without
limitation, pension plans, profit sharing plans, group life insurance, group
health insurance and group disability insurance.
5. Vacation and Sick Leave. Employee shall be entitled to a paid
vacation of four (4) weeks annually. In addition, Employee shall be entitled to
paid time off for personal illness in accordance with Employer's policy for such
leave as the same may exist from time to time.
6. Devotion of Time. Employee shall devote his full time,
attention and energies to the business of Employer allowing time off for illness
and vacation. Notwithstanding the foregoing, Employee may engage in other
personal business so long as the performance of such activities do not interfere
with the efficient and timely performance of Employee's duties hereunder.
7. Restrictive Covenants.
7.1 Non-Competition. During the term of Employee's
employment under this Agreement, Employee shall not own or have any interest
directly in, or act as an officer, director, agent, employee or consultant of,
or assist in any way or in any capacity, any person, firm, association,
partnership, corporation, or entity which shall be competitive with the
supermarket business then engaged in by Employer, in any area where Employer
engages in business. The restrictions of this
Paragraph prohibiting ownership in a competitive business shall not apply to (i)
any ownership or interest held by Employee at the time of execution of this
Agreement, (ii) any ownership of publicly traded stock, or (iii) any investment
in real property (whether made directly or through the vehicle of a partnership,
corporation, investment trust or other entity), notwithstanding the fact that a
supermarket in competition with Employer might be a lessee of some or all of
such real property.
7.2 Delivery of Records. Upon termination of Employee's
employment with Employer, Employee shall deliver to Employer all books, records,
lists of suppliers and customers, samples, price lists, brochures and other
property belonging to Employer or developed in connection with the business of
Employer.
7.3 Confidentiality. Except in the course of Employer's
business, Employee shall not at any time during or after his employment with
Employer, reveal, divulge or make known to any person, firm or corporation any
confidential knowledge or information or any confidential facts concerning any
suppliers, customers, methods, processes, developments, schedules, lists or
plans of or relating to the business of Employer and will retain all
confidential knowledge and information which he has acquired or which he will
acquire during his employment therewith relating to such suppliers, customers,
methods, processes, developments, schedules, lists or plans and the business of
Employer for the sole benefit of Employer, its successors and assigns; provided,
however, that this restriction shall not apply to any knowledge, information or
fact held by or known to Employee which is generally available from sources
other than Employee or which was acquired by Employee other than in his capacity
as Employee.
7.4 Reasonableness. In the event any court shall finally
hold that the time or territory or any other provision of this Paragraph 7
constitutes an unreasonable restriction against Employee, the provisions hereof
shall not be rendered void but shall apply as to such time, territory and other
provision to such extent as such court may judicially determine or indicate
constitutes a reasonable restriction under the circumstances involved.
7.5 Survival. The provisions of this Paragraph 7 shall
survive the termination of the term of this Agreement and shall run to and inure
to the benefit of Employer, its successors and assigns.
8. Termination.
8.1 Termination at Will. Employee's employment under the
terms of this Agreement may be terminated at any time by either party upon
ninety (90) days written notice to the other party.
8.2 Termination for Cause.
8.2.1 Employee's employment under the terms of
this Agreement may be terminated immediately, at the option of Employer, if
Employee defaults in the performance of any material covenant, agreement, term
or provision of this Agreement to be kept, observed or performed by him, and
such default continues for a period of thirty (30) days after written notice
from Employer, which notice shall describe the default with particularity.
8.2.2 Employee's employment under the terms of
this Agreement may be suspended without pay immediately, at the option of
Employer, in the event that criminal charges involving a felony of moral
turpitude should be filed against Employee. In the event Employee is convicted
of such crime, such suspension shall automatically become a termination for
cause. In the event that Employee is acquitted of such crime, or in the event
such charges should be dismissed, such suspension shall be terminated and
employee shall be reinstated retroactively.
9. Payments upon Termination of Employment.
9.1 Payments to Employee. IN THE EVENT OF THE CESSATION
OF EMPLOYEE'S EMPLOYMENT PRIOR TO THE EXPIRATION OF THE TERM OF THIS AGREEMENT,
EMPLOYER SHALL PAY TO EMPLOYEE THE AMOUNTS SET FORTH IN THIS PARAGRAPH 9
BIWEEKLY THROUGHOUT THE BALANCE OF THE TERM OF THIS AGREEMENT; PROVIDED,
HOWEVER, THAT EMPLOYER SHALL HAVE NO OBLIGATION TO PAY ANY AMOUNTS WHATSOEVER
UNDER THE PROVISIONS OF THIS PARAGRAPH 9 IF EMPLOYEE: (a) IS TERMINATED BY XXXX
X. XXXXX IN HIS CAPACITY AS PRESIDENT AND/OR CHIEF EXECUTIVE OFFICER OF
EMPLOYER; (b) IS TERMINATED BY EMPLOYER'S BOARD OF DIRECTORS WITH THE
CONCURRENCE OF XXXX X. XXXXX IN HIS CAPACITY AS PRESIDENT AND/OR CHIEF EXECUTIVE
OFFICER OF EMPLOYER; (c) VOLUNTARILY TERMINATED HIS EMPLOYMENT DURING SUCH TIME
AS XXXX X. XXXXX MAY BE PRESIDENT AND/OR CHIEF EXECUTIVE OFFICER OF EMPLOYER;
(d) IS TERMINATED FOR CAUSE, AS THAT TERM IS DEFINED IN PARAGRAPH 8.2 HEREOF; OR
(e) IF UPON A CHANGE OF CONTROL, EMPLOYEE ACCEPTS A RENEWAL OF THE TERM OF THIS
AGREEMENT AND THEREAFTER VOLUNTARILY TERMINATES HIS EMPLOYMENT.
9.1.1 Calculation of Payments. The first
twenty-six (26) payments to be made pursuant to the terms of this Paragraph 9
shall be in an amount equal to 1/26th of the greater of (i) the average of the
annual total compensation (including, but not limited to, salary and bonus) paid
by Employer, its affiliates and/or successors to Employee during the three (3)
year period immediately preceding Employee's termination of employment
hereunder, or (ii) the amount of Employee's total compensation (including, but
not limited to, salary and bonus) paid by Employer, its affiliates and/or
successors to Employee during the twelve (12) month period immediately preceding
Employee's termination of employment. Thereafter, the biweekly payments shall
increase annually in accordance with Subparagraph 9.1.2.
9.1.2 Annual Increases. On each anniversary of
Employee's termination from employment, any remaining amounts to be paid during
the next year pursuant to this Paragraph 9 shall be increased to an amount equal
to one hundred ten percent (110%) of the amounts required to be paid by Employer
hereunder under the provisions of this Paragraph 9 during the preceding year.
9.2 Payments Upon Death. In the event of the death of
Employee, Employer shall nonetheless pay to the estate of Employee, or in such
other manner as Employee may designate in writing to Employer, all sums which
would otherwise have been paid to Employee under this Paragraph 9 for the
balance of the term of this Agreement. For purposes of funding this obligation
to make payments upon Employee's death, Employer may purchase and hold such life
insurance policies on the life of Employee as may be appropriate; provided,
however, that if the total funds available to Employer under the terms of such
life insurance policies exceed the amount which would otherwise be payable to
Employee by Employer under the terms of this Paragraph 9, Employer's payment
obligation under this Paragraph 9 shall be increased to the total amount
received by Employer under such insurance policies.
9.3 Termination of Payments. All payments due Employee
under this Paragraph 9 shall cease in the event Employee is employed to perform
management services for compensation for any supermarket chain located in any
area where Employer engages in the supermarket business.
10. Prior Agreements. All prior employment agreements between
Employer and Employee are hereby superseded and any such agreement or agreements
shall be of no further force or effect.
11. Personal Nature. This Agreement is personal, and is entered
into based upon the singular skill, qualifications and experience of Employee.
Employee shall not assign this Agreement or any rights hereunder without the
express written consent of Employer.
12. Notices. Any and all notice or other communications required
or permitted by this Agreement or by law to be given by any of the parties
hereto shall be in writing and shall be deemed duly served and given when
personally delivered to the party to whom such notice or communication is
directed or, in lieu of such personal service, when deposited in the United
States mail, certified, return receipt requested, postage prepaid, addressed as
follows:
Employer Employee
-------- --------
Stater Bros. Markets Xxx X. Xxx
00000 Xxxxxx Xxxx ___________________
Xxxxxx, XX 00000 ___________________
Each party may change the address for notice hereunder by
giving written notice of such change in the manner provided for in this
Paragraph.
13. Good Faith. All approvals required to be given by each party
shall be given or denied in good faith and may not be unreasonably denied. Each
party shall use due diligence in its attempt to accomplish any act required to
be accomplished by that party.
14. Attorneys' Fees. In the event that it should become necessary
for any party to bring an action, including arbitration, either at law or in
equity, to enforce or interpret the terms of this Agreement, the prevailing
party in such action shall be entitled to recover its reasonable attorneys' fees
as a part of any judgment therein, in addition to any other award which may be
granted.
15. Applicable Law/Venue. This Agreement shall be construed and
interpreted in accordance with the internal laws of the State of California,
with proper venue for any litigation or arbitration in San Bernardino County,
California.
16. Integrated Agreement. This Agreement constitutes the entire
agreement of the parties with respect to the subject matter of this Agreement.
17. Heirs and Assigns. Subject to any restriction on assignment
contained herein, this Agreement shall be binding upon and shall inure to the
benefit of the respective party's heirs and assigns.
18. Severability. Any provision in this Agreement which is
illegal, invalid or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such illegality, invalidity or
unenforceability without invalidating the remaining provisions hereof or
affecting the legality, validity, or enforceability of such provision in any
other jurisdiction. The parties hereto agree to negotiate in good faith to
replace any illegal, invalid or unenforceable provision of this Agreement with a
legal, valid and enforceable provision that, to the extent possible, will
preserve the economic bargain of this Agreement, or otherwise to amend this
Agreement, including the provision relating to choice of law, to achieve such
result.
19. Indemnity. Employer shall indemnify and hold Employee harmless
from and against any and all loss, cost, liability and damage (including
attorneys' fees) arising out of or connected with, or claimed to arise out of or
to be connected with, any act performed or omitted to be performed under this
Agreement, unless it be shown that the act or omission was not in good faith, or
in the event of criminal proceedings that Employee had reasonable cause to
believe his conduct was unlawful. An adverse judgment or plea of nolo contendre
shall not create a presumption that Employee did not act in good faith or that
he had reasonable cause to believe his conduct was unlawful. Expenses incurred
in defending a civil or criminal action shall be paid by Employer upon receipt
of an undertaking by or on behalf of the Employee to repay such expense if it is
later determined that Employee was not entitled to indemnification.
This Agreement is executed to be effective as of the date first above
set forth.
Employee
__________________________________
Xxx X. Xxx
Employer
Stater Bros. Markets,
a California corporation
By:________________________________
Xxxx X. Xxxxx, President and
Chief Executive Officer
