EXHIBIT 10.14
January 24, 2002
Xx. Xxxxxx X. Xxxxx
Chairman & Chief Executive Officer
Eagle Food Centers, Inc.
Xxxxx 00 xxx Xxxxxxxxx Xxxx
Xxxxx, Xxxxxxxx 00000
Dear Xx. Xxxxx:
Reference is made herein to the Employment Agreement, dated as of May 10,
1995 between yourself (the "Executive") and Eagle Food Centers, Inc. (the
"Company") (the "Employment Agreement") and the Letter of Agreement between the
Executive and the Company dated May 10, 1998 (the "Extension Agreement").
Capitalized terms used herein shall have the meaning set forth in the Employment
Agreement, unless otherwise defined herein.
The Executive served as Chief Executive Officer and President of the
Company beginning May 10, 1995 and the term of employment of the Executive
pursuant to the Employment Agreement was originally scheduled to expire on May
22, 1998. The Company, desiring to continue to retain the services of the
Executive for an additional term and to amend certain terms of the Employment
Agreement in light of significant contributions made by the Executive to the
business and affairs of the Company, entered into the Extension Agreement,
which, INTER ALIA, extended the Executive's term of employment to December 31,
2001, and caused the Executive to be elected as a Director and Chairman of the
Board of Directors. The Company now desires to further continue to retain the
services of the Executive for an additional term, as a Director and Chairman of
the Board of Directors only, and to amend certain terms of the Extension
Agreement in light of the continuing significant contributions made by the
Executive to the affairs of the Company.
In furtherance of the foregoing, the parties agree to the following:
1. EXTENDED TERM/CHAIRMANSHIP. Paragraph (1) of the Extension Agreement
shall be amended to extend the Executive's term of employment to
December 31, 2002. During the extended term, and for so long as the
Executive remains employed, the Company shall cause the Executive to be
elected as a Director and Chairman of the Board of Directors.
2. COMPENSATION. The Executive shall receive an annual salary of
$190,000.00, paid on a weekly basis. Such salary rate shall be
predicated on the Executive performing work at the Milan headquarters or
at the retail store sites of the Company for a time period of one week
per month, and additional availability for telephone calls relating to
Company business, on an as-needed basis. Any period of time spent by the
Executive working at the Milan headquarters or at the retail store sites
of the Company over and above one week per month shall be compensated at
the annual salary of $350,000.00 per year, paid on a weekly basis. The
Executive shall be reimbursed by the Company for out-of-pocket expenses
incurred by him during the course of his duties throughout the term of
this Agreement.
3. INCENTIVE COMPENSATION AND INSURANCE MATTERS. For each full calendar
year the Executive remains employed by the Company, commencing on December 31,
1997 and continuing on each December 31 thereafter (the one year period from
December 31, 1997 through December 31, 1998, and each year ending on December 31
thereafter, are referred to herein as a "Service Year" or "Service Years," as
the case may be), the Company shall ensure that:
(a) EXTENDED OPTION EXERCISE PERIOD. In the event of a Change of
Control of the Company occurring within two years of the date of termination of
the Executive's employment for any reason other than cause (the "Termination
Date"), the exercise period for each tranche of then vested and unexercised
Option as provided for in Section (5)(b) of the Employment Agreement shall be
extended by one year for each completed Service Year, up to the maximum ten-year
expiration period provided for under the Company's stock incentive plans; IT
BEING UNDERSTOOD that (i) there shall be no extended option exercise period
attributable in any respect to any portion of the Option exercised by the
Executive for any
reason prior to the occurrence of a Change in Control and (ii) there shall be no
extended option period with respect to any unexercised portion of the Option in
the event that a Change in Control fails to occur within two years of the
Termination Date.
(b) EXTENDED TERM LIFE INSURANCE COVERAGE. Upon the Executive's
termination of employment for any reason other than cause, the Company shall
continue to pay all premiums associated with the Executive's term life insurance
policy as in effect at the time of such termination, for a period of 2 years
following such termination.
(c) EXTENDED HEALTH INSURANCE COVERAGE. Upon the Executive's
termination of employment for any reason other than cause, the Company shall pay
all COBRA premiums associated with the Executive's health insurance program as
in effect at the time of such termination, for a period of 2 years following
such termination.
4. MISCELLANEOUS. Paragraphs 2. (Executive Payment) and 4. (Moving Costs)
of the Extension Agreement are hereby deleted.
5. SURVIVAL. Except as otherwise provided for herein, the Employment
Agreement and Extension Agreement shall remain in full force and effect.
6. COUNTERPARTS. This Letter Agreement may be executed in counterparts
which, taken together, shall be deemed to be a fully executed original hereof.
7. GOVERNING LAW. This Letter Agreement shall be governed by and construed
in accordance with the laws of the State of Illinois.
Please acknowledge your agreement to the foregoing by signing where
indicated below.
Very truly yours,
EAGLE FOOD CENTERS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------
Title: President and CEO
ACCEPTED AND AGREED TO
THIS 25TH DAY OF
January, 2002:
/s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
