EXHIBIT 10.18
EMPLOYMENT CONTRACT
AGREEMENT made as of the 8th day of May, 2000 between EAGLE FOOD
CENTERS, INC., a Delaware corporation with principal offices presently located
at Xxxxx 00 xxx Xxxxxxxxx Xxxx, Xxxxx, Xxxxxxxx 00000 (hereinafter referred to
as the "Corporation"), and XXXX XXXXXXXX, presently residing at 00000 Xxxx
Xxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxx (hereinafter referred to as "Employee").
W I T N E S S E T H :
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WHEREAS, the Corporation desires that Employee shall be employed by the
Corporation as its Senior Vice President, Retail, and Employee is desirous of
such employment, upon the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements hereinafter contained, the parties hereto hereby agree as follows:
1. EMPLOYMENT. The Corporation shall employ Employee, and Employee
shall serve the Corporation, as its Senior Vice President, Retail, upon the
terms and conditions hereinafter set forth.
2. TERM. The employment of Employee by the Corporation hereunder shall
commence as of the date hereof and, unless sooner terminated pursuant to
Paragraphs 9 through 11 hereof, shall continue for a period of three years (the
"Term"); PROVIDED, HOWEVER, that if Employee does not arrive at the
Corporation's offices and commence his employment hereunder on or before June 1,
2000, this Agreement shall be null and void.
3. OFFICE; DUTIES; EXTENT OF SERVICES.
(a) During the Term, Employee shall serve as Senior Vice President,
Retail, faithfully and to the best of his ability, under the direction and
supervision of the President and Chief Executive Officer of the Corporation (the
"CEO"). Employee shall transmit or shall cause to be transmitted necessary
instructions and advice to all subordinate employees of the Corporation and all
other proper persons. Employee also shall perform such other duties and services
and shall exercise such other powers for the Corporation and for any of its
subsidiary companies, including, but not limited to, acting as an officer and/or
director of any such subsidiary companies, as from time to time may be assigned
to him by the CEO, and shall enter into such supplemental agreement or
agreements with any such subsidiary company or subsidiary companies with respect
thereto (containing terms which are not inconsistent with the provisions hereof)
as may be requested by the CEO, all without further compensation other than that
for which provision is made in this Agreement.
b) Employee agrees that he shall devote his best efforts, energies
and skills to the discharge of his duties and responsibilities hereunder. To
this end, Employee agrees that he shall devote his full business time and
attention to the business and affairs of the Corporation and he shall not,
without the prior written approval of the CEO, directly or indirectly, engage or
participate in, or become an officer or director of, or become employed by, or
render advisory or other services in connection with, any other business
enterprise.
4. SALARY AND BONUS ARRANGEMENTS.
(a) During the Term, the Corporation shall pay to Employee a
salary for his services at the rate of $170,000 per annum (the "Base Salary"),
payable in accordance with the normal payroll practices and procedures of the
Corporation. Annual salary adjustments (cost of living adjustments or otherwise)
shall be in accordance with the terms and conditions of the Corporation's
compensation plan. The Employee shall, upon reporting to work to commence his
work duties, receive a signing bonus in the amount of $30,000.00 provided,
however, that if Employee's employment hereunder is terminated within six (6)
months after the date hereof by the Corporation for "cause" (as hereinafter
defined) or by Employee for any reason other than "Good Reason" (as hereinafter
defined), such $30,000.00 bonus payment shall be returned to the Corporation.
(b) During the Term, Employee shall be eligible to receive bonus
compensation at the end of each fiscal year of the Corporation in an amount to
be determined by the Board of Directors in its sole discretion. The Corporation
and Employee shall use reasonable efforts to agree on mutually acceptable
performance targets for such bonus compensation. Bonus compensation shall be at
a targeted rate of 50% of the Base Salary during any year of Employee's
employment hereunder and may be up to 100% of the Base Salary. Payout of the
bonus compensation shall be in accordance with the terms and conditions of the
Corporation's compensation plan.
(c) In the event the Corporation shall terminate Employee's
employment hereunder other than for "cause" pursuant to paragraph 11(a) herein,
Employee shall receive payment in a lump sum equal to eighteen (18) months of
compensation based upon Employee's base salary upon the date of termination of
his employment, regardless of term. Normal deductions and withholdings shall be
deducted from such payment. In addition, Employee shall receive:
(i) Continued health and dental insurance coverage at the same
benefit levels as at the time of termination of employment, for a
period of eighteen (18) months or until Employee is gainfully employed
by a new employer offering such benefits.
(ii) Any accrued but unused vacation pay.
(iii) Professional outplacement services and assistance to
provided and paid for by the Corporation up to the sum of $20,000. To
the extent such assistance is not utilized, Employee shall be entitled
to a lump sum payment of the unused portion of such sum.
5. STOCK OPTION.
(a) The Corporation hereby grants Employee an option (the "Option")
to purchase up to 75,000 shares of Common Stock. The Option will be a stock
option that does not qualify as an "incentive stock option" under Section 422(b)
of the Internal Revenue Code of 1986, as amended (i.e., a non-qualified stock
option).
(b) Except as otherwise provided in this Agreement, the Option
shall be exercisable, on a cumulative basis, at the times and prices as follows:
(i) up to 25,000 of the total shares subject to the Option may be
purchased by Employee on or after the first anniversary of
Employee's start date at the price defined in paragraph
5(b)(iv) herein;
(ii) up to an additional 25,000 shares of the total shares subject
to the Option may be purchased by Employee on or after the
second anniversary of Employee's start date at the price
defined in paragraph 5(b)(iv) herein plus one dollar; and
(iii) the balance of the total number of shares subject to the
Option may be purchased by Employee on or after the third
anniversary of Employee's start date at the price defined in
paragraph 5(b)(iv) plus two dollars.
(iv) Option price shall be defined as the lowest closing price
within a twenty (20) day period after the Corporation's stock
begins trading again after the current suspension of trading
ends. However, the option price pursuant to this subparagraph
(iv) shall not exceed one dollar and fifty cents.
Subject to earlier termination as described below, the Option shall
expire at the end of the Term.
Except as provided in the immediately following sentence, if the
employment of the Employee with the Corporation shall terminate by reason of
Employee's death, permanent disability (as defined herein), by the Corporation
for any other reason than for "cause" (as defined herein), the Option shall
immediately become exercisable by Employee (or Employee's legal representative,
beneficiary or estate, as the case may be), for any and all of such number of
shares subject to the Option, at any time up to and including six (6) months
after the effective date of such termination of employment. If the employment of
Employee with Corporation shall terminate for any reason other than that
provided in the immediately preceding sentence, including, without limitation,
termination by the Corporation for "cause" (as described herein) or termination
by Employee for any reason other than Good Reason, the Option shall terminate
and become null and void, as of the effective date of such termination.
In the event of a Change in Control (as defined below), the Option
shall immediately become exercisable for any or all of such number of shares
subject to the Option. For purposes of this Agreement, a "Change in Control"
means the occurrence of any of the following events: (i) any person or entity
(with the exception of Odyssey Partners, LP, or any successors, subsidiary or
affiliate thereof) acquires 50% or more of the voting securities of the
Corporation; (ii) the shareholders approve a plan of complete liquidation, an
agreement for sale or disposition of substantially all of the Corporation's
assets (other than to Odyssey Partners, LP, or any successors, subsidiary or
affiliate thereof), or materially dilutive merger or consolidation of the
Corporation; or (iii) the Board of Directors agrees by a two-thirds vote that
Change in Control has occurred or is about to occur and within six months
actually does occur. However, for purposes hereof, no Change in Control would be
deemed to occur with respect to any employee who is a material equity
participant of the purchasing group that consummates a Change in Control.
(c) Subject to the limitations on exercise provided in the
Agreement, the Option shall be exercised by Employee as to all or part of the
shares covered thereby by giving written notice of exercise to the Corporation,
specifying the number of shares to be purchased (unless the number purchased is
the total balance for which the Option is then exercisable; provided, however,
that in no event shall the Option be exercised for a fraction of a share or for
less than 100 shares) and specifying a business day not more than 10 days from
the date such notice is given for the payment of the purchase price
against delivery of the shares being purchased. On the date specified in the
notice of exercise the Corporation shall deliver such shares to Employee and
Employee shall deliver to the Corporation immediately available funds in an
amount equal to the aggregate purchase price for such shares.
(d) If the Corporation (1) pays a stock dividend on its Common
Stock, (2) subdivides its outstanding shares of Common Stock into a greater
number of shares, (3) combines its outstanding shares into a smaller number of
shares, or (4) issues by reclassification of its Common Stock any shares of its
capital stock, then the number and kind of shares into which the Option granted
to Employee under Paragraph 5(a) hereof is exercisable shall be adjusted so that
Employee upon exercise of the Option shall be entitled to receive the kind and
number of shares of the Corporation that Employee would have owned or have been
entitled to receive after the happening of any of the events described above had
the Option been exercised immediately prior to the happening of such event or
any record date with respect hereto. The exercise price for the Option shall be
adjusted by the inverse of any such adjustment to the number of shares into
which the Option is exercisable. An adjustment made pursuant to this paragraph
(d) shall become effective on the date of the dividend payment, subdivision,
combination or issuance retroactive to the record date with respect thereto, if
any, for such event. The adjustment to the number of shares into which the
Option is exercisable described in this paragraph (d) shall be made each time
any event listed in clauses (1) through (4) of this paragraph (d) occurs.
6. EXPENSES OTHER THAN RELOCATION EXPENSES. It is contemplated that, in
connection with his employment hereunder, Employee may be required to incur
reasonable and necessary travel, business entertainment and other business
expenses. The Corporation agrees to pay, or reimburse Employee for, all
reasonable and necessary travel, business entertainment and other business
expenses incurred or expended by him incident to the performance of his duties
and responsibilities hereunder, upon submission by Employee to the CEO (or his
designee or designees) of vouchers or expense statements satisfactorily
evidencing such expenses.
7. RELOCATION AND RELOCATION EXPENSES.
(a) Employee agrees to move to a new residence within one hour
commuting distance of Milan, Illinois (the "Principal Office City"), not later
than October 31, 2000 in accordance with the provisions of this Paragraph 7.
Employee agrees to place his Arizona residence for sale on the housing market
with a registered broker on or before May 31, 2000. If the Corporation changes
the location of its Principal Office City during the Term, then concurrently
with such change Employee agrees to move to a new residence within one hour
commuting distance of such new Principal Office City. Such a concurrent move
will be expensed in accordance with paragraphs 7(b), (c), and (d) herein.
(b) The Corporation agrees to pay, or reimburse Employee for all
reasonable and necessary moving expenses incurred by Employee in moving
(including any such expenses incurred in connection with moving his immediate
family) from Employee's present residence to a new residence within one hour
commuting distance of the Principal Office City not later than six (6) months
from Employee's date of hire, including, but not limited to, real estate selling
fees, closing costs, purchase fees up to two percent (2%) of purchase price,
bills of any movers, telephone, television, electrician, plumber, locksmith
charges, and tips and gratuities, upon submission by Employee to the CEO (or his
designee or designees) of vouchers or expense statements satisfactorily
evidencing such expenses.
The reimbursement payment provided for in this Section (4) shall be made to the
Executive within 30 days of the presentation of satisfactory documentation.
(c) The Corporation shall reimburse Employee for reasonable
temporary living expenses incurred by Employee for a period not to exceed six
(6) months from date of hire, upon submission by Employee to the CEO (or his
designee or designees) of vouchers or expense statements satisfactorily
evidencing such expenses.
(d) The Corporation shall reimburse Employee for the reasonable
costs of one househunting trip for Employee and his spouse upon submission by
Employee to the CEO (or his designee or designees) of vouchers or expense
statements satisfactorily evidencing such expenses.
8. EMPLOYEE BENEFITS; VACATIONS. Employee shall be entitled to
participate in any and all life insurance, medical insurance, disability
insurance, directors' and officers' liability insurance and any other employee
benefit plan or plans which may be generally made available during the Term to
senior level executives of the Corporation to the extent that Employee qualifies
under the eligibility provisions of any such plan or plans and as such plans may
be amended. Employee shall be entitled to vacations (taken consecutively or in
segments), aggregating four (4) weeks in each twelve month period of the Term,
in accordance with the Corporation's vacation policy, to be taken at times
consistent with the effective discharge of Employee's duties.
9. DEATH. In the event of the death of Employee during the Term, the
salary to which Employee would be otherwise entitled pursuant to Paragraph 4(a)
hereof shall continue to be paid through the end of the month in which death
occurs to the last beneficiary designated by Employee by written notice to the
Corporation, or, failing such designation, to his estate and such beneficiary or
estate shall also be entitled to all accrued and unpaid bonus compensation owing
to Employee under Paragraph 4(b) hereof and to exercise the Option to the extent
not then exercised in accordance with Paragraphs 5(b) and 5(c) hereof; provided,
however, that notwithstanding any termination of Employee's employment hereunder
due to Employee's death, such beneficiary or estate shall be entitled to receive
the Base Salary through the date which is eighteen months after the date of such
termination. Employee shall have the right to name, from time to time, any one
person as beneficiary hereunder or, with the consent of the CEO, he may make
other forms of designation of beneficiary or beneficiaries. Employee's
designated beneficiary or beneficiaries or personal representative, as the case
may be, shall accept the payments provided for in this Paragraph 10 in full
discharge and release of the Corporation of and from any further obligations
under this Agreement.
10. TERMINATION.
(a) Employee's employment hereunder may be terminated by the
Corporation for "cause" at any time if Employee shall commit any of the
following "Acts of Default":
(i) Employee shall have refused to perform any of his
obligations set forth herein in any material respect
or Employee shall have taken any action which causes
material harm to the Corporation or its operations,
and Employee shall have failed to cure such failure
or action within five (5) days after receiving
written notice thereof from the CEO;
(ii) Employee shall have committed an act of fraud,
theft or dishonesty against, or shall breach
fiduciary obligation to, the Corporation and/or any
of its subsidiary companies; or
(iii) Employee shall be convicted of (or plead NOLO
CONTENDERE to) any felony or any misdemeanor (whether
or not involving the Corporation and/or any of its
subsidiary companies) involving moral turpitude or
which might, in the opinion of the Board of
Directors, cause embarrassment to the Corporation
and/or any of its subsidiary companies.
In the event the Corporation elects to terminate the employment of
Employee for "cause" pursuant to this Paragraph 11(a), the CEO shall send
written notice to Employee terminating such employment and describing the action
of Employee constituting the Act of Default, and thereupon the Corporation shall
have no further obligations under this Agreement, with the exception of the
obligation to pay Employee, promptly after such termination, any accrued or
unpaid salary earned by Employee through and including the effective date of
such termination and any accrued and unpaid bonus compensation owing to Employee
pursuant to Paragraph 4(b) hereof, but Employee shall continue to have the
obligations provided for in Paragraph 12 hereof. Nothing contained in this
Paragraph 11 shall constitute a waiver or release by the Corporation of any
rights or claims it may have against Employee for actions or omissions which may
give rise to an event causing termination of this Agreement pursuant to this
Paragraph 11(a).
(b) Employee may terminate his employment hereunder for Good
Reason. For purposes of this Agreement "Good Reason" shall mean any assignment
to Employee of any material duties other than those contemplated by Paragraph 3
hereof; provided, however, that Employee first delivers written notice thereof
to the CEO and the Corporation shall have failed to cure such non-permitted
assignment or limitation within thirty (30) days after receipt of such written
notice. Any termination by Employee pursuant to this Paragraph 11(b) shall be
communicated by written Notice of Termination to the CEO. For purposes of this
Agreement, a "Notice of Termination" shall mean a notice which shall indicate
the specific termination provision in this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of Employee's employment under the provision so indicated.
In the event of any termination of Employee's employment hereunder pursuant to
this Paragraph 11(b), Employee shall be entitled to the Base Salary through the
date which is eighteen months after the date of such termination, and Employee
shall also be entitled to all bonus awarded to him under Paragraph 4(b) hereof,
but remaining unpaid as of the date of such termination. Executive shall also be
entitled to exercise the Option to the extent not then exercised in accordance
with Paragraphs 5(b) and 5 (c) hereof. In the event of any termination of
employment by Employee for Good Reason, Employee shall have no further
obligations under this Agreement other than the obligations provided for in
Section 12 hereof.
11. RESTRICTIVE COVENANTS AND CONFIDENTIALITY INJUNCTIVE RELIEF.
(a) Employee agrees, as a condition to the performance by the
Corporation of its obligations hereunder, particularly its obligations under
Paragraph 4 hereof, that during the Term and during the further period of one
(1) year after the termination of such employment, for any reason, Employee
shall not, without prior written approval of the CEO, directly or indirectly
through any other individual or entity:
(i) solicit, raid, entice or induce any individual or entity
that presently is or at any time during the Term shall be, or who has
indicated an interest in becoming, a supplier of the Corporation,
and/or any of its subsidiary companies, to become a supplier of any
other individual or entity, and Employee shall not approach any such
individual or entity for such purpose or authorize or knowingly approve
the taking of such actions by any other individual or entity; or
(ii) solicit, raid, entice or induce an individual who
presently is or at any time during the Term shall be an employee of or
consultant to the Corporation and/or any of its subsidiary companies,
to leave such employment or consulting position or positions or to
become employed by or become a consultant to any other individual or
entity, and Employee shall not approach any such employee or consultant
for such purpose or authorize or knowingly approve the taking of such
actions by any other individual or entity.
(b) Recognizing and acknowledging that confidential information may
exist, from time to time, with respect to the business and/or activities of the
Corporation and/or its subsidiary companies, and that the knowledge, information
and relationships with suppliers and agents, including, but not limited to,
supplier lists and/or other such lists, and that the knowledge of the
Corporation's and/or its subsidiary companies' business methods, systems, plans
and policies and other confidential information which he has heretofore and
shall hereafter establish, receive or obtain as an employee of the Corporation
and/or its subsidiary companies or otherwise, are valuable and unique assets of
the respective businesses of the Corporation and its subsidiary companies,
Employee agrees that during and at all times after the Term he shall not
(otherwise than pursuant to his duties hereunder), without the prior written
approval of the CEO, disclose any such knowledge or information pertaining to
the Corporation and/or any of its subsidiary companies, their business,
activities, personnel or policies, to any individual or entity, for any reason
or purpose whatsoever, or use for his own benefit or for the benefit of any
other individual or entity, any such knowledge or information. The provisions of
this Paragraph 12(b) shall not apply to information which is or shall become
generally known to the public or the trade (except by reason of Employee's
breach of his obligations hereunder), information which is or shall become
available in trade or other publications and information which Employee is
required to disclose by order of, or subpoena issued by, a court of competent
jurisdiction or other governmental authority (but only to the extent
specifically ordered by such court or other governmental authority); provided,
however, that promptly upon receipt of such subpoena or order requiring
disclosure Employee shall give the Corporation written notice of the
circumstances under which Employee is so required to make disclosure of
such information, as well as the intended disclosure of such information, so
that the Corporation has the opportunity to seek a protective order or follow
such other course or courses of action as the Corporation, in its sole
discretion, may deem appropriate.
(c) The provisions of this Paragraph 12 shall survive the
termination of Employee's employment hereunder, irrespective of the reason
thereof.
(d) Employee recognizes and acknowledges that the services to be
rendered by him are of a special, unique and extraordinary character and, in
connection with such services, he will have access to confidential information
vital to the Corporation's and/or it subsidiary companies' businesses. By reason
of this, Employee consents and agrees that if he violates any of the provisions
of this Agreement with respect to diversion of the Corporation's and/or its
subsidiary companies' suppliers or employees, or confidentiality, the
Corporation and its subsidiary companies would sustain irreparable harm, and,
therefore, in addition to any other remedies which the Corporation may have
under this Agreement or otherwise, the Corporation and/or its subsidiary
companies shall be entitled to apply to any court of competent jurisdiction for
an injunction restraining Employee from committing or continuing any such
violation or violations of this Agreement, and Employee shall not object to any
such application or applications made in good faith. Nothing in this Agreement
shall be construed as prohibiting the Corporation and/or its subsidiary
companies from pursuing any other remedy or remedies, including, without
limitation, recovery of damages.
12. TRANSACTIONS OFFERED TO THE CORPORATION; PROPRIETARY MATERIALS. During the
term of his employment hereunder, Employee agrees to bring to the attention of
the CEO, all proposals, business opportunities or investments of whatever
nature, in areas in which the Corporation and/or any of its subsidiary companies
is active or may be interested in becoming active, which are created or devised
by Employee or come to the attention of Employee and which might reasonably be
expected to be of interest to the Corporation and/or any of its subsidiary
companies. Without limiting the generality of the foregoing, Employee
acknowledges and agrees that memoranda, notes, records and other documents made
or compiled by Employee or made available to Employee during the term of this
Agreement concerning the business and/or activities of the Corporation and/or
any of its subsidiary companies shall be the Corporation's property and shall be
delivered by Employee to the CEO upon termination of this Agreement or at any
other time at the request of the CEO.
13. DEDUCTIONS AND WITHHOLDING. Employee agrees that the Corporation shall
withhold from any and all payments paid or payable to Employee, or on Employee's
behalf, pursuant to this Agreement, an amount equal to any taxes required by any
governmental regulatory authority to be withheld or otherwise deducted and paid
by the Corporation in respect of such payments. In connection with the exercise
of the Option, the Corporation may require the Employee to reimburse the
Corporation for any such withholding tax liability in respect of the issuance of
shares upon such exercise. In lieu thereof, the Corporation shall have the right
to withhold the amount of such taxes from any other sums due or to become due
from the exercise of any such option. The Corporation may, in its discretion,
hold the stock certificate to which Employee is entitled upon exercise of the
Option as security for the payment of such withholding tax liability, until cash
sufficient to pay that liability has been accumulated. In addition, the
Corporation shall be authorized, without the prior written consent of Employee,
to effect any such withholding
upon exercise of the Option by retention of shares issuable upon such exercise
having a fair market value at the date of exercise which is equal to the amount
to be withheld; provided, however, that the Corporation shall not be authorized
to effect such withholding without the prior written consent of Employee if such
withholding would subject Employee to liability under Section 16(b) of the
Securities Exchange Act of 1934, as amended.
14. PRIOR AGREEMENTS. This Agreement cancels and supersedes any and all
prior agreements and understandings between the parties hereto respecting the
employment of Employee by the Corporation.
15. REPRESENTATIONS AND WARRANTIES OF THE PARTIES.
(a) Employee (x) represents and warrants to the Corporation that (i)
he is not under any obligation, restriction or limitation, contractual or
otherwise, to any other individual or entity which would prohibit or impede him
from performing his duties and responsibilities hereunder, and that he is free
to enter into and perform the terms and provisions of this Agreement, (ii) he
does not have any impairment which would interfere with his ability to perform
the essential functions of his job, and (iii) Common Stock purchased or acquired
hereunder will be purchased or acquired for his own account, for investment only
and not with a view to the resale or distribution thereof in violation of any
federal or state securities laws, and (y) agrees that any subsequent resale or
distribution of any such Common Stock shall be made only pursuant to either (A)
an effective registration statement under the Securities Act of 1933, as
amended, covering such Common Stock and under applicable state securities laws
or (B) specific exemptions from the registration requirements of the Securities
Act of 1933, as amended, and any applicable state securities laws. In the event
that Employee exercises the Option, in connection therewith Employee shall
deliver to the Corporation a written statement to the effect set forth in
clauses (x) (iii) and (y) above.
(b) This Agreement has been duly authorized by all necessary corporate
action on the part of the Corporation and has been duly executed and delivered
on behalf and in the name of the Corporation by the CEO.
16. EFFECTIVENESS. This Agreement shall become effective when, and only
when, the Corporation shall have received (i) counterparts of this Agreement
signed by the Corporation and Employee, and (ii) a copy of a physician's report,
dated a recent date, as to the health of Employee, in form and substance
satisfactory to the Corporation.
17. WAIVER. Waiver by either party hereto of any breach or default by the
other party of any of the terms and provisions of this Agreement shall not
operate as a waiver of any other breach or default, whether similar to or
different from the breach or default waived.
18. NOTICES. All notices required to be given under this Agreement shall
be in writing and sent by registered mail or certified mail, postage prepaid,
return receipt requested. Such notices shall be deemed to have been validly
served, given or delivered three (3) business days after deposit in the United
States mail addressed to the party or parties to be notified at the following
addresses:
If to the Corporation:
Xxxx Xxxxxx
President and Chief Executive Officer
Eagle Food Centers, Inc.
Xxxxx 00 xxx Xxxxxxxxx Xxxx
Xxxxx, Xxxxxxxx 00000
with a copy to:
Xxxxx X. Xxxxxxx
Vice President, Human Resources
Eagle Food Centers, Inc.
Xxxxx 00 xxx Xxxxxxxxx Xxxx
Xxxxx, Xxxxxxxx 00000
If to Employee:
Xxxx Xxxxxxxx
00000 Xxxx Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
Either party may change the address to which notices, requests, demands
and other communications hereunder shall be sent by sending written notice of
such change of address to the other party in the manner above stated.
19. ASSIGNABILITY AND BINDING EFFECT. This Agreement shall inure the
benefit of and shall be binding upon the heirs, executors, administrators,
successors and legal representatives of Employee, and shall inure to the benefit
of and be binding upon the Corporation and its successors and assigns. The
obligations of Employee may not be delegated and, except as expressly provided
in Paragraph 9 above relating to the designation of beneficiaries, Employee may
not assign, transfer, pledge, encumber, hypothecate or otherwise dispose of this
Agreement, or any of his rights hereunder, without the prior written consent of
the Corporation, and any such attempted assignment, transfer, pledge,
encumbrance, hypothecation or other disposition without such consent shall be
null and void without effect. This Agreement may be assigned by the Corporation,
in its sole discretion, to any one or more of its subsidiary companies or to
another individual or entity in connection with the merger or consolidation of
the Corporation with another corporation, partnership or other business
enterprise or the sale of all or substantially all of the assets and business of
the Corporation to another individual or entity.
20. COMPLETE UNDERSTANDING; AMENDMENTS, ETC. This Agreement constitutes the
complete understanding and entire agreement between the parties hereto with
respect to the employment of Employee hereunder, and no statement,
representation, warranty or covenant has been made by either party with respect
thereto except as expressly set forth herein. This Agreement shall not be
altered, modified, amended or terminated (other than in accordance with the
provisions hereof) except by written instrument signed by the party against whom
enforcement may be sought.
21. GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the State of Illinois.
22. PARAGRAPH HEADINGS. The paragraph headings contained in this Agreement
are for reference purposes only and shall not limit, define or affect in any way
the meaning or interpretation of this Agreement or any portion or portions
thereof.
23. SEPARABILITY. In case any one or more of the provisions of this
Agreement shall be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected thereby.
24. ATTORNEYS' FEES. Each party hereto agrees that if the other party shall
prevail in any action or proceeding arising hereunder or in connection herewith,
such other party shall be entitled to reimbursement of reasonable attorneys'
fees and disbursements related to such action or proceeding.
25. This Employment Contract supercedes the Employment Contract between the
parties hereto dated April 11, 1999 (2000).
IN WITNESS WHEREOF, the parties hereto have entered in to this Agreement and
duly set their hands on the day and year first above written.
EAGLE FOOD CENTERS, INC.
By: /s/ Xxxxxxx Xxxxxx /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx Xxxxxx Xxxx Xxxxxxxx
President and Chief Executive Officer
CORRECTION TO EMPLOYMENT CONTRACT
OF XXXX XXXXXXXX
Xx. Xxxxxxx Xxxxxx and Xx. Xxxx Xxxxxxxx hereby acknowledge that
Paragraph 5 of the Employment Contract signed on the 8th day of May, 2001, was
incorrect, and both parties agree that paragraph 5 should read as follows:
5. STOCK OPTION.
(a) The Corporation hereby grants Employee an option (the "Option")
to purchase up to 75,000 shares of Common Stock. The Option will be a stock
option that does not qualify as an "incentive stock option" under Section 422(b)
of the Internal Revenue Code of 1986, as amended (i.e., a non-qualified stock
option).
(b) Except as otherwise provided in this Agreement, the Option shall
be exercisable, on a cumulative basis, at the times and prices as follows:
(i) up to 25,000 of the total shares subject to the Option may be
purchased by Employee on or after the first anniversary of
Employee's start date at the price defined in paragraph
5(b)(iv) herein;
(ii) up to an additional 25,000 shares of the total shares subject
to the Option may be purchased by Employee on or after the
second anniversary of Employee's start date at the price
defined in paragraph 5(b)(iv) herein plus one dollar; and
(iii) the balance of the total number of shares subject to the
Option may be purchased by Employee on or after the third
anniversary of Employee's start date at the price defined in
paragraph 5(b)(iv) plus two dollars.
(iv) Option price shall be defined as the lowest closing price
within a twenty (20) day period after the Corporation's stock
begins trading again after the current suspension of trading
ends. However, the option price pursuant to this subparagraph
(iv) shall not exceed one dollar and fifty cents.
Subject to earlier termination as described below, the Option shall
expire ten years from the effective date of this contract.
Except as provided in the immediately following sentence, if the
employment of the Employee with the Corporation shall terminate by reason of
Employee's death, permanent disability (as defined herein), by the Corporation
for any other reason than for "cause" (as defined herein), the Option shall
immediately become exercisable by Employee (or Employee's legal representative,
beneficiary or estate, as the case may be), for any and all of such number of
shares subject to the Option, at any time up to and including six (6) months
after the effective date of such termination of employment. If the employment of
Employee with Corporation shall terminate for any reason other than that
provided in the immediately preceding sentence, including, without limitation,
termination by the Corporation for "cause" (as described herein) or termination
by Employee for any reason other than Good Reason, the Option shall terminate
and become null and void, as of the effective date of such termination.
In the event of a Change in Control (as defined below), the Option
shall immediately become exercisable for any or all of such number of shares
subject to the Option. For purposes of this Agreement, a "Change in Control"
means the occurrence of any of the following events: (i) any person or entity
(with the exception of Odyssey Partners, L.P., or any successors, subsidiary or
affiliate thereof) acquires 50% or more of
the voting securities of the Corporation; (ii) the shareholders approve a plan
of complete liquidation, an agreement for sale or disposition of substantially
all of the Corporation's assets (other than to Odyssey Partners, L.P., or any
successors, subsidiary or affiliate thereof), or materially dilutive merger or
consolidation of the Corporation; or (iii) the Board of Directors agrees by a
two-thirds vote that Change in Control has occurred or is about to occur and
within six months actually does occur. However, for purposes hereof, no Change
in Control would be deemed to occur with respect to any employee who is a
material equity participant of the purchasing group that consummates a Change in
Control.
(c) Subject to the limitations on exercise provided in the
Agreement, the Option shall be exercised by Employee as to all or part of the
shares covered thereby by giving written notice of exercise to the Corporation,
specifying the number of shares to be purchased (unless the number purchased is
the total balance for which the Option is then exercisable; provided, however,
that in no event shall the Option be exercised for a fraction of a share or for
less than 100 shares) and specifying a business day not more than 10 days from
the date such notice is given for the payment of the purchase price against
delivery of the shares being purchased. On the date specified in the notice of
exercise the Corporation shall deliver such shares to Employee and Employee
shall deliver to the Corporation immediately available funds in an amount equal
to the aggregate purchase price for such shares.
(d) If the Corporation (1) pays a stock dividend on its Common
Stock, (2) subdivides its outstanding shares of Common Stock into a greater
number of shares, (3) combines its outstanding shares into a smaller number of
shares, or (4) issues by reclassification of its Common Stock any shares of its
capital stock, then the number and kind of shares into which the Option granted
to Employee under Paragraph 5(a) hereof is exercisable shall be adjusted so that
Employee upon exercise of the Option shall be entitled to receive the kind and
number of shares of the Corporation that Employee would have owned or have been
entitled to receive after the happening of any of the events described above had
the Option been exercised immediately prior to the happening of such event or
any record date with respect hereto. The exercise price for the Option shall be
adjusted by the inverse of any such adjustment to the number of shares into
which the Option is exercisable. An adjustment made pursuant to this paragraph
(d) shall become effective on the date of the dividend payment, subdivision,
combination or issuance retroactive to the record date with respect thereto, if
any, for such event. The adjustment to the number of shares into which the
Option is exercisable described in this paragraph (d) shall be made each time
any event listed in clauses (1) through (4) of this paragraph (d) occurs.
Eagle Food Centers, Inc.
/s/ Xxxxxxx Xxxxxx /s/ Xxxx Xxxxxxxx
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Xxxx Xxxxxx Xxxx Xxxxxxxx
President and CEO
May 3, 2001 May 3, 2001
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Date Date
