Exhibit 10.21
EMPLOYMENT CONTRACT
AGREEMENT made as of the 13th day of December, 1999 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 XXXXXX, presently residing at 0000 Xxxx Xxxxxx
Xxxxx, Xxxxxxxxxx, Xxxxxxx (hereinafter referred to as "Employee").
WITNESSETH:
WHEREAS, the Corporation desires that Employee shall be employed by the
Corporation as its President and Chief Executive Officer, 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 President and Chief Executive Officer of the
Corporation, 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 January
31, 2000, this Agreement shall be null and void.
3. Office; Duties; Extent of Services.
(a) During the Term, Employee shall serve as President and Chief
Executive Officer of the Corporation, faithfully and to the best of his
ability, under the direction and supervision of the Board of Directors of the
Corporation (the " Board of Directors") and the Chairman of the Board of the
Corporation (the "Chairman of the Board"). Employee shall transmit or shall
cause to be transmitted necessary instructions and advice to all subordinate
officers of the Corporation and its subsidiary companies 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 Board of Directors and Chairman of the Board, 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 Board of
Directors or the Chairman of the Board, 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 Chairman of the Board or the
Board of Directors, 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 $325,000 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 $100,000.00 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 $100,000.00 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 600,000 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 200,000 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 200,000 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 calculated average closing
price for the last thirty (30) days of trading prior to Employee's
start date.
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, 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 finds 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 Chairman of
the Board (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 July 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 December 31. 1999. 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), (d) and (e)
herein.
(b) The Corporation agrees to pay, or reimburse Employee (i) 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, bills of any
movers, telephone, television, electrician, plumber, locksmith charges, and tips
and gratuities, upon submission by Employee to the Chairman of the Board (or his
designee or designees) of vouchers or expense statements satisfactorily
evidencing such expenses, and (ii) for any income tax liability incurred by the
Executive in any calendar year as a result of the reimbursement provided for in
this subsection (b). The parties agree that the accountants for the Corporation
shall calculate the amount of gross-up payments due to the Executive and that
the Executive shall cooperate fully with such accountants in providing evidence
of his applicable tax rate and related matters. 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 Chairman of the
Board (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 househunting trips for Employee and his spouse upon submission by Employee to
the Chairman of the Board (or his designee or designees) of vouchers or expense
statements satisfactorily evidencing such expenses.
(e) If Employee elects to do so, the Corporation will arrange and
pay all reasonable fees and out of pocket expenses for a firm to enter into a
home repurchase program (the "relocation firm") with Employee for the sale of
Employee's present residence. The relocation firm will make an offer to purchase
Employee's present residence based on the average of two independent market
appraisals from firms which are selected by mutual agreement of the relocation
firm and Employee
(i) Employee shall have not less than 30 days within which he may
accept or reject such offer.
(ii) If the relocation firm's offer is not accepted by Employee
within the period set forth in paragraph 7(e)(i), Employee
shall be free to sell his residence upon whatever terms and
conditions as he desires.
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. Permanent Disability. In the event of the permanent disability
(as hereinafter defined) of Employee during the Term hereunder, the Corporation
shall have the right, upon written notice to Employee, to terminate his
employment hereunder, effective upon the giving of such notice. Upon such
termination, the salary to which Employee would be otherwise entitled pursuant
to Paragraph 4(a) hereof shall continue to be paid to Employee through the end
of the month in which such termination occurs and Employee shall also be
entitled to any bonus awarded to him under Paragraph 4(b) hereof but remaining
unpaid as of the date of the 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; provided, however, that notwithstanding any
such termination of Employee's employment hereunder due to the permanent
disability of Employee, Employee shall be entitled to receive the Base Salary
through the date which is eighteen months after the date of such termination.
Employee shall accept such payments in full discharge and release of the
Corporation of and from any further obligations under this Agreement, but
Employee shall continue to have the obligations provided for in Paragraph 12
hereof. For purposes of this Paragraph 9, "permanent disability" shall be
defined as (a) "permanent disability" within the meaning of the disability
insurance policy or policies then maintained by the Corporation for the benefit
of employees of the Corporation, or (b) if no such policy shall then be in
effect, or
if more than one such policy shall then be in effect in which the term
"permanent disability" shall be assigned different definitions, then "permanent
disability" shall be defined for purposes hereof to mean any physical or mental
disability or incapacity which renders Employee incapable of fully performing
the services required of him in accordance with his obligations under Paragraph
3 hereof for a period of 120 consecutive days or for shorter periods aggregating
120 days during any twelve-month period.
10. 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 Chairman of the Board, 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.
11. 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 Board of Directors
or the Chairman of the Board;
(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 Chairman of the Board 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 Chairman of the Board 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 Chairman of
the Board. 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.
12. 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 Chairman of the Board, 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 Chairman of the Board, 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.
13. Transactions Offered to the Corporation; Proprietary Materials.
During the term of his employment hereunder, Employee agrees to bring to the
attention of the Board of Directors of the Chairman of the Board, 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 Chairman of the Board upon termination of this Agreement or at any other
time at the request of the Board of Directors or the Chairman of the Board.
14. 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.
15. 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.
16. 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 Chairman of the
Board.
17. 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.
18. 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.
19. 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:
Chairman of the Board of Directors
Eagle Food Centers, Inc.
Xxxxx 00 xxx Xxxxxxxxx Xxxx
Xxxxx, Xxxxxxxx 00000
with a copy to:
Xxxxx 0. Xxxxxxx
Eagle Food Centers, Inc.
Xxxxx 00 xxx Xxxxxxxxx Xxxx
Xxxxx, Xxxxxxxx 00000
If to Employee:
_____________________________
_____________________________
_____________________________
_____________________________
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.
20. 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.
21. 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.
22. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Illinois.
23. Pargraph 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.
24. 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.
25. 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.
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/ Xxxxxx X. Xxxxx /s/ Xxxx Xxxxxx
-------------------------------- ----------------------------------------
Xxxxxx X. Xxxxx Xxxx Xxxxxx
Chairman and Chief Executive
Officer
