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Exhibit 10.5
EMPLOYMENT AGREEMENT
THIS AGREEMENT (this "Agreement"), made and entered into as of
March 22, 1995, between DOMINICK'S FINER FOODS, INC., a Delaware corporation
having its executive offices and a principal place of business in the Chicago,
Illinois (the "Employer"), and XXXXXX X. XxXXX (the "Employee").
RECITALS
A. It is the desire of the Employer to assure itself of the
management services of the Employee by directly engaging the Employee as the
Senior Vice President, Operations of the Employer.
B. The Employee desires to commit himself to serve the
Employer on the terms herein provided.
NOW, THEREFORE, in consideration of the foregoing and of the
respective covenants and agreements set forth below the parties hereto agree as
follows:
ARTICLE I
POSITION AND TERM
1.1 POSITION. The Employer agrees to and does employ the
Employee and the Employee shall enter the employ of the Employer to perform his
duties as Senior Vice President, Operations and such other or additional
incidental or customary duties as determined by the Board of Directors of the
Employer (the "Board") or the Chief Executive Officer of the Employer (the
"CEO").
1.2 PERIOD OF CONTRACT EMPLOYMENT. The term "Period of
Contract Employment," as used herein, means the period beginning on the date
(the "Commencement Date") of the consummation of the Stock Purchase
Transactions (as defined in that certain Stock Purchase Agreement, dated as of
January 17, 1995, by and among Dominick's Supermarkets, Inc. (formerly named
DFF Holdings, Inc.), DFF Acquisition Sub, Inc., Xxxx L.L.C., Xxxx Family
L.L.C., and Xxxx Developments, L.L.C.), as amended, and ending on the earlier
of the third anniversary thereof or at the time of the Termination of Contract
Employment (as defined in Section 3.1 below).
1.3 EXTENSION OF PERIOD OF CONTRACT EMPLOYMENT. The
Period of Contract Employment may be extended by a written agreement of the
Employer and the Employee. Notwithstanding the foregoing, neither the Employer
nor the Employee shall have any obligation to extend the Period of Contract
Employment. If the Employee remains in the employ of the Employer following
the Period of Contract Employment and any extension thereof in accordance with
this Section 1.3, such employment shall be at will unless different terms of
employment are established in writing.
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1.4 SUSPENSION OF SERVICES.
(a) Except in the case of a Termination of Contract
Employment under Article III, in the event that the Employee is advised by the
Employer in writing that his services will no longer be required during the
remainder of the Period of Contract Employment, this shall be treated as a
suspension of services and, except for the purposes set forth in Section 2.4
and 2.5, and except as prohibited by applicable laws and regulations, the
Employee shall continue to be treated as an employee of the Employer for all
purposes including eligibility for those fringe benefits provided for in
Section 2.3, and shall continue to be compensated by the Employer (subject to
the possible offset set forth in subsection (b) below) during the remainder of
the Period of Contract Employment at the rate of "Total Compensation" to which
the Employee was entitled at time of suspension of services. The provisions of
Section 4.3 shall continue to apply in the event of a suspension of services.
The portion of the Period of Contract Employment prior to the suspension of
service is referred to herein as the "Period of Active Employment." For
purposes of this Agreement, the term "Total Compensation" shall mean the Base
Salary set forth in Section 2.1, any increases to such Base Salary granted by
the Employer in accordance with Section 2.1 and any Bonus Compensation earned
by the Employee pursuant to Section 2.2 during the portion of the year of
suspension of services of the Employee which falls within the Period of Active
Employment.
(b) In the event of suspension of services in accordance
with subsection (a) above, the Employee shall be free to become engaged with
another business in any capacity but in such event, fifty percent (50%) of the
compensation of any kind (including deferred compensation and compensation
assigned to an entity or individual other than the Employee) received from or
earned with respect to such other business (except from businesses or
investments owned by the Employee before the date of suspension of services for
which there will be no deduction) and one hundred percent (100%) of the
compensation of any kind (including deferred compensation and compensation
assigned to an entity or individual other than the Employee) received from or
earned with respect to a "Competing Business" (as defined in Section 4.4
below), in each case attributable to the Period of Contract Employment, shall
be subtracted from any amounts otherwise due the Employee from the Employer.
The Employee shall not take any actions to prevent compensation received from
or earned with respect to such other business from being applied pursuant to
this Section 1.4(b) to reduce amounts otherwise due the Employee from the
Employer.
ARTICLE II
COMPENSATION
2.1 ANNUAL BASE SALARY. During the Period of Contract
Employment, the Employer agrees to pay the Employee a base salary in the annual
amount of Two Hundred and Fifty Thousand Dollars ($250,000) (the "Base
Salary"); provided, however, that the agreement as to said amount shall not
preclude or in any way affect the grant by the Employer or the receipt by the
Employee of increases in the Base Salary, or of Bonus Compensation or other
forms of additional compensation (including insurance and other employee plan
benefits), such increases, contingent or otherwise, to be determined solely in
the discretion of the Board or a committee of the Board to which such authority
is delegated by the Board, and such Bonus Compensation and additional
compensation, contingent or otherwise, to be determined in accordance with
Sections
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2.2 and 2.3, respectively. The Base Salary shall be payable as current salary,
in monthly installments subject to all applicable withholding and deductions,
and at the same monthly rate as adjusted for any fraction of a month unexpired
at the Termination of Contract Employment.
2.2 BONUS COMPENSATION. The Employee shall be entitled
to an annual incentive bonus to be paid at such times as the Board shall
determine and to be based upon the Employee's performance during each fiscal
year as measured by the following formula: In the event that the applicable
performance criteria (as determined by the Board) of the Employer or its
successor, shall equal the fiscal year bonus target established by the Board
(the "Bonus Target"), the Employee shall be entitled to receive a bonus payment
equal to 100% of his Base Salary. The fiscal 1995 Bonus Target is attached
hereto as Exhibit B. The bonus payment shall be decreased ratably to 50% of
Base Salary in the event that 85% of the Bonus Target is actually achieved. No
bonus shall be payable if less than 85% of the Bonus Target is actually
achieved. By way of example, if 90% of the Bonus Target is actually achieved,
then the Employee's bonus for that fiscal year shall be 67% of his Base Salary.
Bonuses to be paid hereunder shall be paid not later than ten (10) days after
the receipt of the Employer's audited financial statements.
2.3 BENEFITS. During the Period of Contract Employment,
the Employee shall be entitled to participate in or receive benefits under any
employee benefit plan or other arrangement including, but not limited to, those
benefit plans or arrangements set forth on Exhibit A hereto and any other
medical, dental, retirement, disability, life insurance, sick leave and
vacation plans or arrangements generally made available by the Employer to its
executive officers, subject to and on a basis consistent with the terms,
conditions and overall administration of such plans or arrangements; provided,
however, that such plans and arrangements are made available at the discretion
of the Employer and nothing in this Agreement establishes any right of the
Employee to the availability or continuance of any such plan or arrangement,
including pursuant to Section 1.4(a).
2.4 REIMBURSEMENT OF BUSINESS EXPENSES. The Employer
shall reimburse the Employee for the ordinary and necessary expenses incurred
by him in connection with the performance of his duties hereunder, including,
but not limited to, ordinary and necessary travel expenses and entertainment
expenses, according to the policies established from time to time by the
Employer for its executive officers. The Employee shall provide the Employer
with an accounting of his expenses, which accounting shall clearly reflect
which expenses are reimbursable by the Employer. The Employee will provide the
Employer with such other supporting documentation and other substantiation of
reimbursable expenses as will conform to Internal Revenue Service of other
requirements.
2.5 AUTOMOBILE ALLOWANCE. The Employer agrees that
during the Period of Active Employment the Employer shall furnish one
automobile to the Employee, of a make and year determined by the Employer, to
be used by the Employee in connection with the performance of his duties
hereunder for and on behalf of the Employer. All reasonable expenses incurred
by the Employee in operating such automobile in the performance of his duties
(including, but not limited to, fuel, parking fees, licenses, repairs and
maintenance) shall be paid by the Employer or reimbursed by it to the Employee
according to the policies established from time to time by the Employer for its
executive officers. The Employee shall regularly submit to the Employer
adequate records to substantiate such expenses and copies of any other
documentation reasonably required. The Employer shall maintain automobile
liability insurance in such amounts as shall be
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determined by the Board to be necessary to protect the Employee and the
Employer while the automobile is being operated for and on the Employer's
behalf.
ARTICLE III
TERMINATION OF CONTRACT EMPLOYMENT
3.1 AUTOMATIC TERMINATION. This Agreement and the
Employee's employment hereunder shall automatically terminate upon the first to
occur of the following circumstances (any such termination and any termination
pursuant to Section 3.2 is referred to herein as a "Termination of Contract
Employment"):
(a) Expiration. The failure of the parties prior
to the third anniversary of the Commencement Date to extend the Period of
Contract Employment pursuant to Section 1.3 or the expiration of any extension
of the Period of Contract Employment;
(b) Death. The Employee's death; or
(c) Disability. The failure of the Employee,
during the Period of Contract Employment, to render services to the Employer
for a continuous period of six (6) months, because of the Employee's physical
or mental disability during said period. If there should be any dispute
between the parties as to the Employee's physical or mental disability at any
time, such question shall be settled by the opinion of an impartial reputable
physician agreed upon for the purpose by the parties or their representatives,
or failing agreement within ten (10) days of a written request therefor by
either party to the other, then one designated by the then president of the
Chicago Medical Society. The certificate of such physician as to the matter in
dispute shall be final and binding on the parties; or
3.2 PERMISSIVE TERMINATION. This Agreement and the
Employee's employment hereunder may be terminated by the Employer or the
Employee, as applicable, under the following circumstances:
(a) Resignation or Retirement. The Employee may
voluntarily resign or retire upon thirty (30) days' prior written notice to the
Employer; or
(b) Without Cause. The Employer may terminate
the Employee's employment at any time upon thirty (30) days' prior written
notice to the Employee; or
(c) Cause. The Employer may terminate the
Employee's employment based upon (i) breach by the Employee of any material
covenant under this Agreement and the failure of the Employee to cure such
breach within thirty (30) days after written notice of such breach is given by
the Employer to the Employee; (ii) commission by the Employee of theft or
embezzlement of Employer property or other acts of dishonesty; (iii) commission
by the Employee of a crime resulting in injury to the business, property or
reputation of the Employer or commission of other significant activities
harmful in any material way to the business or reputation of the Employer; (iv)
commission of an act by the Employee in the performance of his duties hereunder
amounting to gross, willful or wanton negligence; (v) willful refusal to
perform or
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substantial neglect of the duties assigned to the Employee pursuant to Article
I hereof; or (vi) any significant violation of any statutory or common law duty
of loyalty to the Employer.
3.3 BENEFITS PAYABLE.
(a) The severance benefits payable to the
Employee by reason of termination of the Period of Contract Employment under
the circumstances described in Sections 3.2(a) or (b) at any time during the
first twelve (12) months following the Commencement Date shall be (1) payment
of a cash lump sum (subject to applicable withholding) equal to the
Cancellation Amount (as defined in the Cancellation and Settlement Agreement
dated as of March 21, 1995 among the Employee, the Employer and Dominick's
Supermarkets, Inc.); and (2) maintenance, at the expense of the Employer, for
the benefit of the Employee until the third anniversary of the Commencement
Date, of all group medical, dental, health, accident, disability, life
insurance and other employee health and welfare benefit plans and programs and
any other benefit plans and perquisites listed in Exhibit A attached hereto in
which the Employee participated prior to the effective date of termination of
the Period of Contract Employment, or maintenance of substantially identical
substitute benefits, which will fully extinguish obligations of the Company
under COBRA.
(b) The severance benefits payable to the
Employee by reason of termination of the Period of Contract Employment under
the circumstances described in Section 3.2(b) at any time after the first
twelve (12) months following the Commencement Date shall be: (1) payment of a
cash lump sum (subject to applicable withholding) equal to difference between
(i) the lesser of the Employee's then Base Salary or the aggregate Base Salary
the Employee would have received had he remained employed from the date of
termination until the third anniversary of the Commencement Date, discounted to
the present value at the date of payment at a rate of 10% per annum, and (ii)
the Cancellation Amount; (2) payment, on the date such sum would otherwise be
payable if the Period of Contract Employment had not been terminated, of a cash
lump sum equal to the bonus award that would have been payable under Section
2.2 hereof if the Period of Contract Employment had not been terminated before
the end of the fiscal year in which termination of the Period of Contract
Employment became effective, and determined as if the Employer achieved one
hundred percent (100%) of the Bonus Target for such fiscal year; and (3)
maintenance, at the expense of the Employer, for the benefit of the Employee
until the third anniversary of the Commencement Date, of all group medical,
dental, health, accident, disability, life insurance and other employee health
and welfare benefit plans and programs and any other benefit plans and
perquisites listed in Exhibit A attached hereto in which the Employee
participated prior to the effective date of termination of the Period of
Contract Employment, or maintenance of substantially identical substitute
benefits, which will fully extinguish obligations of the Company under COBRA.
(c) No severance benefits of any kind shall be
payable to the Employee by reason of termination of the Period of Contract
Employment under the circumstances described in Sections 3.1 or 3.2(c).
(d) Except as set forth in Section 3.3(b), upon
termination of the Period of Contract Employment, the Employee shall cease to
be entitled to receive employee benefits pursuant to Sections 2.3 and 2.5,
other than obligations of the Employer under COBRA.
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(e) The Employee shall not be required to
mitigate the amount of any payment or benefit provided in this Section 3.3 by
seeking other employment or otherwise, except that the Employer may suspend the
payment of benefits described in Section 2.3 hereof at such time as the
Employee becomes eligible to receive corresponding benefits from a new
employer.
3.4 SURRENDER OF PROPERTIES. Upon termination of the
Employee's employment with the Employer, regardless of the reason therefor, the
Employee shall promptly surrender to the Employer all property provided to him
by the Employer for use in relation to his employment, and, in addition, the
Employee shall surrender to the Employer any and all sales material, price
lists, financial information, files, records, or other materials and
information in his possession or under his control of or pertaining to the
Employer or its business or financial affairs, including, but not limited to,
costs, pricing information, markets or prospective markets, market research,
marketing strategies, computer programs, assets, suppliers, services, and
personnel and compensation matters.
ARTICLE IV
COVENANTS
4.1 FULL-TIME EMPLOYEE. The Employee hereby covenants
and agrees that during the Period of Contract Employment he will faithfully and
in conformity with the directions of the Board, or of an officer of the
Employer duly authorized by the Board, perform the duties of his employment
hereunder, and that he shall be a full-time employee of the Employer and that
he shall devote to the performance of said duties all such time and attention
as they shall reasonably require, taking, however, from time to time (as the
Employer agrees that he may) reasonable vacations.
4.2 NO DETRACTION FROM PERFORMANCE. The Employee hereby
consents and agrees that during the Period of Contract Employment he will not,
without the express consent of the Board or a committee of the Board to which
such authority is delegated by the Board or the Chief Executive Officer of the
Employer, become actively associated with or engaged in any business other than
that of the Employer, or a division or subsidiary of the Employer, that would
detract from the performance of his duties to the Employer, and he will do
nothing inconsistent with such duties. Nothing herein shall preclude the
Employee from engaging in charitable, religious or civic activities or the
management of his personal investments, to the extent that such activities do
not detract from the performance of his duties to the Employer.
4.3 CONFIDENTIAL INFORMATION. It is recognized by the
Employee and the Employer that the Employee's duties during the Period of
Contract Employment will entail the receipt of confidential information
concerning not only the Employer's current operations and procedures but also
its short-range and long-range plans. The Employee hereby covenants and agrees
that during the Period of Contract Employment and at any time thereafter (or,
in the case of Confidential Information (as defined below) solely relating to
competitive information about the Employer, for a period of two years), he will
not disclose to anyone outside of the Employer, or use in any activity or
business (other than the Employer's business), Confidential Information (as
defined below) relating to the Employer's business, in any way obtained by him
while employed by the Employer, unless authorized by the Employer in writing.
It is understood that violation of
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this provision would cause irreparable harm to the Employer and that the
Employer may seek to enjoin any such violation or to take any other applicable
action.
For purposes of this Agreement, the term "Confidential
Information" shall include all information of any nature and in any form which
is owned by the Employer and which is not publicly available or generally known
to persons engaged in businesses similar to that of the Employer, including,
but not limited to, research techniques; patents and patent applications;
inventions and improvements, whether patentable or not; development projects;
computer software and related documentation and materials; designs, practices,
processes, methods, know-how and other facts relating to the business of the
Employer; practices, processes, methods, know-how and other facts related to
sales, advertising, promotions, financial matters, customers, customer lists or
customers' purchases of goods or services from the Employer; industry
contracts; and all other secrets and information of a confidential and
proprietary nature.
4.4 COMPETING BUSINESS. The Employee hereby covenants
and agrees that, during the Period of Contract Employment, the Employee will
not have any investment in a Competing Business (as defined below) other than
an equity interest of less than five percent (5%) of any company whose
securities are listed on The New York Stock Exchange, The American Stock
Exchange or NASDAQ and will not render personal services to any Competing
Business in any manner or engage in or in any manner be connected or concerned
with, directly or indirectly, any Competing Business, including, without
limitation, as owner, partner, director, trustee, officer, employee, creditor,
consultant or advisor thereof.
For purposes of this Agreement, "Competing Business" shall
mean any business which (i) is engaged in, owns or operates any retail grocery,
drug or combination store (either as a stand-alone grocery, drug or combination
store or as part of a merchandising operation also involving non-grocery and
non-drug items) in any area where the Employer or any of its subsidiaries
presently does business or, at any time during the Period of Contract
Employment, did business; or (ii) is a supplier, directly or indirectly, to any
such retail grocery, drug or combination store.
If the Employee shall breach the agreement contained in this
Section 4.4, such breach may render the Employee liable to the Employer for
damages therefor and entitle the Employer to enjoin the Employee from making
such investment or from rendering such personal services. In addition, the
Employer shall have the right in such event to enjoin the Employee from
disclosing any Confidential Information concerning the Employer to any
competing business, to enjoin any competing business from receiving from the
Employee or using any such Confidential Information and/or to enjoin any
competing business from retaining or seeking to retain any other employees of
the Employer.
4.5 COMPETITION FOLLOWING TERMINATION. Within the
two-year period following termination of the Employee's employment with the
Employer, regardless of the reason therefor, the Employee shall not, without
the prior written consent of the Employer, which consent may be withheld at the
sole discretion of the Employer, engage in or in any manner be connected or
concerned with, directly or indirectly, any Competing Business operating at a
location within twenty (20) miles of any retail operation of the Employer in
existence at the time of such termination.
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4.6 NO SOLICITATION. The Employee hereby covenants and
agrees that during the Period of Contract Employment or at any time during the
two-year period thereafter, he will not, for himself or any third party,
directly or indirectly, (i) divert or attempt to divert from the Employer any
business of any kind in which the Employer is engaged with entities which
maintained a business relationship with the Employer (or any entities which
were contacted or solicited about entering into a business relationship with
the Employer) during any period the Employee was employed by the Employer,
including, without limitation, the solicitation of the Employer's customers or
interference with any of its suppliers or customers; or (ii) employ or solicit
for employment any person employed by the Employer during the period of the
Employee's employment.
4.7 CONSIDERATION BARGAINED. The Employee acknowledges
that all sums the Employer has undertaken to pay the Employee under this
Agreement following termination of employment are undertaken by the Employer in
consideration for the covenants of the Employee set forth in this Article IV,
whether or not those sums the Employer has undertaken to pay become due and
payable. In the event of any breach by the Employee of the covenants set forth
in this Article IV: (a) the Employer shall be excused from paying any sums or
providing any benefits to the Employee that the Employer would otherwise be
required to pay or provide to the Employee under this Agreement after
termination of employment; and (b) the Employee shall refund to the Employer on
demand all sums paid to the Employee under this Agreement subsequent to the
effective date of termination of employment.
4.8 ACKNOWLEDGMENT. The Employee acknowledges that the
restrictions set forth in Article IV are reasonable in scope and essential to
the preservation of the Employer's business and proprietary properties and the
enforcement thereof will not in any manner preclude the Employee, in the event
of the Employee's termination of employment with the Employer, from becoming
gainfully employed in such manner and to the extent as to provide a standard of
living for himself, the members of his family, and those dependent upon him of
at least the sort and fashion to which he and they have become accustomed and
may expect.
4.9 SEVERABILITY. The covenants of the Employee
contained in Article IV shall each be construed as an agreement independent of
any other provision in this Agreement, and the existence of any claim or cause
of action of the Employee against the Employer, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement by
the Employer of such covenants. Both parties hereby expressly agree and
contract that it is not the intention of either party to violate any public
policy, statutory or common law, and that if any portion of any sentence,
paragraph, clause, or combination of the same of this Agreement is in violation
of the law of any state where applicable, such portion of said sentence,
paragraph, clause or combination of the same shall be void in the jurisdictions
where it is unlawful, but the remainder of such sentence, paragraph, clause, or
combination of the same and this Agreement shall remain binding on the parties
to make the covenants of this Agreement binding to the full extent lawful under
existing applicable laws. In the event that any part of any covenant of this
Agreement is determined by a court of law to be overly broad thereby making the
covenant unenforceable, the parties hereto agree, and it is their desire, that
such court shall substitute the broadest judicially enforceable limitation in
its place, and that as so modified the covenant shall be binding upon the
parties as if originally set forth herein.
4.10 REMEDIES. The Employee and the Employer agree that
the Employer will be irreparably harmed by any violation or threatened
violation of any of the foregoing provisions
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of this Article IV if such provisions are not specifically enforced and
therefore that the Employer shall be entitled to an injunction restraining any
violation of such provisions by the Employee, or any other appropriate decree
of specific performance. Such remedies shall not be exclusive and shall be in
addition to any other remedy to which the Employer may be entitled under this
Agreement or at law.
ARTICLE V
MISCELLANEOUS
5.1 SUCCESSORS. This Agreement shall inure to the
benefit of the Employer and its successors and assigns, as applicable. If the
Employer shall merge or consolidate with or into, or transfer substantially all
of its assets, including goodwill, to another corporation or other form of
business organization, this Agreement shall bind and run to the benefit of the
successor of the Employer resulting from such merger, consolidation, or
transfer. The Employee shall not assign, pledge, or encumber his interest in
this Agreement, or any part thereof, without the prior written consent of the
Employer, and any such attempt to assign, pledge or encumber any interest in
this Agreement shall be null and void and shall have no effect whatsoever.
5.2 GOVERNING LAW. THIS AGREEMENT IS BEING MADE AND
EXECUTED IN AND IS INTENDED TO BE PERFORMED IN THE STATE OF ILLINOIS AND SHALL
BE GOVERNED, CONSTRUED, INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF ILLINOIS, WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES
THEREOF.
5.3 ENTIRE AGREEMENT. This Agreement comprises the
entire agreement between the parties hereto relating to the subject matter
hereof and as of the Commencement Date, supersedes, cancels and annuls all
previous employment agreements between the Employer (and/or its predecessors)
and the Employee, as the same may have been amended or modified, and any right
of the Employee thereunder other than for compensation accrued thereunder as of
the date hereof, and supersedes, cancels and annuls all other prior written and
oral agreements between the Employee and the Employer or any predecessor to the
Employer. The terms of this Agreement are intended by the parties to be the
final expression of their agreement with respect to the employment of the
Employee by the Employer and may not be contradicted by evidence of any prior
or contemporaneous agreement.
5.4 GENDER. Words in the masculine herein may be
interpreted as feminine or neuter, and words in the singular as plural, and
vice versa, where the sense requires.
5.5 DISPUTES. If any arbitration or other proceeding is
brought for the enforcement of this Agreement, or because of an alleged
dispute, breach, default or misrepresentation in connection with any of the
provisions of this Agreement, the successful or prevailing party shall be
entitled to recover reasonable attorneys' fees and other costs incurred in that
action or proceeding, in addition to any other relief that may be granted.
5.6 SEVERABILITY; ENFORCEABILITY. If any provision of
this Agreement, or the application thereof to any person, place, or
circumstance, shall be held to be invalid, unenforceable, or void by the final
determination of a court of competent jurisdiction in any jurisdiction and all
appeals therefrom shall have failed or the time for such appeals shall have
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expired, as to that jurisdiction and subject to this Section 5.6, such clause
or provision shall be deemed eliminated from this Agreement but the remaining
provisions shall nevertheless be given full force and effect. In the event
this Agreement or any portion hereof is more restrictive than permitted by the
law of the jurisdiction in which enforcement is sought, this Agreement or such
portion shall be limited in that jurisdiction only, and shall be enforced in
that jurisdiction as so limited to the maximum extent permitted by the law of
that jurisdiction.
5.7 VALIDITY. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall remain in
full force and effect.
5.8 NOTICES. Any notice, request, claim, demand,
document and other communication hereunder to any party shall be effective upon
receipt (or refusal of receipt) and shall be in writing and delivered
personally or sent by telex, telecopy, or certified or registered mail, postage
prepaid, as follows:
(a) If to the Employer, addressed to its
principal offices to the attention of the CEO and the General Counsel.
(b) If to the Employee, to him at the address set
forth below under his signature;
or at any other address as any party shall have specified by notice in writing
to the other parties.
5.9 COUNTERPARTS. This Agreement may be executed in
several counterparts, each of which shall be deemed to be an original, but all
of which together will constitute one and the same Agreement.
5.10 AMENDMENTS; WAIVERS. This Agreement may not be
modified, amended, or terminated except by an instrument in writing, approved
by the Board and signed by the Employee and the Employer. By an instrument in
writing similarly executed, the Employee or the Employer may waive compliance
by the other party or parties with any provision of this Agreement that such
other party was or is obligated to comply with or perform; provided, however,
that such waiver shall not operate as a waiver of, or estoppel with respect to,
any other or subsequent failure. No failure to exercise and no delay in
exercising any right, remedy or power hereunder shall preclude any other or
further exercise of any other right, remedy or power provided herein or by law
or in equity.
5.11 SURVIVAL OF COVENANTS. The covenants of the Employee
set forth in Article IV of this Agreement shall service the termination of the
Period of Contract Employment or termination of this Agreement, regardless of
the reason therefor.
5.12 NO INCONSISTENT ACTIONS. The parties hereto shall
not voluntarily undertake or fail to undertake any action or course of action
inconsistent with, or to avoid or evade, the provisions or essential intent of
this Agreement. Furthermore, it is the intent of the parties hereto to act in
a fair and reasonable manner with respect to the interpretation and application
of the provisions of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date and year first above written.
DOMINICK'S FINER FOODS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Name: XXXXXX X. XXXXXXX
Title: President
/s/ Xxxxxx X. XxXxx
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XXXXXX X. XxXXX
Address: 0000 Xxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxx 00000
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EXHIBIT A
BENEFIT PLANS
Dominick's Supermarkets, Inc. 1995 Stock Option Plan (See Annex I)
Senior Management Short Term Disability Plan (See Annex II)
Senior Management Long Term Disability Plan (See Annex III)
Senior Management Death Benefit and Capital Accumulation Plan (See Annex IV)
Senior Management Financial Planning Program (See Annex V)
A-1
13
EXHIBIT B
FISCAL 1995 BONUS TARGET
(dollars in thousands)
Pre-Acquisition EBITDA (Periods 1-6) (1) $ 51,740
Post-Acquisition EBITDA (Periods 7-13) $ 61,484
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TOTAL EBITDA $113,224
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(1) "EBITDA" is defined as the net income (or loss) of the Company and its
subsidiaries on a consolidated basis, determined in accordance with GAAP,
excluding (to the extent included therein) without duplication, (i) all net
extraordinary gains (or losses), (ii) total interest expense of the Company
and its subsidiaries on a consolidated basis with respect to outstanding
indebtedness of the Company and its subsidiaries, including without limitation,
all commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing and net costs under interest
rate swap, cap, collar or similar agreements, (iii) provisions for taxes
based on income, (iv) total depreciation expense, (v) total amortization
expense, (vi) LIFO provision, and (vii) other non-cash items reducing net
income, and all other non-cash items increasing net income, all of the foregoing
as determined on a consolidated basis for the Company and its subsidiaries in
accordance with GAAP. Pre-Acquisition EBITDA also includes add-backs for
transaction expenses, SAR expense and write-off of equipment which are not
customary add-backs to EBITDA. Those items are unusual and are not expected to
recur in the future (including the post-Acquisition period). Pre-Acquisition
EBITDA, without these add-backs, is $48,929.
B-1
