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Exhibit 10.39
EMPLOYMENT AGREEMENT
AGREEMENT, made February 6, 1997, by and between BRUNO'S, INC., an Alabama
corporation (the "Company"), and XXXX XXXXXX ("Executive").
RECITALS
In order to induce Executive to serve as an executive officer of the
Company, the Company desires to provide Executive with compensation and other
benefits on the terms and conditions set forth in this Agreement.
Executive is willing to accept such employment and perform services for the
Company, on the terms and conditions hereinafter set forth.
It is therefore hereby agreed by and between the parties as follows:
1. Employment.
1.1 Subject to the terms and conditions of this Agreement, the Company
agrees to employ Executive during the term hereof as its Senior Vice President
Operations.
1.2 Subject to the terms and conditions of this Agreement, Executive hereby
accepts employment as Senior Vice President - Operations of the Company and
agrees to devote his full working time and efforts, to the best of his ability,
experience and talent, to the performance of services, duties and
responsibilities in connection therewith.
2. Term of Employment. Executive's term of employment under this Agreement
shall commence on February 6, 1997 and, subject to the terms hereof, shall
terminate on the earlier of (i) February 5, 2000 (the "Termination Date") or
(ii) termination of
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Executive's employment pursuant to this Agreement (alternatively, the "Term");
provided, however, that any termination of employment by Executive (other than
for death or Permanent Disability) may only be made upon 30 days prior written
notice to the Company.
3. Compensation.
3.1 Salary. During the Term, the Company shall pay Executive a base salary
("Base Salary") at the rate of $210,000 per annum. Base Salary shall be payable
in accordance with the ordinary payroll practices of the Company, but no less
frequently than semi-monthly. Any increase in Base Salary shall be in the
reasonable discretion of the Company and, as so increased, shall constitute
"Base Salary" hereunder.
3.2 Annual Bonus. In addition to his Base Salary, Executive shall be paid
an annual bonus (the "Performance Bonus") during the term of his employment
hereunder with a target amount equal to 50% of Base Salary (the "Target Bonus")
and a maximum amount equal to 100% of Base Salary based on performance criteria
determined by the Company in its reasonable discretion.
3.3 Signing Bonus. In addition to his Base Salary and Performance Bonus,
Executive shall be paid a signing bonus in the amount of $20,000 (net of taxes
and other required withholdings), with such signing bonus to be paid in two
equal installments of $10,000 each (net of taxes and other required
withholdings) on February 28, 1997 and February 28, 1998.
3.4 Compensation Plans and Programs. Executive shall be eligible to
participate in any compensation plan or program maintained by the Company in
which other senior executives of the Company participate on terms comparable to
those applicable to such other senior executives.
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3.5 Payment of Relocation Allowance. To assist the Executive with his
relocation to the Birmingham, Alabama area, the Company agrees to either
reimburse the Executive for or pay directly the expenses actually incurred by
Executive in relocating from the location of his current residence (if other
than the Birmingham area) to the Birmingham area in accordance with the
Company's executive relocation policy.
4. Employee Benefits.
4.1 Employee Benefit Programs, Plans and Practices. The Company shall
provide Executive during the term of his employment hereunder with coverage
under all employee pension and welfare benefit programs, plans and practices
(commensurate with his position in the Company and to the extent permitted under
any employee benefit plan) in accordance with the terms thereof, which the
Company makes available to its senior executives.
4.2 Vacation and Fringe Benefits. Executive shall be entitled to twenty
(20) business days paid vacation in each calendar year, which shall be taken at
such times as are consistent with Executive's responsibilities hereunder. Unless
otherwise approved by the Company, any vacation days not taken in any calendar
year shall be forfeited without payment therefor. In addition, Executive shall
be entitled to the perquisites and other fringe benefits, including, without
limitation, a Company automobile, made available to senior executives of the
Company, commensurate with his position with the Company.
5. Expenses. Executive is authorized to incur reasonable expenses in
carrying out his duties and responsibilities under this Agreement, including,
without limitation, expenses for travel and similar items related to such duties
and responsibilities. The
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Company will reimburse Executive for all such expenses upon presentation by
Executive from time to time of appropriately itemized and approved (consistent
with the Company's policy) accounts of such expenditures.
6. Termination of Employment. The Company may terminate Executive's
employment at any time for any reason.
6.1 Termination Not for Cause or for Good Reason. (a) If Executive's
employment is terminated (i) by the Company other than for Cause (as defined in
this Section 6.1) or (ii) by Executive for Good Reason (as defined in this
Section 6.1) prior to the Termination Date, Executive shall receive a severance
payment equal to twelve month's Base Salary, as in effect immediately prior to
the event giving rise to such termination, payable in accordance with the
ordinary payroll practices of the Company, but no less frequently than monthly
following such termination of employment. In addition, the Company shall pay to
Executive his Performance Bonus (to the extent earned but unpaid) with respect
to the year preceding his termination.
(b) For purposes of this Agreement, "Good Reason" shall mean any of the
following (without Executive's express prior written consent):
(i) Any material breach by the Company of any provision of this
Agreement, including a demotion by the Company in Executive's position or
the assignment to Executive of duties or responsibilities which are
materially inconsistent with the duties or responsibilities contemplated
by Section 1 of this Agreement (except, in either case, in connection with
the termination of Executive's employment for Cause, as a result of
Permanent Disability, as a result of Executive's death or by Executive
other than for Good Reason); or
(ii) A reduction by the Company in Executive's Base Salary, other
than a reduction which is part of a general salary reduction program
affecting senior executives of the Company and which reduction is not, on
average, greater than the salary reduction (as a percentage of Base
Salary) of other senior executives of the Company.
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(c) For purposes of this Agreement, "Cause" mean any of the
following:
(i) willful malfeasance or willful misconduct by Executive in
connection with his employment;
(ii) continuing refusal by Executive to perform his duties hereunder
or any lawful direction of the Chief Executive Officer of the Company
("CEO"), within 10 days after notice of any such refusal to perform such
duties or direction was given to Executive;
(iii) any breach of the provisions of Section 13 of this Agreement by
Executive or any other material breach of this Agreement by Executive; or
(iv) the commission by Executive of (A) any felony or (B) a
misdemeanor involving moral turpitude.
(d) For purposes of this Agreement, "Permanent Disability" shall
mean a disability that would entitle Executive to receive benefits under the
Company's long-term disability plan applicable to senior executive officers as
in effect from time to time, which prevents the Executive from performing his
duties hereunder for 180 consecutive days or more.
6.2 Voluntary Termination by Executive; Discharge for Cause;
Death or Disability. In the event that Executive's employment is terminated (i)
by the Company for Cause; (ii) by Executive other than for Good Reason or (iii)
as a result of the Executive's Permanent Disability or death, prior to the
Termination Date, Executive shall only be entitled to receive the amounts
already earned and accrued, including his Base Salary through the date of
termination and his Performance Bonus (to the extent earned but unpaid) with
respect to the year preceding his termination, based on Executive's employment
with the Company prior to such termination. Executive shall not be entitled,
among other things, to the payment of any Performance Bonus in respect of all
or any portion of the fiscal year in which such termination
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occurs. After the termination of Executive's employment under this Section 6.2
and payment of all amounts due to Executive under the terms of this Agreement in
the event of the termination of Executive's employment under this Section 6.2,
the obligations of the Company under this Agreement to make any further
payments, or provide any benefits specified herein (other than benefits required
to be provided by applicable law or under the terms of any employee benefit plan
of the Company in which the Executive was a participant) to Executive shall
thereupon cease and terminate. Termination of Executive pursuant to this Section
6.2 shall be made by delivery to Executive of a notice from the CEO setting
forth in reasonable detail the reasons for such termination.
7. Stock Arrangements. (a) The Company shall provide Executive with the
opportunity to purchase 20,833 shares of common stock, par value $.01 per share,
of the Company ("Common Stock") at a price per share equal to the fair market
value of a share of the Common Stock on the date of purchase. Executive and the
Company shall enter into a Management Stockholder's Agreement (the "Stock
Agreement") in a form acceptable to the Company and Executive. In respect of the
Common Stock to be purchased pursuant to the Stock Agreement (the "Purchase
Stock"), the Company shall lend to Executive half of such purchase price at an
interest rate equal to the applicable Federal rate as determined under Section
1274(d) of the Internal Revenue Code of 1986, as amended, at the time such loan
is made (the "Loan"). The Loan shall be due upon the earliest of (i) one year
following termination of Executive's employment by the Company without Cause or
by Executive for Good Reason or immediately upon the termination of Executive's
employment for any other reason, (ii) the disposition of the Purchase Stock by
Executive or (iii) seven years from the date of the purchase of the Purchase
Stock. The Loan shall be secured by the entire amount of
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the Purchase Stock and the Company shall have full recourse thereto in the event
of Executive's default on the Loan. Executive and the Company shall enter into
written arrangements necessary to effect the foregoing, including, without
limitation, a loan agreement, note and pledge agreement, upon such terms and
conditions as the parties shall agree.
(b) For each share of Purchase Stock purchased by Executive pursuant to
Section 7(a) hereof, Executive shall be granted an option (the "Option") to
purchase three shares of Common Stock at an exercise price per share equal to
the price per share that Executive pays for the Purchase Stock. With respect to
Options granted to Executive, Executive and the Company shall enter into a
standard form stock option agreement, with such changes as the Company shall
deem necessary or desirable.
8. Mitigation of Damages. Executive shall not be required to mitigate
damages or the amount of any payment provided for under this Agreement by
seeking other employment or otherwise after the termination of his employment
hereunder, and no amounts earned by Executive, whether from self-employment, as
a common-law employee or otherwise, shall reduce the amount of any termination
amount otherwise payable to him.
9. Notices. All notices or communications hereunder shall be in writing,
addressed as follows:
To the Company:
Xxxxxxx X. Xxxxxx
Bruno's, Inc.
000 Xxxxxxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
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with a copy to:
Xxxxx X. Xxxxx, Esq.
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
To Executive:
Xxxx Xxxxxx
c/o Bruno's, Inc.
000 Xxxxxxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Any such notice or communication shall be delivered by hand or by courier or
sent certified or registered mail, return receipt requested, postage prepaid,
addressed as above (or to such other address as such party may designate in a
notice duly delivered as described above), and the third business day after the
actual date of mailing shall constitute the time at which notice was given.
10. Separability; Legal Fees. If any provision of this Agreement shall be
declared to be invalid or unenforceable, in whole or in part, such invalidity or
unenforceability shall not affect the remaining provisions hereof which shall
remain in full force and effect. The Company shall pay the reasonable fees and
disbursements (not in excess of $7,500) of Executive's legal counsel in
connection with the negotiation and execution of this Agreement and the other
documents contemplated hereby. Other than as provided in the foregoing sentence,
each party shall bear the costs of any legal fees and other fees and expenses
which may be incurred in respect of negotiating or enforcing its respective
rights under this Agreement.
11. Assignment. This Agreement shall be binding upon and inure to the
benefit of the heirs and representatives of Executive and the assigns and
successors of the
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Company, but neither this Agreement nor any rights or obligations hereunder
shall be assignable or otherwise subject to hypothecation by Executive (except
by will or by operation of the laws of intestate succession) or by the Company,
except that the Company may assign this Agreement to any successor (whether by
merger, purchase or otherwise) to all or substantially all of the stock, assets
or businesses of the Company, if such successor expressly agrees to assume the
obligations of the Company hereunder.
12. Amendment. This Agreement may only be amended by written agreement of
the parties hereto.
13. Nondisclosure of Confidential Information; Non-Competition. (a)
Executive shall not, without the prior written consent of the Company, use,
divulge, disclose or make accessible to any other person, firm, partnership,
corporation or other entity any Confidential Information pertaining to the
business of the Company or any of its affiliates, except (i) while employed by
the Company, in the business of and for the benefit of the Company, or (ii) when
required to do so by a court of competent jurisdiction, by any governmental
agency having supervisory authority over the business of the Company, or by any
administrative body or legislative body (including a committee thereof) with
jurisdiction to order Executive to divulge, disclose or make accessible such
information. For purposes of this Section 13(a), "Confidential Information"
shall mean non-public information concerning the financial data, strategic
business plans, product development (or other proprietary product data),
customer lists, marketing plans and other non-public, proprietary and
confidential information of the Company, Kohlberg Kravis Xxxxxxx & Co. or their
respective affiliates (the "Restricted Group") or customers, that, in any case,
is not otherwise available to the public (other than by Executive's breach of
the terms hereof).
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(b) During the period of his employment hereunder and for one year
thereafter, Executive agrees that, without the prior written consent of the
Company, (A) he will not, directly or indirectly, either as principal, manager,
agent, consultant, officer, stockholder, partner, investor, lender or employee
or in any other capacity, carry on, be engaged in or have any financial interest
in, any business which is in competition with the business of the Company and
(B) he shall not, on his own behalf or on behalf of any person, firm or company,
directly or indirectly, solicit or offer employment to any person who has been
employed by the Restricted Group at any time during the 12 months immediately
preceding such solicitation.
(c) For purposes of this Section 13, a business shall be deemed to be in
competition with the Company if it is principally involved in the purchase, sale
or other dealing in any property or the rendering of any service purchased,
sold, dealt in or rendered by the Company as a material part of the business of
the Company within the same geographic area in which the Company makes such
purchases, sales or dealings or renders such services. Nothing in this Section
13 shall be construed so as to preclude Executive from investing in any publicly
or privately held company, provided Executive's beneficial ownership of any
class of such company's securities does not exceed 1% of the outstanding
securities of such class.
(d) Executive and the Company agree that this covenant not to compete is a
reasonable covenant under the circumstances, and further agree that if in the
opinion of any court of competent jurisdiction such restraint is not reasonable
in any respect, such court shall have the right, power and authority to excise
or modify such provision or provisions of this covenant as to the court shall
appear not reasonable and to enforce the remainder of the
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covenant as so amended. Executive agrees that any breach of the covenants
contained in this Section 13 would irreparably injure the Company. Accordingly,
Executive agrees that the Company may, in addition to pursuing any other
remedies it may have in law or in equity, cease making any payments otherwise
required by this Agreement and obtain an injunction against Executive from any
court having jurisdiction over the matter restraining any further violation of
this Agreement by Executive.
14. Beneficiaries; References. Executive shall be entitled to select (and
change, to the extent permitted under any applicable law) a beneficiary or
beneficiaries to receive any compensation or benefit payable hereunder following
Executive's death, and may change such election, in either case by giving the
Company written notice thereof. In the event of Executive's death or a judicial
determination of his incompetence, reference in this Agreement to Executive
shall be deemed, where appropriate, to refer to his beneficiary, estate or other
legal representative. Any reference to the masculine gender in this Agreement
shall include, where appropriate, the feminine.
15. Survivorship. The respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations. The
provisions of this Section 15 are in addition to the survivorship provisions of
any other section of this Agreement.
16. Governing Law. This Agreement shall be construed, interpreted and
governed in accordance with the laws of the State of Alabama, without reference
to rules relating to conflicts of law.
17. Effect on Prior Agreements. This Agreement contains the entire
understanding between the parties hereto and supersedes in all respects any
prior agreement or
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understanding between the Company or any affiliate of the Company and Executive
as to employment matters other than the agreements referred to in Section 7
hereof.
18. Withholding. The Company shall be entitled to withhold from payment any
amount of withholding required by law.
19. Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original.
BRUNO'S, INC.
By /s/ Xxxxxxx X. Xxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President and Chief
Executive Officer
EXECUTIVE
/s/ Xxxx Xxxxxx
----------------
Xxxx Xxxxxx
