Commission File No. 0-6544
EMPLOYMENT AGREEMENT
AGREEMENT, made September 12, 1996, by and between
BRUNO'S, INC., an Alabama corporation (the "Company"), and XXXXXX
X. XXXXX ("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, General Counsel,
and Secretary.
1.2 Subject to the terms and conditions of this
Agreement, Executive hereby accepts employment as Senior Vice
President, General Counsel and Secretary 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 commenced on June 17, 1996 and, subject to the
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terms hereof, shall terminate on the earlier of (i) June 16, 1999
(the "Termination Date") or (ii) termination of 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 $240,000
per annum. Base Salary shall be payable in accordance with the
ordinary payroll practices of the Company, but no less frequently
than 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 "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 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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3.4 Relocation Allowance. To assist the Executive with his
relocation to the Birmingham, Alabama area, the Company agrees to pay to the
Executive a relocation allowance in the amount of $50,000. Such
payment shall be made upon the execution of this Agreement.
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 positions 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
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limitation, expenses for travel and similar items related to such
duties and responsibilities. The 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 any earned but unpaid bonus of Executive 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
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(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.
(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. (a) 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
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already earned and accrued, including Base Salary through the date
of termination and any earned but unpaid bonus of Executive 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
Bonus in respect of all or any portion of the fiscal year in
which such termination 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 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. The Company shall provide
Executive with the opportunity to purchase 25,000 shares of
common stock, par value $.01 per share, of the Company at a price
of $12.00 per share. Executive and the Company shall enter into
the Management Stockholder's Agreement (the "Stock Agreement"),
substantially in the form attached hereto as Exhibit A, with such
changes as the Company shall deem necessary or desirable. In
addition, the Company shall grant options (the "Options") to
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Executive to purchase 56,250 shares of the Company's Common Stock at
an exercise price of $12.00 per share. 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
with a copy to:
Xxxxx X. Xxxxx, Esq.
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
To Executive:
Xxxxxx X. Xxxxx
c/o Bruno's, Inc.
000 Xxxxxxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
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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 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 sustantally all of the stock,
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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
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remainder of the 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.
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17. Effect on Prior Agreements. This Agreement
contains the entire understanding between the parties hereto and
supersedes in all respects any prior agreement or
understanding between the Company or any affiliate of the Company
and Executive as to employment matters other than the agreements
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/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
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