Exhibit 10.11
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into this 31st day of
March, 2000, to be effective as of the 2nd day of April, 2000, by
and between Xxxxxx'x, Inc., a Wisconsin corporation (the
"Company") and Xxxx X. Xxxxx, an individual ("Employee").
RECITALS:
WHEREAS, the Company is engaged in, among other things, the
business of owning and operating retail grocery stores (the
"Retail Business"); and
WHEREAS, Employee has extensive experience and expertise in
the retail grocery business, including the management of a large
retail grocery store chain known as Mega Marts, Inc. ("Mega
Marts"); and
WHEREAS, the Company desires to employ Employee and Employee
desires to be employed by the Company pursuant to the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the premises set forth
above, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
l. Employment; Duties. During the Employment Period (as
hereinafter defined):
(a) The Company will employ Employee and Employee will
perform services as the Company's Vice-President - Corporate
Retail. Employee will have general responsibility for the
management, oversight and direction of the Retail Business of the
Company, under the direction, supervision and oversight of, and
reporting directly to, the President and Chief Executive Officer
of the Company. In addition, Employee will have such other
duties and responsibilities as the Board of Directors or the
President of the Company reasonably assigns to Employee from time
to time, provided such other duties and responsibilities are
consistent with Employee's position as a senior member of the
Company's management. In the performance of his duties hereunder
Employee will not be required to travel outside of the
metropolitan Milwaukee area (consisting of the Wisconsin counties
of Milwaukee, Ozaukee, Washington, Waukesha, Racine and Kenosha)
for a total of more than sixty days in any one-year period.
(b) Employee will perform his services hereunder
faithfully and to the best of his abilities, and will devote his
best efforts and all of his business time, attention and skill to
the business and affairs of the Company. If Employee is elected
as an officer and/or director of the Company or any of its
subsidiaries or affiliates, or performs services for any
subsidiary or affiliate of the Company, during the term of this
Agreement, Employee will serve in such additional capacities and
perform such additional services without further compensation.
(c) Employee will not act in any manner, which,
directly or indirectly, could damage the Company's business or
adversely affect the good will, reputation or business
relationships of the Company with the public generally or with
any of its employees, customers, suppliers or other persons
having dealings with it. Employee will conduct himself at all
times in accordance with the Company's code of business conduct
and ethics and all other policies in effect from time to time
governing the conduct of the Company's employees or officers.
(d) Nothing contained herein shall preclude Employee
from serving as a director or member of a committee of, or as a
consultant to, any business organization which does not conflict
with the Company or its business, and from engaging in charitable
and community activities, provided that such services and
activities do not materially interfere with the regular
performance of his duties and responsibilities under this
Agreement, and provided further that the Company is notified in
writing in advance of all such services and activities.
2. Compensation; Benefits.
(a) In consideration of the services to be performed
by Employee during the Employment Period pursuant to Section l
hereof and Employee's compliance with the other provisions of
this Agreement, the Company will pay Employee an annual salary in
the amount of $332,500. Such salary will be payable in
accordance with the Company's normal payroll practices from time
to time in effect for its executive employees.
(b) Employee shall be entitled to participate in any
employee benefits and benefit programs which are made available
generally by the Company to its executives from time to time
during the Employment Period, including any life, health, dental,
accident, sickness and disability plans (whether or not insured),
and in any qualified pension or profit sharing plan, savings
plan, stock option plan, stock appreciation rights plan, deferred
compensation plan or any other fringe benefit plan or program
which the Company may from time to time make available to its
executives, in each case in accordance with and subject to the
terms of such plans as the same may be in effect from time to
time. Employee will be entitled to vacations and perquisites in
accordance with the Company's policies as in effect from time to
time for its executives, including the use of a "Class A" vehicle
on the same terms as those on which such vehicles are made
available to other Company executives.
(c) The amounts payable to Employee pursuant to this
Section 2 are before any deductions therefrom for any taxes
required to be withheld by federal, state and local governments.
3. Term.
(a) The term of this Agreement pursuant to which
Employee will provide services to the Company hereunder and the
Company will employ Employee (the "Employment Period") will be
for a period of five (5) years commencing on the date hereof,
unless earlier terminated in any of the following ways:
(i) The Employment Period will terminate upon the
written agreement of the parties;
(ii) The Employment Period will terminate upon the
death or permanent disability of Employee. The term
"permanent disability" of Employee means any mental or
physical illness, disability or incapacity which renders
Employee unable to perform his duties hereunder effectively
for a continuous period of One Hundred Eighty (180) days, or
Employee receiving or becoming entitled to receive permanent
disability payments pursuant to the Company's group
disability insurance policy covering Employee. If there is
any dispute as to whether Employee is permanently disabled
within the meaning of this Section 3(a)(ii), such dispute
shall be submitted to a licensed physician acceptable to the
parties who shall conduct an examination of Employee for the
purpose of resolving such dispute. Employee shall submit to
such examination and the determination of such physician as
to whether Employee is permanently disabled within the
meaning of this Section 3(a)(ii) will be binding and
conclusive on the parties.
(iii) The Company may terminate the Employment
Period at any time for "cause." For purposes of this
Agreement, the term "cause" means only (i) the wilful
commission by Employee of a material act of dishonesty or
moral turpitude involving the Company; (ii) Employee's
commission of an act constituting a felony; (iii) Employee's
gross negligence or gross incompetence in the performance of
his duties and responsibilities hereunder or in any other
capacity in which he may be serving the Company; (iv) the
wilful failure of Employee to carry out his duties and
responsibilities hereunder or to follow a specific and
lawful directive of the Board of Directors or President of
the Company (provided such directive is consistent with his
position hereunder) but only if such failure continues for
ten days after Employee has been provided with written
notice of such failure (which notice includes a description
of the nature of the failure); (v) Employee's wilful
disclosure of material proprietary confidential information
of the Company to or for the benefit of a competitor of the
Company, to the extent such information was not available
publicly; (vi) any intentional and material
misrepresentation by Employee to the President, directors or
shareholders of the Company; (vii) Employee's use of illegal
drugs or chronic or habitual use abuse of alcohol; or (viii)
any material breach of this Agreement by Employee, but only
after Employee has been provided with written notice of such
breach (which notice includes a description of the nature of
the breach) and a period of five (5) days after such breach
to cure the same.
(b) Upon termination of the Employment Period, the
Company will pay to Employee the full amount of any unpaid
compensation earned by Employee pursuant to Section 2 of this
Agreement through and including the termination date (and
prorated as appropriate), and the Company will not be obligated
to make any further payments to or for the benefit of Employee.
(c) Employee's obligations set forth in Sections 4
through 9 hereof shall survive the termination of the Employment
Period, regardless of the reason for such termination (including
termination other than as permitted under the preceding
subsection 3(a), whether or not either party is in breach of this
Agreement), except as provided in Sections 4(b) and 4(c) below.
4. Noncompetition.
(a) During the Employment Period and for two (2) years
(the "Restriction Period") after the Employee's employment
hereunder terminates (regardless of the reason for such
termination, except as provided in Sections 4(b) and 4(c) below)
Employee will not, directly or indirectly, as a principal, agent,
consultant, owner, employee, trustee, beneficiary, partner, co-
venturer, officer, director, stockholder (other than as a
stockholder of less than 5% of the stock of a publicly traded
corporation) or in any other capacity, engage in, have an
interest in, provide services or advice to, or become associated
with any entity, firm, business, activity or enterprise which is
engaged in the wholesale or retail distribution or sale of
groceries and which (either directly or through a subsidiary or
affiliate) has a grocery warehouse or distribution facility or a
retail grocery store in the "Proscribed Territory," as that term
is defined below. The "Proscribed Territory" means (i) the area
consisting of the States of Wisconsin, Michigan, Illinois,
Indiana, and Ohio, plus (ii) to the extent not included within
(i), the area encompassed within a radius of four hundred (400)
miles of any warehouse or distribution facility operated by the
Company or any affiliate of the Company.
(b) Notwithstanding the preceding Section 4(a), if the
Employment Period is terminated by the Employer in breach of this
Agreement and without "cause" as provided in Subsection 3(a)(iii)
above, then the duration of the Restriction Period shall be one
(1) year and not two (2) years after the termination of the
Employment Period (but shall not in any event extend beyond the
date on which the five-year period specified in Section 3 above
would have expired).
(c) Notwithstanding the preceding Sections 4(a) and
4(b), Section 4(a) shall not apply after the termination of the
Employment Period in the event the Employment Period terminates
by expiration of the five-year term specified in Section 3(a)
above (and not pursuant to Subsections 3(a)(i) through 3(a)(iii)
nor by Employee's voluntary termination or resignation).
(d) Employee acknowledges and agrees that the
restrictions set forth in this Section 4 are founded on valuable
consideration and are reasonable in duration and geographic area
in view of the circumstances under which this Agreement is
entered into, and that such restrictions are necessary to protect
the legitimate interests of the Company, including, without
limitation, to secure to the Company the full value of its
investment in Mega Marts, Inc., Employee's former employer. In
the event that any provision of this Section 4 is determined to
be invalid by any court of competent jurisdiction, the provisions
of this Section 4 shall be deemed to have been amended and the
parties will execute any documents and take whatever action is
necessary to evidence such amendment, so as to eliminate or
modify any such invalid provision and to carry out the intent of
this Section 4 so to render the terms of this Section 4
enforceable in all respects as so modified.
(e) Employee acknowledges and agrees that irreparable
injury will result to the Company in the event Employee breaches
any covenant or obligation of Employee contained in this Section
4, and that the remedy at law for such breach will be inadequate.
Therefore, if Employee engages or threatens to engage in any act
in violation of the provisions of this Section 4, the Company
shall be entitled, in addition to such other remedies and damages
as may be available to it by law or under this Agreement, to
injunctive or other equitable relief to enforce the provisions of
this Section 4.
5. Confidential Information. As used herein, the term
"Confidential Information" refers to all information and
materials belonging to, used by or in the possession of the
Company relating to its business strategies, products, pricing,
purchasing, vendor relationships, customers, technology,
programs, costs, employee compensation, marketing plans,
developmental plans, computer programs, computer systems,
inventions, developments, formulae, processes, designs, drawings
and trade secrets of every kind and character. "Confidential
Information" also includes confidential information belonging to
other companies and disclosed to Employee by the Company.
"Confidential Information" does not, however, include (a)
information which Employee can demonstrate was in the public
domain or known generally to the industry at the time of its
disclosure to Employee, or (b) information which is disclosed to
Employee after the termination of the Employment Period, without
restriction, by a third party not directly or indirectly
obligated to the Company to maintain the confidentiality of such
information, or (c) information which enters the public domain or
becomes known generally to the industry through no act or failure
to act on the part of Employee. For purposes of this Section 5
and the following Sections 6 through 10, the term "Company"
includes all past, present or future subsidiaries and affiliates
of Xxxxxx'x, Inc., including Mega Marts, and "Confidential
Information" includes confidential information of Mega Marts.
6. Ownership. Employee acknowledges that all of the
Confidential Information is and shall continue to be the
exclusive proprietary property of the Company, whether or not
prepared in whole or in part by Employee and whether or not
disclosed to or entrusted to the custody of Employee.
7. Nondisclosure and Nonuse. Employee will not, either
during the Employment Period or at any time thereafter
(regardless of the reason for the termination of the Employment
Period), disclose any Confidential Information, in whole or in
part, to any person or entity (other than to employees of the
Company to whom such disclosure is necessary for the performance
of Employee's duties hereunder), for any reason or purpose,
unless the Company gives its prior written consent to such
disclosure. Employee also will not use any Confidential
Information in any manner for Employee's own purposes or for the
benefit of any person or entity other than the Company, whether
such use consists of duplication, removal, oral communication,
disclosure, transfer or any other unauthorized use thereof,
unless the Company gives its prior written consent to such use.
8. New Developments. Employee will promptly (and in any
event upon the request of the Company) disclose to the Company
any and all improvements, inventions, developments, discoveries,
innovations, systems, techniques, ideas, processes, programs and
other things which may be of assistance or benefit to the
Company, whether or not patentable or otherwise legally
protectable, relating to or arising out of any developments,
services or products of, or pertaining in any manner to, any
aspect of the business of the Company, and made or conceived of
by Employee, alone or with others, during the Employment Period
(collectively the "New Developments"). All New Developments
shall be and remain the sole and exclusive property of the
Company and upon the request of the Company, and without further
compensation, Employee will do all lawful things reasonably
necessary to ensure the Company's ownership of such New
Developments, including, without limitation, the execution of
documents assigning and transferring to the Company or its
assigns all of Employee's right, title and interest in and to
such New Developments, and the rendering of assistance and the
execution of all documents required to enable the Company to file
and obtain patents, trademark or trade name registrations in the
United States and foreign countries on any of such New
Developments and otherwise to register or legally protect its
rights thereto.
9. Surrender of Material Upon Termination. Upon
termination of the Employment Period, for whatever reason,
Employee will immediately surrender to the Company all of the
property and other things of value in his possession, or in the
possession of any person or entity under his control, relating
directly or indirectly to the business of the Company, including,
without limitation, all personal notes, drawings, manuals,
documents, photographs or the like, including copies thereof,
relating directly or indirectly to any Confidential Information
or New Developments.
10. Common Law of Torts or Trade Secrets. Nothing in this
Agreement shall be construed to limit or negate the common law of
torts or trade secrets where such common law provides the Company
with broader protection than the protection provided by this
Agreement.
l1. Expense Reimbursement. The Company will reimburse
Employee for his out-of-pocket expenses reasonably incurred in
connection with the performance of his services hereunder,
subject to the submission of documentation substantiating such
expenses and other compliance with the Company's policies
regarding expense reimbursement.
12. Employee's Representation. Employee hereby represents
and warrants that he is not a party to any agreement (whether
written or oral) with, and he does not have any obligations to,
any person or entity other than the Company that are inconsistent
with or would be breached or violated by the Employee's entering
into this Agreement or providing services to the Company as
contemplated hereby, including, without limitation, obligations
and restrictions relating to noncompetition, nonsolicitation,
confidentiality, intellectual property, or the like.
13. Severability. The invalidity or unenforceability of
any provision of this Agreement shall not affect or impair the
validity or enforceability of any other provision, and this
Agreement shall be construed as if such invalid or unenforceable
provision were not contained herein. Notwithstanding the
preceding sentence, if any arbitrator or court of competent
jurisdiction shall determine that any geographic or time
restraint provided in this Agreement is too broad as to the area
or time covered, such restraint may be reduced to whatever extent
the court deems reasonable and such restraint may be enforced as
reduced.
14. Notice. All notices under this Agreement shall be in
writing and any notice shall be considered to be given and
received in all respects on the day it is personally delivered or
deposited in the United States mail, first class, postage
prepaid, addressed as follows (or to such other address as may be
designated by one party to the other by notice duly given);
provided that written notice given in any other manner will
nonetheless be effective upon its actual receipt by the person or
entity entitled to receive it hereunder:
If to the Company:
Xxxxxx'x, Inc.
00000 Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attn: President
with a copy to:
Xxxxx Xxxxxxxxxxx Xxxxx S.C.
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxx
If to Employee:
at the then current address for Employee as
contained in the Company's employment records
15. Exclusive Jurisdiction; Attorneys' Fees.
(a) Each of the parties hereby (i) irrevocably
consents and agrees that any action or proceeding arising under,
or in connection with, this Agreement shall be brought
exclusively in any federal or state court within Milwaukee
County, State of Wisconsin, and any court to which an appeal may
be taken in any such litigation, and (ii) by execution and
delivery of this Agreement, irrevocably submits to, and accepts,
with respect to any such action or proceeding, the jurisdiction
of the aforesaid courts, and irrevocably waives any and all
rights such party may now or hereafter have to object to such
jurisdiction under the constitution or laws of the State of
Wisconsin or the Constitution or laws of the United States of
America or otherwise.
(b) In any action hereunder or to enforce any
provision of this Agreement, the prevailing party shall be
reimbursed by the other party for all reasonable legal fees and
expenses, if any, reasonably incurred by such party in the
enforcement of its or his rights under any provisions of this
Agreement.
16. Waiver of Jury Trial. THE PARTIES HERETO HEREBY
VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE
(WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) BETWEEN OR AMONG
ANY OF THE PARTIES ARISING OUT OF OR IN ANY WAY RELATED TO THIS
AGREEMENT OR THE EMPLOYMENT RELATIONSHIP CONTEMPLATED HEREBY.
17. Waiver. A waiver by a party of any breach by the other
party of any provision of this Agreement shall not be deemed to
be a waiver by such first party of any subsequent breach.
18. Assignment. Employee may not assign, pledge or
encumber this Agreement or any interest herein.
19. Binding Effect. This Agreement shall be binding upon
and inure to the benefit of the parties hereto, the Company's
successors and permitted assigns and Employee's heirs and legal
representatives.
20. Amendment. This Agreement may be amended only by a
written instrument executed by the parties hereto or their
respective successors, assigns, heirs or legal representatives,
as applicable.
21. Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of
Wisconsin.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first above written.
XXXXXX'X, INC.
By: XXXXXX X. XXXXXXX
---------------------------
Xxxxxx X. Xxxxxxx, President
and Chief Executive Officer
XXXX X. XXXXX
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Xxxx X. Xxxxx ("Employee")
