Exhibit 10.15
EMPLOYMENT CONTRACT
AGREEMENT made as of the 9th day of May 2002 between EAGLE FOOD
CENTERS, INC., a Delaware corporation with principal offices presently located
at Xxxxx 00 xxx Xxxxxxxxx Xxxx, Xxxxx, Xxxxxxxx 00000 (hereinafter referred to
as the "Corporation"), and XXXX XXXX, (hereinafter referred to as "Employee").
W I T N E S S E T H :
WHEREAS, the Corporation desires that Employee shall be employed by the
Corporation as its Vice President of Sales and Marketing and Employee is
desirous of such employment, upon the terms and conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter contained, the parties hereto hereby agree
as follows:
1. EMPLOYMENT. The Corporation shall employ Employee, and Employee
shall serve the Corporation, as its Vice President of Sales and Marketing, upon
the terms and conditions hereinafter set forth.
2. TERM. The employment of Employee by the Corporation hereunder shall
commence as of the date hereof and, unless sooner terminated pursuant to
Paragraphs 9 through 11 hereof, and shall continue for a period of two (2) years
(the "Term).
3. OFFICE; DUTIES; EXTENT OF SERVICES.
(a) During the Term, Employee shall serve as Vice President,
Sales and Marketing, faithfully and to the best of his ability, under the
direction and supervision of the Chief Executive Officer of the Corporation (the
"CEO"). Employee shall transmit or shall cause to be transmitted necessary
instructions and advice to all subordinate employees of the Corporation and all
other proper persons.
b) Employee agrees that he shall devote his best efforts,
energies and skills to the discharge of his duties and responsibilities
hereunder. To this end, Employee agrees that he shall devote his full business
time and attention to the business and affairs of the Corporation and he shall
not, without the prior written approval of the CEO, directly or indirectly,
engage or participate in, or become an officer or director of, or become
employed by, or render advisory or other services in connection with, any other
business enterprise.
4. SALARY AND BONUS ARRANGEMENTS.
(a) During the Term, the Corporation shall pay to Employee a
salary for his services at the rate of $190,000 per annum (the "Base Salary"),
payable in accordance with the normal payroll practices and procedures of the
Corporation. Annual salary adjustments (cost of living adjustments or otherwise)
shall be in accordance with the terms and conditions of the Corporation's
compensation plan. The Employee acknowledges that, upon reporting to work to
commence his work duties, he received a signing bonus in the amount of
$35,000.00. If Employee's employment hereunder is terminated within six (6)
months after the date hereof by the Corporation for "cause" (as hereinafter
defined), or if Employee abandons such employment, such $35,000.00 bonus payment
shall be returned to the Corporation.
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(b) During the Term, Employee shall be eligible to receive
bonus compensation at the end of each fiscal year of the Corporation in an
amount to be determined by the Board of Directors in its sole discretion. The
Corporation and Employee shall use reasonable efforts to agree on mutually
acceptable performance targets for such bonus compensation. Bonus compensation
shall be at a targeted rate of 40% of the Base Salary during any year of
Employee's employment hereunder and may be up to 80% of the Base Salary. Payout
of the bonus compensation shall be in accordance with the terms and conditions
of the Corporation's compensation plan.
(c) In the event the Corporation shall terminate Employee's
employment hereunder other than for "cause" pursuant to paragraph 11(a) herein,
Employee shall receive payment in a lump sum equal to twelve (12) months of
compensation based upon Employee's base salary upon the date of termination of
his employment, regardless of term. Normal deductions and withholdings shall be
deducted from such payment. In addition, Employee shall receive:
1) Continued health and dental insurance coverage at the same benefit levels
as at the time of termination of employment, for a period of twelve (12)
months or until Employee is gainfully employed by a new employer offering
such benefits.
2) Any accrued but unused vacation pay.
3) Professional outplacement services and assistance to provided and paid for
by the Corporation up to the sum of $10,000.
5. EXPENSES OTHER THAN RELOCATION EXPENSES. It is contemplated that, in
connection with his employment hereunder, Employee may be required to incur
reasonable and necessary travel, business entertainment and other business
expenses. The Corporation agrees to pay, or reimburse Employee for, all
reasonable and necessary travel, business entertainment and other business
expenses incurred or expended by him incident to the performance of his duties
and responsibilities hereunder, upon submission by Employee to the CEO (or his
designee or designees) of vouchers or expense statements satisfactorily
evidencing such expenses and such expenses being approved by the CEO.
6. RELOCATION AND RELOCATION EXPENSES.
Employer agrees to pay reasonable relocation expenses for moving.
Such expenses to be reimbursed after submission and approval by the CEO. If
the Corporation changes the location of its Principal Office City during the
Term, then concurrently with such change Employee agrees to move to a new
residence within one hour commuting distance of such new Principal Office
City. Such a concurrent move will be expensed in accordance with paragraphs
7(b), (c), and (d) herein.
Employer will provide reimbursement of all usual and customary real
estate fees and closing costs (up to 7%) associated with the sale of your
primary residence if sold within one (1) year following the execution of this
agreement. Reasonable costs do not include items such as fire and hazard
insurance, real estate taxes or loan initiation fees or loan points. Eagle
will pay reasonable closing costs on the purchase of a new residence when
submitted with appropriate closing documents and approved by the CEO. Any
relocation costs or real estate fees or costs paid pursuant to this agreement
will be repaid to the Employer if Employee terminates employment within one
(1) year of the execution of this Agreement.
Employer shall provide up to three (3) months of reasonable
temporary living expenses beginning with the first date of employment with
Employer.
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7. EMPLOYEE BENEFITS; VACATIONS.
Employee shall be entitled to participate in any and all life
insurance, medical insurance, disability insurance, directors' and officers'
liability insurance and any other employee benefit plan or plans which may be
generally made available during the Term to senior level executives of the
Corporation to the extent that Employee qualifies under the eligibility
provisions of any such plan or plans and as such plans may be amended. Employee
shall be entitled to vacations (taken in segments), aggregating four (4) weeks
in each twelve month period of the Term, in accordance with the Corporation's
vacation policy, to be taken at times consistent with the effective discharge of
Employee's duties.
8. DEATH. In the event of the death of Employee during the Term, the
salary to which Employee would be otherwise entitled pursuant to Paragraph 4(a)
hereof shall continue to be paid through the end of the month in which death
occurs to the last beneficiary designated by Employee by written notice to the
Corporation, or, failing such designation, to his estate and such beneficiary or
estate shall also be entitled to all accrued and unpaid bonus compensation owing
to Employee under Paragraph 4(b). Employee shall have the right to name, from
time to time, any one person as beneficiary hereunder or, with the consent of
the CEO, he may make other forms of designation of beneficiary or beneficiaries.
Employee's designated beneficiary or beneficiaries or personal representative,
as the case may be, shall accept the payments provided for in this Paragraph 10
in full discharge and release of the Corporation of and from any further
obligations under this Agreement.
9. TERMINATION.
Employee's employment hereunder may be terminated by the
Corporation for "cause" at any time if Employee shall commit any of the
following "Acts of Default":
(i) Employee shall have refused to perform any of his
obligations set forth herein in any material respect or Employee shall have
taken any action which causes material harm to the Corporation or its
operations, and Employee shall have failed to cure such failure or action within
five (5) days after receiving written notice thereof from the CEO;
(ii) Employee shall have committed an act of fraud,
theft or dishonesty against, or shall breach fiduciary obligation to, the
Corporation and/or any of its subsidiary companies; or
(iii) Employee shall be convicted of (or plead NOLO
CONTENDERE to) any felony or any misdemeanor (whether or not involving the
Corporation and/or any of its subsidiary companies) involving moral turpitude or
which might, in the opinion of the Board of Directors, cause embarrassment to
the Corporation and/or any of its subsidiary companies.
In the event the Corporation elects to terminate the employment of Employee for
"cause" pursuant to this Paragraph 11(a), the CEO shall send written notice to
Employee terminating such employment and describing the action of Employee
constituting the Act of Default, and thereupon the Corporation shall have no
further obligations under this Agreement, with the exception of the obligation
to pay Employee, promptly after such termination, any accrued or unpaid salary
earned by Employee through and including the effective date of such termination
and any accrued and unpaid bonus compensation owing to Employee pursuant to
Paragraph 4(b) hereof, but Employee shall continue to have the obligations
provided for in Paragraph 12 hereof. Nothing contained in this Paragraph 11
shall constitute a waiver or release by the Corporation of any rights or claims
it may have against Employee for actions or omissions which may give rise to an
event causing termination of this Agreement pursuant to this Paragraph 11(a).
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10. RESTRICTIVE COVENANTS AND CONFIDENTIALITY INJUNCTIVE RELIEF.
(a) Employee agrees, as a condition to the performance by
the Corporation of its obligations hereunder, particularly its obligations under
Paragraph 4 hereof, that during the Term and during the further period of one
(1) year after the termination of such employment, for any reason, Employee
shall not, without prior written approval of the CEO, directly or indirectly
through any other individual or entity:
(i) solicit, raid, entice or induce any
individual or entity that presently is or at
any time during the Term shall be, or who
has indicated an interest in becoming, a
supplier of the Corporation, and/or any of
its subsidiary companies, to become a
supplier of any other individual or entity,
and Employee shall not approach any such
individual or entity for such purpose or
authorize or knowingly approve the taking of
such actions by any other individual or
entity; or
(ii) solicit, raid, entice or induce an
individual who presently is or at any time
during the Term shall be an employee of or
consultant to the Corporation and/or any of
its subsidiary companies, to leave such
employment or consulting position or
positions or to become employed by or become
a consultant to any other individual or
entity, and Employee shall not approach any
such employee or consultant for such purpose
or authorize or knowingly approve the taking
of such actions by any other individual or
entity.
(b) Recognizing and acknowledging that confidential
information may exist, from time to time, with respect to the business and/or
activities of the Corporation and/or its subsidiary companies, and that the
knowledge, information and relationships with suppliers and agents, including,
but not limited to, supplier lists and/or other such lists, and that the
knowledge of the Corporation's and/or its subsidiary companies' business
methods, systems, plans and policies and other confidential information which he
has heretofore and shall hereafter establish, receive or obtain as an employee
of the Corporation and/or its subsidiary companies or otherwise, are valuable
and unique assets of the respective businesses of the Corporation and its
subsidiary companies, Employee agrees that during and at all times after the
Term he shall not (otherwise than pursuant to his duties hereunder), without the
prior written approval of the CEO, disclose any such knowledge or information
pertaining to the Corporation and/or any of its subsidiary companies, their
business, activities, personnel or policies, to any individual or entity, for
any reason or purpose whatsoever, or use for his own benefit or for the benefit
of any other individual or entity, any such knowledge or information. The
provisions of this Paragraph 12(b) shall not apply to information which is or
shall become generally known to the public or the trade (except by reason of
Employee's breach of his obligations hereunder), information which is or shall
become available in trade or other publications and information which Employee
is required to disclose by order of, or subpoena issued by, a court of competent
jurisdiction or other governmental authority (but only to the extent
specifically ordered by such court or other governmental authority); provided,
however, that promptly upon receipt of such subpoena or order requiring
disclosure Employee shall give the Corporation written notice of the
circumstances under which Employee is so required to make disclosure of such
information, as well as the intended disclosure of such information, so that the
Corporation has the opportunity to seek a protective order or follow such other
course or courses of action as the Corporation, in its sole discretion, may deem
appropriate.
(c) The provisions of this Paragraph 12 shall survive the
termination of Employee's employment hereunder, irrespective of the reason
thereof.
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(d) Employee recognizes and acknowledges that the
services to be rendered by him are of a special, unique and extraordinary
character and, in connection with such services, he will have access to
confidential information vital to the Corporation's and/or it subsidiary
companies' businesses. By reason of this, Employee consents and agrees that if
he violates any of the provisions of this Agreement with respect to diversion of
the Corporation's and/or its subsidiary companies' suppliers or employees, or
confidentiality, the Corporation and its subsidiary companies would sustain
irreparable harm, and, therefore, in addition to any other remedies which the
Corporation may have under this Agreement or otherwise, the Corporation and/or
its subsidiary companies shall be entitled to apply to any court of competent
jurisdiction for an injunction restraining Employee from committing or
continuing any such violation or violations of this Agreement, and Employee
shall not object to any such application or applications made in good faith.
Nothing in this Agreement shall be construed as prohibiting the Corporation
and/or its subsidiary companies from pursuing any other remedy or remedies,
including, without limitation, recovery of damages.
11. TRANSACTIONS OFFERED TO THE CORPORATION; PROPRIETARY MATERIALS.
During the term of his employment hereunder, Employee agrees to bring to the
attention of the CEO, all proposals, business opportunities or investments of
whatever nature, in areas in which the Corporation and/or any of its subsidiary
companies is active or may be interested in becoming active, which are created
or devised by Employee or come to the attention of Employee and which might
reasonably be expected to be of interest to the Corporation and/or any of its
subsidiary companies. Without limiting the generality of the foregoing, Employee
acknowledges and agrees that memoranda, notes, records and other documents made
or compiled by Employee or made available to Employee during the term of this
Agreement concerning the business and/or activities of the Corporation and/or
any of its subsidiary companies shall be the Corporation's property and shall be
delivered by Employee to the CEO upon termination of this Agreement or at any
other time at the request of the CEO.
12. DEDUCTIONS AND WITHHOLDING. Employee agrees that the Corporation
shall withhold from any and all payments paid or payable to Employee, or on
Employee's behalf, pursuant to this Agreement, an amount equal to any taxes
required by any governmental regulatory authority to be withheld or otherwise
deducted and paid by the Corporation in respect of such payments. In connection
with the exercise of the Option, the Corporation may require the Employee to
reimburse the Corporation for any such withholding tax liability in respect of
the issuance of shares upon such exercise. In lieu thereof, the Corporation
shall have the right to withhold the amount of such taxes from any other sums
due or to become due from the exercise of any such option. The Corporation may,
in its discretion, hold the stock certificate to which Employee is entitled upon
exercise of the Option as security for the payment of such withholding tax
liability, until cash sufficient to pay that liability has been accumulated. In
addition, the Corporation shall be authorized, without the prior written consent
of Employee, to effect any such withholding upon exercise of the Option by
retention of shares issuable upon such exercise having a fair market value at
the date of exercise which is equal to the amount to be withheld; provided,
however, that the Corporation shall not be authorized to effect such withholding
without the prior written consent of Employee if such withholding would subject
Employee to liability under Section 16(b) of the Securities Exchange Act of
1934, as amended.
13. PRIOR AGREEMENTS. This Agreement cancels and supersedes any and all
prior agreements and understandings between the parties hereto respecting the
employment of Employee by the Corporation.
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14. REPRESENTATIONS AND WARRANTIES OF THE PARTIES.
(a) Employee (x) represents and warrants to the
Corporation that (i) he is not under any obligation, restriction or limitation,
contractual or otherwise, to any other individual or entity which would prohibit
or impede him from performing his duties and responsibilities hereunder, and
that he is free to enter into and perform the terms and provisions of this
Agreement, (ii) he does not have any impairment which would interfere with his
ability to perform the essential functions of his job, and (iii) Common Stock
purchased or acquired hereunder will be purchased or acquired for his own
account, for investment only and not with a view to the resale or distribution
thereof in violation of any federal or state securities laws, and (y) agrees
that any subsequent resale or distribution of any such Common Stock shall be
made only pursuant to either (A) an effective registration statement under the
Securities Act of 1933, as amended, covering such Common Stock and under
applicable state securities laws or (B) specific exemptions from the
registration requirements of the Securities Act of 1933, as amended, and any
applicable state securities laws. In the event that Employee exercises the
Option, in connection therewith Employee shall deliver to the Corporation a
written statement to the effect set forth in clauses (x) (iii) and (y) above.
(b) This Agreement has been duly authorized by all
necessary corporate action on the part of the Corporation and has been duly
executed and delivered on behalf and in the name of the Corporation by the CEO.
15. EFFECTIVENESS. This Agreement shall become effective when, and only
when, the Corporation shall have received this Agreement signed by the
Corporation and Employee.
16. WAIVER. Waiver by either party hereto of any breach or default by
the other party of any of the terms and provisions of this Agreement shall not
operate as a waiver of any other breach or default, whether similar to or
different from the breach or default waived.
17. NOTICES. All notices required to be given under this Agreement
shall be in writing and sent by registered mail or certified mail, postage
prepaid, return receipt requested. Such notices shall be deemed to have been
validly served, given or delivered three (3) business days after deposit in the
United States mail addressed to the party or parties.
Either party may change the address to which notices,
requests, demands and other communications hereunder shall be sent by sending
written notice of such change of address to the other party in the manner above
stated.
18. ASSIGNABILITY AND BINDING EFFECT. This Agreement shall inure the
benefit of and shall be binding upon the heirs, executors, administrators,
successors and legal representatives of Employee, and shall inure to the benefit
of and be binding upon the Corporation and its successors and assigns. The
obligations of Employee may not be delegated and, except as expressly provided
in Paragraph 9 above relating to the designation of beneficiaries, Employee may
not assign, transfer, pledge, encumber, hypothecate or otherwise dispose of this
Agreement, or any of his rights hereunder, without the prior written consent of
the Corporation, and any such attempted assignment, transfer, pledge,
encumbrance, hypothecation or other disposition without such consent shall be
null and void without effect. This Agreement may be assigned by the Corporation,
in its sole discretion, to any one or more of its subsidiary companies or to
another individual or entity in connection with the merger or consolidation of
the Corporation with another corporation, partnership or other business
enterprise or the sale of all or substantially all of the assets and business of
the Corporation to another individual or entity.
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19. COMPLETE UNDERSTANDING; AMENDMENTS, ETC. This Agreement constitutes
the complete understanding and entire agreement between the parties hereto with
respect to the employment of Employee hereunder, and no statement,
representation, warranty or covenant has been made by either party with respect
thereto except as expressly set forth herein. This Agreement shall not be
altered, modified, amended or terminated (other than in accordance with the
provisions hereof) except by written instrument signed by the party against whom
enforcement may be sought.
20. GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the State of Illinois.
21. PARAGRAPH HEADINGS. The paragraph headings contained in this
Agreement are for reference purposes only and shall not limit, define or affect
in any way the meaning or interpretation of this Agreement or any portion or
portions thereof.
22. SEPARABILITY. In case any one or more of the provisions of this
Agreement shall be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected thereby.
23. ATTORNEYS' FEES. Each party hereto agrees that if the other party
shall prevail in any action or proceeding arising hereunder or in connection
herewith, such other party shall be entitled to reimbursement of reasonable
attorneys' fees and disbursements related to such action or proceeding.
24. This Employment Contract supercedes the Employment Offer letter
between the parties hereto dated February 16, 2002.
IN WITNESS WHEREOF, the parties hereto have entered in to this
Agreement and duly set their hands on the day and year first above written.
EAGLE FOOD CENTERS, INC.
By: /s/ Xxxxxx X. Xxxxx /s/ Xxxx Xxxx
--------------------------------- ------------------------------------
Xxxxxx X. Xxxxx Xxxx Xxxx
Chief Executive Officer
Chairman of the Board
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