Commission File No. 0-6544
EMPLOYMENT AGREEMENT
AGREEMENT, made September 12, 1996, by and between
BRUNO'S, INC., an Alabama corporation (the "Company"), and XXXXX
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 - Human Resources.
1.2 Subject to the terms and conditions of this
Agreement, Executive hereby accepts employment as Senior Vice
President - Human Resources of the Company and agrees to devote
her full working time and efforts, to the best of her 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 July 8, 1996 and, subject to
the terms hereof, shall terminate on the earlier of (i) July 7, 1999
(the "Termination Date") or (ii) termination of Executive's
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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 $190,000
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 her Base Salary,
Executive shall be paid an annual bonus (the "Bonus") during the
term of her 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.
3.4 Payment of Relocation Allowance. To assist the
Executive with her relocation to the Birmingham, Alabama area,
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the Company agrees to either reimburse the Executive for or pay
directly the expenses set forth on Exhibit A hereto to the extent
actually incurred by Executive in relocating from the location of
her current residence (if other than the Birmingham area) to the
Birmingham area.
4. Employee Benefits.
4.1 Employee Benefit Programs, Plans and Practices.
The Company shall provide Executive during the term of her
employment hereunder with coverage under all employee pension and
welfare benefit programs, plans and practices (commensurate with
her 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 her position with the Company.
5. Expenses. Executive is authorized to incur
reasonable expenses in carrying out her duties and responsibilities
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under this Agreement, including, without 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 semi-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 her 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 her employment;
(ii) continuing refusal by Executive to perform her
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 her 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
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to receive the amounts 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 her
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. (a) The Company shall provide
Executive with the opportunity to purchase 15,625 shares of
common stock, par value $.01 per share, of the Company ("Common
Stock") 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 B, with such changes as the Company shall
deem necessary or desirable. 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
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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 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
Company 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 her employment hereunder, and
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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 her.
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:
Xxxxx 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.
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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 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
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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).
(b) During the period of her employment hereunder and
for one year thereafter, Executive agrees that, without the
prior written consent of the Company, (A) she 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) she shall not, on her 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.
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(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 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.
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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 her incompetence, reference
in this Agreement to Executive shall be deemed, where
appropriate, to refer to her 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
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.
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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/ Xxxxx Xxxxxx
Xxxxx Xxxxxx
Exhibit A
In connection with Executive's relocation to the
Birmingham, Alabama area, the Company shall reimburse Executive
for the following expenses, subject to reasonable substantiation
thereof:
1. Reasonable travel costs, including airfare and lodging,
associated with locating a residence in the Birmingham
area.
2. The reasonable costs of moving company fees incurred in
moving Executive's household to the Birmingham area and
of local moving (from temporary housing and storage to
permanent housing).
3. The reasonable costs of temporary housing and storage
in the Birmingham area for a period not to exceed six
months.
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