Exhibit 10.29
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EMPLOYMENT AGREEMENT
AGREEMENT, made August 17, 1995, by and between BRUNO'S INC., a
Delaware corporation (the "Company") and XXXXXXX X. XXXXXX ("Executive").
RECITALS
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In order to induce Executive to serve as the Chairman of the
Board and Chief 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.
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1.1 Subject to the terms and conditions of this Agreement, the
Company agrees to employ Executive during the term hereof as its Chairman
of the Board and Chief Executive Officer. In his capacity as the Chairman
of the Board and Chief Executive Officer of the Company, Executive shall
report to the Board of Directors of the Company (the "Board") and shall
have the customary powers, responsibilities and authorities of chief
executive officers of corporations of the size, type and nature of the
Company, as it exists from time to time, as are assigned by the Board.
1.2 Subject to the terms and conditions of this Agreement,
Executive hereby accepts employment as the Chairman of the Board and Chief
Executive officer of the Company commencing
as soon as possible after the date hereof but in no event later than
September 1, 1995, and agrees to devote his full working time and efforts
(except for permitted vacation periods and reasonable periods of illness
and other incapacity), to the best of his ability, experience and talent,
to the performance of services, duties and responsibilities in connection
therewith. Executive shall perform such duties and exercise such powers,
commensurate with his position, as the Chairman of the Board and Chief
Executive officer of the Company as the Board shall from time to time
delegate to him on such terms and conditions and subject to such
restrictions as such Board may reasonably from time to time impose. The
Company hereby agrees to take all reasonable and necessary corporate action
to ensure that Executive is elected to the Board of Directors.
1.3 Nothing in this Agreement shall preclude Executive from
engaging, so long as, in the reasonable determination of such Board, such
activities do not interfere with his duties and responsibilities hereunder,
in charitable and community affairs, from managing any passive investment
made by him in publicly traded equity securities or other property
(provided that no such investment may exceed 1% of the equity of any
entity, without the prior approval of such Board of Directors) or from
serving, subject to the prior approval of such Board of Directors, as a
member of boards of directors or as a trustee of any other corporation,
association or entity. For purposes of the preceding sentence, any
approval of the Board required therein shall not be unreasonably withheld.
2. Term of Employment. Executive's term of employment under
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this Agreement shall commence as soon as possible after August 21, 1995 but
in any event no later than September 1, 1995 and, subject to the terms
hereof, shall terminate (the "Termination Date") on the earlier of
(i) August 31, 1998 or (ii) termination of Executive's employment pursuant
to this Agreement; provided, however, that any termination of employment by
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Executive (other than for death, Permanent Disability or Good Reason) may
only be made upon 90 days prior written notice to the Company and any
termination of employment by Executive for Good Reason may only be made
upon 30 days prior written notice to the Company.
3. Compensation.
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3.1 Salary. The Company shall pay Executive a base
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salary ("Base Salary") at the rate of $400,000 per annum for the period
commencing on the beginning of Executive's term of employment hereunder and
ending on the Termination Date. Base Salary shall be payable in accordance
with the ordinary payroll practices of the Company. Any increase in Base
salary shall be in the discretion of the Board and, as so increased, shall
constitute "Base Salary" hereunder.
3.2 Annual Bonus. In addition to his Base Salary, Executive
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shall be paid an annual bonus (the "Bonus") during the term of his
employment hereunder with a target amount equal to not less than 50% of
Base Salary (the "Target Bonus") and a maximum amount equal to 100% of Base
salary based on performance criteria attached hereto as Exhibit 1.
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3.3 Supplemental Payment. Upon the execution of this Agreement
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by the Company and Executive, the Company, or an affiliate of the Company
on behalf of the Company, shall pay $300,000 to Executive by check or any
other method of payment acceptable to Executive and the Company.
3.4 Compensation Plans and Programs. Executive shall be
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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.
3.5 Relocation and Payment of Relocation Expenses. Executive
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agrees that he and his family shall relocate to the Birmingham, Alabama
area no later than August 31, 1996. To assist the Executive with his
relocation to the Birmingham, Alabama area, the Company agrees to provide
Executive with the benefits and reimbursements set forth on Schedule A
hereto to the extent actually incurred by Executive in connection with his
relocation from the greater Chicago metropolitan area to the Birmingham,
Alabama area.
4. Employee Benefits.
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4.1 Employee Benefit Programs, Plans and Practices. The Company
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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.
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4.2 Vacation and Fringe Benefits. While employed hereunder,
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Executive shall be entitled to no less than twenty-five (25) business days
paid vacation in each calendar year, which shall be taken at such times as
are consistent with Executive's responsibilities hereunder. In addition,
while employed hereunder, Executive shall be entitled to the perquisites
and other fringe benefits made available to senior executives of the
company, commensurate with his position with the Company.
5. Expenses. Executive is authorized to incur reasonable
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expenses in carrying out his duties and responsibilities under this
Agreement, including, without limitation, expenses for travel (including
reasonable travel expenses for Executive's spouse for relevant industry
meetings) 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.
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6.1 Termination Not for Cause or for Good Reason. (a) The
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Company may terminate Executive's employment at any time for any reason.
If Executive's employment is terminated by the Company other than for Cause
(as defined in section 6.4 hereof) or as a result of Executive's death or
Permanent Disability (as defined in section 6.2 hereof) or if Executive
terminates his employment for Good Reason (as defined in Section 6.1 (c)
hereof)
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prior to the August 31, 1998, Executive shall receive such payments, if
any, under applicable plans or programs, including but not limited to those
referred to in Section 3.4 and 4.1 hereof, to which he is entitled pursuant
to the terms of such plans or programs. In addition, Executive shall be
entitled to receive an amount (the "Termination Amount") in lieu of any
Bonus in respect of all or any portion of the fiscal year in which such
termination occurs and any other cash compensation (other than the Vacation
Payment and the Compensation Payment, as defined below), which Termination
Amount shall be payable in eighteen monthly installments at the beginning
of each month following such termination of employment. The Termination
Amount shall consist of the greater of (i) an amount equal to the
Executive's Base Salary for eighteen months at its then current monthly
rate plus 1.5 times the amount of Executive's Target Bonus for the year in
which his termination occurs or (ii) the amount of Base Salary plus Target
Bonus which Executive would have received for the remaining term of this
Agreement. In addition, Executive shall be entitled to receive a cash lump
sum payment in respect of accrued but unused vacation days (the "Vacation
Payment") and to compensation earned but not yet paid (including any
deferred Bonus payments ) (the "Compensation Payment"), and to continued
coverage for 18 months under any employee medical, disability and life
insurance plans in accordance with the respective terms thereof.
(b) The Vacation Payment and the Compensation Payment shall be
paid by the Company to Executive within 30 days after
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the termination of Executive's employment by check payable to the order of
Executive or by wire transfer to an account specified by Executive.
(c) For purposes of this Agreement, "Good Reason" shall mean any
of the following (which occur without Executive's express prior written
consent):
(i) any material breach by the Company of any provision of
this Agreement, including any material reduction by the Company
of Executive's duties, authority, support or responsibilities
(except 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);
(ii) the Board requiring that Executive perform his duties
and responsibilities for the Company at a location other than
Birmingham, Alabama area; or
(iii) a reduction by the Company in Executive's employee
benefits or Base Salary, other than a reduction in Base Salary
which is part of a general cost reduction affecting at least
ninety percent (90%) of the officers of the Company which does
not exceed twenty percent (20%) of Executive's Base Salary.
6.2 Permanent Disability. If the Executive becomes disabled to
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an extent which entitles him to long-term benefits under the Company's
long-term disability benefit plan applicable to senior executive officers
as in effect on the date hereof ("Permanent Disability"), the Company or
Executive may terminate Executive's employment on written notice thereof,
and Executive shall receive or commence receiving, as soon as practicable:
(i) amounts payable pursuant to the terms of a disability
insurance policy or similar arrangement which the Company
maintains during the term hereof;
(ii) the Target Bonus in respect of the fiscal year in which
his termination occurs, prorated by a fraction, the numerator of
which is the number of days
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of the fiscal year until termination and the denominator of which is
365;
(iii) the Vacation Payment and the Compensation Payment;and
(iv) such payments under applicable plans or programs,
including but not limited to those referred to in Section 3.4 and
4.1 hereof, to which he is entitled pursuant to the terms of such
plans or programs.
6.3 Death. In the event of Executive's death during the term of
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his employment hereunder, Executive's estate or designated beneficiaries
shall receive or commence receiving, as soon as practicable:
(i) the Target Bonus in respect of the fiscal year in which
his death occurs, prorated by a fraction, the numerator of which
is the number of days of the fiscal year until hisdeath and the
denominator of which is 365;
(ii) any death benefits provided under the employee benefit
programs, plans and practices referred to in Section 4.1 hereof,
in accordance with their terms;
(iii) the Vacation Payment and the Compensation Payment; and
(iv) such payments under applicable plans or programs,
including but not limited to those referred to in Section 3.4 and
4.1 hereof, to which Executive's estate or designated
beneficiaries are entitled pursuant to the terms of such plans or
programs.
6.4 Voluntary Termination by Executive; Discharge for Cause.
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(a) The Company shall have the right to terminate the employment of
Executive for Cause. In the event that Executive's employment is
terminated by the Company for Cause or by Executive other than for Good
Reason or other than as a result of the Executive's Permanent Disability or
death, prior to August 31, 1998, Executive shall only be entitled to
receive the
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Compensation Payment and the Vacation Payment. 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 6.4. the
obligations of the Company under this Agreement to make any further
payments, or provide any benefits specified herein, to Executive shall
thereupon cease and terminate.
(b) As used herein, the term "Cause" shall be limited to
(i) willful malfeasance or willful misconduct by Executive in connection
with his employment, (ii) willful, substantial and continuing refusal by
Executive to perform his duties hereunder or any lawful direction of the
Board of Directors of the Company as required under Section 1.3, which
continues beyond ten days after a written demand for substantial
performance is delivered to Executive by the Company, (iii) any breach of
the provisions of Section 13 of this Agreement by Executive or any other
material breach of this Agreement by Executive which continues beyond ten
days after a written demand for substantial performance is delivered to
Executive by the Company or (iv) the indictment of Executive of (a) any
felony or (b) a misdemeanor involving moral turpitude; provided, however,
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that in the event Executive is subsequently found not guilty or the charges
against Executive are dismissed, any amounts that would have been due
Executive hereunder if he had been terminated without Cause shall be paid
to Executive on the same basis as if a Termination without Cause has
occurred on the date he was actually
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terminated. Termination of Executive pursuant to this Section 6.4 shall be
made by delivery to Executive of a copy of a resolution duly adopted by the
affirmative vote of not less than a majority of the Directors at a meeting
of the Board of Directors of the Company called and held for the purpose
(after 30 days prior written notice to Executive and reasonable opportunity
for Executive to be heard before the Board prior to such vote), finding
that in the reasonable judgment of such Board, Executive was guilty of
conduct set forth in any of clauses (i) through (iv) above and specifying
the particulars thereof.
6.5 Expiration of Agreement. In the event of Executive's
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termination of employment by the Company without Cause following the
expiration of the term of this Agreement Executive shall receive an amount
equal to 1.5 times the sum of (i) the Executive's Base Salary at its then
current annual rate and (ii) the amount of Executive's Target Bonus for the
year in which his termination occurs, payable in 18 monthly installments at
the beginning of each month following such termination of employment. In
addition, Executive shall be entitled receive a lump sum payment equal to
the sum of (i) the Vacation Payment and (ii) the Compensation Payment as
soon as practicable following such termination.
7. Stock Arrangements. As soon as practicable after the
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execution of this agreement, Executive and the Company shall enter into the
Common Stock Subscription Agreement (the "Subscription Agreement") on terms
and conditions mutually
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acceptable to the parties and Executive shall purchase $1 million of
Company common stock (the "Purchase Stock"). In order to enable Executive
to make such purchase, the Company shall lend to Executive an amount (the
"Loan") equal to the excess of $1 million over the net after tax proceeds
of the sale of the American Stores Company stock owned by Executive. The
Loan shall accrue interest at the applicable federal rate as in existence
at the time the loan is made and principal and interest shall be due upon
any sale, transfer or other disposition of the Purchase Stock whether
pursuant to the Subscription Agreement or otherwise.
8. Mitigation of Damages. Executive shall not be required to
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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.
9. Notices. All notices or communications hereunder shall be
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in writing, addressed as follows:
To the Company:
x/x Xxxxxxxx Xxxxxx
Xxxxxxx & Co.
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
with a copy to:
Xxxxx X. Xxxxx, Esq.
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
To Executive:
Xx. Xxxxxxx X. Xxxxxx
000 Xxxxxxxx Xxxx
Xx Xxxxxx, XX 00000
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with a copy to:
Xxxxxx X. Xxxxx, Esq.
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 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
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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. Except to
the extent expressly provided otherwise in the next sentence, each party
shall bear the costs of any legal fees and other fees and expenses which
may be incurred in respect of enforcing its respective rights under this
Agreement. The Company shall pay the reasonable fees and disbursements
(not in excess of $35,000) of Executive's legal counsel in connection with
the negotiation and execution of this Agreement and the other documents
contemplated hereby; provided, however, that no such payment shall be made
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without reasonable substantiation of the amounts. In addition, the Company
shall pay any costs and fees associated with any legal action brought
against Executive by American Stores Company for breach of the
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non-competition clause contained in the employment agreement between
Executive and American Stores Company as in effect immediately prior to
Executive's commencement of employment hereunder.
11. Assignment. This contract shall be binding upon and inure
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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
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agreement of the parties hereto.
13. Nondisclosure of Confidential Information; Non-competition.
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(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
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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, its
subsidiaries, Kohlberg Kravis Xxxxxxx & Co. or any affiliate of Kohlberg
Kravis & Xxxxxxx & Co. principally engaged in the retail grocery business
(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 his employment hereunder and for 18
months 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 in Competition (as
defined in Section 13(c)) with the business of the Restricted Group 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.
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(c) For purposes of this section 13, a business shall be deemed
to be in "Competition" with the Restricted Group if it is principally
engaged in the retail grocery business within the same geographic area in
which the Restricted Group conducts such business. 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,
obtain an injunction against Executive from any court having jurisdiction
over the matter restraining any further violation of this Agreement by
Executive and cease making any payments otherwise required by this
Agreement; provided, however, that in the event a court of competent
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jurisdiction, which recognizes the validity of the provisions of this
section 13, finds the Executive not to be in
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violation of the provisions of this section 13, then the Company shall pay
to Executive, in a lump sum, all amounts that would have been payable to
Executive hereunder through the date of such determination and continue
making any other payments due with respect to periods of time subsequent to
such determination in accordance with the provisions of this Agreement.
14. Beneficiaries; References. Executive shall be entitled to
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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
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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,
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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
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entire understanding between the parties hereto and supersedes in all
respects any prior or other agreement or understanding between the Company
or any affiliate of the company and Executive other than the Common Stock
Subscription Agreement referred to in Section 7 hereof.
18. Withholding. The Company shall be entitled to withhold from
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payment any amount of withholding required by law.
19. Survival. Notwithstanding the expiration of the term of
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this Agreement, the provisions of section 6.5 and Section 13 hereunder
shall remain in effect as long as is necessary to give effect thereto.
20. Counterparts. This Agreement may be executed in two or more
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counterparts, each of which will be deemed an original.
BRUNO'S INC.
By /s/ Xxxx X. Xxxxxxx
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Name: Xxxx X. Xxxxxxx
Title:
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
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