Commission File No. 0-6544
EMPLOYMENT AGREEMENT
AGREEMENT, made September 12, 1996, by and between
BRUNO'S, INC., an Alabama corporation (the "Company"), and ▇▇▇▇▇
▇. ▇▇▇▇▇ ("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 and Chief Financial Officer.
1.2 Subject to the terms and conditions of this
Agreement, Executive hereby accepts employment as Senior Vice
President and Chief Financial Officer of the Company
and agrees to devote his full working time and efforts, to the
best of his ability, experience and talent, to the performance of
services, duties and responsibilities in connection therewith.
2. Term of Employment. Executive's term of employment
under this Agreement (the "Term") commenced on May 6, 1996 and,
subject to the terms hereof, shall terminate on the termination
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of Executive's employment pursuant to this Agreement (the
"Termination Date"); 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 $275,000
per annum. Base Salary shall be payable in accordance with
the ordinary payroll practices of the Company, but no less
frequently than monthly. Any increase in Base Salary
shall be in the reasonable discretion of the Company and, as so
increased, shall constitute "Base Salary" hereunder.
3.2 Annual Bonus. In addition to his Base Salary,
Executive shall be paid an annual bonus (the "Bonus") during the
term of his employment hereunder with a target amount equal to
50% of Base Salary (the "Target Bonus") and a maximum amount
equal to 100% of Base Salary based on performance criteria
determined by the Company in its reasonable discretion.
3.3 Compensation Plans and Programs. Executive shall
be eligible to participate in any compensation plan or program
maintained by the Company in which other senior executives of the
Company participate on terms comparable to those applicable to
such other senior executives.
3.4 Payment of Relocation Allowance. To assist the Executive
with his relocation to the Birmingham, Alabama area, the Company
agrees to either reimburse the Executive for or pay directly the
expenses set forth on Exhibit A hereto to the extent actually
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incurred by Executive in relocating from the location of his
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 his
employment hereunder with coverage under all employee pension and
welfare benefit programs, plans and practices (commensurate with
his positions in the Company and to the extent permitted under
any employee benefit plan) in accordance with the terms thereof,
which the Company makes available to its senior executives.
4.2 Vacation and Fringe Benefits. Executive shall be
entitled to twenty (20) business days paid vacation in each
calendar year, which shall be taken at such times as are
consistent with Executive's responsibilities hereunder. Unless
otherwise approved by the Company, any vacation days not taken in
any calendar year shall be forfeited without payment therefor.
In addition, Executive shall be entitled to the perquisites and
other fringe benefits, including, without limitation, a Company
automobile, made available to senior executives of the Company,
commensurate with his position with the Company.
5. Expenses. Executive is authorized to incur
reasonable expenses in carrying out his duties and
responsibilities under this Agreement, including, without
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.
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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),
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 his termination.
(b) For purposes of this Agreement, "Good Reason" shall mean
any of the following (without Executive's express prior written
consent):
(i) Any material breach by the Company of any
provision of this Agreement, including a demotion by
the Company in Executive's position or the assignment
to Executive of duties or responsibilities which are
materially inconsistent with the duties or
responsibilities contemplated by Section 1 of this
Agreement (except, in either case, in connection with
the termination of Executive's employment for Cause, as
a result of Permanent Disability, as a result of
Executive's death or by Executive other than for Good
Reason); or
(ii) A reduction by the Company in Executive's
Base Salary, other than a reduction which is part of a
general salary reduction program affecting senior
executives of the Company and which reduction is not,
on average, greater than the salary reduction (as a
percentage of Base Salary) of other senior executives
of the Company.
(c) For purposes of this Agreement, "Cause" mean any
of the following:
(i) willful malfeasance or willful misconduct by Executive in
connection with his employment;
(ii) continuing refusal by Executive to perform his duties
hereunder or any lawful direction of the Chief Executive Officer
of the Company ("CEO"), within 10 days after notice of any such
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refusal to perform such duties or direction was given to Executive;
(iii) any breach of the provisions of Section 13 of
this Agreement by Executive or any other material breach of
this Agreement by Executive; or
(iv) the commission by Executive of (A) any felony or (B) a
misdemeanor involving moral turpitude.
(d) For purposes of this Agreement, "Permanent
Disability" shall mean a disability that would entitle Executive
to receive benefits under the Company's long-term disability plan
applicable to senior executive officers as in effect from time to
time, which prevents the Executive from performing his duties
hereunder for 180 consecutive days or more.
6.2 Voluntary Termination by Executive; Discharge for
Cause; Death or Disability. (a) In the event that Executive's
employment is terminated (i) by the Company for Cause;
(ii) by Executive other than for Good Reason or (iii)
as a result of the Executive's Permanent Disability or death,
Executive shall only be entitled 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 his termination, based on
Executive's employment with the Company prior to such
termination. Executive shall not be entitled, among other
things, to the payment of any Bonus in respect of all or any
portion of the fiscal year in which such termination occurs.
After the termination of Executive's employment under this
Section 6.2 and payment of all amounts due to Executive under the
terms of this Agreement in the event of the termination of
Executive's employment under this Section 6.2, the obligations of
the Company under this Agreement to make any further payments, or
provide any benefits specified herein (other than benefits
required to be provided by applicable law or under the terms of
any employee benefit of the Company in
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which the Executive was a participant) to Executive shall
thereupon cease and terminate. Termination of Executive pursuant
to this Section 6.2 shall be made by delivery to Executive of a
notice from the CEO setting forth in reasonable detail the
reasons for such termination.
7. Stock Arrangements. The Company shall provide
Executive with the opportunity to purchase 25,000 shares of
common stock, par value $.01 per share, of the Company at a price
of $12.00 per share. Executive and the Company shall enter into
the Management Stockholder's Agreement (the "Stock Agreement"),
substantially in the form attached hereto as Exhibit B, with such
changes as the Company shall deem necessary or desirable. In
addition, the Company shall grant options (the "Options") to
Executive to purchase 66,667 shares of the Company's Common Stock
at an exercise price of $12.00 per share. With respect to
Options granted to Executive, Executive and the Company shall
enter into a standard form stock option agreement, with such
changes as the Company shall deem necessary or desirable.
8. Mitigation of Damages. Executive shall not be
required to mitigate damages or the amount of any payment
provided for under this Agreement by seeking other employment or
otherwise after the termination of his employment hereunder, and
no amounts earned by Executive, whether from self-employment, as
a common-law employee or otherwise, shall reduce the amount of
any termination amount otherwise payable to him.
9. Notices. All notices or communications hereunder
shall be in writing, addressed as follows:
To the Company:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Bruno's, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
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with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
To Executive:
▇▇▇▇▇ ▇. ▇▇▇▇▇
c/o Bruno's, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Any such notice or communication shall be delivered by hand or by
courier or sent certified or registered mail, return receipt
requested, postage prepaid, addressed as above (or to such other
address as such party may designate in a notice duly delivered
as described above), and the third business day after the actual
date of mailing shall constitute the time at which notice was given.
10. Separability; Legal Fees. If any provision of this
Agreement shall be declared to be invalid or unenforceable, in
whole or in part, such invalidity or unenforceability shall not
affect the remaining provisions hereof which shall remain in full
force and effect. The Company shall pay the reasonable fees and
disbursements (not in excess of $7,500) of Executive's legal
counsel in connection with the negotiation and
execution of this Agreement and the other documents contemplated
hereby. Other than as provided in the foregoing sentence, each
party shall bear the costs of any legal fees and other fees and
expenses which may be incurred in respect of negotiating or
enforcing its respective rights under this Agreement.
11. Assignment. This Agreement shall be binding upon and
inure to the benefit of the heirs and representatives of
Executive and the assigns and successors of the Company, but neither
this Agreement nor any rights or obligations hereunder shall be
assignable or otherwise subject to hypothecation by Executive
(except by will or by operation of the laws of intestate
succession) or by the Company, except that the Company may assign
this Agreement to any successor (whether by merger, purchase or
otherwise) to all or 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 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 ▇▇▇▇▇▇▇ & Co. or their respective affiliates (the
"Restricted Group") or customers, that, in any case, is not
otherwise available to the public (other than by Executive's
breach of the terms hereof).
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(b) During the period of his employment hereunder and
for one year thereafter, Executive agrees that, without the
prior written consent of the Company, (A) he will not, directly
or indirectly, either as principal, manager, agent, consultant,
officer, stockholder, partner, investor, lender or employee or in
any other capacity, carry on, be engaged in or have any financial
interest in, any business which is in competition with the
business of the Company and (B) he shall not, on his own behalf
or on behalf of any person, firm or company, directly or
indirectly, solicit or offer employment to any person who has
been employed by the Restricted Group at any time during the 12
months immediately preceding such solicitation.
(c) For purposes of this Section 13, a business shall
be deemed to be in competition with the Company if it is
principally involved in the purchase, sale or other dealing in
any property or the rendering of any service purchased, sold,
dealt in or rendered by the Company as a material part of the
business of the Company within the same geographic area in
which the Company makes such purchases, sales or dealings or
renders such services. Nothing in this Section 13 shall be
construed so as to preclude Executive from investing in any
publicly or privately held company, provided Executive's
beneficial ownership of any class of such company's securities
does not exceed 1% of the outstanding securities of such class.
(d) Executive and the Company agree that this covenant
not to compete is a reasonable covenant under the circumstances,
and further agree that if in the opinion of any court of competent
jurisdiction such restraint is not reasonable in any respect,
such court shall have the right, power and authority to excise or
modify such provision or provisions of this covenant as to the
court shall appear not reasonable and to enforce the remainder of the
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covenant as so amended. Executive agrees that any breach of the
covenants contained in this Section 13 would irreparably injure
the Company. Accordingly, Executive agrees that the Company may,
in addition to pursuing any other remedies it may have in law or in
equity, cease making any payments otherwise required by this
Agreement and obtain an injunction against Executive from any court
having jurisdiction over the matter restraining any further
violation of this Agreement by Executive.
14. Beneficiaries; References. Executive shall be
entitled to select (and change, to the extent permitted under any
applicable law) a beneficiary or beneficiaries to receive any
compensation or benefit payable hereunder following Executive's death,
and may change such election, in either case by giving the Company
written notice thereof. In the event of Executive's death or a
judicial determination of his incompetence, reference in this
Agreement to Executive shall be deemed, where appropriate, to
refer to his beneficiary, estate or other legal representative.
Any reference to the masculine gender in this Agreement shall include,
where appropriate, the feminine.
15. Survivorship. The respective rights and obligations
of the parties hereunder shall survive any termination of
this Agreement to the extent necessary to the intended
preservation of such rights and obligations. The provisions of
this Section 15 are in addition to the survivorship provisions of
any other section of this Agreement.
16. Governing Law. This Agreement shall be construed,
interpreted and governed in accordance with the laws of the
State of Alabama, without reference to rules relating to
conflicts of law.
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17. Effect on Prior Agreements. This Agreement
contains the entire understanding between the parties hereto and
supersedes in all respects any prior agreement or
understanding between the Company or any affiliate of the Company
and Executive as to employment matters other than the agreements
to in Section 7 hereof.
18. Withholding. The Company shall be entitled to withhold
from payment any amount of withholding required by law.
19. Counterparts. This Agreement may be executed in
two or more counterparts, each of which will be deemed an
original.
BRUNO'S, INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief
Executive Officer
EXECUTIVE
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇
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