EMPLOYMENT AGREEMENT
This Employment Agreement dated effective as of
January __, 1999, is made and entered into by and between
Jitney-Jungle Stores of America, Inc., a Mississippi corporation
(the "Company"), and Xxxxxxx X. Xxxxxxx (the
"Executive"), an individual residing at 0000 Xxxxxxx Xxxxx,
Xxxxx, Xxxxxxx 00000.
RECITALS
The Company desires to employ the Executive in the
business operated by the Company, according to the terms,
covenants and conditions hereinafter set forth.
NOW, THEREFORE, the Company and the Executive
hereto agree as follows:
1. Employment and Duties. Subject to the terms
hereof, the Company employs Executive as Chief Financial
Officer and Executive Vice President of the Company and in
such capacities with its affiliates and subsidiaries as the
Company shall designate, with such duties as are commensurate
and normally associated with the position of Chief Financial
Officer, subject to the direction of the Company's Chief
Executive Officer and Board of Directors. Executive accepts
such employment and agrees to devote substantially his entire
professional time, attention and energies to the business of the
Company and to perform such additional responsibilities and
duties consistent with his position as provided in the Bylaws and
as may be assigned to him from time to time by the Board of
Directors. Executive shall work at the principal office of the
Company located in or near the Jackson, Mississippi
metropolitan area or at such other location in or near the
Jackson, Mississippi metropolitan area as the Board of Directors,
in its discretion, may select.
2. Extent of Services. Executive shall devote
substantially all his working time (during normal business hours)
and attention (other than during any illness and vacations) and
give his good faith efforts, skills and abilities to the management
and operations of the Company; it being understood and agreed
that Executive shall be permitted to manage his own personal
affairs and serve as director or officer of any trade association,
civic, corporate, educational or charitable organization or
governmental entity, provided that Executive's service does not
materially interfere with Executive's performance of his duties
hereunder. Notwithstanding the above, the Executive shall not
be required to perform any duties or responsibilities which
would be likely to result in non-compliance with or violation of
any applicable law or regulation.
3. Term. The initial term of this Agreement shall
commence as of the effective date hereof and, unless earlier
terminated pursuant to Section 8, shall continue thereafter until
the earliest of (a) December 31, 1999, (b) until terminated by
either party upon the giving of at least thirty (30) days' advance
written notice, or (c) the day following the consummation of a
transaction giving rise to a Change of Control Event (as defined
in Section 8(e) of the Agreement).
4. Compensation. Executive's compensation
under this Agreement shall be as follows:
(a) Base Salary. Company shall pay
Executive a base salary ("Base Salary") at a rate of no
less than $200,000.00 per year from the date hereof.
The Base Salary shall be inclusive of all compensation
for any services Executive may be elected or selected to
perform (i) as a member of the Board of Directors of the
Company and/or any of its affiliates and subsidiaries, or
(ii) as a member of any appointed committees of such
Boards of Directors, including the Executive Committee.
Executive's Base Salary shall be paid in installments in
accordance with the Company's normal payment
schedule for its senior management. All payments shall
be subject to the deduction of payroll taxes and similar
assessments as required by law.
(b) Bonus. In addition to the Base Salary,
Executive shall be paid on December 31, 1999 a cash
bonus of $300,000.00 provided any of the following
occur: (i) Executive remains employed with Company
as the Chief Financial Officer through December 31,
1999; (ii) the Company terminates this Agreement
without Cause (as hereinafter defined); or (iii) the
Executive terminates this Agreement for Good Reason
(as hereinafter defined).
5. Fringe Benefits.
(a) The Company agrees to furnish an
automobile to Executive and to make such automobile
available for the Executive's exclusive use during the
period of his employment with the Company. All
maintenance, taxes and other operating costs shall be
paid by the Company, subject to appropriate withholding
requirements.
(b) The Company shall also make available
to Executive those benefits which are made available to
the executive officers of the Company as a group, which
benefits currently include, without limitation, 401(k)
plans, profit sharing plans, and health, dental, and
disability insurance.
(c) The Company shall also furnish
Executive with suitable living arrangements in Jackson,
Mississippi.
6. Vacation. Executive shall be entitled to take
three weeks of paid vacation during each fiscal year in which he
is employed. Accrued but unused vacation shall be carried over
only in accordance with the Company's standard policies.
7. Expense Reimbursement. In addition to the
compensation and benefits provided in Sections 4, 5 and 6
hereof, the Company shall, upon receipt of appropriate
documentation, reimburse Executive for his reasonable travel,
lodging, entertainment, and other ordinary and necessary
business expenses incurred in the course of his duties on behalf
of the Company, including weekly travel to and from
Executive's home in Tampa, Florida.
8. Termination of Employment.
(a) Either party may terminate Executive's
employment under this Agreement for any reason by
giving thirty (30) days' written notice to the other party.
In the event of a termination by the Company, the
Company may elect that the Executive cease all services
and leave the premises immediately. Following the
termination of Executive's employment for any reason,
Executive shall remain entitled to (i) the portion of his
Base Salary then due through the date of such
termination, (ii) reimbursement for any reimbursable
expenses incurred by Executive prior to such
termination and (iii) all benefits which are accrued,
vested and earned up to the termination date under the
terms of any existing benefit plan of the Company, such
as the vested balance of Executive's account under any
retirement or deferred compensation plan and any
benefits which are legally required to be provided after
termination, such as COBRA benefits. If the Company
terminates Executive's employment without Cause
pursuant to this Section 8(a) or if the Executive resigns
at the request (without Cause) of the Board of Directors
or terminates his employment for Good Reason,
Executive shall be paid, in addition to any amounts
described in the preceding sentence, an amount equal to
the sum of (x) the balance of the Base Salary that
otherwise would be paid through December 31, 1999,
plus (y) the bonus to which Executive would be entitled
pursuant to Section 4(b) of this Agreement. The
Executive shall continue to receive all benefits under the
health benefit plans, practices, policies and programs
provided by the Company to the extent applicable
generally to other peer executives of the Company
through the earlier of December 31, 1999, or until the
date Executive becomes re-employed with another
employer and is eligible to receive medical or other
welfare benefits under another employer provided plan.
All cash severance compensation amounts owed
pursuant to this Section 8(a) shall be paid through
December 31, 1999 following the effective date of
Executive's termination in the normal payment schedule
as if Executive remained employed except that the bonus
deemed earned by Executive on the date of termination
specified above in this Section 8(a) shall be paid in a
lump sum within thirty (30) days following the effective
date of Executive's termination. If Executive notifies
the Company of his intention to terminate his
employment pursuant to this Section 8(a) for any reason,
the Company shall have the right to accelerate the date
of termination to a date on or after the date of
Executive's notice. The Executive's termination of
employment is deemed for "Good Reason," if any of
the following occurs without the Executive's written
consent: (i) the assignment to Executive of any duties
materially inconsistent with, or the substantial reduction
of powers or functions associated with, his positions,
duties, responsibilities and status with the Company
(other than changes in reporting or management
responsibilities required by applicable federal or state
law); (ii) a reduction by the Company of Executive's
salary or a material reduction in other benefits taken as a
whole (except to the extent such benefits are no longer
generally available to members of management of the
Company), except in connection with the termination of
such Executive's employment by the Company for
Cause (it being understood that failure to receive bonus
payments at the same level as in prior years or periods
shall not be deemed to be a reduction in salary); (iii) a
change in Executive's principal work location, except
for required travel on the Company's business; or (iv)
the willful and continuing failure by the Company
substantially to perform its obligations under this
Agreement; provided, however, "Good Reason" shall
not be deemed to exist hereunder unless the Company
shall have failed to cure any breach or nonperformance
within thirty (30) days after receipt by the Company of
written notice thereof from the Executive, which notice
shall be given by Executive promptly and in any event
within fifteen (15) days after any event that the
Executive believes constitutes "Good Reason." It is
hereby expressly acknowledged that the foregoing
definition of "Good Reason" shall be effective solely
for purposes of this Agreement and shall not be
applicable to any other agreement or understanding
between Executive and the Company. "Cause" when
used in connection with the termination of Executive's
employment with the Company, means (A) act or acts of
dishonesty or conviction of a felony by Executive;
provided acts of "dishonesty" shall not extend to
expense account items to the extent the items involved
are nominal and any error is attributable to carelessness
or committed in good faith within reasonable
interpretation of the Company's policies, (B) failure by
the Executive in any material respect as to his
obligations, services or duties hereunder, which
determination shall be made by the Board of Directors of
the Company acting in good faith; provided, however,
"Cause" shall not be deemed to exist hereunder unless
the Executive shall have failed to cure any such breach
or nonperformance within thirty (30) days after receipt
by the Executive of written notice thereof from the
Company, (C) willful and deliberate violations of
Executive's obligations (whether such obligations are
designated by the Board of Directors or are set forth
herein) to the Company that result in material injury to
the Company and (D) misappropriation or
embezzlement of any funds or property of the Company
by the Executive. For purposes of this definition of
Cause, no act or failure to act, shall be considered
"willful" unless done, or omitted to be done, (1) in bad
faith and without reasonable belief that the action or
omission was in the best interest of the Company or, (2)
in the event the direction of the Board of Directors is
unclear, without the reasonable belief that the action or
omission was in the best interest of the Company. In the
event that there is a disagreement regarding the
existence of Good Reason or Cause (other than for
conviction of a felony), either party may submit such
disagreement to arbitration under the rules of the
American Arbitration Association or such other
procedure as the parties may agree. The ruling of the
arbitration shall be final and binding on both parties.
The Company and the Executive shall each pay their
own arbitration costs unless the arbitrator's award
determines otherwise, in which case such costs,
expenses, and fees shall be paid in accordance with the
arbitrator's award. The arbitration proceeding shall be
conducted in Atlanta, Georgia.
(b) Notwithstanding anything to the
contrary in Section 8(a), the Company may terminate
Executive's employment, effective immediately upon
written notice to Executive or on any other dates
specified in such notice, for Cause. Termination by the
Company of Executive's employment for any other
reason shall be deemed for the purposes of this
Agreement to be without Cause.
(c) Executive's employment hereunder
shall terminate immediately upon his death or disability
except as to any right which Executive's estate or
dependents may have under COBRA or any other
federal or state law or which are derived independent of
this Agreement by reason of his participation in any plan
maintained by the Company. For purposes of this
Section 8(c), Executive shall be deemed to be disabled
if, on account of illness or other incapacity, he has been
unable to perform his duties for seventy-five (75)
consecutive days and, in the good faith judgment of the
Board of Directors, will be unable to perform his duties
hereunder for a period of twelve (12) consecutive
months. The Company shall continue to pay Executive
his base salary and other employment benefits hereunder
prior to the termination by the Board of Directors
pursuant to this Section 8(c) even though Executive is
disabled during that period of time.
(d) Severance payments due under Section
8(a) shall be paid when due regardless whether
Executive accepts employment with a new employer.
(e) In the event (x) a Change of Control
Event occurs prior to the later of (i) December 31, 1999,
or (ii) the date that is six (6) months after the termination
of Executive's employment, and (y) at the time of the
Change of Control Event the Executive's employment
has not been terminated by the Company for Cause or
the Executive has not terminated his employment
without Good Reason, the Company agrees to pay to
Executive a transaction bonus in the sum set forth on
Schedule "A" less the bonus paid or payable to
Executive, if any, pursuant to Section 4(b) above (the
"Transaction Bonus"). For purposes of this Agreement,
the term "Change of Control Event" shall mean the first
to occur of any of the following events:
(i) the entry by the Company
or any of its shareholders
into a binding agreement to
effect any transaction or
series of related transactions
(including, but not limited
to, any tender officer,
exchange offer, merger or
other business combination
or other similar transaction),
the result of which is that
less than a majority of the
combined voting power of
the then outstanding
securities of the Company,
or any successor to the
Company resulting from
such transaction or series of
related transactions, would
be held in the aggregate by
holders of the Company's
securities immediately prior
to such transaction or the
beginning of the series of
related transactions; or
(ii) the entry by the Company
into a binding agreement to
sell, lease, exchange or
otherwise transfer (in one
transaction or a series of
related transactions) all or
substantially all of the assets
of the Company.
The Transaction Bonus to which Executive is
entitled pursuant to this Section 8(e) shall be due and
payable in a lump sum on the closing of the transaction
giving rise to the Change in Control Event.
Notwithstanding anything herein to the contrary,
however, the provisions of this Section 8(e) shall not be
effective, and shall be of no force or effect, unless and
until such provisions are approved by the separate vote
of the holders of more than seventy five percent (75%)
of the voting power of all of the outstanding stock of the
Company.
(f) Excess Parachute Payments. In the
event that any payment to be received by Executive
hereunder would be subject to an excise tax pursuant to
Section 4999 of the Code, whether in whole or in part, as
a result of being an "excess parachute payment" within
the meaning of such term in Section 280G(b) of the
Internal Revenue Code, then the amount payable under
this Agreement shall be reduced (if necessary) to an
amount that results in the greatest after-tax proceeds to
Executive.
9. Confidentiality. From and after the date hereof,
Executive shall, and shall cause his affiliates and representatives
to, keep confidential and not disclose to any other person or use
for his own benefit or the benefit of any other person any trade
secrets or other confidential proprietary information in his or
their possession or control regarding the Company or its
affiliates or their respective businesses and operations. The
obligation of Executive under this Section 9 shall not apply to
information which (i) is or becomes generally available to the
public without breach of the commitment provided for in this
Section; or (ii) is required to be disclosed by law, order or
regulation of a court or tribunal or governmental authority;
provided, however, that, in any such case, Executive shall notify
the Company as early as reasonably practicable prior to
disclosure to allow the Company to take appropriate measures to
preserve the confidentiality of such information.
10. Competition; Solicitation. Executive hereby
agrees that during the Term he will not, unless authorized in
writing to do so by the Company, (a) directly or indirectly own,
manage, operate, join, control or participate in the ownership,
management, operation or control of, or be employed or
otherwise connected in any substantial manner with any business
which directly or indirectly competes to a material extent with
any line of business of the Company or its subsidiaries;
provided, that nothing in this Agreement shall prohibit Executive
from acquiring up to 2% of any class of outstanding equity
securities of any corporation whose equity securities are
regularly traded on a national securities exchange or in the
"over-the-counter market"; (b) recruit any employee of the
Company or solicit or induce, or attempt to solicit or induce, any
employee of the Company to terminate his or her employment
with, or otherwise cease his or her relationship with, the
Company; or (c) solicit, divert or take away, or attempt to solicit,
divert or to take away, the business or patronage of any of the
clients, customers or accounts as prospective clients, customers
or accounts, of the Company. Provided that the Company pays
the Executive (i) the severance payment due to Executive in
accordance with Section 8(a) hereof or, (ii) an amount equal to
the Section 8(a) severance payment within thirty (30) days
following the effective date of Executive's termination, the
covenants contained in the preceding sentence regarding
competition and solicitation shall extend for a period of one year
from the termination or expiration of the Term in consideration
for such payment. For purposes of the post-termination
covenants under this Section 10, the restriction shall be limited
to the geographic area in which the Company conducts business
as of the day immediately prior to the date of termination of
Executive's employment or the Change of Control Event,
whichever is earlier.
11. Equitable Relief. The Company and Executive
confirm that the restrictions contained in Sections hereof are, in
view of the nature of the business of the Company, reasonable
and necessary to protect the legitimate interests of the Company
and that any violation of any provision of Sections will result in
irreparable injury to the Company. Executive hereby agrees
that, in the event of any breach or threatened breach of the terms
or conditions of this Agreement by Executive, the Company's
remedies at law will be inadequate and, in any such event, the
Company shall be entitled to commence an action for
preliminary and permanent injunctive relief and other equitable
relief in any court of competent jurisdiction.
12. Indemnity. The Company agrees to indemnify
Executive against all costs, charges and expenses incurred or
sustained by Executive in connection with any action, suit or
proceeding to which he may be a party by reason of being or
having been a director, officer or employee at the request of the
Company to the fullest extent permitted by applicable law.
13. Amendment. This Agreement contains and its
terms constitute the entire Agreement of the parties and
supersedes all prior Agreements regarding employment, and may
be amended only by a written document signed by both parties to
this Agreement
14. Governing Law. This Agreement shall be
governed by the laws of the State of Mississippi. The parties
hereby irrevocably consent to, and waive any objection to the
exercise of, personal jurisdiction by the state and federal courts
located in the State of Mississippi with respect to any action or
proceeding arising out of this Agreement.
15. Attorneys' Fees. The Company agrees to pay,
to the full extent permitted by law, all legal fees and expenses
which the Executive may reasonably incur as a result of any
contest (only to the extent the Executive prevails in the outcome
thereof) by the Company of the validity or enforceability of, or
liability under, any provision of this Agreement (including as a
result of any contest by the Executive about the amount of any
payment pursuant to this Agreement).
16. Severability. Should any provision hereof be
deemed, for any reason whatsoever, to be invalid or inoperative,
that provision shall be deemed severable and shall not affect the
force and validity of all other provisions of this Agreement.
17. Survival. All provisions which may reasonably
be interpreted or construed to survive the expiration or
termination of this Agreement shall survive the expiration or
termination of this Agreement.
18. Notices. Any notice, request or instruction to be
given hereunder shall be in writing and shall be deemed given
when personally delivered or three (3) days after being sent by
certified mail, postage prepaid, to the other party at such party's
address set forth below.
IF TO EXECUTIVE:
Xxxxxxx X. Xxxxxxx
c/o Jitney-Jungle Stores of America, Inc.
P. O. Xxx 0000
Xxxxxxx, Xxxxxxxxxxx 00000-0000
IF TO COMPANY:
Jitney-Jungle Stores of America, Inc.
P. O. Xxx 0000
Xxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxx
with a copy to:
Bruckmann, Xxxxxx, Xxxxxxxx & Co., Inc.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx XX
Each party may change the address to which notices from the
other party are to be sent by notifying such party of its new
address in accordance with this Section 18.
19. Waiver. No waiver of any condition, obligation
or term hereof shall constitute a waiver of any other or a waiver
of a subsequent right to demand strict compliance with all
conditions, obligations and terms hereof.
20. Successors. This Agreement, including the
documents and instruments referred to herein, shall inure to the
benefit of and be binding upon and enforceable against the heirs,
legal representatives, successors, and assigns of the parties
hereto.
21. Delegation of Duties. Executive may not
delegate or assign any of his duties or obligations hereunder.
With the exception of assigning duties to the Executive relating
to the business of the affiliates or any subsidiaries of the
Company and with the exception of an assignment to any
acquiror in connection with (i) an acquisition of 50% or more of
the Company's voting stock, (ii) a merger or consolidation of
the Company resulting in the holders of the Company's voting
stock immediately prior to such transaction holding less than
50% of the total voting common stock of the surviving
corporation after such termination or (iii) a sale or exchange of
all or substantially all of the property or assets of the Company,
the Company shall have no right to assign this Agreement
without Executive's written consent.
22. Partial Invalidity. If any provision in this
Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remaining provisions shall,
nevertheless, continue in full force and without being impaired
or invalidated in any way.
23. Entire Agreement. This Agreement contains the
entire agreement between the parties hereto with respect to the
transactions contemplated hereby and supersedes all prior
arrangements or understandings with respect thereto.
Executed as of the day and year first above written.
JITNEY-JUNGLE STORES OF AMERICA, INC.
("Company")
By:
Name:
Title:
XXXXXXX X. XXXXXXX
("Executive")
SCHEDULE "A"
Executive shall be paid the sum indicated in Column A (less the bonus
paid, if any, pursuant to Section 4(b) of the Employment Agreement) if
the common stock shareholders receive the net purchase price in cash or
marketable securities for all common shares (the "Equity Value") of the
amounts listed in Column B.
A ($000) B ($mm)
*** ***
*** ***
*** ***
*** ***
*** ***
*** ***
*** ***
*** ***
*** ***
*** ***
*** ***
*** ***
*** ***
*** ***
*** ***
*** ***
*** ***
To the extent the Equity Value paid shareholders
exceeds an identified level in Column B, the payment specified
in Column A shall be adjusted pro rata. For example, if the
Equity Value is ***, the payment under Column A would be *** (***).
In the event that a Change of Control Event occurs and the
Equity Value is less than ***, Executive shall still be entitled to
a payment of *** less any bonus paid pursuant to Section 4(b). In no
event shall the payment calculated pursuant to Schedule "A" exceed ***.
*** This information has been omitted and filed separately with
the Securities and Exchange Commission and is subject to a confidential
treatment request with respect thereto.
