EMPLOYMENT AGREEMENT
This Employment Agreement is made and entered into as of the 6th day of
March, 1997, among PAMIDA HOLDINGS CORPORATION ("Holdings"), a Delaware
corporation, PAMIDA, INC. ("Pamida"), a Delaware corporation, and ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ (the "Executive"). Holdings and Pamida collectively are referred to in
this Employment Agreement as the "Companies".
* * *
WHEREAS, Pamida is a wholly-owned subsidiary of Holdings; and
WHEREAS, the Executive currently is employed by Pamida and serves as
Executive Vice President and Chief Operating Officer of both Holdings and
Pamida; and
WHEREAS, the Executive is actively involved in all aspects of the
management and operations of the Companies; and
WHEREAS, the Companies desire to provide for the continued services of the
Executive; and
WHEREAS, the Companies desire concurrently to retain and employ the
Executive as Executive Vice President and Chief Operating Officer for an
extended period of time; and
WHEREAS, the Executive desires to accept such concurrent and extended
employment;
NOW, THEREFORE, in consideration of the foregoing recitals and the
respective covenants and agreements of the parties contained in this document,
the Companies and the Executive agree as follows:
1. EMPLOYMENT AND DUTIES. Each of the Companies hereby employs the
Executive as Executive Vice President and Chief Operating Officer throughout the
term of this agreement and agrees to cause the Executive from time to time to be
elected or appointed to such corporate offices (or such other more senior
corporate offices as the Boards of Directors of the Companies may specify) or
positions. The duties and responsibilities of the Executive shall include the
duties and responsibilities of the Executive's corporate offices and positions
referred to above which are set forth in the respective bylaws of the Companies
from time to time, responsibility for the day-to-day business operations of the
Companies (subject to the direction of the Chief Executive Officer of the
Companies), and such other duties and responsibilities consistent with the
Executive's corporate offices and positions referred to above and this agreement
which the Board of Directors of Holdings (the "Board") or the Chief Executive
Officer of the Companies from time to time may assign to the Executive. If the
Executive is elected or appointed as a director of Pamida or Holdings or as an
officer or director of any of the respective subsidiaries of the Companies
during the term of this agreement, then he also shall serve in such capacity or
capacities but without additional compensation.
2. TERM. The term of this agreement shall begin on the date of this
agreement and shall continue thereafter through March 5, 2000, unless sooner
terminated in accordance with this agreement.
3. PLACE OF EMPLOYMENT. The executive offices of the Companies shall be
located in Omaha, Nebraska, during the term of this agreement, and the Executive
will not be required to relocate or transfer his principal residence from the
immediate vicinity of Omaha, Nebraska.
4. BASE SALARY. For all services to be rendered by the Executive pursuant
to this agreement, the Companies agree to pay the Executive a base salary at an
annual rate of Two Hundred Seventy-Five Thousand Dollars ($275,000.00) during
the term of this agreement (the "Base Salary"). The Base Salary shall be paid in
periodic installments in accordance with the Companies' regular payroll
practices. The Board or the Compensation Committee of the Board shall review the
Base Salary at least annually as of the payroll payment date nearest to May 1
(beginning in 1998); and the Companies agree to make such increases in the Base
Salary as the Board may approve from time to time. Once established at a
specific increased annual rate, the Base Salary thereafter may not be reduced by
the Companies without the Executive's written consent.
5. INCENTIVE BONUS FOR FISCAL 1998. In addition to the Executive's Base
Salary and any other benefits to which the Executive is entitled under this
agreement but subject to all of the provisions of this paragraph, the Executive
also shall be entitled to receive an incentive bonus (the "Incentive Bonus")
from the Companies for the fiscal year of Holdings ending February 1, 1998
("Fiscal 1998"), in accordance with the following provisions of this paragraph:
(a) If the consolidated earnings of Holdings and its subsidiaries (on a
first-in, first-out basis with respect to merchandise inventories) before
interest, taxes, depreciation, and amortization for Fiscal 1998 (the
"EBITDA") are less than $42,000,000, then the Executive shall not be
entitled to any incentive bonus for Fiscal 1998.
(b) If the EBITDA equals or exceeds $42,000,000, then the Executive's incentive
bonus for Fiscal 1998 shall be determined as a percentage of the
Executive's base salary from the matrix attached to this agreement taking
into account (i) the EBITDA and (ii) the percentage increase in the
comparable store sales of Pamida for Fiscal 1998 compared with the fiscal
year ended February 2, 1997. Comparable store sales percentage increases
shall be determined in accordance with Pamida's historical practices.
(c) For purposes of such matrix, comparable store sales percentage increases of
more than 9% shall be treated as increases of 9%, and EBITDA of more than
$52,000,000 shall be treated as EBITDA of $52,000,000.
(d) For purposes of applying such matrix, the Executive's base salary shall be
the Executive's base salary in effect on February 1, 1998.
(e) The maximum incentive bonus that the Executive shall have the opportunity
to earn for Fiscal 1998 is 110% of the Executive's applicable base salary.
(f) EBITDA amounts between whole millions of dollars and comparable store sales
percentage increases between whole percentages shall be interpolated on a
straight-line basis for purposes of applying such matrix.
(g) Solely by way of illustration of the application of such matrix, if the
EBITDA is $44,250,000 and the comparable store sales percentage increase
for Fiscal 1998 is 4.6%, then the Executive's incentive bonus for Fiscal
1998 would be 45.66875% of the Executive's applicable base salary.
The Executive's incentive bonus for Fiscal 1998 (if any) shall be paid to the
Executive as soon as practicable after Holdings has received the final audit
report with respect to Fiscal 1998 from its independent accountants.
6. INCENTIVE BONUS FOR LATER FISCAL YEARS. In addition to the Executive's
Base Salary and any other benefits to which the Executive is entitled under this
agreement but subject to all of the provisions of this paragraph, the Executive
also shall be entitled to earn an incentive bonus from the Companies for the
fiscal years of Holdings ending in 1999, 2000, and 2001. On or before December
31, 1997, 1998, and 1999, the Executive and the Board shall agree upon an
incentive bonus program for the Executive for the fiscal years of Holdings
ending in 1999, 2000, and 2001, respectively. Each such incentive bonus program
shall be reflected in a written amendment to this agreement. The Executive and
the Companies understand and acknowledge that, among other things, such annual
incentive bonus programs will involve the achievement by the Companies of
various financial objectives, which may include but are not limited to sales and
earnings, and also may include the achievement by the Companies of various
non-financial objectives. Each such incentive bonus program shall provide the
Executive with an opportunity to earn (but no guarantee that he will earn) an
incentive bonus at least equal to the Incentive Bonus which the Executive has
the opportunity to earn under the incentive bonus program for fiscal 1998 set
forth in Paragraph 5.
7. EXPENSES. During the term of this agreement, the Executive shall be
entitled to prompt reimbursement by the Companies of all reasonable ordinary and
necessary travel, entertainment, and other expenses incurred by the Executive
(in accordance with the policies and procedures established by the Companies for
their respective senior executive officers) in the performance of his duties and
responsibilities under this agreement; provided, that the Executive shall
properly account for such expenses in accordance with the policies and
procedures of the Companies.
8. OTHER BENEFITS. During the term of this agreement, the Executive shall
be entitled to receive from the Companies all of the fringe benefits which
Pamida was providing or was obligated to provide to the Executive as of the date
of this agreement, including but not limited to (i) medical, hospital, dental,
disability, and life insurance plans and coverages, (ii) unreimbursed medical
expense reimbursement plans (Exec-U-Care), (iii) a cash automobile allowance up
to the annual amount set forth in Exhibit A to this agreement, (iv) professional
financial, tax, and estate planning services up to the annual amount set forth
in Exhibit A to this agreement, and (v) such other fringe benefits as may be
reflected in Exhibit A attached to this agreement. During the term of this
agreement, the Executive also shall be entitled to participate in such other
benefit plans or programs which the Companies from time to time may make
available either to their respective employees generally or to some or all of
their respective senior executive officers, such as but not limited to Pamida's
401(k) plan and Pamida's 1995 Deferred Compensation Plan.
9. VACATIONS AND HOLIDAYS. The Executive shall be entitled to paid
vacations and holidays in accordance with the policies of the Companies in
effect from time to time for their respective senior executive officers, but not
less than four (4) weeks of vacation during each fiscal year.
10. OTHER ACTIVITIES. The Executive shall devote substantially all of his
working time and efforts during the normal business hours of the Companies to
the business and affairs of the Companies and to the diligent and faithful
performance of the duties and responsibilities assigned to him pursuant to this
agreement, except for vacations, holidays, and sick days. However, the Executive
may devote a reasonable amount of his time to civic, community, or charitable
activities, to service on the governing bodies or committees of trade
associations of which either or both of the Companies are members, and, with the
prior approval of the Chief Executive Officer of the Companies, to service as a
director of other corporations and to other types of activities not expressly
mentioned in this paragraph, so long as the activities referred to in this
sentence do not materially interfere with the proper performance of the
Executive's duties and responsibilities under this agreement. The Executive also
shall be free to manage and invest his assets in such manner as will not require
any substantial services by the Executive in the conduct of the businesses or
affairs of the entities or in the management of the properties in which such
investments are made, so long as such activities do not materially interfere
with the proper performance of the Executive's duties and responsibilities under
this agreement.
11. TERMINATION.
(a) TERMINATION BECAUSE OF DEATH. The Executive's employment by the
Companies under this agreement shall terminate upon his death. If the
Executive's employment under this agreement terminates because of his death,
then the Executive's estate or his beneficiaries (as the case may be) shall be
entitled to receive the following compensation and benefits from the Companies:
(i) The Base Salary (as then may be applicable) through the date of
the Executive's death;
(ii) Continued payment of the Base Salary (as then may be applicable)
for a period of ninety (90) days after the date of the
Executive's death;
(iii)A pro rata portion of the Executive's annual incentive bonus for
the fiscal year in which his death occurs (computed as if the
Executive were employed by the Companies throughout such fiscal
year), based upon the number of days in such fiscal year elapsed
through the date of the Executive's death as a proportion of the
total number of days in such fiscal year, to be paid at the same
time that such incentive bonus would have been paid had the
Executive's death not occurred;
(iv) Any other amounts earned, accrued, or owed to the Executive under
this agreement but not paid as of the date of the Executive's
death; and
(v) Any other benefits payable by reason of the Executive's death
under any benefit plans or programs of the Companies in effect on
the date of the Executive's death.
(b) TERMINATION BECAUSE OF DISABILITY. If the Executive becomes incapable
by reason of physical injury, disease, or mental illness of substantially
performing his duties and responsibilities under this agreement for a continuous
period of six (6) months or more, then at any time after the elapse of such
six-month period and while such disability is continuing Holdings may terminate
the Executive's employment by the Companies under this agreement. If the
Executive's employment under this agreement is terminated by Holdings because of
such disability on the part of the Executive, then the Executive shall be
entitled to receive the following compensation and benefits from the Companies:
(i) The Base Salary (as then may be applicable) through the effective
date of such termination;
(ii) A pro rata portion of the Executive's annual incentive bonus for
the fiscal year of the Companies in which such termination occurs
(computed as if the Executive were employed by the Companies
throughout such fiscal year), based upon the number of days in
such fiscal year elapsed through the effective date of such
termination as a proportion of the total number of days in such
fiscal year, to be paid at the same time that such incentive
bonus would have been paid if such termination had not occurred;
(iii)Any other amounts earned, accrued, or owed to the Executive under
this agreement but not paid as of the effective date of such
termination;
(iv) Continued participation in the following benefit plans or
programs of the Companies which may be in effect from time to
time, to the extent that such continued participation by the
Executive is permitted under the terms and conditions of such
plans (unless such continued participation is restricted or
prohibited by applicable governmental regulations governing such
plans), until the first to occur of the cessation of such
disability, the Executive's death, the Executive's attainment of
age sixty-five (65), or (separately with respect to the
termination of each benefit) the provision of a substantially
equivalent benefit to the Executive by another employer of the
Executive:
(1) Group medical/hospital insurance, (2) Group dental insurance,
(3) Group life insurance, (4) Executive life insurance, (5) Group
long-term disability insurance, (6) Executive long-term
disability insurance, (7) Exec-U-Care medical expense
reimbursement insurance, (8) Professional financial, tax, and
estate planning services, (9) Automobile allowance, (10) Annual
physical examination, (11) Business club membership;
and
(v) Any other benefits payable by reason of the Executive's
disability under any benefit plans or programs of the Companies
in effect on the effective date of such termination.
(c) TERMINATION FOR CAUSE. Holdings may terminate the Executive's
employment by the Companies under this agreement for cause; however, for
purposes of this agreement "cause" shall mean only (i) the Executive's
confession or conviction of theft, fraud, embezzlement, or any other crime
involving dishonesty with respect to the Companies or any parent, subsidiary, or
affiliate of the Companies, (ii) the Executive's excessive absenteeism (other
than by reason of physical injury, disease, or mental illness) without
reasonable cause, (iii) material violation by the Executive of the provisions of
Paragraph 13, (iv) habitual and material negligence by the Executive in the
performance of his duties and responsibilities under or pursuant to this
agreement and failure to cure such negligence within thirty (30) days after his
receipt of a written notice from the Board setting forth in reasonable detail
the particulars of such negligence, (v) material non-compliance by the Executive
with his obligations under Paragraph 10 and failure to correct such
non-compliance within thirty (30) days after his receipt of a written notice
from the Board setting forth in reasonable detail the particulars of such
non-compliance, or (vi) material failure by the Executive to comply with a
lawful directive of the Board and failure to cure such non-compliance within
thirty (30) days after his receipt of a written notice from the Board setting
forth in reasonable detail the particulars of such non-compliance. In no event
shall the results of the Companies' operations or any business judgment made in
good faith by the Executive constitute an independent basis for termination for
cause of the Executive's employment under this agreement. Any termination of the
Executive's employment for cause must be authorized by a majority vote of the
Board taken not later than twelve (12) months after a majority of the members of
the Board (other than the Executive) have actual knowledge of the occurrence of
the event or conduct constituting the cause for such termination. If the
Executive's employment under this agreement is terminated by Holdings for cause,
then the Executive shall be entitled to receive the following compensation and
benefits from the Companies:
(i) The Base Salary (as then may be applicable) through the effective
date of such termination;
(ii) A pro rata portion of the Executive's annual incentive bonus for
the fiscal year of the Companies in which such termination occurs
(computed as if the Executive were employed by the Companies
throughout such fiscal year), based upon the number of days in
such fiscal year elapsed through the effective date of such
termination as a proportion of the total number of days in such
fiscal year, to be paid at the same time that such incentive
bonus would have been paid if such termination had not occurred;
(iii)Any other amounts earned, accrued, or owed to the Executive under
this agreement but not paid as of the effective date of such
termination; and
(iv) Any other benefits payable to the Executive upon his termination
for cause under any benefit plans or programs of the Companies in
effect on the effective date of such termination.
(d) TERMINATION WITHOUT CAUSE PRIOR TO A SIGNIFICANT CORPORATE EVENT. If,
prior to the occurrence of a Significant Corporate Event, Holdings or Pamida
terminates the Executive's employment under this agreement for any reason other
than cause or the Executive's death or disability, then (without limiting any
other rights or claims which the Executive may have for breach of this agreement
by the Companies or otherwise) the Executive shall be entitled to receive the
following compensation, benefits, and other payments from the Companies:
(i) The Base Salary (as then may be applicable) through March 5,
2000, to be paid at the same times that the Base Salary (as then
may be applicable) would have been paid if such termination had
not occurred; provided, that if the Executive commences
employment with another employer, whether as an employee or as a
consultant, prior to March 5, 2000 (for purposes of this
subparagraph (d), the "Other Employment"), then such payments of
the Base Salary shall be reduced from time to time by the
aggregate amount of salary or consulting fees received or
receivable by the Executive from the Other Employment for
services performed by him during the period from the commencement
of the Other Employment through March 5, 2000, but in no event
shall the Executive be required to repay to the Companies any
portion of any payments made to the Executive pursuant to this
subparagraph (i) for any periods prior to the periods during
which the Executive earned such salary or consulting fees from
the Other Employment;
(ii) A pro rata portion of the Executive's annual incentive bonus for
the fiscal year of the Companies in which such termination occurs
(computed as if the Executive were employed by the Companies
throughout such fiscal year), based upon the number of days in
such fiscal year elapsed through the effective date of such
termination as a proportion of the total number of days in such
fiscal year, to be paid at the same time that such incentive
bonus would have been paid if such termination had not occurred;
(iii)Any other amounts earned, accrued, or owed to the Executive under
this agreement but not paid as of the effective date of such
termination;
(iv) Continued participation in the following benefit plans or
programs of the Companies which may be in effect from time to
time, to the extent that such continued participation by the
Executive is permitted under the terms and conditions of such
plans (unless such continued participation is restricted or
prohibited by applicable governmental regulations governing such
plans), until the first to occur of March 5, 2000, or (separately
with respect to the termination of each benefit) the provision of
a substantially equivalent benefit to the Executive by another
employer of the Executive:
(1) Group medical/hospital insurance, (2) Group dental insurance,
(3) Group life insurance, (4) Executive life insurance, (5) Group
long-term disability insurance, (6) Executive long-term
disability insurance, (7) Exec-U-Care medical expense
reimbursement insurance, (8) Professional financial, tax, and
estate planning services, (9) Automobile allowance, (10) Annual
physical examination, (11) Business club membership;
however, if continued participation by the Executive in any of
the foregoing benefit plans or programs of the Companies is not
permitted under the terms and conditions of any of such plans or
programs, then in lieu of continued participation in such plan or
program the Companies shall pay to the Executive in cash an
amount equal to the cost that the Companies would have incurred
with respect to the Executive if the Executive were permitted to
continue as a participant in such plan or program during the
applicable period; and the Companies agree not to unilaterally
take any action which would prevent the Executive from continuing
to participate in any of such plans or programs unless such
action similarly affects all other participants in such plans or
programs;
(v) An amount equal to the non-vested Employer Credits and Earnings
Credits under the Pamida, Inc. 1995 Deferred Compensation Plan
(the "Deferred Compensation Plan") which are forfeited by the
Executive as a result of such termination and which would not
have been forfeited by the Executive as of March 5, 2000, if his
employment by the Companies had not been terminated prior to
March 5, 2000, such amount to be paid on March 5, 2000;
(vi) An amount equal to the Employer Credits and Earnings Credits
under the Deferred Compensation Plan that would have been
credited to the Executive's Deferral Account under such Plan for
the period from the effective date of such termination through
March 5, 2000, and become vested as of March 5, 2000, if the
Executive's employment by the Companies had not been terminated
prior to March 5, 2000, and the Executive had deferred the same
percentage of his Base Salary during such period as he was
deferring pursuant to such Plan on the effective date of such
termination, such amount to be paid on March 5, 2000;
(vii)An amount equal to the Matching Contributions that would have
been made by the Companies under the Pamida, Inc. Savings Plus
Plan (401(k) plan) for the benefit of the Executive in respect of
the Basic Contributions to such Plan that would have been made by
the Companies on behalf of the Executive during the period from
the effective date of such termination through March 5, 2000, if
the Executive's employment by the Companies had not been
terminated prior to March 5, 2000, and the Companies had
contributed to such Plan on behalf of the Executive during such
period (pursuant to a compensation reduction agreement with the
Executive) the maximum Basic Contribution then permitted under
such Plan, such amount to be paid on March 5, 2000; and
(viii)Any other benefits payable to the Executive upon his termination
without cause under any benefit plans or programs of the
Companies in effect on the effective date of such termination,
except that the Executive shall not be entitled to any severance
pay or severance benefits unless such termination occurs after
March 5, 1999, in which latter case the effective date of the
Executive's termination shall be deemed to be the date on which
he received a Notice pursuant to Paragraph 12, and the provisions
of Paragraph 12 shall apply.
The Companies agree that they will not terminate the Executive's employment
under this agreement without cause solely for the purpose of avoiding the
obligations of the Companies to pay or provide any bonus or other compensation
or benefits to the Executive the payment or provision of which is conditioned
upon the Executive's continuing in the employ of the Companies for a particular
period of time. Notwithstanding the foregoing provisions of this subparagraph
(d), in the event of the Executive's death subsequent to the termination of his
employment for a reason other than cause or the Executive's disability and prior
to March 5, 2000, then (1) the compensation, benefits, and other payments to
which the Executive is entitled under this subparagraph (d) shall terminate
(and, when applicable, be computed) as of the date of the Executive's death and
(2) the Executive's estate or beneficiaries (as the case may be) shall be
entitled to receive any other benefits payable by reason of the Executive's
death under any benefit plans or programs of the Companies in effect and in
which the Executive was participating on the date of his death.
(e) CONSTRUCTIVE TERMINATION. If at any time during the term of this
agreement the Board materially alters the duties and responsibilities of the
Executive provided for in Paragraph 1 without the Executive's written consent,
then, at the election of the Executive (such election to be made by written
notice from the Executive to the Board), (i) such action by the Board shall
constitute a constructive termination of the Executive's employment by the
Companies without cause, (ii) the Executive may resign from his offices and
positions with the Companies and shall not be obligated to perform any further
services of any kind to or for the Companies, and (iii) the Executive shall be
entitled to receive from the Companies all of the compensation, benefits, and
other payments described in subparagraph (d) of this Paragraph 11 (as if the
effective date of the Executive's resignation were the effective date of his
termination for purposes of determining such compensation, benefits, and other
payments), subject to all of the provisions and conditions of such subparagraph
(d).
(f) TERMINATION WITHOUT CAUSE AFTER A SIGNIFICANT CORPORATE EVENT. If,
after the occurrence of a Significant Corporate Event, Holdings, Pamida, or any
Permitted Assignee of this agreement under Paragraph 16 terminates the
Executive's employment under this agreement for any reason other than cause or
the Executive's death or disability, then the Executive shall be entitled to
receive the following compensation, benefits, and other payments (without
duplication) from the Companies and the Permitted Assignee, if any (all of whom
shall be jointly and severally liable therefor):
(i) All of the compensation, benefits, and other payments from the
Companies which are described in subparagraph (d) of this
Paragraph 11, subject to the final sentence of such subparagraph
(d); and
(ii) An annual incentive bonus for each of the two (2) successive
twelve-month periods following the effective date of such
termination in an amount equal to the average amount of the
incentive bonuses received by the Executive from the Companies
for the three fiscal years of the Companies ending prior to the
fiscal year in which such termination occurs, such annual
incentive bonuses to be paid on the first and second
anniversaries of the effective date of such termination;
provided, that (1) if such termination occurs after March 5,
1998, and before March 6, 1999, then the annual bonus for the
second of such two twelve-month periods shall be prorated based
upon the number of days from the first anniversary of the
effective date of such termination through March 5, 2000, as a
proportion of 365, (2) if such termination occurs after March 5,
1999, and before March 6, 2000, then the annual bonus for the
first of such two twelve-month periods shall be prorated based
upon the number of days from the first anniversary of the
effective date of such termination through March 6, 2000, as a
proportion of 365, and no annual bonus shall be payable for the
second of such two twelve-month periods, (3) each such annual
bonus shall be reduced by any bonuses received or receivable by
the Executive from the Other Employment (if any) referred to in
subparagraph (d)(i) of this Paragraph 11 for services performed
by him during the twelve-month period corresponding to a
twelve-month period referred to in this subparagraph (ii); and
(4) in the event of the Executive's death during either of such
two twelve-month periods, any incentive bonus to which the
Executive would be entitled for the twelve-month period in which
his death occurred shall be prorated and paid to the Executive's
estate or beneficiaries (as the case may be) in the manner set
forth in subparagraph (a)(iii) of this Paragraph 11, and no
incentive bonus shall be payable for the subsequent twelve-month
period (if any).
The Executive agrees to accept the compensation, benefits, and other payments
provided for in this subparagraph (f) as full and complete liquidated damages
for any breach of this agreement resulting from the termination of the
Executive's employment under this agreement, after the occurrence of a
Significant Corporate Event, for a reason other than cause or the Executive's
death or disability; and the Executive shall not have any other rights or claims
in respect of such breach.
(g) NOTICE OF OTHER EMPLOYMENT AND OF BENEFITS. The Executive promptly
shall notify the Companies in writing of (i) his acceptance of the Other
Employment referred to in subparagraph (d) of this Paragraph 11, (ii) the
effective date of such Other Employment, and (iii) the amount of salary or
consulting fees and the amount of any bonuses which the Executive receives or is
entitled to receive from the Other Employment for services performed by him
during the period from the commencement of the Other Employment through March 5,
2000. Whenever relevant for purposes of this Paragraph 11, the Executive also
promptly shall notify the Companies of his receipt from another employer of any
benefits of the types referred to in subparagraphs (b)(iv) and (d)(iv) of this
Paragraph 11. Such information shall be updated by the Executive whenever
necessary to keep the Companies informed on a current basis.
12. NOTICE OF NONRENEWAL. If the Companies determine not to continue the
employment of the Executive after the expiration of the term of this agreement
at a base salary at least equal to the Base Salary which is in effect as of the
last day of the term of this agreement and with fringe benefits and an incentive
bonus program reasonably comparable to those in effect as of the last day of the
term of this agreement, then the Companies shall so notify the Executive in
writing (the "Notice") promptly after such determination has been made. If the
Executive receives the Notice at a time when there are less than twelve (12)
months left in the term of this agreement and if the Executive does not remain
in the employ of the Companies after the expiration of the term of this
agreement, then after the expiration of the term of this agreement the Executive
shall be entitled to receive the following payments and benefits from the
Companies:
(a) Continued payment of the Executive's Base Salary, at the annual rate in
effect on the last day of the term of this agreement, until that date (the
"Extended Payment Date") which is twelve (12) months after the date on
which the Executive received the Notice; provided, that such payments shall
be reduced by the aggregate amount of salary or consulting fees which the
Executive derives from employment with another employer (for purposes of
this Paragraph 12, the "Other Employment"), whether as an employee or as a
consultant, during the period from March 6, 2000, through the Extended
Payment Date (the "Extended Payment Period"). In no event, however, shall
the Executive be required to repay to the Companies any portion of any
payments made to the Executive pursuant to this subparagraph 12(a) for any
periods prior to the periods during which the Executive earned such salary
or consulting fees from the Other Employment.
(b) An incentive bonus in an amount equal to (i) the average amount of the
incentive bonuses received by the Executive from the Companies for the
three fiscal years of the Companies ended prior to March 5, 2000,
multiplied by (ii) a fraction whose numerator is the number of days in the
Extended Payment Period and whose denominator is 365, such incentive bonus
to be paid on the last day of the Extended Payment Period; provided, that
such incentive bonus shall be reduced by any bonuses received or receivable
by the Executive from the Other Employment (if any) for services performed
by him during the Extended Payment Period.
(c) Continued participation in the following benefit plans or programs of the
Companies which may be in effect from time to time, to the extent that
continued participation by the Executive is permitted under the terms and
conditions of such plans or programs (unless such continued participation
is restricted or prohibited by applicable governmental regulations
governing such plans or programs), until the first to occur of the
expiration of the Extended Payment Period or (separately with respect to
the termination of each benefit) the provision of a substantially
equivalent benefit to the Executive by another employer of the Executive:
(1) Group medical/hospital insurance, (2) Group dental insurance,
(3) Group life insurance, (4) Executive life insurance, (5) Group
long-term disability insurance, (6) Executive long-term
disability insurance, (7) Exec-U-Care medical expense
reimbursement insurance, (8) Professional financial, tax, and
estate planning services, (9) Automobile allowance, (10) Annual
physical examination, (11) Business club membership.
If continued participation by the Executive in any of the foregoing benefit
plans or programs of the Companies is not permitted under the terms and
conditions of any of such plans or programs, then in lieu of continued
participation in such plan or program the Companies shall pay to the Executive
in cash an amount equal to the cost that the Companies would have incurred with
respect to the Executive if the Executive were permitted to continue as a
participant in such plan or program during the applicable period. The Companies
agree not to unilaterally take any action which would prevent the Executive from
continuing to participate in any of such plans or programs unless such action
similarly affects all other participants in such plans or programs.
The Executive promptly shall notify the Companies of his acceptance of the Other
Employment and of the amount of compensation and benefits which the Executive
receives or is entitled to receive from the Other Employment during the Extended
Payment Period. In the event of the Executive's death prior to the end of the
Extended Payment Period, the payments and benefits provided for in this
Paragraph 12 shall cease and terminate as of the date of the Executive's death,
except as otherwise required by applicable law.
13. NONDISCLOSURE. During the term of this agreement and thereafter, the
Executive shall not, without the prior written consent of the Board or a person
(other than the Executive) so authorized by the Board, disclose or use for any
purpose (except in the course of his employment under this agreement and in
furtherance of the business of the Companies or any of their respective
subsidiaries) any confidential information or proprietary data of the Companies
or any of their respective subsidiaries; provided, however, that confidential
information shall not include any information then known generally to the public
or ascertainable from public or published information (other than as a result of
unauthorized disclosure by the Executive) or any information of a type not
otherwise considered confidential by persons engaged in the same business or a
business similar to that conducted by the Companies or their respective
subsidiaries, as the case may be.
14. SUCCESSORS AND ASSIGNS. This agreement and all rights under this
agreement shall be binding upon, inure to the benefit of, and be enforceable by
the parties hereto and their respective personal or legal representatives,
executors, administrators, heirs, distributees, devisees, legatees, successors,
and assigns. This agreement is personal in nature, and none of the parties to
this agreement shall, without the written consent of the others, assign or
transfer this agreement or any right or obligation under this agreement to any
other person or entity, except as permitted by Paragraph 16.
15. NOTICES. For purposes of this agreement, notices and other
communications provided for in this agreement shall be deemed to be properly
given if delivered personally or sent by United States certified mail, return
receipt requested, postage prepaid, addressed as follows:
If to the Executive: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
c/o Pamida, Inc.
8800 "F" Street
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to the Companies: Pamida, Inc. and Pamida
Holdings Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Executive Officer
or to such other address as either party may have furnished to the other party
in writing in accordance with this paragraph. Such notices or other
communications shall be effective only upon receipt.
16. MERGER, CONSOLIDATION, SALE OF ASSETS. In the event of (a) a merger of
Pamida with another corporation in a transaction in which Pamida is not the
surviving corporation, (b) the consolidation of Pamida into a new corporation
resulting from such consolidation, (c) the sale or other disposition of all or
substantially all of the assets of Pamida, the Companies may assign this
agreement and all of the rights and obligations of the Companies under this
agreement to the surviving, resulting, or acquiring entity (a "Permitted
Assignee"); provided, that such surviving, resulting, or acquiring entity shall
in writing assume and agree to perform all of the obligations of the Companies
under this agreement; and provided further, that the Companies shall remain
jointly and severally liable for the performance of their obligations under this
agreement in the event of a failure of the Permitted Assignee to perform its
obligations under this agreement.
17. SIGNIFICANT CORPORATE EVENT. For purposes of this agreement, a
"Significant Corporate Event" shall be deemed to have occurred upon the earlier
of (i) the happening of any of the following events or (ii) the first public
announcement of the anticipated happening of any of the following events: (a)
Holdings ceases to own a majority of the outstanding Voting Shares of Pamida
(unless such event results from the merger of Pamida into Holdings, with no
change in the ownership of the Voting Shares of Holdings), (b) Pamida is merged
or consolidated into a corporation other than Holdings, and at any time after
such merger or consolidation becomes effective Holdings does not own a majority
of the outstanding Voting Shares of the surviving or resulting corporation in
such merger or consolidation, (c) Holdings is merged or consolidated into
another corporation, and immediately after such merger or consolidation becomes
effective the holders of a majority of the outstanding Voting Shares of Holdings
immediately prior to the effectiveness of such merger or consolidation do not
own a majority of the outstanding Voting Shares of the surviving or resulting
corporation in such merger, (d) any person, entity, or group of persons within
the meaning of Sections 13(d) or 14(d) of the Securities Exchange Act of 1934
(the "1934 Act") and the rules promulgated thereunder, other than 399 Venture
Partners, Inc. or any of its affiliates (as defined in Rule 12b-2 under the 1934
Act), becomes the beneficial owner (within the meaning of Rule 13d-3 of the ▇▇▇▇
▇▇▇) of thirty percent (30%) or more of the outstanding Voting Shares of
Holdings, or (e) the stockholders of Pamida vote (or act by written consent) to
dissolve Pamida or to sell or otherwise dispose of all or substantially all of
the property and assets of Pamida. For purposes of this Paragraph 17, "Voting
Shares" of a corporation means the outstanding shares of capital stock of such
corporation entitled to vote generally in the election of directors of such
corporation.
18. MISCELLANEOUS. No provision of this agreement may be modified, waived,
or discharged unless such waiver, modification, or discharge is agreed to in
writing and is signed by the Executive and an officer of Holdings (other than
the Executive) so authorized by the Board of Directors of Holdings. No waiver by
any party to this agreement at any time of any breach by any other party of, or
compliance by any other party with, any condition or provision of this agreement
to be performed by such other party shall be deemed to be a waiver of similar or
dissimilar provisions or conditions at the same or any prior or subsequent time.
No agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter of this agreement have been made by any party that
are not expressly set forth in this agreement.
19. REPRESENTATIONS OF COMPANIES. The Companies severally represent and
warrant to the Executive that they have full legal power and authority to enter
into this agreement and that the performance of their respective obligations
under this agreement will not violate any agreement between the Companies, or
either of them, and any other person, firm, or organization.
20. NON-SOLICITATION OF EMPLOYEES. Until the later of (i) twelve (12)
months after the effective date of the termination of the Executive's employment
under this agreement or (ii) twelve (12) months after the last payment of Base
Salary to the Executive pursuant to Paragraph 11 or Paragraph 12 (as the case
may be), without the prior written consent of Holdings, the Executive agrees not
to employ, solicit for employment, assist any other person in employing or
soliciting for employment, or advise or recommend to any other person that such
other person employ or solicit for employment any person who then is, or during
any portion of the twelve (12) months prior to such employment or solicitation
for employment was, an employee of the Companies (or either of them) or any of
the Companies' respective subsidiaries.
21. JOINT AND SEVERAL OBLIGATIONS. All of the obligations of the Companies
under this agreement are joint and several; and neither the bankruptcy,
insolvency, dissolution, merger, consolidation, reorganization, nor cessation of
business or corporate existence of one of the Companies shall affect, impair, or
diminish the obligations under this agreement of the other of the Companies. The
compensation and benefits to which the Executive is entitled under this
agreement are aggregate compensation and benefits, and the payment of such
compensation or the provision of such benefits by one of the Companies shall to
the extent of such payment or provision satisfy the obligations of the other of
the Companies. The Companies may agree between themselves as to which of them
will be responsible for some or all of the Executive's compensation and benefits
under this agreement, but any such agreement between the Companies shall not
diminish to any extent the joint and several liability of the Companies to the
Executive for all of such compensation and benefits.
22. TERMINATION OF PRIOR AGREEMENT. The Retention and Confidentiality
Agreement dated January 12, 1995, between the Executive and Pamida, as amended
on February 21, 1996, hereby is terminated, effective as of the date of this
agreement.
23. VALIDITY. The invalidity or unenforceability of any provision or
provisions of this agreement shall not affect the validity or enforceability of
any other provision of this agreement, which other provision shall remain in
full force and effect; nor shall the invalidity or unenforceability of a portion
of any provision of this agreement affect the validity or enforceability of the
balance of such provision.
24. COUNTERPARTS. This document may be executed in one or more
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute a single agreement.
25. HEADINGS. The headings of the paragraphs contained in this document are
for reference purposes only and shall not in any way affect the meaning or
interpretation of any provision of this agreement.
26. APPLICABLE LAW. This agreement shall be governed by and construed in
accordance with the internal substantive laws, and not the choice of law rules,
of the State of Nebraska.
IN WITNESS WHEREOF, the Companies and the Executive have executed this
agreement on the day and year first above written.
PAMIDA HOLDINGS CORPORATION, a
Delaware corporation
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chairman of the
Board and Chief Executive Officer
PAMIDA, INC., a Delaware corporation
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chairman of the
Board and Chief Executive Officer
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Attachment to Exhibit 10.17 - Executive Bonus Matrix
Bonus as % of Pay - FYE98 - ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Comp store sales increase
EBITDA <3% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0%
=========================================================================================
<42 0 0 0 0 0 0 0 0
-----------------------------------------------------------------------------------------
42 29.750% 42.500% 43.250% 44.000% 44.750% 49.750% 54.750% 59.750%
-----------------------------------------------------------------------------------------
43 30.625% 43.375% 44.125% 44.875% 45.625% 50.625% 55.625% 60.625%
-----------------------------------------------------------------------------------------
44 31.500% 44.250% 45.000% 45.750% 46.500% 51.500% 56.500% 61.500%
-----------------------------------------------------------------------------------------
45 32.375% 45.125% 45.875% 46.625% 47.375% 52.375% 57.375% 62.375%
-----------------------------------------------------------------------------------------
46 33.250% 46.000% 46.750% 47.500% 48.250% 53.250% 58.250% 63.250%
-----------------------------------------------------------------------------------------
47 34.125% 46.875% 47.625% 48.375% 49.125% 54.125% 59.125% 64.125%
-----------------------------------------------------------------------------------------
48 35.000% 47.750% 48.500% 49.250% 50.000% 55.000% 60.000% 65.000%
-----------------------------------------------------------------------------------------
49 40.000% 52.750% 53.500% 54.250% 55.000% 60.000% 65.000% 70.000%
-----------------------------------------------------------------------------------------
50 50.000% 62.750% 63.500% 64.250% 65.000% 70.000% 75.000% 80.000%
-----------------------------------------------------------------------------------------
51 65.000% 77.750% 78.500% 79.250% 80.000% 85.000% 90.000% 95.000%
-----------------------------------------------------------------------------------------
52 80.000% 92.750% 93.500% 94.250% 95.000% 100.000% 105.000% 110.000%
=========================================================================================
EXHIBIT A
"OTHER BENEFITS" RELATED TO
EMPLOYMENT AGREEMENT DATED MARCH 6, 1997
AMONG PAMIDA HOLDINGS CORPORATION
AND ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, EXECUTIVE VICE PRESIDENT
Company paid Exec-U-Care insurance
Company paid life insurance - $500,000
Financial, legal counseling services - up to $10,000 annually
Company car - up to $12,000 allowance
Annual physical examination
Car phone
Use of company plane
Interest free loans - up to $50,000 approved by Chairman
Spousal travel - where appropriate and approved
Minimum vacation accrual * - 4 weeks
Athletic/Recreational membership
Supplemental disability insurance
Deferred compensation
*The greater of general employee vacation schedule or this list will be granted
