EXHIBIT 10.104
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of
the 1st day of September, 1998, by and between SMART & FINAL INC., a Delaware
corporation ("Employer"), and PHILLIP E. HAWKINS ("Employee").
RECITALS
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A. Employer is engaged in the business of distributing food and related
non-food items through wholesale outlets under the name "Smart & Final" and by
delivery, under the trade names "Smart & Final Foodservice" and "Henry Lee" in
the Western United States, Florida and Northern Mexico.
B. Employer desires to employ Employee, and Employee desires to be
employed, on the terms and conditions set forth in this Agreement.
AGREEMENT
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Accordingly, in consideration of the mutual covenants contained herein, the
parties agree as follows:
1. TERM OF AGREEMENT.
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1.1 Term. The term of this Agreement shall begin on September
1, 1998 and shall continue until the earlier of (a) the date on which it is
terminated pursuant to Section 5 or (b) September 30, 2000.
2. EMPLOYMENT
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2.1 Employment of Employee. Employer hereby hires Employee as
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President and Chief Operating Officer of its Smart & Final Stores Corporation
subsidiary ("Stores"). Employee hereby accepts such employment on the terms and
conditions of this Agreement.
2.2 Position and Duties. Employee shall serve as the President
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and Chief Operating Officer of Stores and shall have the general powers, duties,
and obligations commensurate with that office to be performed in such place or
places, as may be prescribed by the Board of Directors or the Bylaws of Employer
from time to time, provided, however that notwithstanding anything to the
contrary in the Section 2.2, Section 2.3 below, or any other provision of this
Agreement, Employee's principal office shall be at the corporate headquarters of
Employer in the greater Los Angeles metropolitan area. In this position,
Employee shall report directly to, and be subject to the supervision of,
Employer's Chairman and CEO or his/her designee.
2.3 Standard of Performance. Employee agrees that he will at all
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times faithfully and industriously and to the best of his ability, experience
and talents perform all of the duties that may be required of and from him
pursuant to the terms of this Agreement. Such duties shall be performed at such
place or places as the interests, needs, business and opportunities of Employer
shall require or render advisable.
2.4 Exclusive Service. Employee shall devote all of his business
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energies and abilities and all of his productive time to the performance of his
duties under this Agreement (reasonable absences during holidays and vacations
excepted), and shall not, without the prior written consent of Employer, render
to others any service of any kind (whether or not for compensation) that, in the
reasonable opinion of Employer, would materially interfere with the performance
of his duties under this Agreement. Employee shall not, without the prior
written consent of Employer, maintain any affiliation with, whether as an agent,
consultant, employee, officer, director, trustee or otherwise, nor shall he
directly or indirectly render any services of an advisory nature or otherwise
to, or participate or engage in, any other business activity. Nothing contained
herein shall restrict or prohibit Employee from making investments in other
companies for his personal benefit, provided that at no time
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shall Employee own 5% or more of any company that is in direct competition with
Employer. Employee shall use diligent, conscientious, good faith efforts to
promote the interests of Employer.
2.5 Employee shall be subject to and bound by all policies, group
requirements, rules and procedures of Employer including without limitation all
policies requiring employees to submit to testing as to consumption of alcohol
and/or illegal substances.
2.6 Employee shall be deemed part of Employer's senior management group
and notwithstanding anything to the contrary in this Agreement in that capacity
shall be subject only to such policies, procedures and rules as other members of
Employer's senior management group. As used herein "senior management" shall
include all of Employer's executive officers except the Chairman. Employer
shall, during the term of this agreement be considered for the same benefits or
perquisites as any other member of Employer's senior management group.
3. COMPENSATION
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3.1 Compensation. During the term of this Agreement, Employer
shall pay the amounts and provide the benefits described in this Section 3, and
Employee agrees to accept such amounts and benefits in full payment for
Employee's services under this Agreement.
3.2 Base Salary. Employer shall pay to Employee a base salary
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of $400,000.00 annually in equal installments payable no less frequently than
monthly. Such salary shall be subject to the normal review procedures of
Employer regarding increases; provided that Employee acknowledges that he is not
guaranteed any increase in compensation.
3.3 Bonus. Employer shall pay to Employee a bonus in accordance
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with Employer's policies as established from time to time by the Compensation
Committee and the Board of Directors. For calendar year 1998, Employer's target
bonus shall constitute up to 60% of base salary and shall be prorated based on
the number of months in the year in which Employee was employed by Employer.
3.4 Fringe Benefits. Upon satisfaction of any applicable
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eligibility requirements, Employee shall be entitled to such fringe benefits
which Employer may make generally available from time to time for its executive
employees. Such benefits shall include the following:
(a) group healthcare insurance including the Executive
Healthcare program which provides for an additional $9,500 of coverage
for Employee and Employee's family;
(b) participation in Employer's retirement, pension and
401(k) plans upon meeting such eligibility requirements as are
enumerated therein;
(c) reimbursement of up to $10,000 per year for tax and
estate planning services; and
(d) insurance coverage for primary vehicle under Employer's
fleet program and reimbursement for maintenance expenses of up to
$2,500 annually.
Notwithstanding the foregoing, Employee shall not be eligible to
participate in the Supplemental Employee Retirement Plan ("Plan") adopted for
officers employed by the Company on the effective date of the Plan.
3.5 Stock Options. At the first Board of Directors meeting
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following the date of this Agreement, Employee shall be awarded a grant of
options for the purchase of 100,000 shares of common stock in Employer pursuant
to the terms of Employer's Long-Term Equity Compensation Plan.
3.6 Deduction from Compensation. Employer shall deduct and
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withhold from all compensation payable to Employee all amounts required to be
deducted or withheld pursuant to any present or future law, ordinance,
regulation, order, writ, judgment, or decree requiring such deduction and
withholding.
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4. REIMBURSEMENT OF EXPENSES
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4.1 Travel and Other Expenses. Employer shall pay to or
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reimburse Employee for those travel and similar expenditures incurred by
Employee which Employer determines are reasonably necessary for the proper
discharge of Employee's duties under this Agreement and for which Employee
submits appropriate receipts and indicates the amount, date, location and
business character. Such reimbursements shall be timely made in accordance with
customary Employer policy.
5. TERMINATION
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5.1 Termination. Employee's employment under this Agreement
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shall terminate prior to the expiration of its stated term upon the happening of
any of the following events:
(a) By mutual agreement between Employer and Employee.
(b) Upon the death of Employee.
(c) At the option of Employer or Employee, if Employee has
become (in the opinion of a licensed physician selected by Employer) so
physically or mentally disabled as to be incapable of substantially performing
his duties hereunder for a period of 90 consecutive days.
(d) By Employee in the event of any material breach by
Employer hereunder constituting good cause, which shall mean the failure of
Employer to pay any amounts payable pursuant to Section 3 or the failure of
Employer to perform any material obligation hereunder, within 3 days following
written notice from Employee specifying with particularity the amounts payable
or obligations to be so performed, it being agreed that in the event this
Agreement is terminated pursuant to this subsection (d), Employee shall not be
bound by the provisions of Section 6.5 below.
(e) By Employer in the event of any breach by Employee
hereunder constituting good cause, which shall mean (i) the failure of Employee
to perform any obligation hereunder within 3 days following written notice from
Employer specifying with particularity the obligations to be so performed, or
(ii) the Employee shall have been convicted of or shall have pled guilty or no
contest to any (A) felony or (B) misdemeanor involving either I) moral turpitude
or II) an offense that may have a material adverse effect on Employer, (iii) any
willful violation by Employee of any material laws or regulations applicable to
Employer's business, (iv) gross negligence, willful or dishonest misconduct,
fraud, or embezzlement on the part of Employee, or (v) commission of any act
involving moral turpitude including without limitation any offense relating to
being under the influence of a controlled substance or driving a vehicle while
intoxicated, or (vi) any adverse misrepresentations made by Employee.
5.2 Termination Date. The date on which this Agreement
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terminates shall be the "Termination Date." After the Termination Date, Employee
shall not be employed by Employer, Employer shall promptly, but in no event
later than 5 days following the Termination Date, pay to Employee any
compensation under this Agreement accrued but unpaid as of that date, and
Employee shall not be entitled to any compensation from Employer for the
performance by Employee after that date of any obligations of Employee to
Employer under this Agreement. Notwithstanding the foregoing in the event
Employer terminates Employee's employment prior to the term of this Agreement
for any reason other than that specified in section's 5.1(a), 5.1(b), 5.1(c), or
5.1(e), or if Employee terminates this Agreement pursuant to Section 5.1(d)
above, Employee shall be entitled to all compensation due to him under the
Agreement.
5.3 Return of Employer Property. Within five days after the
Termination Date, Employee shall return to Employer all products, books,
records, forms, specifications, formulae, data processes, designs, papers and
writings relating to the business of Employer including without limitation
proprietary or licensed computer programs, customer lists and customer data,
and/or copies or duplicates thereof in Employee' s
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possession or under Employee's control. Employee shall not retain any copies or
duplicates of such property and all licenses granted to him by Employer to use
computer programs or software shall be revoked on the Termination Date.
6. CONFIDENTIAL INFORMATION As a material inducement to
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Employer to enter into and consummate this Agreement, Employee agrees that:
6.1 Trade Secrets. Employee shall not, without the prior written
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consent of Employer, except as may be required by law, governmental rules and
regulations or litigation between the parties, disclose or use, in any way, any
confidential business or technical information or trade secret of Employer,
whether or not conceived of or prepared by Employee (the "Trade Secrets"),
including without limitation any information concerning any procedures,
operations, investments, techniques, data, compilations of information, records,
financing, costs, employees, purchasing, accounting, marketing, merchandising,
sales, customers, salaries, pricing, profits, plans for future development, and
the identity, requirements, preferences, practices and methods of doing business
of specific parties with whom Employer transacts business, and all other
information which is related to any service or business of Employer; all of
which Trade Secrets are the exclusive and valuable property of Employer.
6.2 Tangible Items. All customer lists, patents, copyrights,
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trademarks, tradenames, files, records, documents, drawings, plans,
specifications, manuals, books, forms, receipts, notes, reports, memoranda,
studies, data, calculations, recordings, catalogues, compilations of
information, correspondence and all copies, abstracts and summaries of the
foregoing and all physical items related to the business of Employer, other than
a merely personal item, whether of a public nature or not, and whether prepared
by Employee or not, are and shall remain the exclusive property of Employer and
shall not be removed from the premises of Employer, without the prior written
consent of Employer.
6.3 Solicitation of Customers. During the one(1) year period
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commencing on the earlier to occur of (i) the Termination Date or (ii) the date
on which this agreement expires by its terms, Employee shall not directly,
either for his own benefit or purposes or for the benefit or purposes of any
other person, solicit, call on, interfere with, accept any business form,
attempt to or divert or entice away any person or firm who has or is a customer
of Employer, if such business involves the wholesale distribution of food or
related equipment or supplies.
6.4 Solicitation of Employees. , During the one (1) year period
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commencing on the earlier to occur of (i) the Termination Date or (ii) the date
on which this agreement expires by its terms, Employee shall not directly or
indirectly, employ or offer to employ, call on, solicit, interfere with, attempt
to direct or entice away any prior or existing employee or independent
contractor of Employer in any capacity if that person possesses or has knowledge
of any Trade Secrets.
6.5 Noncompetition.
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(a) As used herein, the term "Competitive Activity" shall
mean any participation in, assistance of business from, engagement in business
with, or assistance, promotion or organization of, any person, partnership,
corporation, firm, association or other business organization, entity or
enterprise by Employee (other than Employer) which, directly or indirectly, is
engaged in, or hereinafter engages in the operation of retail stores selling
food or related equipment or supplies (other than ownership not to exceed two
percent in any publicly traded company).
(b) During the one (1) year period commencing on the
earlier to occur of (i) the Termination Date or (ii) the date on which this
agreement expires by its terms, Employee shall not engage in any Competitive
Activity in any of the following geographic areas: the States of Arizona,
California, Florida, Idaho, Nevada, Oregon and Washington and the country of
Mexico.
6.6 Injunctive Relief. Employee hereby acknowledges and agrees
that it would be difficult to fully compensate Employer for damages resulting
from the breach or threatened breach of the foregoing provisions and,
accordingly, that Employer, without being required to post any bond, shall be
entitled to temporary and injunctive relief, including temporary restraining
orders, preliminary injunctions and permanent injunctions, to
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enforce such provisions. This provision with respect to injunctive relief shall
not, however, diminish Employer's right to claim and recover damages.
6.7 Confidentiality Program. Employee shall implement such
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policies and programs specified by Employer, all in order to protect the trade
secrets and other confidential information of Employer, its affiliates and
customers.
6.8 Continuing Effect. The provisions of this Section 6 shall
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remain in effect after the Termination Date.
6.9 Early Termination. Notwithstanding anything to the contrary
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in this Agreement, Sections 6.3, 6.4, 6.5 and 6.8 shall not apply in the event
that (a) Employee is terminated involuntarily prior to the expiration date of
the term hereof, or (b) Employer elects not to extend or renew or this Agreement
(upon terms comparable to those set forth herein) upon the expiration of the
term of this Agreement, or (c) Employee terminates this Agreement pursuant to
Section 5.1 (d) above.
7. OTHER PROVISIONS
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7.1 Compliance With Other Agreements. Employee represents and
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warrants to Employer that the execution, delivery and performance of this
Agreement will not conflict with or result in the violation or breach of any
term or provision of any order, judgment, injunction, contract, agreement,
commitment or other arrangement to which Employee is a party or by which he is
bound, including without limitation any agreement restricting the sale of
products similar to Employer's products in any geographic location or otherwise.
Employee acknowledges that Employer is relying on his representation and
warranty in entering into this Agreement, and agrees to indemnify Employer from
and against all claims, demands, causes of action, damages, costs or expenses
(including attorneys' fees) arising from any breach thereof.
7.2 Injunctive Relief. Employee acknowledges that the services
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to be rendered under this Agreement and the items described in Sections 5.3 and
6 are of a special, unique and extraordinary character, that it would be
difficult or impossible to replace such services or to compensate Employer in
money damages for a breach of this Agreement. Accordingly, Employee agrees and
consents that if he violates any of the provisions of this Agreement, Employer,
in addition to any other rights and remedies available under this Agreement or
otherwise, shall be entitled to temporary and permanent injunctive relief,
without the necessity of proving actual damages and without the necessity of
posting any bond or other undertaking in connection therewith.
7.3 Attorneys' Fees. In the event any party takes legal action
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to enforce any of the terms of this Agreement, the unsuccessful party to such
action shall pay the successful party's reasonable expenses, including
attorneys' fees for pretrial investigation, at trial, and on appeal, incurred in
such action.
7.4 Nondelegable Duties. This is a contract for Employee's
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personal services. The duties of Employee under this Agreement are personal and
may not be delegated or transferred in any manner whatsoever, and shall not be
subject to involuntary alienation, assignment or transfer by Employee during his
life.
7.5 Entire Agreement. This Agreement is the only agreement and
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understanding between the parties pertaining to the subject matter of this
Agreement, and supersedes all prior agreements, summaries of agreements,
descriptions of compensation packages, discussions, negotiations,
understandings, representations or warranties, whether verbal or written,
between the parties pertaining to such subject matter.
7.6 Governing Law; Venue. The validity, construction and
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interpretation of this Agreement shall be governed by the internal laws of the
State of California applicable to contracts made and to be performed wholly
within that state. Any action commenced by the parties may be brought only in
the Federal or California state courts serving Los Angeles County, California.
The parties expressly consent to the jurisdiction of the foregoing courts, and
waive any objection that such courts constitute an inconvenient forum.
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7.7 Severability. The invalidity or unenforce ability of any
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particular provision of this Agreement shall not affect the other provisions,
and this Agreement shall be construed in all respects as if any invalid or
unenforceable provision were omitted.
7.8 Amendment and Waiver. This Agreement may be amended,
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modified or supplemented only by a writing executed by each of the parties.
Either party may in writing waive any provision of this Agreement to the extent
such provision is for the benefit of the waiving party. No waiver by either
party of a breach of any provision of this Agreement shall be construed as a
waiver of any subsequent or different breach, and no forbearance by a party to
seek a remedy for noncompliance or breach by the other party shall be construed
as a waiver of any right or remedy with respect to such noncompliance or breach.
7.9 Binding Effect. The provisions of this Agreement shall bind
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and inure to the benefit of the parties and their respective successors and
permitted assigns.
7.10 Notice. Any notice or other communication required or
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permitted hereunder shall be in writing, and shall be deemed to have been given
if personally delivered, or delivered by facsimile transmission, or actually
delivered (as evidenced by appropriate receipt) by Federal Express or 72 hours
after being placed in the United States mail, registered or certified-return
receipt requested, postage prepaid, addressed as follows:
If to Employee:
Phillip E. Hawkins
26140 Birchfield Dr.
Rancho Palos Verdes, CA 90275
If to Employer:
Smart & Final, Inc.
600 Citadel Drive
City of Commerce, California 90040
Attn: Legal Department
Facsimile: (323) 869-7862
Each of the parties shall be entitled to specify a different address by
giving notice as aforesaid.
7.11 Headings. The Section and other headings contained in this
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Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
EMPLOYER
SMART & FINAL INC.
a Delaware corporation
By /s/ Robert J. Emmons
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Title Chairman
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By /s/ Donald G. Alvarado
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Title Sr. VP
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EMPLOYEE
/s/ Phillip E. Hawkins
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PHILLIP E. HAWKINS
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