EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement"), effective June 1, 2004, is
made and entered into by and between Koninklijke Ahold N.V. (the "Parent
Company"), Ahold U.S.A., Inc. ("AUSA") and William Grize (the "Executive") and
restates and modifies, in part, the existing letter agreement between the
parties, dated August 31, 2001 (the "2001 Letter Agreement").
AGREEMENT
---------
In consideration of the foregoing, of the mutual promises contained herein
and for other valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parent Company, AUSA and the Executive intend to be
legally bound and agree as follows:
1. Employment and Agreement Term.
1.1 Agreement Term. The Parent Company will employ the Executive as a
member of its Executive Board, or in such other position as may be mutually
agreed upon by the parties, under the terms and conditions set forth in this
Agreement for a term beginning on the date of this Agreement (the "Effective
Date") and ending on April 30, 2006 (the "Term"). Should the Executive's
employment terminate for any reason prior to the end of the Term (other than a
termination with Cause), the Executive shall receive the compensation and
benefits set forth in this Agreement as if he had remained actively employed
through the end of the Term.
1.2 Extension of Agreement. Upon the expiration of the Term, this Agreement
shall terminate, except to the extent that the parties have continuing
obligations under it. The Executive may, however, at his option, elect to
perform an advisory or consulting role for either the Parent Company or AUSA for
a period of two years following the expiration of the Term. The terms and
conditions of such an advisory or consulting role shall be mutually agreed upon
by the parties.
2. Duties. During the Term, the Executive will continue to serve as the
Chief Executive Officer for AUSA, with management responsibility for all of
AUSA's operating and support companies, including The Stop & Shop Supermarket
Company LLC, Giant Food LLC, Giant Food Stores, LLC, BI-LO, LLC, Tops Markets,
LLC, and Peapod, LLC, as set forth in the 2001 Letter Agreement. The Executive
will have the powers and authority normally associated with such position. In
addition, the Executive will assume such other responsibilities, consistent with
Executive's position, as the Parent Company may delegate to the Executive. The
Executive will be employed on a full-time basis and shall devote his full
employment time, efforts and energy to the performance of his duties under this
Agreement.
3. Compensation. As compensation for the Executive's services, AUSA hereby
agrees to pay or cause to be paid to the Executive, and the Executive hereby
agrees to accept, the following compensation:
3.1 Base Salary. The Executive will be paid an initial base salary equal to
Eight Hundred Ninety Five Thousand Dollars ($895,000.00) per annum, less
applicable withholdings and deductions, payable in accordance with AUSA's
payroll practices ("Base Salary"). The
Executive's Base Salary may be adjusted on an annual basis according to the
Parent Company's normal merit process, and may be increased from time to time,
with the approval of the Board.
3.2 Bonus. Executive shall be entitled to participate in the Parent
Company's incentive plan in accordance with the terms and conditions set forth
in the 2001 Letter Agreement.
3.3 Vacation. The Executive shall be entitled to vacation in accordance
with the vacation pay schedule applicable to the Executive.
3.4 Performance Share Grant. The Executive shall be entitled to participate
in the Parent Company's Performance Share Grant Plan, as adopted by the general
meeting of shareholders on March 3, 2004, according to the terms and conditions
of that Plan.
3.5 Stock Options. The Executive shall receive stock options according to
the general remuneration policy adopted by the general meeting of shareholders
on March 3, 2004.
3.6 Employee Benefits. The Executive shall be entitled to participate in
all tax-qualified retirement plans, the annual incentive program, any
non-qualified deferred compensation plan, and all medical, life, dental and
other welfare and fringe benefit plans established or maintained by the Parent
Company or AUSA for its employees generally, subject to the terms and conditions
of such plans, and all plans or programs specifically adopted for the benefit of
the management employees of AUSA or members of the Board of the Parent Company,
including but not limited to The Stop & Shop Supermarket Company Executive
Committee Retirement Allowance Plan.
3.7 Expense Reimbursements. The Executive will be reimbursed for all
documented business and travel expenses incurred in accordance with AUSA's
travel and expense policies.
3.8 Indemnification. The Parent Company and AUSA shall indemnify and hold
the Executive harmless from and against any and all losses, claims, damages,
liabilities or expenses, including attorney's fees, of whatever nature, as
incurred, arising out of or relating to the fact that the Executive was a board
member, manager, or officer of the Parent Company or AUSA, to the greatest
extent permitted by law. Notwithstanding the foregoing, no indemnification may
be made to the Executive or on his behalf if a judgment or other final
adjudication establishes (a) that the Executive's acts were committed in bad
faith or were the result of active and deliberate dishonesty and were material
to the cause of action so adjudicated, or (b) that the Executive personally
gained in fact a financial profit or other advantage to which he was not legally
entitled.
4. Termination.
4.1 Notice and Compensation. Upon ninety (90) days notice, any party to
this Agreement may terminate the Executive's employment. If such termination
occurs prior to the end of the Term, the parties agree that the Executive will
receive all compensation and benefits due and owing under this Agreement as if
he had worked through the end of the Term.
2 of 8
4.2 Disability/Death. In the event of the Executive's disability or death
during the Term, the Executive or his designated beneficiary shall be entitled
to receive the compensation and severance benefits set forth in this Agreement
as if the Executive had worked through the end of the Term.
5. Compensation and Benefits Upon Termination.
5.1 Upon the expiration of the Term, provided that the Executive executes
(and does not later revoke) a waiver and release agreement substantially similar
to the form attached hereto as Attachment A (the "Release Agreement"), AUSA will
pay or cause to be paid to the Executive the following benefits:
(a) Base Salary and Payment Schedule. The Executive shall be paid an amount
equal to twelve (12) months of the Executive's Base Salary, in a lump sum within
60 days of the expiration of the Term. No payment shall issue under this
paragraph until after the expiration of the revocation period set forth in the
Release Agreement. All severance benefits shall be payable to the Executive
solely under this Agreement, the 2001 Letter Agreement, and the executed Release
Agreement.
(b) Bonus. The Executive shall be paid twelve (12) months bonus under the
Parent Company's incentive program. Such bonus payment shall be calculated based
on the average of the bonus amounts actually paid to the Executive under the
Parent Company's incentive program in 2004 and 2005. Such incentive payment
shall be made within 60 days of the expiration of the Term. No payment shall
issue under this paragraph until after the expiration of the revocation period
set forth in the Release Agreement.
(c) Stock Options. If, upon the date of termination of the Executive's
employment, the Executive holds any options with respect to stock and/or
American Depository Receipts of the Parent Company, all such options will
continue to vest and be exercisable for the maximum period allowable under the
terms of the option plan or agreement granting such options.
(d) Medical Benefits. Upon the expiration of the Term, the Executive will
be eligible to elect individual and dependent continuation group health and
dental coverage, as provided under Section 4980B(f) of the Internal Revenue Code
("COBRA"), for the maximum COBRA coverage period available, subject to all
conditions and limitations (including payment of premiums and cancellation of
coverage upon obtaining duplicate coverage or Medicare entitlement). If the
Executive or one or more of the Executive's covered dependents elects COBRA
coverage, then AUSA shall pay or cause to be paid the cost of the COBRA coverage
for the twelve (12) month period following the expiration of the Term. The
Executive (or dependents, as applicable) shall be responsible for paying the
full cost of the COBRA coverage (including the two percentage administrative
charge) after the earlier of (i) twelve months following the expiration of the
Term, or (ii) eligibility for coverage under another employer's medical plan.
5.2 Notwithstanding anything in this Agreement or the 2001 Letter Agreement
to the contrary, payments and benefits under Section 5.1 shall not be made or be
available if the Executive is terminated with Cause. "Cause" shall be deemed to
exist if (i) the Parent Company
3 of 8
or AUSA determines in good faith and following a reasonable investigation that
the Executive has committed fraud, theft or embezzlement; (ii) the Executive
pleads guilty or no lo contendere to or is convicted of any felony or other
crime involving moral turpitude, fraud, theft, or embezzlement; or (iii) the
Executive willfully fails or refuses to perform any material obligation under
this Agreement or to carry out the reasonable directives of Anders Moberg, and
the Executive fails to cure the same within a period of 30 days after written
notice of such failure is provided to the Executive by Anders Moberg (for
purposes of this subsection (iii) only, the Executive's obligation to carry out
the reasonable directives of Anders Moberg is specific to Anders Moberg and does
not apply to any person who may succeed Anders Moberg as Chief Executive Officer
of the Parent Company). The Executive's resignation in advance of an anticipated
termination for Cause shall constitute a termination for Cause.
6. Confidential Information; Non-Competition/Non-Interference. The
Executive acknowledges by signing this Agreement that (i) the principal business
of the Parent Company and AUSA and its controlled group members (as determined
under Section 414 of the Internal Revenue Code of 1986, as amended)
(collectively, "Affiliates") is the retail grocery business (the "Present
Business"); (ii) the Parent Company, AUSA, or any Affiliate constitutes one of a
limited number of persons who have developed the Present Business; (iii) the
Executive's work for the Parent Company, AUSA, or any Affiliate has given and
will continue to give him access to the confidential affairs and proprietary
information not readily available to the public; and (iv) the agreements and
covenants of the Executive contained in this Section 6 are essential to the
business and goodwill of the Parent Company, AUSA, or any Affiliate.
Accordingly, the Executive agrees as follows:
6.1 Upon termination of employment, the Executive will return to the Parent
Company or AUSA all memoranda, notices, files, records, documents and
confidential information about the Parent Company or AUSA's business, and
materials and property of the Parent Company or AUSA in the Executive's
possession, custody or control. The Executive will not at any time during or
after the Term personally use or use for others, or divulge to others any trade
secret or confidential or proprietary business information, knowledge or data of
the Parent Company or AUSA disclosed to the Executive during the Executive's
employment unless authorized in writing by the Board or required by law.
6.2 For a period of twelve (12) months following the expiration of the Term
(the "Restricted Period"), the Executive shall not, directly or indirectly, own,
manage, operate, join or control, or participate in the ownership, management,
operation or control of, or be a proprietor, director, officer, stockholder,
member, partner or an employee or agent of, or a consultant to:
(a) Carrefour Supermarche SA, Tesco PLC, J. Sainsbury PLC, Groupe Delhaize
SA, Metro AG, Casino Guichard-Perrachon SA, Albertson's, Kroger, Food Lion,
Harris Teeter, Hannaford Bros. Co. (including Shop 'n Save), Ingle's, Pathmark,
Shop Rite, Wakefern, Publix, Safeway, Shaw's Supermarkets, Shoppers Food
Warehouse, Wal-Mart, Weis Markets, Wegmans or Winn-Dixie, including any
affiliates of such entities, or
(b) any business, firm, corporation, partnership or other entity which
engages in the Present Business in Europe, any state in the United States of
America or in the District of Columbia in which AUSA or any Affiliate operated
(including through any licensee) one or
4 of 8
more retail grocery stores at any time during the two (2) year period preceding
the date of termination of the Executive's employment with the Parent Company or
any Affiliate (the entities set forth in subparagraphs (a) and (b) of this
Section 6.2 are hereinafter collectively referred to as "Competitor").
6.3 The Executive will not be in violation of Section 6.2 if the Executive
owns, directly or indirectly, solely as an investment, securities of a
Competitor which are traded on any national securities exchange or the NASDAQ if
the Executive (A) is not a controlling person of, or a member of a group which
controls, such entity and (B) does not, directly or indirectly, own one percent
(1%) or more of any class of securities of such entity.
6.4 During the Restricted Period, the Executive shall not, directly or
indirectly, for the Executive's own account or as proprietor, stockholder,
partner, director, officer, employee, agent or otherwise for or on behalf of any
person, business, firm, corporation, partnership or other entity other than the
Parent Company, AUSA, or any Affiliate, solicit to hire or hire any person who
is an employee of the Parent Company, AUSA, or any Affiliate.
6.5 The Executive expressly agrees that he shall not disclose the terms, or
the existence, of this Agreement to anyone other than the Parent Company's
executive leadership group, his legal counsel, financial advisor, and immediate
family.
6.6 Before accepting employment with any other person, organization or
entity while employed by the Parent Company and during the Restricted Period,
the Executive will inform such person, organization or entity of the
restrictions contained in this Article.
6.7 The parties acknowledge and agree that the restrictions of this Article
have been carefully negotiated at arm's length and are believed by the parties
to be reasonable and necessitated by legitimate business needs. Notwithstanding
the preceding statement, if any provision set forth in this Article is
determined by any competent court or tribunal to be unenforceable or invalid for
any reason, the parties agree that this Article will be interpreted to extend
only over the maximum period of time for which it may be enforceable, and/or
over the maximum geographical area as to which it may be enforceable, and/or to
the maximum extent in any and all respects as to which it may be enforceable,
all as determined by such court or tribunal. The parties further agree that the
Parent Company or AUSA will be entitled (without posting bond or other security)
to injunctive or other equitable relief, as deemed appropriate by any such court
or tribunal, to prevent a breach of the Executive's obligations set forth in
this Article.
7. Resolution of Differences Over Breaches of Agreement. The parties shall
use good faith efforts to resolve any controversy or claim arising out of, or
relating to this Agreement or the breach thereof. If despite their good faith
efforts, the parties are unable to resolve such controversy or claim, then such
controversy or claim shall be resolved by arbitration in Boston, Massachusetts,
with one (1) arbitrator, in accordance with the National Rules for Resolution of
Employment Disputes of the American Arbitration Association, and judgment upon
the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof. The arbitrator shall have the discretion to award
reasonable attorneys' fees, costs and expenses, including fees and costs of the
arbitrator and the arbitration, to the prevailing party.
5 of 8
8. Complete Agreement. This Agreement and the 2001 Letter Agreement contain
the complete agreement and understanding concerning the employment arrangement
between the parties and supersede all other agreements, understandings or
commitments between the parties as to such subject matter. To the extent that
there may be a conflict between the Agreement and the 2001 Letter Agreement, the
Agreement governs. In particular, the choice of law and arbitration provisions
provided herein will supercede the applicable law and jurisdiction provisions
set forth in the 2001 Letter Agreement. The parties agree that neither of them
has made any representations concerning the subject matter of this Agreement
except such representations as are specifically set forth herein.
9. Executive Assignment. The Executive may not assign the Executive's
rights under this Agreement without the prior written consent of the Parent
Company and AUSA. This Agreement will be binding upon the Executive and the
Executive's heirs and legal representatives.
10. Employer Assignment/Change in Control. This Agreement shall bind any
successor of the Company, its assets or its businesses (whether direct or
indirect, by purchase, merger, consolidation, or otherwise) in the same manner
and to the same extent that the Parent Company and AUSA would be obligated if no
succession had taken place. In the case of any transaction in which a successor
would not by the foregoing provision or by operation of law be bound by this
Agreement, the Parent Company and/or AUSA shall require such successor expressly
and unconditionally to assume and agree to perform their obligations under this
Agreement in the same manner and to the same extent that they would be required
to perform if no such succession had taken place.
11. Notices. All notices required to be given or which may be given under
this Agreement must be in writing, must be either personally delivered, or
delivered by first class mail (postage prepaid) or by a nationally recognized
express courier. Notices will be deemed given when personally delivered, when
delivered to the addressee's address (when delivered by express courier) or five
(5) days after having been deposited with the U.S. Postal Service if mailed, and
addressed as follows:
If to AUSA: If to the Parent Company: If to the Executive:
- ---------- ------------------------ -------------------
Ahold U.S.A., Inc. Koninklijke Ahold N.V. William Grize
14101 Newbrook Dr. Albert Heijnweg 1 ___________, MA
Chantilly, VA 20151 Zaandam
Attn. Jim Lawler Noord, The Netherlands
1507 EH
Attn. Anders Moberg
Either party may change the address to which such notices are to be addressed by
notice thereof to the other party in the manner set forth above.
6 of 8
12. Miscellaneous.
12.1 The Executive agrees that any and all processes, systems, software,
technology or other intellectual property created or developed by the Executive
as part of the work being performed by him for the Parent Company or AUSA is
"work for hire," which is owned exclusively by the Parent Company and for which
the Parent Company receives all ownership rights, including the copyrights
thereto. The Executive hereby assigns to the Parent Company any and all right,
title and interest the Executive may have in such work.
12.2 No waiver, modification or amendment of any provision of this
Agreement will be effective, binding or enforceable unless in writing and signed
by the party against which it is sought to be enforced.
12.3 If any portion of this Agreement is held unenforceable or inoperative
for any reason, such portion will not affect any other portion of this
Agreement, and the remainder will be as effective as though the ineffective
portion had not been contained in this Agreement.
12.4 The validity of this Agreement and of any of the terms or provisions
as well as the rights and duties of the parties hereunder will be governed by
the laws of the Commonwealth of Massachusetts (excluding the conflict of laws
provisions thereof).
* * *
7 of 8
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
Ahold U.S.A., Inc.
By /s/ James Lawler
---------------------------------------------------
James Lawler
Chief Human Resources Officer
Koninklijke Ahold N.V.
By: /s/ Karel Vuursteen
--------------------------------------------------
Karel Vuursteen
Title: Chairman, Supervisory Board
-----------------------------------------------
EXECUTIVE:
/s/ William Grize
- -------------------
William Grize
8 of 8
ATTACHMENT A
WAIVER AND RELEASE AGREEMENT
In consideration for the benefits to be provided to me under the terms of the
Employment Agreement by and between Koninklijke Ahold N.V. (the "Parent
Company"), Ahold U.S.A., Inc. ("AUSA") and me, effective [_________, 2004] (the
"Agreement"), I hereby acknowledge, understand and agree under this Waiver and
Release Agreement (the "Release") to the following:
1. In consideration of the foregoing, including, without limitation, payment
to me of the determined amounts under the Agreement, I unconditionally release
the Parent Company and AUSA and all of its partners, affiliates, parents,
predecessors, successors, assigns, officers, directors, trustees, employees,
agents, administrators, representatives, attorneys, insurers or fiduciaries,
past, present or future (collectively, the "Released Parties") from any and all
administrative claims, actions, suits, debts, demands, damages, claims,
judgments, or liabilities of any nature, including costs and attorneys' fees,
whether known or unknown, including, but not limited to, all claims arising out
of my employment with or separation from the Parent Company and/or AUSA and (by
way of example only) any claims for bonus, severance, or other benefits apart
from the benefits set forth in the Agreement; claims for breach of contract,
wrongful discharge, tort claims (e.g., infliction of emotional distress,
defamation, negligence, privacy, fraud, misrepresentation); claims under
federal, state and local wage and hour laws and wage payment laws; claims for
reimbursements; claims for commissions; or claims under the following, in each
case, as amended: 1) Title VII of the Civil Rights Act of 1964 (race, color,
religion, sex and national origin discrimination); 2) 42 U.S.C. Section 1981
(discrimination); 3) 29 U.S.C. Section 206(d)(1) (equal pay); 4) Executive Order
11246 (race, color, religion, sex and national origin discrimination); 5) Age
Discrimination in Employment Act and Executive Order 11,141 (age
discrimination); (6) the Americans with Disabilities Act of 1990 ("ADA"), 42
U.S.C. Section 12101, et seq.; 7) the Family and Medical Leave Act; 8) the
Immigration Reform and Control Act; 9) Massachusetts and Virginia Fair
Employment Laws (discrimination in employment); 10) the Employee Retirement
Income Security Act of 1974, 29 U.S.C. Sections 1001 et seq.; 11) the Vietnam
Era Veterans Readjustment Assistance Act; 12) Sections 503-504 of the
Rehabilitation Act of 1973 (handicap discrimination), or any other claims under
any other state, federal, local law, statute, regulation, or common law or
claims at equity relating to conduct or events occurring prior to my date of
separation. This release shall not extend to or include the following: (a) any
rights or obligations under applicable law which cannot be waived or released
pursuant to an agreement, (b) any rights or claims that arise after the
Separation Date, (c) any rights I may have under the Parent Company's or Ahold
USA's Director's and Officer's insurance policy or under the Parent Company's or
Ahold USA's charter or by-laws, (d) any rights I may have under Section 3.9 of
the Agreement, or (e) the right to enforce the Agreement. I represent and
warrant that, as of the Effective Date, I have not assigned or transferred any
claims of any nature that I would otherwise have against the Parent Company,
AUSA, or their successors or assigns.
2. I intend this Release to be binding on my successors, and I specifically
agree not to file or continue any claim in respect of matters covered by this
Release. I further agree never to institute any suit, complaint, proceeding,
grievance or action of any kind at law, in equity, or otherwise in any court of
the United States or in any state, or in any administrative agency of the United
States or any state, county or municipality, or before any other tribunal,
public or private,
against the Parent Company or AUSA arising from or relating to my employment
with or my termination of employment and/or any other occurrences to the date of
this Release, other than a claim challenging the validity of this Release under
the ADEA.
3. I am further waiving my right to receive money or other relief in any
action instituted by me or on my behalf by any person, entity or governmental
agency. Nothing in this Release shall limit the rights of any governmental
agency or your right of access to, cooperation or participation with any
governmental agency, including without limitation, the United States Equal
Employment Opportunity Commission. I further agree to waive my rights under any
other statute or regulation, state or federal, which provides that a general
release does not extend to claims which the creditor does not know or suspect to
exist in his favor at the time of executing the release, which if known to him
must have materially affected his settlement with the debtor.
4. In further consideration of the promises made by the Released Parties in
the Agreement and this Release, I specifically waive and release the Released
Parties from all claims I may have as of the date I sign this Release, whether
known or unknown, arising under the ADEA. I further agree that:
(A) My waiver of rights under this Release is knowing and voluntary and in
compliance with the Older Workers Benefit Protection Act of 1990
("OWBPA");
(B) I understand the terms of this Release;
(C) The consideration offered by the Parent Company and/or AUSA under the
Agreement in exchange for the signing of this Release represents
consideration over and above that to which I would otherwise be
entitled, and that the consideration would not have been provided had
I not agreed to sign this Release and do not sign this Release;
(D) The Parent Company and/or AUSA are hereby advising me in writing to
consult with an attorney prior to executing this Release;
(E) The Parent Company and/or AUSA are giving me a period of twenty-one
(21) days within which to consider this Release;
(F) Following my execution of this Release, I have seven (7) days in which
to revoke this Release by written notice. An attempted revocation not
actually received by the Parent Company and/or AUSA prior to the
revocation deadline will not be effective;
(G) This entire Release shall be void and of no force and effect if I
choose to so revoke, and if I choose not to so revoke this Release
shall then become effective and enforceable.
This Section 5 does not waive rights or claims that may arise under the ADEA
after the date I sign this Release. To the extent barred by the OWBPA, the
covenant not to sue contained in Section 3 does not apply to claims under the
ADEA that challenge the validity of this Release.
2
5. To revoke this Release, I must send a written statement of revocation to:
Ahold USA, Inc.
Attn: Executive Vice President, Human Resources
The revocation must be received no later than 5:00 p.m. on the seventh day
following my execution of this Release. If I do not revoke, the eighth day
following my acceptance will be the "effective date" of this Release.
6. I agree to cooperate fully with the Parent Company, AUSA, and other
affiliates, and their legal counsel in connection with any disputes arising out
of matters with which I was directly or indirectly involved while serving as an
employee of the Parent Company and/or AUSA. This cooperation shall include, but
shall not be limited to, meeting with, and providing information to, the Parent
Company and/or AUSA and its legal counsel, maintaining the confidentiality of
any past or future privileged communications with the Parent Company's or AUSA's
legal counsel (outside and in-house counsel), and making myself available to
testify truthfully by affidavit, in depositions, or in any other forum on behalf
of the Parent Company and/or AUSA.
7. I acknowledge that I remain bound by, and reaffirm my intention to comply
with, continuing obligations under any agreements between myself and the Parent
Company and/or AUSA, as presently in effect, including, but not limited to, my
confidentiality obligations.
3
BY SIGNING THIS RELEASE, I ACKNOWLEDGE THAT: I HAVE READ THIS RELEASE AND
UNDERSTAND ITS TERMS; I HAVE HAD THE OPPORTUNITY TO REVIEW THIS RELEASE WITH
LEGAL OR OTHER PERSONAL ADVISORS OF MY OWN CHOICE; I UNDERSTAND THAT BY SIGNING
THIS RELEASE I AM RELEASING THE RELEASED PARTIES OF ALL CLAIMS AGAINST THEM; I
HAVE BEEN GIVEN TWENTY-ONE DAYS TO CONSIDER THE TERMS AND EFFECT OF THIS RELEASE
AND I VOLUNTARILY AGREE TO ITS TERMS.
SIGNED this ___ day of _____, 200_.
- -----------------------
William Grize
4