<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
(Mark One)
[x] Annual report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (Fee Required)
For the fiscal year ended July 2, 1994
[ ] Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (No Fee Required)
For the transition period from _______ to _______
Commission File Number 0-6544
BRUNO'S, INC.
(Exact Name of Registrant as Specified in its Charter)
Alabama 63-0411801
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
800 Lakeshore Parkway, Birmingham, Alabama 35211
(Address of Principal Executive Offices) Zip Code)
205/940-9400
(Registrant's Telephone Number, Including Area Code)
Securities Registered Pursuant to Section 12(b) of the Act:
NONE
Securities Registered Pursuant to Section 12(g) of the Act:
COMMON STOCK
$.01 Par Value
Indicate by check mark whether Bruno's, Inc. (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [X]
The aggregate market value of the voting stock held by non-affiliates of
Bruno's, Inc. as of September 7, 1994, was approximately $531,336,737.
As of September 7, 1994, the number of shares of Bruno's, Inc. Common Stock
outstanding was 78,096,941.
DOCUMENTS INCORPORATED BY REFERENCE
(1) Part II incorporates by reference portions of the Bruno's,
Inc. Annual Report to Shareholders for the Fiscal Year Ended July 2, 1994.
(2) Part III incorporates by reference portions of the Bruno's,
Inc. Proxy Statement for the fiscal year ended July 2, 1994, filed with the
Commission on September 19, 1994.
<PAGE> 2
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Item Page
<S> <C> <C> <C>
Part I 1 Business. 1
2 Properties. 5
3 Legal Proceedings. 6
4 Submission of Matters to a Vote of
Security Holders. 6
Part II 5 Market for Registrant's Common Equity
and Related Stockholder Matters 7
6 Selected Financial Data. 7
7 Management's Discussion and Analysis
of Financial Condition and Results of
Operations 7
8 Financial Statements and Supplementary
Data 8
9 Changes in and Disagreements with
Accountants on Accounting and Financial
Disclosure 8
Part III 10 Directors and Executive Officers of the
Registrant 8
11 Executive Compensation 8
12 Security Ownership of Certain Beneficial
Owners and Management 8
13 Certain Relationships and Related
Transactions 8
Part IV 14 Exhibits, Financial Statement Schedules,
and Reports on Form 8-K 9
</TABLE>
<PAGE> 3
PART I
Item 1. Business.
General
Bruno's, Inc. ("Bruno's" or the "Company"), a corporation organized in 1959
under the laws of the State of Alabama, is a leading regional supermarket
retailer operating in the southeastern United States. The Company operates a
total of 257 supermarkets and combination food and drug stores, of which 125
are located in Alabama, 90 in Georgia, 20 in Florida, 11 in Tennessee, 6 in
Mississippi and 5 in South Carolina. The Company attempts to achieve high
sales volume by offering a wide variety of nationally-advertised brands at
prices equal to or below those of competing stores. The Company, through
pricing, merchandising and promotion, attempts to achieve a first or second
market share position in each market area in which it operates. The Company
also operates eight liquor stores in Florida which are adjacent to supermarkets
operated by the Company.
The Company operates conventional, discount and warehouse supermarkets and
combination food and drug stores of various sizes, primarily under five
separate store formats. The Company utilizes these different formats to enable
it to vary its pricing strategy, store size, product mix, and decor and design
to best suit the demographic conditions and competitive environment of each
store location.
The Company's major formats include:
Food World. The Company's 80 Food World supermarkets range in size from 30,000
to 60,000 square feet, and offer a wide selection of brand-name merchandise in
a modern format that includes expanded specialty departments. These
supermarkets advertise everyday low prices on television, radio and in
newspapers in an effort to draw customers from a wide area around each
location.
Food Max. The Company's 50 Food Max stores are large "superwarehouse" stores
emphasizing an open warehouse appearance with modern decor and ranging in size
from 34,000 to 75,000 square feet. In addition to a wide selection of
brand-name merchandise, these superwarehouse stores emphasize private label and
generic merchandise, bulk foods, large delicatessens and expanded meat and
produce departments. These stores, which achieve low overhead through reduced
staffing, are promoted primarily through newspaper advertising and regularly
offer unadvertised specials.
Food Fair. The Company's 32 Food Fair supermarkets range in size from 21,000
to 42,000 square feet. These smaller supermarkets are designed to operate with
a lower overhead and competitive pricing in areas that will not support the
volume necessary for a larger supermarket. These stores are promoted primarily
through newspaper and radio advertising.
<PAGE> 4
Bruno's Food and Pharmacy. The Company's 17 Bruno's Food and Pharmacy stores
generally are located in markets with suburban shoppers who appreciate
"one-stop shopping" and a wide range of merchandise. These combination stores
range in size from 48,000 to 60,000 square feet and typically contain expanded
produce, bakery and delicatessen departments, full service seafood and meat
departments, a floral department, pharmacy, and a large selection of general
merchandise. These stores carry specialty and gourmet foods generally not
found in conventional supermarkets, as well as a variety of products normally
found in large drug stores. Many also have in-store banking services. The
Bruno's Food and Pharmacy stores are promoted primarily through newspaper
advertising.
Piggly Wiggly. The Company's 56 Piggly Wiggly stores are conventional
supermarkets, ranging in size from 18,000 to 48,000 square feet and are
typically located in medium to small towns all in central and southern Georgia.
These Piggly Wiggly stores offer weekly specials on selected merchandise, store
specials and double manufacturers' coupons. They are promoted primarily
through newspaper advertising and printed circulars available in the stores.
The majority of the Company's other supermarkets operate under the names
Bruno's Finer Foods (12 stores), Bruno's Super Center (5 stores), and Consumer
Warehouse Foods (2 stores).
All of the Company's stores offer fresh produce, meat and poultry and a wide
selection of groceries, including dairy and bakery products, frozen foods, soft
drinks, health and beauty aids and a variety of other general merchandise
customarily carried by supermarkets. Many of the Company's stores, including
all of the Food World, Bruno's Food & Pharmacy, Bruno's Finer Foods, Bruno's
Super Center and Food Max stores, have delicatessens and bakery departments.
All of the Company's stores are air-conditioned, well-lighted, and equipped
with modern fixtures and adjacent to off street parking facilities. All of the
Company's stores are equipped with electronic scanning equipment except the
Piggly Wiggly stores, of which the majority are so equipped. The Company
varies the inventory in its stores to take into account seasonal changes in
consumer demand.
Distribution
The Company minimizes the square footage utilized for warehousing in each store
in order to maximize the square footage available in each store to display
merchandise for sale. Restocking of inventory is achieved primarily through
the Company's warehouses. Each of the Company's stores receives frequent
deliveries from the Company's distribution fleet of 153 tractors, 152
refrigerated trailers and 184 dry trailers. The approximately 1,375,000 square
foot Birmingham warehouse, distribution center and executive headquarters are
located on a 200-acre site. The Company-owned
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Vidalia warehouse and distribution center is located in southeastern Georgia on
a 90-acre site. The Birmingham warehouse utilizes a computerized inventory
control and ordering system that is linked directly to the stores it serves.
Approximately 26% of the Company's purchases, including beverages, tobacco
products, milk, bread and snack foods, are supplied directly to the stores by
local distributors. The Company believes that the existing warehouse capacity
will be sufficient to serve all stores proposed to be opened during the next
two years. The Company owns ample adjacent acreage for expansion thereafter.
Generally, it is efficient to supply stores within a 300-mile radius of a
distribution facility.
Expansion
The Company has expanded through the development of individual stores and the
acquisition of existing stores. The Company's expansion policy is to seek
locations for new stores in areas believed to be capable of supporting a high
level of sales volume. The Company plans to continue to expand through the
development of new stores in Alabama and Georgia and in the surrounding
southeastern states and may acquire existing stores or supermarket chains, if
attractive opportunities become available. There are no current agreements or
negotiations with respect to any acquisitions, and there can be no assurances
that opportunities to make acquisitions will become available on terms deemed
favorable by the Company or that the Company will be able to effect any
acquisitions. During the past several years, the Company has emphasized the
development of larger stores. The Company plans to open approximately 8 new
stores during the current fiscal year and 10 new stores during the following
year.
The following table sets forth certain statistical information with respect to
the Company's supermarket operations for the fiscal years indicated.
<TABLE>
<CAPTION>
June 27, July 3, July 2,
1992 1993 1994
<S> <C> <C> <C>
Stores open at beginning
of period 240 253 257
Stores opened or acquired
during period 20 23 8
Stores closed or sold during
period 7 19 8
Stores open at end of period 253 257 257
</TABLE>
Competition
The Company's business is highly competitive. In each of the markets in which
the Company operates, it competes directly with a
3
<PAGE> 6
number of national and regional chains, as well as with various local chains
and numerous single unit stores. Many items sold by the Company's combination
stores also can be found in variety stores, discount stores, drug stores and
department stores. The supermarket business is characterized by narrow profit
margins and, accordingly, the Company's earnings depend primarily on the
efficiency of its operations and on its ability to maintain a large sales
volume. Competition among supermarkets and drug stores generally takes the
form of price competition, store location, product selection and service
performance. The Company believes that its policy of pricing its merchandise
competitively with, and generally lower than, competing stores is an important
competitive factor.
The number of competitors and the amount of competition experienced by the
Company's stores varies from city to city and in various locations within
cities. The main competitors of the Company are the supermarket chains
operated by Winn-Dixie Stores, Inc., the Kroger Company, BiLo, Food Lion and
Delchamps, Inc. Winn-Dixie Stores, Inc. competes with the Company throughout
Alabama and Georgia, and the Kroger Company competes with the Company
throughout Alabama, with the exception of the Birmingham, Montgomery and Mobile
markets and certain parts of Georgia. BiLo and Food Lion compete with the
Company throughout Georgia with the exception of Atlanta.
Employees
At July 2, 1994, the Company employed approximately 11,084 full time and 16,136
part-time employees. Of this number, approximately 25,553 are employed in the
supermarkets and combination stores, 1,363 are employed in the warehousing
operations and 304 are employed in the Company's business offices.
Approximately 69% of such employees are covered under collective bargaining
agreements. The Company believes that its relationship with its employees is
good.
The Company has an incentive compensation plan covering its key purchasing,
warehouse and management staff and with each district manager, store manager,
co-manager and assistant manager in which their compensation is based upon the
profitability of the operations within the scope of their management
responsibility.
4
<PAGE> 7
Other Matters
Bruno's does not include industry segments. The Company's business is not
seasonal to any material extent. No part of the business of Bruno's is
dependent upon a single customer, or a few customers, the loss of any one of
which would have a materially adverse effect upon the Company. Bruno's does
not engage in any operations in foreign countries, nor is any portion of its
sales or revenue derived from customers in any foreign countries.
Item 2. Properties.
Store Properties
As of the end of the latest fiscal year, Bruno's leased 185 of its 257 food
stores and seven of its eight liquor stores under standard commercial leases,
no one of which is deemed to be materially important to the Company. All of
these leases are long-term leases, generally with one or more renewal options.
The Company generally owns the furniture and fixtures in each leased location,
and has made various leasehold improvements in the store locations. Thirteen
of the leases are with PM Associates, a joint venture owned 50% by a
wholly-owned subsidiary of Bruno's and 50% by Metropolitan Life Insurance
Company.
As of the end of the latest fiscal year, Bruno's owned 72 of its 257 food
stores. Of these 72 stores, 48 are free-standing stores situated on tracts of
land owned by Bruno's in various locations in Alabama and one store in Florida
situated on leased land. In addition, 24 stores owned by the Company are
located in shopping centers owned by Bruno's in various locations in Alabama,
Tennessee and Georgia, with the remaining space in these shopping centers
leased to commercial tenants. Bruno's also owns one shopping center in the
Roebuck area of Birmingham, Alabama, in which the Company does not operate a
store, with all space being leased to other commercial tenants.
Warehouse Properties
The approximately 1,375,000 square foot Birmingham warehouse, distribution
center and office complex is located on a 200-acre site in the Oxmoor West
Industrial Park in Birmingham, Alabama. The Company leases the Birmingham
warehouse from The Industrial Development Board of the City of Birmingham,
pursuant to a lease entered into in connection with the issuance of industrial
revenue bonds. The lease has a primary term of 20 years. Upon the expiration
of the lease term, the Company has the right to purchase the entire property
for nominal consideration.
The approximately 686,000 square foot Vidalia warehouse and distribution
center, owned by the Company, is located on a 90-acre site owned by the Company
in Vidalia, Georgia.
5
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The Company owns four additional warehouses in the Birmingham area, located on
two separate parcels of land owned by the Company, which warehouses were
formerly used for its central warehouse facility prior to the completion of its
new distribution center in May of 1986. The Company is using one of these
additional warehouses and three are vacant. The Company intends to sell these
warehouses whenever it locates a suitable purchaser and has written the
carrying value of these assets down to the estimated net realizable values.
Item 3. Legal Proceedings.
In 1991, the Company received a favorable termination letter with respect to
the termination of the employee pension plan of a supermarket chain acquired by
the Company in 1989. Pursuant to that termination, distributions were made to
all participants of that employee pension plan. After all of the benefit
liabilities were paid, there remained a balance of $2,716,795 which was
transferred to the Company as a reversion of excess pension assets. On June
15, 1992, the Company received a letter from the Pension Benefit Guaranty
Corporation contending that inappropriate actuarial assumptions were used to
determine the value of the employee's benefits distributed and that additional
distributions must be made to numerous former participants of the said plan.
It is impossible to quantify the extent of any liability at this time, if any,
but any liability is not expected to exceed $2,716,795.
Except for this matter, there are no material, pending legal proceedings, other
than ordinary, routine litigation incidental to the business, to which Bruno's
is a party or of which any of its property is the subject.
Item 4. Submission of Matters to a Vote of Security Holders.
Bruno's did not submit any matters to a vote of its security holders during the
fourth quarter of its fiscal year ended July 2, 1994.
6
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PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.
The Company's Common Stock trades on the NASDAQ National Market System under
the symbol BRNO. The following table sets forth, by fiscal quarter, the high
and low sales prices, rounded to the nearest eighth, reported by the NASDAQ
National Market System for the periods indicated.
<TABLE>
<CAPTION>
For Fiscal Year Ended: July 3, 1993 July 2, 1994
High Low High Low
<S> <C> <C> <C> <C>
First Quarter 14-5/8 12-1/2 12-1/4 8-7/8
Second Quarter 14-3/8 10-1/2 11-3/8 8-1/2
Third Quarter 14-1/4 9-1/8 9-5/8 7-1/8
Fourth Quarter 10-5/8 7-7/8 8-1/2 6-7/8
</TABLE>
As of September 7, 1994, there were approximately 8,077 holders of record of
the Company's Common Stock.
The following table sets forth the dividends paid by Bruno's to its
shareholders during the last two fiscal years. Bruno's intends to continue its
policy of paying quarterly cash dividends. Future dividends will be dependent,
however, upon the Company's earnings, financial requirements and other relevant
factors.
<TABLE>
<CAPTION>
For Fiscal Year Ended: July 3, 1993 July 2, 1994
<S> <C> <C>
First Quarter $.055 $.06
Second Quarter $.055 $.06
Third Quarter $.055 $.06
Fourth Quarter $.055 $.06
</TABLE>
Item 6. Selected Financial Data.
The information set forth under the caption "Selected Financial Data",
appearing on page 23 of the Bruno's, Inc. Annual Report to Shareholders for the
Fiscal Year Ended July 2, 1994, is incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The information set forth under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations", appearing on pages
24 through 26 of the Bruno's, Inc. Annual Report to Shareholders for the Fiscal
Year Ended July 2, 1994, is incorporated herein by reference.
7
<PAGE> 10
Item 8. Financial Statements and Supplementary Data.
The Financial Statements appearing on pages 9 through 22, and the Unaudited
Quarterly Financial Data appearing on page 27, of the Bruno's, Inc. Annual
Report to Shareholders for the Fiscal Year Ended July 2, 1994, are incorporated
herein by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
Not Applicable.
PART III
Item 10. Directors and Executive Officers of the Registrant.
The information set forth under the captions "NOMINEES" and "OFFICERS",
appearing in the Bruno's, Inc. Proxy Statement for the 1994 Annual Meeting of
Shareholders dated September 16, 1994, is incorporated herein by reference.
Item 11. Executive Compensation.
The information set forth under the captions "BOARD OF DIRECTORS" and
"COMPENSATION TO EXECUTIVE OFFICERS", appearing in the Bruno's, Inc. Proxy
Statement for the 1994 Annual Meeting of Shareholders dated September 16, 1994,
is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The information set forth under the captions "SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT" and "NOMINEES", appearing in the Bruno's,
Inc. Proxy Statement for the 1994 Annual Meeting of Shareholders dated
September 16, 1994, is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions.
The information set forth under the caption "INTERESTS OF OFFICERS, DIRECTORS
AND OTHERS IN CERTAIN TRANSACTIONS", appearing in the Bruno's, Inc. Proxy
Statement for the 1994 Annual Meeting of Shareholders dated September 16, 1994,
is incorporated herein by reference.
8
<PAGE> 11
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) The following documents are filed as a part of this report:
1. Financial Statements
The following financial statements of the Company and report
of independent public accountants are incorporated herein by
reference to the Bruno's, Inc. Annual Report to Shareholders
for the Fiscal Year Ended July 2, 1994:
Consolidated Balance Sheets as of July 2, 1994, and July 3,
1993.
Consolidated Statements of Income for Fiscal Years Ended July
2, 1994, July 3, 1993, and June 27, 1992.
Consolidated Statements of Shareholders' Investment for Fiscal
Years Ended July 2, 1994, July 3, 1993, and June 27, 1992.
Consolidated Statements of Cash Flows for Fiscal Years Ended
July 2, 1994, July 3, 1993, and June 27, 1992.
Notes to Consolidated Financial Statements
Report of Independent Public Accountants
Unaudited Quarterly Financial Data
2. Schedules to Financial Statements
Index to Schedules
Report of Independent Public Accountants
Schedule V - Property and Equipment
Schedule VI - Reserves for Depreciation and Amortization of
Property and Equipment
3. Exhibits
Exhibit No. Description
3(i) Certificate of Incorporation of the Company, and amendments
thereto, incorporated by reference to Exhibit 3(a) to the
Company's Annual Report on Form 10-K, dated September 24,
1990.
9
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<TABLE>
<CAPTION>
Exhibit Sequential
Number Description Page Number
<S> <C> <C>
3(ii) By-Laws of the Company, and amendments thereto, incorporated
by reference to the Form S-3 Registration Statement No.
33-22594 of the Company.
3(iii) Amendment to By-Laws of the Company adopted by the Board of
Directors on August 11, 1992, incorporated by reference to
Exhibit 3(c) to the Company's Annual Report on Form 10-K,
dated September 15, 1992.
4 Specimen Common Stock Certificate, $.01 par value, of the
Company, incorporated by reference to Exhibit 4(a) to the Form
S-3 Registration Statement No. 33-22594 of the Company.
10(a) Amended and Restated Group Term Life Insurance Plan of
Bruno's, Inc., dated March 15, 1984, incorporated by reference
to Exhibit 10(h) of the Company's Annual Report on Form 10-K,
dated August 27, 1985.
10(b) Second Amended and Restated Bruno's, Inc. Employee Stock
Option Plan dated October 20, 1989, incorporated by reference
to Exhibit 28 of Amendment No. 2 to the Form S-8 Registration
Statement No. 2-81642.
10(c) Bruno's, Inc. Profit Sharing Retirement Plan, incorporated by
reference to Exhibit 10(h) of the Company's Annual Report on
Form 10-K, dated August 9, 1989.
10(d) Form of Restricted Stock Bonus Plan of Bruno's, Inc.,
incorporated by reference to Exhibit 10(o) of the Company's
Annual Report on Form 10-K, dated September 30, 1988.
10(e) Joint Venture Agreement for PM Associates between SSS
Enterprises, Inc. and Metropolitan Life Insurance Company,
incorporated by reference to Exhibit 10.2 to Form S-1
Registration Statement No. 33-12239 of Piggly Wiggly Southern,
Inc.
10(f) Note Purchase Agreement dated as of September 1, 1993, between
Bruno's, Inc., and the Various Purchasers Listed on Annex 1,
incorporated by reference to Exhibit 10(r) to the Company's
Annual Report on Form 10-K, dated September 29, 1993.
10(g) Bruno's, Inc. Employee Incentive Stock Option Plan, approved
by Bruno's Board of Directors on May 6, 1993, incorporated by
reference to Exhibit 10(s) to the Company's Annual Report on
Form 10-K, dated September 29, 1993.
</TABLE>
10
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<TABLE>
<CAPTION>
Exhibit Sequential
Number Description Page Number
<S> <C> <C>
10(h) Employment and Deferred Compensation Agreement dated July 22,
1994, between the Company and Ronald G. Bruno.
10(i) Employment and Deferred Compensation Agreement dated July 22,
1994, between the Company and Paul F. Garrison.
10(j) Employment and Deferred Compensation Agreement dated July 22,
1994, between the Company and Glenn J. Griffin.
10(k) Employment and Deferred Compensation Agreement dated July 22,
1994, between the Company and Kenneth Bruno.
10(l) Employment and Deferred Compensation Agreement dated July 22,
1994, between the Company and R. Michael Conley.
10(m) Employment Continuity Agreement dated July 22, 1994, between
the Company and Ronald G. Bruno.
10(n) Employment Continuity Agreement dated July 22, 1994, between
the Company and Paul F. Garrison.
10(o) Employment Continuity Agreement dated July 22, 1994, between
the Company and Glenn J. Griffin.
10(p) Employment Continuity Agreement dated July 22, 1994, between
the Company and Kenneth Bruno.
10(q) Employment Continuity Agreement dated July 22, 1994, between
the Company and R. Michael Conley.
13 Pages 9 through 27 of the Bruno's, Inc. Annual Report to
Shareholders for the Fiscal Year Ended July 2, 1994. Printed
copies of the Bruno's, Inc. Annual Report to Shareholders for
the Fiscal Year Ended July 2, 1994, were distributed to
shareholders of the Company on September 19, 1994, and were
filed with the Securities and Exchange Commission at that
time. Such Annual Report shall not be deemed to be filed with
the Securities and Exchange Commission as a part of this Form
10-K Annual Report or otherwise subject to the liabilities of
Section 18 of the Securities and Exchange Act of 1934, as
amended (except for the specific portions thereof which are
incorporated by reference in this Form 10-K Annual Report).
18 Letter re change in accounting principles
22 Subsidiaries.
23(i) Consent of independent public accountants to the incorporation
(by reference to this Form 10-K Annual Report) of their report
on the Company's consolidated financial statements for the
fiscal year ended July 2,
</TABLE>
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1994, into this Form 10-K Annual Report and the Company's Form
S-8 Registration Statement No. 2-81642.
27 Financial Data Schedule
BRUNO'S, INC. WILL FURNISH TO EACH SHAREHOLDER, UPON WRITTEN REQUEST, COPIES
OF THE EXHIBITS REFERRED TO ABOVE AT A COST OF TEN CENTS PER PAGE. REQUESTS
SHOULD BE ADDRESSED TO: GLENN J. GRIFFIN, ASSISTANT SECRETARY, BRUNO'S, INC.,
POST OFFICE BOX 2486, BIRMINGHAM, ALABAMA 35201.
(b) No report on Form 8-K has been filed by Bruno's during the last
quarter of the fiscal year ended July 2, 1994.
12
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BRUNO'S, INC. AND SUBSIDIARIES
INDEX TO SCHEDULES
JULY 2, 1994
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SCHEDULE
NUMBER PAGE
- - -------- ----
<S> <C> <C>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 14
V PROPERTY AND EQUIPMENT 15
VI RESERVES FOR DEPRECIATION AND AMORTIZATION OF
PROPERTY AND EQUIPMENT 16
</TABLE>
Schedules other than those listed above have been
omitted since the information is not applicable,
not required, or is included in the financial
statements or notes thereto.
13
<PAGE> 16
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders of
Bruno's, Inc.:
We have audited in accordance with generally accepted auditing standards, the
consolidated financial statements included in the BRUNO'S, INC. fiscal 1994
annual report to shareholders incorporated by reference in this Form l0-K, and
have issued our report thereon dated July 29, 1994. Our audit was made for the
purpose of forming an opinion on those statements taken as a whole. The
schedules listed in the accompanying index are the responsibility of the
Company's management and are presented for purposes of complying with the
Securities and Exchange Commission's rules and are not part of the basic
consolidated financial statements. These schedules have been subjected to the
auditing procedures applied in the audit of the basic consolidated financial
statements and, in our opinion, fairly state in all material respects the
financial data required to be set forth therein in relation to the basic
consolidated financial statements taken as a whole.
ARTHUR ANDERSEN & CO.
Birmingham, Alabama
July 29, 1994
14
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BRUNO'S, INC. AND SUBSIDIARIES
SCHEDULE V -- PROPERTY AND EQUIPMENT
(DOLLAR AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
Balance at
Beginning Additions Retirements Balance at
Classification of Period at Cost or Sales Other End of Period
- - --------------------------------------------- ----------- ----------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C>
YEAR ENDED JUNE 27, 1992:
Land $ 33,712 $ 24,877 $ (960) $ (387) $ 57,242
Buildings 131,257 17,674 (4,259) 23,412 168,084
Equipment 295,500 39,531 (6,460) 4,437 333,008
Leasehold improvements 37,080 4,434 (2) 67 41,579(1)
Investment in property under capital leases 38,103 0 0 0 38,103(1)
Construction in progress 29,206 15,534 0 (31,573) 13,167
Leasehold interests 25,865 0 0 0 25,865
-------- -------- -------- -------- --------
$590,723 $102,050 $(11,681) $ (4,044) $677,048
======== ======== ======== ======== ========
YEAR ENDED JULY 3, 1993:
Land $ 57,242 $ 10,413 $ (125) $ 210 $ 67,740
Buildings 168,084 35,825 (5,521) 10,995 209,383
Equipment 333,008 62,150 (14,063) (218) 380,877
Leasehold improvements 41,579 8,416 (67) 473 50,401(1)
Investment in property under capital leases 38,103 0 0 0 38,103(1)
Construction in progress 13,167 14,937 0 (11,460) 16,644
Leasehold interests 25,865 0 0 0 25,865(1)
-------- -------- -------- -------- --------
$677,048 $131,741 $(19,776) $ 0 $789,013
======== ======== ======== ======== ========
YEAR ENDED JULY 2, 1994:
Land $ 67,740 $ 558 $ (3,128) $ 73 $ 65,243
Buildings 209,383 14,317 (3,270) 9,319 229,749
Equipment 380,877 35,144 (12,074) (225) 403,722
Leasehold improvements 50,401 4,953 (2,154) (12) 53,188(1)
Investment in property under capital leases 38,103 0 (1,514) 0 36,589(1)
Construction in progress 16,644 9,017 0 (9,257) 16,404
Leasehold interests 25,865 0 0 0 25,865(1)
-------- -------- -------- -------- --------
$789,013 $ 63,989 $(22,140) $ (102) $830,760
======== ======== ======== ======== ========
<CAPTION>
Investment in Property
Leasehold Improvements Under Capital Leases Leasehold Interests
-------------------------- -------------------------- -------------------------
July 2, 1994 July 3, 1993 July 2, 1994 July 3, 1993 July 2, 1994 July 3, 1993
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Amounts shown above $53,188 $50,401 $36,589 $38,103 $25,865 $25,865
Less reserves (Schedule VI) 20,477 17,221 22,487 21,808 13,000 11,563
------- ------- ------- ------- ------- -------
Amounts shown in consolidated financial statements $32,711 $33,180 $14,102 $16,295 $12,865 $14,302
======= ======= ======= ======= ======= =======
</TABLE>
(1) Leasehold improvements, investment in property under capital leases,
and leasehold interests in the consolidated financial statements are
net of the related reserves for amortization, as follows:
15
<PAGE> 18
BRUNO'S, INC. AND SUBSIDIARIES
SCHEDULE VI--RESERVES FOR DEPRECIATION AND AMORTIZATION
OF PROPERTY AND EQUIPMENT
(DOLLAR AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
Balance at Additions Balance
Beginning Charged Retirements at End
of Period to Income or Sales Other of Period
------------- ------------- ------------ --------- ---------
<S> <C> <C> <C> <C> <C>
YEAR ENDED JUNE 27, 1992:
Buildings $ 18,558 $ 4,535 $ (497) $0 $ 22,596
Equipment 114,733 30,552 (2,483) 0 142,802
Leasehold improvements 10,659 2,992 31 0 13,682
Investment in property under capital leases 18,290 1,794 0 0 20,084
Leasehold interests 8,370 1,690 0 0 10,060
-------- ------- -------- -- --------
$170,610 $41,563 $ (2,949) $0 $209,224
======== ======= ======== == ========
YEAR ENDED JULY 3, 1993:
Buildings $ 22,596 $ 5,827 $ (913) $0 $ 27,510
Equipment 142,802 34,562 (10,330) 0 167,034
Leasehold improvements 13,682 3,605 (66) 0 17,221
Investment in property under capital leases 20,084 1,724 0 0 21,808
Leasehold interests 10,060 1,503 0 0 11,563
-------- ------- -------- -- --------
$209,224 $47,221 $(11,309) $0 $245,136(1)
======== ======= ======== == ========
YEAR ENDED JULY 2, 1994:
Buildings $ 27,510 $ 6,639 $ (586) $0 $ 33,563
Equipment 167,034 36,976 (2,916) 0 201,094
Leasehold improvements 17,221 4,117 (861) 0 20,477
Investment in property under capital leases 21,808 1,607 (928) 0 22,487
Leasehold interests 11,563 1,437 0 0 13,000
-------- ------- -------- -- --------
$245,136 $50,776 $ (5,291) $0 $290,621(1)
======== ======= ======== == ========
<CAPTION>
July 2, 1994 July 3, 1993
------------ ------------
<S> <C> <C>
Total reserves shown above $290,621 $245,136
Less:
Reserves for amortization of leasehold improvements 20,477 17,221
Reserves for amortization of investment in property under capital leases 22,487 21,808
Reserves for leasehold interests 13,000 11,563
-------- --------
Amounts shown in consolidated financial statements $234,657 $194,544
======== ========
</TABLE>
(1) The reserves for amortization of leasehold improvements, investment in
property under capital leases and leasehold interests have been netted
against the respective cost of leasehold improvements, investment in
property under capital leases and leasehold interests in the
consolidated financial statements (see reconciliation on Schedule V).
A reconciliation of the reserves for depreciation, as reflected in the
consolidated financial statements, are as follows:
16
<PAGE> 19
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Bruno's, Inc. has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
BRUNO'S, INC.
By /s/ Ronald G. Bruno
--------------------------------
Ronald G. Bruno,
Chief Executive Officer
and Chairman of the Board
DATED: September 29, 1994
By /s/ Glenn J. Griffin
--------------------------------
Glenn J. Griffin,
Treasurer, Chief
Financial Officer,
Executive Vice President
and Assistant Secretary
DATED: September 29, 1994
17
<PAGE> 20
Pursuant to the requirements of the Securities Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Joseph S. Bruno Chairman Emeritus of Sept. 29, 1994
Joseph S. Bruno the Board of Directors
/s/ Ronald G. Bruno Chief Executive Sept. 29, 1994
Ronald G. Bruno Officer and Chairman
of the Board
/s/ Paul F. Garrison President, Chief Sept. 29, 1994
Paul F. Garrison Operating Officer,
Director
/s/ Glenn J. Griffin Executive Vice Presi- Sept. 29, 1994
Glenn J. Griffin dent, CFO, Treasurer,
Assistant Secretary
/s/ Kenneth J. Bruno Director Sept. 29, 1994
Kenneth J. Bruno
/s/ Judy M. Merritt Director Sept. 29, 1994
Judy M. Merritt
/s/ Richard Cohn Director Sept. 29, 1994
Richard Cohn
/s/Benny M. LaRussa,Jr. Director Sept. 29, 1994
Benny M. LaRussa, Jr.
/s/ J. Mason Davis, Jr. Director Sept. 29, 1994
J. Mason Davis, Jr.
/s/ Bart Starr Director Sept. 29, 1994
Bart Starr
</TABLE>
18
<PAGE> 21
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Sequential
Number Description Page Number
<S> <C> <C>
3(i) Certificate of Incorporation of the Company, and amendments
thereto, incorporated by reference to Exhibit 3(a) to the
Company's Annual Report on Form 10-K, dated September 24,
1990.
3(ii) By-Laws of the Company, and amendments thereto, incorporated
by reference to the Form S-3 Registration Statement No.
33-22594 of the Company.
3(iii) Amendment to By-Laws of the Company adopted by the Board of
Directors on August 11, 1992, incorporated by reference to
Exhibit 3(c) to the Company's Annual Report on Form 10-K,
dated September 15, 1992.
4 Specimen Common Stock Certificate, $.01 par value, of the
Company, incorporated by reference to Exhibit 4(a) to the Form
S-3 Registration Statement No. 33-22594 of the Company.
10(a) Amended and Restated Group Term Life Insurance Plan of
Bruno's, Inc., dated March 15, 1984, incorporated by reference
to Exhibit 10(h) of the Company's Annual Report on Form 10-K,
dated August 27, 1985.
10(b) Second Amended and Restated Bruno's, Inc. Employee Stock
Option Plan dated October 20, 1989, incorporated by reference
to Exhibit 28 of Amendment No. 2 to the Form S-8 Registration
Statement No. 2-81642.
10(c) Bruno's, Inc. Profit Sharing Retirement Plan, incorporated by
reference to Exhibit 10(h) of the Company's Annual Report on
Form 10-K, dated August 9, 1989.
10(d) Form of Restricted Stock Bonus Plan of Bruno's, Inc.,
incorporated by reference to Exhibit 10(o) of the Company's
Annual Report on Form 10-K, dated September 30, 1988.
10(e) Joint Venture Agreement for PM Associates between SSS
Enterprises, Inc. and Metropolitan Life Insurance Company,
incorporated by reference to Exhibit 10.2 to Form S-1
</TABLE>
19
<PAGE> 22
<TABLE>
<CAPTION>
Exhibit Sequential
Number Description Page Number
<S> <C> <C>
Registration Statement No. 33-12239 of Piggly Wiggly Southern,
Inc.
10(f) Note Purchase Agreement dated as of September 1, 1993, between
Bruno's, Inc., and the Various Purchasers Listed on Annex 1,
incorporated by reference to Exhibit 10(r) to the Company's
Annual Report on Form 10-K, dated September 29, 1993.
10(g) Bruno's, Inc. Employee Incentive Stock Option Plan, approved
by Bruno's Board of Directors on May 6, 1993, incorporated by
reference to Exhibit 10(s) to the Company's Annual Report on
Form 10-K, dated September 29, 1993.
10(h) Employment and Deferred Compensation Agreement dated July 22,
1994, between the Company and Ronald G. Bruno.
10(i) Employment and Deferred Compensation Agreement dated July 22,
1994, between the Company and Paul F. Garrison.
10(j) Employment and Deferred Compensation Agreement dated July 22,
1994, between the Company and Glenn J. Griffin.
10(k) Employment and Deferred Compensation Agreement dated July 22,
1994, between the Company and Kenneth Bruno.
10(l) Employment and Deferred Compensation Agreement dated July 22,
1994, between the Company and R. Michael Conley.
10(m) Employment Continuity Agreement dated July 22, 1994, between
the Company and Ronald G. Bruno.
10(n) Employment Continuity Agreement dated July 22, 1994, between
the Company and Paul F. Garrison.
10(o) Employment Continuity Agreement dated July 22, 1994, between
the Company and Glenn J. Griffin.
10(p) Employment Continuity Agreement dated July 22, 1994, between
the Company and Kenneth Bruno.
</TABLE>
20
<PAGE> 23
<TABLE>
<CAPTION>
Exhibit Sequential
Number Description Page Number
<S> <C> <C>
10(q) Employment Continuity Agreement dated July 22, 1994, between
the Company and R. Michael Conley.
13 Pages 9 through 27 of the Bruno's, Inc. Annual Report to
Shareholders for the Fiscal Year Ended July 2, 1994. Printed
copies of the Bruno's, Inc. Annual Report to Shareholders for
the Fiscal Year Ended July 2, 1994, were distributed to
shareholders of the Company on September 19, 1994, and were
filed with the Securities and Exchange Commission at that
time. Such Annual Report shall not be deemed to be filed with
the Securities and Exchange Commission as a part of this Form
10-K Annual Report or otherwise subject to the liabilities of
Section 18 of the Securities and Exchange Act of 1934, as
amended (except for the specific portions thereof which are
incorporated by reference in this Form 10-K Annual Report).
18 Letter re change in accounting principles
22 Subsidiaries.
23(i) Consent of independent public accountants to the incorporation
(by reference to this Form 10-K Annual Report) of their report
on the Company's consolidated financial statements for the
fiscal year ended July 2, 1994, into this Form 10-K Annual
Report and the Company's Form S-8 Registration Statement No.
2-81642.
27 Financial Data Schedule
</TABLE>
21
<PAGE> 1
STATE OF ALABAMA ) EXHIBIT 10(h)
)
JEFFERSON COUNTY )
1994 EMPLOYMENT AND DEFERRED COMPENSATION AGREEMENT
THIS AGREEMENT made this 22 day of July, 1994, by and between BRUNO'S,
INC., an Alabama corporation (the "Employer"), and RONALD G. BRUNO of
Birmingham, Alabama (the "Employee"), as follows:
W I T N E S S E T H:
WHEREAS, the Employer is engaged in the business or owning and operating
supermarkets throughout the Southeastern United States, and its business
operations are of such complexity and magnitude as to require it to employ and
retain executive management of the highest possible caliber at all times; and
WHEREAS, the Employee has been employed by the Employer for numerous years
and now serves and has served as one of its chief executive officers of the
Employer, faithfully, loyally and to the fullest extent of his time and
capabilities; and
WHEREAS, in consideration of the past services by the Employee and the
future services expected of him, the Employer desires to provide to the
Employee certain deferred compensatory benefits to be available to him at the
time of his retirement from the employment of the Employer or in the event of
his disability prior to retirement, or to be available to his family in the
event of his death; and
WHEREAS, the Employer and the Employee desire to reduce to writing the
terms of the employment arrangement between them and the terms the
above-described deferred compensation arrangement;
NOW, THEREFORE, in consideration of the above and below stated mutual
premises, the parties hereto agree as follows:
1. EMPLOYMENT. The Employee shall continue in the employ of the Employer,
from year to year, unless and until said employment is terminated by the
Employer or the Employee on thirty (30) days written notice by either to the
other. The annual compensation of the Employee shall be in such amounts as
shall be mutually agreed from year to year by and between the Employer and the
Employee, and shall include his fixed annual salary and any bonus granted to
him by the Employer under the Company's Bonus Compensation Program, whether
paid in cash or other consideration.
2. RETIREMENT. At the earlier of the Employee reaching the age of sixty-five
(65) years or having been employed by the Employer for a total of 300 full
calendar months, he may retire from the active and daily service of the
Employer by notifying the Employer of his intent to retire. Commencing after
the date of such retirement, the Employer shall pay to the Employee, each
month, during the succeeding one hundred eighty (180) months, an amount equal
to 5% of the Employee's "Average Annual
<PAGE> 2
Compensation," as defined in Paragraph 3 hereof, at the time of his retirement.
The first payment shall be made on the first business day of the first calendar
month following the month in which the Employee retires. Each succeeding
payment thereafter shall be due and payable on the first business day of each
succeeding calendar month and shall continue as long as Employee shall live and
shall not be in violation of any of the terms of this Agreement.
3. AVERAGE ANNUAL COMPENSATION. The "Average Annual Compensation" of the
Employee at the time of his retirement shall be deemed to be the average yearly
"Total Compensation," as defined below, received by the Employee from the
Employer or any of its wholly owned subsidiaries during the past three (3)
calendar years prior to the year in which his retirement occurs, beginning with
the calendar year ending most recently prior to the date of his retirement and
including the next two (2) preceding years. The Total Compensation of an
Employee shall be an amount equal to his annual base salary for such year and
his bonus for the year under the Company's Bonus Compensation Program, whether
paid in cash or other consideration.
4. DISABILITY. In the event of the "disability" as defined in Paragraph 7
hereof, of the Employee while still in the employ of the Employer (even if the
Employee is not otherwise eligible for retirement hereunder), the Employee
shall, beginning at the time of the Employee's disability, be entitled to
receive the payments described in Paragraph 2 from the Employer, the amount of
such payments under Paragraph 2 and the commencement of such payments under
Paragraph 2 to be based on treating the time at which the disability occurs as
being the time at which retirement occurs under Paragraph 2.
5. PAYMENTS IN THE EVENT OF DEATH.
(a) In the event the Employee dies, while still in the employ of the
Employer, prior to retirement or disability (whether or not the Employee is
eligible to retire at that time), the wife or personal representatives of the
Employee shall, beginning at the time of the Employee's death, be entitled to
receive the payments described in Paragraph 2 above in accordance with the
priorities of section (c) of this Paragraph 5, the date of such death being
deemed to be the date at which retirement occurs for the purposes of computing
the amount of payments due under Paragraph 2 and the time at which payments are
to commence under Paragraph 2.
(b) In the event the Employee, after his retirement from the Employer or
after the date of his disability, and while then receiving payments under
Paragraph 2 hereof, should die, prior to having received all payments due the
Employee under Paragraph 2, the Employer shall make any remaining payments due
under Paragraph 2 to the wife or personal representatives of the deceased
Employee in accordance with the priorities of section (c) of this Paragraph 5.
(c) Any payments due to the wife or personal representatives of a
deceased Employee under sections (a) or (b) of this Paragraph 5 shall
be paid in the following manner and in the following priority as set forth in
this section (c). If the Employee is married at the time of his death, all
payments shall be made to his wife, as due, for so long as she continues to
live. If the Employee is not married at the time of his death, any said
remaining payments shall be paid to the heirs of Employee, as that term is
defined in Paragraph 6 hereof. If the Employee's wife becomes entitled to
receive payments under this provision but dies prior to having received all
payments due, any remaining payments due at the time of her death shall be paid
to the heirs of the Employee, as that term is defined in Paragraph 6 hereof.
Under no circumstances shall the Employer be required to make more than 180
monthly payments in the aggregate to the Employee, his wife, or his heirs under
this Agreement.
2
<PAGE> 3
6. DEFINITION OF PERSONAL REPRESENTATIVE OF EMPLOYEE'S ESTATE. The term
"heirs" of the employee, as used in Paragraph 5, section (c), above, shall mean
those persons entitled to inherit the assets of the Employee under the laws of
intestacy of the State of Alabama if the Employee had died intestate and had
not been survived by any spouse.
7. DEFINITION OF DISABILITY. "Disability" shall, for the purposes of this
Agreement, mean such total, permanent disability which will prevent and
prohibit the Employee from continuing to perform substantially all of the
duties as were being performed by him prior to becoming disabled and which has
at that date continued uninterrupted for a period of six (6) continuous months.
In the event there shall be any dispute or disagreement as to whether the
disability of the Employee has occurred, such a matter shall be determined by
the Board of Directors of the Employer in its sole discretion which
determination shall be conclusive and binding upon the Employee.
8. EMPLOYMENT CONTINUITY AGREEMENT. The occurrence of any event which
entitles the Employee to receive compensation under Section 3 of the Employment
Continuity Agreement between the Employer and the Employee shall be deemed to
be a "retirement" of the Employee at the date he becomes so entitled, entitling
him to the compensation provided under Section 2 of this Agreement and the
other rights and benefits provided under this Agreement.
9. EXCLUSIVITY OF SERVICES. The Employee expressly agrees, as a condition of
this Agreement, that during the term of this Agreement and of any renewal
hereof, and during the further period for which monthly payments to the
Employee are provided herein upon his retirement, he will not, directly or
indirectly, render any services of an advisory nature or otherwise to, or
become employed by, or participate or engage in, directly or indirectly, any
business competitive with the business of the Employer without the prior
written consent of the Employer, which written consent may be withheld without
cause; provided, however, in the event the Employee's retirement is deemed to
have occurred pursuant to Section 8 hereof, the Employee shall not be
restricted after said retirement from providing services of any type whatsoever
to a business which competes with that of Employer. However, nothing herein
shall prohibit the Employee from owning stock or other securities of a
competitor which are relatively insubstantial to the total outstanding stock of
such competitor (i.e. less than 2%), and so long as he, in fact, does not have
the power to control or direct the management or policies of such competitor,
and does not serve as a director or officer of, and is not otherwise associated
with, any competitor except as consented to by the Employer.
10. PERSONAL AGREEMENT. The Employee hereby agrees on behalf of himself,
and of his executors and administrators, heirs, legatees, distributees, and any
other person or persons, claiming any benefits under him by virtue of this
Agreement, that this Agreement and the rights, interests and benefits hereunder
shall not be assigned, transferred, pledged or hypothecated in any way by the
Employee or any executor, administrator, heir, legatee, distributee or other
person claiming under the Employee by virtue of this Agreement and shall not be
subject to execution, attachment, or a similar process. Any attempted
assignment, transfer, pledge, or hypothecation, or other disposition of this
Agreement or of such rights, interests and benefits contrary to the foregoing
provisions, or the levy of any attachment or a similar process thereupon, shall
be null and void and without effect.
11. SUCCESSORS BOUND. This Agreement shall be binding upon and inure to the
benefit of any successor of the Employer and any such successor shall be deemed
substituted for the Employer under the terms of this Agreement. As used in
this Agreement, the term "successor" shall include any
3
<PAGE> 4
person, firm, corporation or other business entity which at any time, whether
by merger, purchase, or otherwise, acquires all or substantially all of the
assets of the business of the Employer.
12. ALABAMA LAW. This Agreement shall be construed according to the laws of
the State of Alabama. Any disputes by the parties hereto concerning this
Agreement shall be settled in accordance with the Rules of the American
Arbitration Association, which determination shall be binding upon the parties
conclusively.
13. AMENDMENT AND WAIVER. The Agreement may be amended only in writing, by
the parties hereto, and no condition or provision of the Agreement may be
waived except in writing. Waiver by either party at any time of the other
party's breach of, or failure to comply with, any condition or provision of
this Agreement to be performed by such other party shall not be deemed a waiver
of any other provision or condition at the same time or of any provision or
condition at any prior or subsequent time, unless specifically stated therein.
14. FUNDING. This Agreement shall not be construed to create or require the
Company to create a trust or to otherwise act to fund the amounts payable
hereunder.
15. ARBITRATION. In recognition of the mutual benefits of arbitration, the
parties hereby agree that arbitration as provided for herein shall be the
exclusive remedy for resolving any claim or dispute arising under this
Agreement, and hereby mutually waive any and all other remedies at law or in
equity for determining any such claim or dispute.
(a) Any arbitration under this Agreement, and any related judicial
proceeding, shall be initiated and shall proceed pursuant to the then
prevailing rules of the American Arbitration Association (the "Association")
for labor and employment contracts. To initiate arbitration hereunder demand
shall be given in writing to the Association and the other party no later than
one year after the claim arises. Any claim for which such demand is not made
within one year after the claim arises shall be barred and discharged
absolutely.
(b) Any arbitration under this Agreement shall be before a single
arbitrator, and an award in such arbitration may include only damages which the
arbitrator determines to be due under express provisions of this Agreement.
The arbitrator shall have no authority to award any other damages, including
without limitation, consequential and exemplary damages. Any award in
arbitration shall be subject to enforcement and appeal pursuant to the Act.
16. REPLACES PRIOR AGREEMENTS. This Agreement shall replace and
supersede the Employment and Deferred Compensation Agreement heretofore
entered into between the Employee and the Employer and shall be deemed a
successor thereof.
4
<PAGE> 5
IN WITNESS WHEREOF, the parties have hereunto executed this Agreement
on the day set forth hereinabove.
BRUNO'S, INC.
By:/s/ Paul F. Garrison
--------------------
Paul F. Garrison
Its President
ATTEST:
/s/ Glenn J. Griffin
- - ------------------------
Glenn J. Griffin
Its Assistant Secretary (Employer)
/s/ Ronald G. Bruno (SEAL)
--------------------------
Ronald G. Bruno
(Employee)
5
<PAGE> 1
STATE OF ALABAMA ) EXHIBIT 10(i)
)
JEFFERSON COUNTY )
1994 EMPLOYMENT AND DEFERRED COMPENSATION AGREEMENT
THIS AGREEMENT made this 22 day of July, 1994, by and between BRUNO'S,
INC., an Alabama corporation (the "Employer"), and PAUL F. GARRISON of
Birmingham, Alabama (the "Employee"), as follows:
W I T N E S S E T H:
WHEREAS, the Employer is engaged in the business or owning and operating
supermarkets throughout the Southeastern United States, and its business
operations are of such complexity and magnitude as to require it to employ and
retain executive management of the highest possible caliber at all times; and
WHEREAS, the Employee has been employed by the Employer for numerous years
and now serves and has served as one of its chief executive officers of the
Employer, faithfully, loyally and to the fullest extent of his time and
capabilities; and
WHEREAS, in consideration of the past services by the Employee and the
future services expected of him, the Employer desires to provide to the
Employee certain deferred compensatory benefits to be available to him at the
time of his retirement from the employment of the Employer or in the event of
his disability prior to retirement, or to be available to his family in the
event of his death; and
WHEREAS, the Employer and the Employee desire to reduce to writing the
terms of the employment arrangement between them and the terms the
above-described deferred compensation arrangement;
NOW, THEREFORE, in consideration of the above and below stated mutual
premises, the parties hereto agree as follows:
1. EMPLOYMENT. The Employee shall continue in the employ of the Employer,
from year to year, unless and until said employment is terminated by the
Employer or the Employee on thirty (30) days written notice by either to the
other. The annual compensation of the Employee shall be in such amounts as
shall be mutually agreed from year to year by and between the Employer and the
Employee, and shall include his fixed annual salary and any bonus granted to
him by the Employer under the Company's Bonus Compensation Program, whether
paid in cash or other consideration.
2. RETIREMENT. At the earlier of the Employee reaching the age of sixty-five
(65) years or having been employed by the Employer for a total of 300 full
calendar months, he may retire from the active and daily service of the
Employer by notifying the Employer of his intent to retire. Commencing after
the date of such retirement, the Employer shall pay to the Employee, each
month, during the succeeding one hundred eighty (180) months, an amount equal
to 5% of the Employee's "Average Annual
<PAGE> 2
Compensation," as defined in Paragraph 3 hereof, at the time of his retirement.
The first payment shall be made on the first business day of the first calendar
month following the month in which the Employee retires. Each succeeding
payment thereafter shall be due and payable on the first business day of each
succeeding calendar month and shall continue as long as Employee shall live and
shall not be in violation of any of the terms of this Agreement.
3. AVERAGE ANNUAL COMPENSATION. The "Average Annual Compensation" of the
Employee at the time of his retirement shall be deemed to be the average yearly
"Total Compensation," as defined below, received by the Employee from the
Employer or any of its wholly owned subsidiaries during the past three (3)
calendar years prior to the year in which his retirement occurs, beginning with
the calendar year ending most recently prior to the date of his retirement and
including the next two (2) preceding years. The Total Compensation of an
Employee shall be an amount equal to his annual base salary for such year and
his bonus for the year under the Company's Bonus Compensation Program, whether
paid in cash or other consideration.
4. DISABILITY. In the event of the "disability" as defined in Paragraph 7
hereof, of the Employee while still in the employ of the Employer (even if the
Employee is not otherwise eligible for retirement hereunder), the Employee
shall, beginning at the time of the Employee's disability, be entitled to
receive the payments described in Paragraph 2 from the Employer, the amount of
such payments under Paragraph 2 and the commencement of such payments under
Paragraph 2 to be based on treating the time at which the disability occurs as
being the time at which retirement occurs under Paragraph 2.
5. PAYMENTS IN THE EVENT OF DEATH.
(a) In the event the Employee dies, while still in the employ of the
Employer, prior to retirement or disability (whether or not the Employee is
eligible to retire at that time), the wife or personal representatives of the
Employee shall, beginning at the time of the Employee's death, be entitled to
receive the payments described in Paragraph 2 above in accordance with the
priorities of section (c) of this Paragraph 5, the date of such death being
deemed to be the date at which retirement occurs for the purposes of computing
the amount of payments due under Paragraph 2 and the time at which payments are
to commence under Paragraph 2.
(b) In the event the Employee, after his retirement from the Employer or
after the date of his disability, and while then receiving payments under
Paragraph 2 hereof, should die, prior to having received all payments due the
Employee under Paragraph 2, the Employer shall make any remaining payments due
under Paragraph 2 to the wife or personal representatives of the deceased
Employee in accordance with the priorities of section (c) of this Paragraph 5.
(c) Any payments due to the wife or personal representatives of a
deceased Employee under sections (a) or (b) of this Paragraph 5 shall
be paid in the following manner and in the following priority as set forth in
this section (c). If the Employee is married at the time of his death, all
payments shall be made to his wife, as due, for so long as she continues to
live. If the Employee is not married at the time of his death, any said
remaining payments shall be paid to the heirs of Employee, as that term is
defined in Paragraph 6 hereof. If the Employee's wife becomes entitled to
receive payments under this provision but dies prior to having received all
payments due, any remaining payments due at the time of her death shall be paid
to the heirs of the Employee, as that term is defined in Paragraph 6 hereof.
Under no circumstances shall the Employer be required to make more than 180
monthly payments in the aggregate to the Employee, his wife, or his heirs under
this Agreement.
2
<PAGE> 3
6. DEFINITION OF PERSONAL REPRESENTATIVE OF EMPLOYEE'S ESTATE. The term
"heirs" of the employee, as used in Paragraph 5, section (c), above, shall mean
those persons entitled to inherit the assets of the Employee under the laws of
intestacy of the State of Alabama if the Employee had died intestate and had
not been survived by any spouse.
7. DEFINITION OF DISABILITY. "Disability" shall, for the purposes of this
Agreement, mean such total, permanent disability which will prevent and
prohibit the Employee from continuing to perform substantially all of the
duties as were being performed by him prior to becoming disabled and which has
at that date continued uninterrupted for a period of six (6) continuous months.
In the event there shall be any dispute or disagreement as to whether the
disability of the Employee has occurred, such a matter shall be determined by
the Board of Directors of the Employer in its sole discretion which
determination shall be conclusive and binding upon the Employee.
8. EMPLOYMENT CONTINUITY AGREEMENT. The occurrence of any event which
entitles the Employee to receive compensation under Section 3 of the Employment
Continuity Agreement between the Employer and the Employee shall be deemed to
be a "retirement" of the Employee at the date he becomes so entitled, entitling
him to the compensation provided under Section 2 of this Agreement and the
other rights and benefits provided under this Agreement.
9. EXCLUSIVITY OF SERVICES. The Employee expressly agrees, as a condition of
this Agreement, that during the term of this Agreement and of any renewal
hereof, and during the further period for which monthly payments to the
Employee are provided herein upon his retirement, he will not, directly or
indirectly, render any services of an advisory nature or otherwise to, or
become employed by, or participate or engage in, directly or indirectly, any
business competitive with the business of the Employer without the prior
written consent of the Employer, which written consent may be withheld without
cause; provided, however, in the event the Employee's retirement is deemed to
have occurred pursuant to Section 8 hereof, the Employee shall not be
restricted after said retirement from providing services of any type whatsoever
to a business which competes with that of Employer. However, nothing herein
shall prohibit the Employee from owning stock or other securities of a
competitor which are relatively insubstantial to the total outstanding stock of
such competitor (i.e. less than 2%), and so long as he, in fact, does not have
the power to control or direct the management or policies of such competitor,
and does not serve as a director or officer of, and is not otherwise associated
with, any competitor except as consented to by the Employer.
10. PERSONAL AGREEMENT. The Employee hereby agrees on behalf of himself,
and of his executors and administrators, heirs, legatees, distributees, and any
other person or persons, claiming any benefits under him by virtue of this
Agreement, that this Agreement and the rights, interests and benefits hereunder
shall not be assigned, transferred, pledged or hypothecated in any way by the
Employee or any executor, administrator, heir, legatee, distributee or other
person claiming under the Employee by virtue of this Agreement and shall not be
subject to execution, attachment, or a similar process. Any attempted
assignment, transfer, pledge, or hypothecation, or other disposition of this
Agreement or of such rights, interests and benefits contrary to the foregoing
provisions, or the levy of any attachment or a similar process thereupon, shall
be null and void and without effect.
11. SUCCESSORS BOUND. This Agreement shall be binding upon and inure to the
benefit of any successor of the Employer and any such successor shall be deemed
substituted for the Employer under the terms of this Agreement. As used in
this Agreement, the term "successor" shall include any
3
<PAGE> 4
person, firm, corporation or other business entity which at any time, whether
by merger, purchase, or otherwise, acquires all or substantially all of the
assets of the business of the Employer.
12. ALABAMA LAW. This Agreement shall be construed according to the laws of
the State of Alabama. Any disputes by the parties hereto concerning this
Agreement shall be settled in accordance with the Rules of the American
Arbitration Association, which determination shall be binding upon the parties
conclusively.
13. AMENDMENT AND WAIVER. The Agreement may be amended only in writing, by
the parties hereto, and no condition or provision of the Agreement may be
waived except in writing. Waiver by either party at any time of the other
party's breach of, or failure to comply with, any condition or provision of
this Agreement to be performed by such other party shall not be deemed a waiver
of any other provision or condition at the same time or of any provision or
condition at any prior or subsequent time, unless specifically stated therein.
14. FUNDING. This Agreement shall not be construed to create or require the
Company to create a trust or to otherwise act to fund the amounts payable
hereunder.
15. ARBITRATION. In recognition of the mutual benefits of arbitration, the
parties hereby agree that arbitration as provided for herein shall be the
exclusive remedy for resolving any claim or dispute arising under this
Agreement, and hereby mutually waive any and all other remedies at law or in
equity for determining any such claim or dispute.
(a) Any arbitration under this Agreement, and any related judicial
proceeding, shall be initiated and shall proceed pursuant to the then
prevailing rules of the American Arbitration Association (the "Association")
for labor and employment contracts. To initiate arbitration hereunder demand
shall be given in writing to the Association and the other party no later than
one year after the claim arises. Any claim for which such demand is not made
within one year after the claim arises shall be barred and discharged
absolutely.
(b) Any arbitration under this Agreement shall be before a single
arbitrator, and an award in such arbitration may include only damages which the
arbitrator determines to be due under express provisions of this Agreement.
The arbitrator shall have no authority to award any other damages, including
without limitation, consequential and exemplary damages. Any award in
arbitration shall be subject to enforcement and appeal pursuant to the Act.
16. REPLACES PRIOR AGREEMENTS. This Agreement shall replace and
supersede the Employment and Deferred Compensation Agreement heretofore
entered into between the Employee and the Employer and shall be deemed a
successor thereof.
4
<PAGE> 5
IN WITNESS WHEREOF, the parties have hereunto executed this Agreement
on the day set forth hereinabove.
BRUNO'S, INC.
By: /s/ Paul F. Garrison
------------------------
Paul F. Garrison
Its President
ATTEST:
/s/ Glenn J. Griffin
- - ------------------------
Glenn J. Griffin
Its Assistant Secretary (Employer)
/s/ Paul F. Garrison (SEAL)
---------------------------
Paul F. Garrison
(Employee)
5
<PAGE> 1
STATE OF ALABAMA ) EXHIBIT 10(j)
)
JEFFERSON COUNTY )
1994 EMPLOYMENT AND DEFERRED COMPENSATION AGREEMENT
THIS AGREEMENT made this 22 day of July, 1994, by and between BRUNO'S,
INC., an Alabama corporation (the "Employer"), and GLENN J. GRIFFIN of
Birmingham, Alabama (the "Employee"), as follows:
W I T N E S S E T H:
WHEREAS, the Employer is engaged in the business or owning and operating
supermarkets throughout the Southeastern United States, and its business
operations are of such complexity and magnitude as to require it to employ and
retain executive management of the highest possible caliber at all times; and
WHEREAS, the Employee has been employed by the Employer for numerous years
and now serves and has served as one of its chief executive officers of the
Employer, faithfully, loyally and to the fullest extent of his time and
capabilities; and
WHEREAS, in consideration of the past services by the Employee and the
future services expected of him, the Employer desires to provide to the
Employee certain deferred compensatory benefits to be available to him at the
time of his retirement from the employment of the Employer or in the event of
his disability prior to retirement, or to be available to his family in the
event of his death; and
WHEREAS, the Employer and the Employee desire to reduce to writing the
terms of the employment arrangement between them and the terms the
above-described deferred compensation arrangement;
NOW, THEREFORE, in consideration of the above and below stated mutual
premises, the parties hereto agree as follows:
1. EMPLOYMENT. The Employee shall continue in the employ of the Employer,
from year to year, unless and until said employment is terminated by the
Employer or the Employee on thirty (30) days written notice by either to the
other. The annual compensation of the Employee shall be in such amounts as
shall be mutually agreed from year to year by and between the Employer and the
Employee, and shall include his fixed annual salary and any bonus granted to
him by the Employer under the Company's Bonus Compensation Program, whether
paid in cash or other consideration.
2. RETIREMENT. At the earlier of the Employee reaching the age of sixty-five
(65) years or having been employed by the Employer for a total of 300 full
calendar months, he may retire from the active and daily service of the
Employer by notifying the Employer of his intent to retire. Commencing after
the date of such retirement, the Employer shall pay to the Employee, each
month, during the succeeding one hundred eighty (180) months, an amount equal
to 5% of the Employee's "Average Annual
<PAGE> 2
Compensation," as defined in Paragraph 3 hereof, at the time of his retirement.
The first payment shall be made on the first business day of the first calendar
month following the month in which the Employee retires. Each succeeding
payment thereafter shall be due and payable on the first business day of each
succeeding calendar month and shall continue as long as Employee shall live and
shall not be in violation of any of the terms of this Agreement.
3. AVERAGE ANNUAL COMPENSATION. The "Average Annual Compensation" of the
Employee at the time of his retirement shall be deemed to be the average yearly
"Total Compensation," as defined below, received by the Employee from the
Employer or any of its wholly owned subsidiaries during the past three (3)
calendar years prior to the year in which his retirement occurs, beginning with
the calendar year ending most recently prior to the date of his retirement and
including the next two (2) preceding years. The Total Compensation of an
Employee shall be an amount equal to his annual base salary for such year and
his bonus for the year under the Company's Bonus Compensation Program, whether
paid in cash or other consideration.
4. DISABILITY. In the event of the "disability" as defined in Paragraph 7
hereof, of the Employee while still in the employ of the Employer (even if the
Employee is not otherwise eligible for retirement hereunder), the Employee
shall, beginning at the time of the Employee's disability, be entitled to
receive the payments described in Paragraph 2 from the Employer, the amount of
such payments under Paragraph 2 and the commencement of such payments under
Paragraph 2 to be based on treating the time at which the disability occurs as
being the time at which retirement occurs under Paragraph 2.
5. PAYMENTS IN THE EVENT OF DEATH.
(a) In the event the Employee dies, while still in the employ of the
Employer, prior to retirement or disability (whether or not the Employee is
eligible to retire at that time), the wife or personal representatives of the
Employee shall, beginning at the time of the Employee's death, be entitled to
receive the payments described in Paragraph 2 above in accordance with the
priorities of section (c) of this Paragraph 5, the date of such death being
deemed to be the date at which retirement occurs for the purposes of computing
the amount of payments due under Paragraph 2 and the time at which payments are
to commence under Paragraph 2.
(b) In the event the Employee, after his retirement from the Employer or
after the date of his disability, and while then receiving payments under
Paragraph 2 hereof, should die, prior to having received all payments due the
Employee under Paragraph 2, the Employer shall make any remaining payments due
under Paragraph 2 to the wife or personal representatives of the deceased
Employee in accordance with the priorities of section (c) of this Paragraph 5.
(c) Any payments due to the wife or personal representatives of a
deceased Employee under sections (a) or (b) of this Paragraph 5 shall
be paid in the following manner and in the following priority as set forth in
this section (c). If the Employee is married at the time of his death, all
payments shall be made to his wife, as due, for so long as she continues to
live. If the Employee is not married at the time of his death, any said
remaining payments shall be paid to the heirs of Employee, as that term is
defined in Paragraph 6 hereof. If the Employee's wife becomes entitled to
receive payments under this provision but dies prior to having received all
payments due, any remaining payments due at the time of her death shall be paid
to the heirs of the Employee, as that term is defined in Paragraph 6 hereof.
Under no circumstances shall the Employer be required to make more than 180
monthly payments in the aggregate to the Employee, his wife, or his heirs under
this Agreement.
2
<PAGE> 3
6. DEFINITION OF PERSONAL REPRESENTATIVE OF EMPLOYEE'S ESTATE. The term
"heirs" of the employee, as used in Paragraph 5, section (c), above, shall mean
those persons entitled to inherit the assets of the Employee under the laws of
intestacy of the State of Alabama if the Employee had died intestate and had
not been survived by any spouse.
7. DEFINITION OF DISABILITY. "Disability" shall, for the purposes of this
Agreement, mean such total, permanent disability which will prevent and
prohibit the Employee from continuing to perform substantially all of the
duties as were being performed by him prior to becoming disabled and which has
at that date continued uninterrupted for a period of six (6) continuous months.
In the event there shall be any dispute or disagreement as to whether the
disability of the Employee has occurred, such a matter shall be determined by
the Board of Directors of the Employer in its sole discretion which
determination shall be conclusive and binding upon the Employee.
8. EMPLOYMENT CONTINUITY AGREEMENT. The occurrence of any event which
entitles the Employee to receive compensation under Section 3 of the Employment
Continuity Agreement between the Employer and the Employee shall be deemed to
be a "retirement" of the Employee at the date he becomes so entitled, entitling
him to the compensation provided under Section 2 of this Agreement and the
other rights and benefits provided under this Agreement.
9. EXCLUSIVITY OF SERVICES. The Employee expressly agrees, as a condition of
this Agreement, that during the term of this Agreement and of any renewal
hereof, and during the further period for which monthly payments to the
Employee are provided herein upon his retirement, he will not, directly or
indirectly, render any services of an advisory nature or otherwise to, or
become employed by, or participate or engage in, directly or indirectly, any
business competitive with the business of the Employer without the prior
written consent of the Employer, which written consent may be withheld without
cause; provided, however, in the event the Employee's retirement is deemed to
have occurred pursuant to Section 8 hereof, the Employee shall not be
restricted after said retirement from providing services of any type whatsoever
to a business which competes with that of Employer. However, nothing herein
shall prohibit the Employee from owning stock or other securities of a
competitor which are relatively insubstantial to the total outstanding stock of
such competitor (i.e. less than 2%), and so long as he, in fact, does not have
the power to control or direct the management or policies of such competitor,
and does not serve as a director or officer of, and is not otherwise associated
with, any competitor except as consented to by the Employer.
10. PERSONAL AGREEMENT. The Employee hereby agrees on behalf of himself,
and of his executors and administrators, heirs, legatees, distributees, and any
other person or persons, claiming any benefits under him by virtue of this
Agreement, that this Agreement and the rights, interests and benefits hereunder
shall not be assigned, transferred, pledged or hypothecated in any way by the
Employee or any executor, administrator, heir, legatee, distributee or other
person claiming under the Employee by virtue of this Agreement and shall not be
subject to execution, attachment, or a similar process. Any attempted
assignment, transfer, pledge, or hypothecation, or other disposition of this
Agreement or of such rights, interests and benefits contrary to the foregoing
provisions, or the levy of any attachment or a similar process thereupon, shall
be null and void and without effect.
11. SUCCESSORS BOUND. This Agreement shall be binding upon and inure to the
benefit of any successor of the Employer and any such successor shall be deemed
substituted for the Employer under the terms of this Agreement. As used in
this Agreement, the term "successor" shall include any
3
<PAGE> 4
person, firm, corporation or other business entity which at any time, whether
by merger, purchase, or otherwise, acquires all or substantially all of the
assets of the business of the Employer.
12. ALABAMA LAW. This Agreement shall be construed according to the laws of
the State of Alabama. Any disputes by the parties hereto concerning this
Agreement shall be settled in accordance with the Rules of the American
Arbitration Association, which determination shall be binding upon the parties
conclusively.
13. AMENDMENT AND WAIVER. The Agreement may be amended only in writing, by
the parties hereto, and no condition or provision of the Agreement may be
waived except in writing. Waiver by either party at any time of the other
party's breach of, or failure to comply with, any condition or provision of
this Agreement to be performed by such other party shall not be deemed a waiver
of any other provision or condition at the same time or of any provision or
condition at any prior or subsequent time, unless specifically stated therein.
14. FUNDING. This Agreement shall not be construed to create or require the
Company to create a trust or to otherwise act to fund the amounts payable
hereunder.
15. ARBITRATION. In recognition of the mutual benefits of arbitration, the
parties hereby agree that arbitration as provided for herein shall be the
exclusive remedy for resolving any claim or dispute arising under this
Agreement, and hereby mutually waive any and all other remedies at law or in
equity for determining any such claim or dispute.
(a) Any arbitration under this Agreement, and any related judicial
proceeding, shall be initiated and shall proceed pursuant to the then
prevailing rules of the American Arbitration Association (the "Association")
for labor and employment contracts. To initiate arbitration hereunder demand
shall be given in writing to the Association and the other party no later than
one year after the claim arises. Any claim for which such demand is not made
within one year after the claim arises shall be barred and discharged
absolutely.
(b) Any arbitration under this Agreement shall be before a single
arbitrator, and an award in such arbitration may include only damages which the
arbitrator determines to be due under express provisions of this Agreement.
The arbitrator shall have no authority to award any other damages, including
without limitation, consequential and exemplary damages. Any award in
arbitration shall be subject to enforcement and appeal pursuant to the Act.
16. REPLACES PRIOR AGREEMENTS. This Agreement shall replace and
supersede the Employment and Deferred Compensation Agreement heretofore
entered into between the Employee and the Employer and shall be deemed a
successor thereof.
4
<PAGE> 5
IN WITNESS WHEREOF, the parties have hereunto executed this Agreement
on the day set forth hereinabove.
BRUNO'S, INC.
By: /s/ Paul F. Garrison
------------------------
Paul F. Garrison
Its President
ATTEST:
/s/ Glenn J. Griffin
- - -----------------------
Glenn J. Griffin
Its Assistant Secretary (Employer)
/s/ Glenn J. Griffin (SEAL)
--------------------
Glenn J. Griffin
(Employee)
5
<PAGE> 1
STATE OF ALABAMA ) EXHIBIT 10(k)
)
JEFFERSON COUNTY )
1994 EMPLOYMENT AND DEFERRED COMPENSATION AGREEMENT
THIS AGREEMENT made this 22 day of July, 1994, by and between BRUNO'S,
INC., an Alabama corporation (the "Employer"), and KENNETH BRUNO of
Birmingham, Alabama (the "Employee"), as follows:
W I T N E S S E T H:
WHEREAS, the Employer is engaged in the business or owning and operating
supermarkets throughout the Southeastern United States, and its business
operations are of such complexity and magnitude as to require it to employ and
retain executive management of the highest possible caliber at all times; and
WHEREAS, the Employee has been employed by the Employer for numerous years
and now serves and has served as one of its chief executive officers of the
Employer, faithfully, loyally and to the fullest extent of his time and
capabilities; and
WHEREAS, in consideration of the past services by the Employee and the
future services expected of him, the Employer desires to provide to the
Employee certain deferred compensatory benefits to be available to him at the
time of his retirement from the employment of the Employer or in the event of
his disability prior to retirement, or to be available to his family in the
event of his death; and
WHEREAS, the Employer and the Employee desire to reduce to writing the
terms of the employment arrangement between them and the terms the
above-described deferred compensation arrangement;
NOW, THEREFORE, in consideration of the above and below stated mutual
premises, the parties hereto agree as follows:
1. EMPLOYMENT. The Employee shall continue in the employ of the Employer,
from year to year, unless and until said employment is terminated by the
Employer or the Employee on thirty (30) days written notice by either to the
other. The annual compensation of the Employee shall be in such amounts as
shall be mutually agreed from year to year by and between the Employer and the
Employee, and shall include his fixed annual salary and any bonus granted to
him by the Employer under the Company's Bonus Compensation Program, whether
paid in cash or other consideration.
2. RETIREMENT. At the earlier of the Employee reaching the age of sixty-five
(65) years or having been employed by the Employer for a total of 300 full
calendar months, he may retire from the active and daily service of the
Employer by notifying the Employer of his intent to retire. Commencing after
the date of such retirement, the Employer shall pay to the Employee, each
month, during the succeeding one hundred eighty (180) months, an amount equal
to 5% of the Employee's "Average Annual
<PAGE> 2
Compensation," as defined in Paragraph 3 hereof, at the time of his retirement.
The first payment shall be made on the first business day of the first calendar
month following the month in which the Employee retires. Each succeeding
payment thereafter shall be due and payable on the first business day of each
succeeding calendar month and shall continue as long as Employee shall live and
shall not be in violation of any of the terms of this Agreement.
3. AVERAGE ANNUAL COMPENSATION. The "Average Annual Compensation" of the
Employee at the time of his retirement shall be deemed to be the average yearly
"Total Compensation," as defined below, received by the Employee from the
Employer or any of its wholly owned subsidiaries during the past three (3)
calendar years prior to the year in which his retirement occurs, beginning with
the calendar year ending most recently prior to the date of his retirement and
including the next two (2) preceding years. The Total Compensation of an
Employee shall be an amount equal to his annual base salary for such year and
his bonus for the year under the Company's Bonus Compensation Program, whether
paid in cash or other consideration.
4. DISABILITY. In the event of the "disability" as defined in Paragraph 7
hereof, of the Employee while still in the employ of the Employer (even if the
Employee is not otherwise eligible for retirement hereunder), the Employee
shall, beginning at the time of the Employee's disability, be entitled to
receive the payments described in Paragraph 2 from the Employer, the amount of
such payments under Paragraph 2 and the commencement of such payments under
Paragraph 2 to be based on treating the time at which the disability occurs as
being the time at which retirement occurs under Paragraph 2.
5. PAYMENTS IN THE EVENT OF DEATH.
(a) In the event the Employee dies, while still in the employ of the
Employer, prior to retirement or disability (whether or not the Employee is
eligible to retire at that time), the wife or personal representatives of the
Employee shall, beginning at the time of the Employee's death, be entitled to
receive the payments described in Paragraph 2 above in accordance with the
priorities of section (c) of this Paragraph 5, the date of such death being
deemed to be the date at which retirement occurs for the purposes of computing
the amount of payments due under Paragraph 2 and the time at which payments are
to commence under Paragraph 2.
(b) In the event the Employee, after his retirement from the Employer or
after the date of his disability, and while then receiving payments under
Paragraph 2 hereof, should die, prior to having received all payments due the
Employee under Paragraph 2, the Employer shall make any remaining payments due
under Paragraph 2 to the wife or personal representatives of the deceased
Employee in accordance with the priorities of section (c) of this Paragraph 5.
(c) Any payments due to the wife or personal representatives of a
deceased Employee under sections (a) or (b) of this Paragraph 5 shall be paid
in the following manner and in the following priority as set forth in this
section (c). If the Employee is married at the time of his death, all payments
shall be made to his wife, as due, for so long as she continues to live. If the
Employee is not married at the time of his death, any said remaining payments
shall be paid to the heirs of Employee, as that term is defined in Paragraph 6
hereof. If the Employee's wife becomes entitled to receive payments under this
provision but dies prior to having received all payments due, any remaining
payments due at the time of her death shall be paid to the heirs of the
Employee, as that term is defined in Paragraph 6 hereof. Under no
circumstances shall the Employer be required to make more than 180 monthly
payments in the aggregate to the Employee, his wife, or his heirs under this
Agreement.
2
<PAGE> 3
6. DEFINITION OF PERSONAL REPRESENTATIVE OF EMPLOYEE'S ESTATE. The term
"heirs" of the employee, as used in Paragraph 5, section (c), above, shall mean
those persons entitled to inherit the assets of the Employee under the laws of
intestacy of the State of Alabama if the Employee had died intestate and had
not been survived by any spouse.
7. DEFINITION OF DISABILITY. "Disability" shall, for the purposes of this
Agreement, mean such total, permanent disability which will prevent and
prohibit the Employee from continuing to perform substantially all of the
duties as were being performed by him prior to becoming disabled and which has
at that date continued uninterrupted for a period of six (6) continuous months.
In the event there shall be any dispute or disagreement as to whether the
disability of the Employee has occurred, such a matter shall be determined by
the Board of Directors of the Employer in its sole discretion which
determination shall be conclusive and binding upon the Employee.
8. EMPLOYMENT CONTINUITY AGREEMENT. The occurrence of any event which
entitles the Employee to receive compensation under Section 3 of the Employment
Continuity Agreement between the Employer and the Employee shall be deemed to
be a "retirement" of the Employee at the date he becomes so entitled, entitling
him to the compensation provided under Section 2 of this Agreement and the
other rights and benefits provided under this Agreement.
9. EXCLUSIVITY OF SERVICES. The Employee expressly agrees, as a condition
of this Agreement, that during the term of this Agreement and of any renewal
hereof, and during the further period for which monthly payments to the
Employee are provided herein upon his retirement, he will not, directly or
indirectly, render any services of an advisory nature or otherwise to, or
become employed by, or participate or engage in, directly or indirectly, any
business competitive with the business of the Employer without the prior
written consent of the Employer, which written consent may be withheld without
cause; provided, however, in the event the Employee's retirement is deemed to
have occurred pursuant to Section 8 hereof, the Employee shall not be
restricted after said retirement from providing services of any type whatsoever
to a business which competes with that of Employer. However, nothing herein
shall prohibit the Employee from owning stock or other securities of a
competitor which are relatively insubstantial to the total outstanding stock of
such competitor (i.e. less than 2%), and so long as he, in fact, does not have
the power to control or direct the management or policies of such competitor,
and does not serve as a director or officer of, and is not otherwise associated
with, any competitor except as consented to by the Employer.
10. PERSONAL AGREEMENT. The Employee hereby agrees on behalf of himself,
and of his executors and administrators, heirs, legatees, distributees, and any
other person or persons, claiming any benefits under him by virtue of this
Agreement, that this Agreement and the rights, interests and benefits hereunder
shall not be assigned, transferred, pledged or hypothecated in any way by the
Employee or any executor, administrator, heir, legatee, distributee or other
person claiming under the Employee by virtue of this Agreement and shall not be
subject to execution, attachment, or a similar process. Any attempted
assignment, transfer, pledge, or hypothecation, or other disposition of this
Agreement or of such rights, interests and benefits contrary to the foregoing
provisions, or the levy of any attachment or a similar process thereupon, shall
be null and void and without effect.
11. SUCCESSORS BOUND. This Agreement shall be binding upon and inure to
the benefit of any successor of the Employer and any such successor shall be
deemed substituted for the Employer under the terms of this Agreement. As used
in this Agreement, the term "successor" shall include any
3
<PAGE> 4
person, firm, corporation or other business entity which at any time, whether
by merger, purchase, or otherwise, acquires all or substantially all of the
assets of the business of the Employer.
12. ALABAMA LAW. This Agreement shall be construed according to the laws of
the State of Alabama. Any disputes by the parties hereto concerning this
Agreement shall be settled in accordance with the Rules of the American
Arbitration Association, which determination shall be binding upon the parties
conclusively.
13. AMENDMENT AND WAIVER. The Agreement may be amended only in writing, by
the parties hereto, and no condition or provision of the Agreement may be
waived except in writing. Waiver by either party at any time of the other
party's breach of, or failure to comply with, any condition or provision of
this Agreement to be performed by such other party shall not be deemed a waiver
of any other provision or condition at the same time or of any provision or
condition at any prior or subsequent time, unless specifically stated therein.
14. FUNDING. This Agreement shall not be construed to create or require the
Company to create a trust or to otherwise act to fund the amounts payable
hereunder.
15. ARBITRATION. In recognition of the mutual benefits of arbitration, the
parties hereby agree that arbitration as provided for herein shall be the
exclusive remedy for resolving any claim or dispute arising under this
Agreement, and hereby mutually waive any and all other remedies at law or in
equity for determining any such claim or dispute.
(a) Any arbitration under this Agreement, and any related judicial
proceeding, shall be initiated and shall proceed pursuant to the then
prevailing rules of the American Arbitration Association (the "Association")
for labor and employment contracts. To initiate arbitration hereunder demand
shall be given in writing to the Association and the other party no later than
one year after the claim arises. Any claim for which such demand is not made
within one year after the claim arises shall be barred and discharged
absolutely.
(b) Any arbitration under this Agreement shall be before a single
arbitrator, and an award in such arbitration may include only damages which the
arbitrator determines to be due under express provisions of this Agreement.
The arbitrator shall have no authority to award any other damages, including
without limitation, consequential and exemplary damages. Any award in
arbitration shall be subject to enforcement and appeal pursuant to the Act.
16. REPLACES PRIOR AGREEMENTS. This Agreement shall replace and supersede
the Employment and Deferred Compensation Agreement heretofore entered into
between the Employee and the Employer and shall be deemed a successor thereof.
4
<PAGE> 5
IN WITNESS WHEREOF, the parties have hereunto executed this Agreement
on the day set forth hereinabove.
BRUNO'S, INC.
By:/s/ Paul F. Garrison
-----------------------
Paul F. Garrison
Its President
ATTEST:
/s/ Glenn J. Griffin
- - -----------------------
Glenn J. Griffin
Its Assistant Secretary (Employer)
/s/ Kenneth Bruno (SEAL)
--------------------------
Kenneth Bruno
(Employee)
5
<PAGE> 1
STATE OF ALABAMA ) EXHIBIT 10(l)
)
JEFFERSON COUNTY )
1994 EMPLOYMENT AND DEFERRED COMPENSATION AGREEMENT
THIS AGREEMENT made this 22 day of July, 1994, by and between BRUNO'S,
INC., an Alabama corporation (the "Employer"), and R. MICHAEL CONLEY of
Birmingham, Alabama (the "Employee"), as follows:
W I T N E S S E T H:
WHEREAS, the Employer is engaged in the business or owning and operating
supermarkets throughout the Southeastern United States, and its business
operations are of such complexity and magnitude as to require it to employ and
retain executive management of the highest possible caliber at all times; and
WHEREAS, the Employee has been employed by the Employer for numerous years
and now serves and has served as one of its chief executive officers of the
Employer, faithfully, loyally and to the fullest extent of his time and
capabilities; and
WHEREAS, in consideration of the past services by the Employee and the
future services expected of him, the Employer desires to provide to the
Employee certain deferred compensatory benefits to be available to him at the
time of his retirement from the employment of the Employer or in the event of
his disability prior to retirement, or to be available to his family in the
event of his death; and
WHEREAS, the Employer and the Employee desire to reduce to writing the
terms of the employment arrangement between them and the terms the
above-described deferred compensation arrangement;
NOW, THEREFORE, in consideration of the above and below stated mutual
premises, the parties hereto agree as follows:
1. EMPLOYMENT. The Employee shall continue in the employ of the Employer,
from year to year, unless and until said employment is terminated by the
Employer or the Employee on thirty (30) days written notice by either to the
other. The annual compensation of the Employee shall be in such amounts as
shall be mutually agreed from year to year by and between the Employer and the
Employee, and shall include his fixed annual salary and any bonus granted to
him by the Employer under the Company's Bonus Compensation Program, whether
paid in cash or other consideration.
2. RETIREMENT. At the earlier of the Employee reaching the age of sixty-five
(65) years or having been employed by the Employer for a total of 300 full
calendar months, he may retire from the active and daily service of the
Employer by notifying the Employer of his intent to retire. Commencing after
the date of such retirement, the Employer shall pay to the Employee, each
month, during the succeeding one hundred eighty (180) months, an amount equal
to 5% of the Employee's "Average Annual
<PAGE> 2
Compensation," as defined in Paragraph 3 hereof, at the time of his retirement.
The first payment shall be made on the first business day of the first calendar
month following the month in which the Employee retires. Each succeeding
payment thereafter shall be due and payable on the first business day of each
succeeding calendar month and shall continue as long as Employee shall live and
shall not be in violation of any of the terms of this Agreement.
3. AVERAGE ANNUAL COMPENSATION. The "Average Annual Compensation" of the
Employee at the time of his retirement shall be deemed to be the average yearly
"Total Compensation," as defined below, received by the Employee from the
Employer or any of its wholly owned subsidiaries during the past three (3)
calendar years prior to the year in which his retirement occurs, beginning with
the calendar year ending most recently prior to the date of his retirement and
including the next two (2) preceding years. The Total Compensation of an
Employee shall be an amount equal to his annual base salary for such year and
his bonus for the year under the Company's Bonus Compensation Program, whether
paid in cash or other consideration.
4. DISABILITY. In the event of the "disability" as defined in Paragraph 7
hereof, of the Employee while still in the employ of the Employer (even if the
Employee is not otherwise eligible for retirement hereunder), the Employee
shall, beginning at the time of the Employee's disability, be entitled to
receive the payments described in Paragraph 2 from the Employer, the amount of
such payments under Paragraph 2 and the commencement of such payments under
Paragraph 2 to be based on treating the time at which the disability occurs as
being the time at which retirement occurs under Paragraph 2.
5. PAYMENTS IN THE EVENT OF DEATH.
(a) In the event the Employee dies, while still in the employ of the
Employer, prior to retirement or disability (whether or not the Employee is
eligible to retire at that time), the wife or personal representatives of the
Employee shall, beginning at the time of the Employee's death, be entitled to
receive the payments described in Paragraph 2 above in accordance with the
priorities of section (c) of this Paragraph 5, the date of such death being
deemed to be the date at which retirement occurs for the purposes of computing
the amount of payments due under Paragraph 2 and the time at which payments are
to commence under Paragraph 2.
(b) In the event the Employee, after his retirement from the Employer or
after the date of his disability, and while then receiving payments under
Paragraph 2 hereof, should die, prior to having received all payments due the
Employee under Paragraph 2, the Employer shall make any remaining payments due
under Paragraph 2 to the wife or personal representatives of the deceased
Employee in accordance with the priorities of section (c) of this Paragraph 5.
(c) Any payments due to the wife or personal representatives of a
deceased Employee under sections (a) or (b) of this Paragraph 5 shall be paid
in the following manner and in the following priority as set forth in this
section (c). If the Employee is married at the time of his death, all payments
shall be made to his wife, as due, for so long as she continues to live. If
the Employee is not married at the time of his death, any said remaining
payments shall be paid to the heirs of Employee, as that term is defined in
Paragraph 6 hereof. If the Employee's wife becomes entitled to receive
payments under this provision but dies prior to having received all payments
due, any remaining payments due at the time of her death shall be paid to the
heirs of the Employee, as that term is defined in Paragraph 6 hereof. Under no
circumstances shall the Employer be required to make more than 180 monthly
payments in the aggregate to the Employee, his wife, or his heirs under this
Agreement.
2
<PAGE> 3
6. DEFINITION OF PERSONAL REPRESENTATIVE OF EMPLOYEE'S ESTATE. The term
"heirs" of the employee, as used in Paragraph 5, section (c), above, shall mean
those persons entitled to inherit the assets of the Employee under the laws of
intestacy of the State of Alabama if the Employee had died intestate and had
not been survived by any spouse.
7. DEFINITION OF DISABILITY. "Disability" shall, for the purposes of this
Agreement, mean such total, permanent disability which will prevent and
prohibit the Employee from continuing to perform substantially all of the
duties as were being performed by him prior to becoming disabled and which has
at that date continued uninterrupted for a period of six (6) continuous months.
In the event there shall be any dispute or disagreement as to whether the
disability of the Employee has occurred, such a matter shall be determined by
the Board of Directors of the Employer in its sole discretion which
determination shall be conclusive and binding upon the Employee.
8. EMPLOYMENT CONTINUITY AGREEMENT. The occurrence of any event which
entitles the Employee to receive compensation under Section 3 of the Employment
Continuity Agreement between the Employer and the Employee shall be deemed to
be a "retirement" of the Employee at the date he becomes so entitled, entitling
him to the compensation provided under Section 2 of this Agreement and the
other rights and benefits provided under this Agreement.
9. EXCLUSIVITY OF SERVICES. The Employee expressly agrees, as a condition of
this Agreement, that during the term of this Agreement and of any renewal
hereof, and during the further period for which monthly payments to the
Employee are provided herein upon his retirement, he will not, directly or
indirectly, render any services of an advisory nature or otherwise to, or
become employed by, or participate or engage in, directly or indirectly, any
business competitive with the business of the Employer without the prior
written consent of the Employer, which written consent may be withheld without
cause; provided, however, in the event the Employee's retirement is deemed to
have occurred pursuant to Section 8 hereof, the Employee shall not be
restricted after said retirement from providing services of any type whatsoever
to a business which competes with that of Employer. However, nothing herein
shall prohibit the Employee from owning stock or other securities of a
competitor which are relatively insubstantial to the total outstanding stock of
such competitor (i.e. less than 2%), and so long as he, in fact, does not have
the power to control or direct the management or policies of such competitor,
and does not serve as a director or officer of, and is not otherwise associated
with, any competitor except as consented to by the Employer.
10. PERSONAL AGREEMENT. The Employee hereby agrees on behalf of himself,
and of his executors and administrators, heirs, legatees, distributees, and any
other person or persons, claiming any benefits under him by virtue of this
Agreement, that this Agreement and the rights, interests and benefits hereunder
shall not be assigned, transferred, pledged or hypothecated in any way by the
Employee or any executor, administrator, heir, legatee, distributee or other
person claiming under the Employee by virtue of this Agreement and shall not be
subject to execution, attachment, or a similar process. Any attempted
assignment, transfer, pledge, or hypothecation, or other disposition of this
Agreement or of such rights, interests and benefits contrary to the foregoing
provisions, or the levy of any attachment or a similar process thereupon, shall
be null and void and without effect.
11. SUCCESSORS BOUND. This Agreement shall be binding upon and inure to the
benefit of any successor of the Employer and any such successor shall be deemed
substituted for the Employer under the terms of this Agreement. As used in
this Agreement, the term "successor" shall include any
3
<PAGE> 4
person, firm, corporation or other business entity which at any time, whether
by merger, purchase, or otherwise, acquires all or substantially all of the
assets of the business of the Employer.
12. ALABAMA LAW. This Agreement shall be construed according to the laws of
the State of Alabama. Any disputes by the parties hereto concerning this
Agreement shall be settled in accordance with the Rules of the American
Arbitration Association, which determination shall be binding upon the parties
conclusively.
13. AMENDMENT AND WAIVER. The Agreement may be amended only in writing, by
the parties hereto, and no condition or provision of the Agreement may be
waived except in writing. Waiver by either party at any time of the other
party's breach of, or failure to comply with, any condition or provision of
this Agreement to be performed by such other party shall not be deemed a waiver
of any other provision or condition at the same time or of any provision or
condition at any prior or subsequent time, unless specifically stated therein.
14. FUNDING. This Agreement shall not be construed to create or require the
Company to create a trust or to otherwise act to fund the amounts payable
hereunder.
15. ARBITRATION. In recognition of the mutual benefits of arbitration, the
parties hereby agree that arbitration as provided for herein shall be the
exclusive remedy for resolving any claim or dispute arising under this
Agreement, and hereby mutually waive any and all other remedies at law or in
equity for determining any such claim or dispute.
(a) Any arbitration under this Agreement, and any related judicial
proceeding, shall be initiated and shall proceed pursuant to the then
prevailing rules of the American Arbitration Association (the "Association")
for labor and employment contracts. To initiate arbitration hereunder demand
shall be given in writing to the Association and the other party no later than
one year after the claim arises. Any claim for which such demand is not made
within one year after the claim arises shall be barred and discharged
absolutely.
(b) Any arbitration under this Agreement shall be before a single
arbitrator, and an award in such arbitration may include only damages which the
arbitrator determines to be due under express provisions of this Agreement.
The arbitrator shall have no authority to award any other damages, including
without limitation, consequential and exemplary damages. Any award in
arbitration shall be subject to enforcement and appeal pursuant to the Act.
16. REPLACES PRIOR AGREEMENTS. This Agreement shall replace and supersede
the Employment and Deferred Compensation Agreement heretofore entered into
between the Employee and the Employer and shall be deemed a successor thereof.
4
<PAGE> 5
IN WITNESS WHEREOF, the parties have hereunto executed this Agreement
on the day set forth hereinabove.
BRUNO'S, INC.
By: /s/ Paul F. Garrison
---------------------
Paul F. Garrison
Its President
ATTEST:
/s/ Glenn J. Griffin
- - ------------------------
Glenn J. Griffin
Its Assistant Secretary (Employer)
/s/ R. Michael Conley (SEAL)
---------------------
R. Michael Conley
(Employee)
5
<PAGE> 1
EXHIBIT 10(m)
EMPLOYMENT CONTINUITY AGREEMENT
This Agreement made as of this 22 day of July, 1994, by and
between BRUNO'S, INC., an Alabama corporation with its principal place of
business in Birmingham, Alabama (the "Company") and RONALD G. BRUNO
("Employee"), of Birmingham, Alabama.
WHEREAS, Employee is employed by the Company as a Director, as its
Chairman and Chief Executive Officer; and
WHEREAS, Employee's creativity, ability to work with people, experience,
knowledge and business skills are extremely valuable to the Company and its
stockholders; and
WHEREAS, in the current business climate an attempted acquisition of the
Company is always a possibility; and
WHEREAS, the Company desires to assure itself of the continued
employment of Employee and the benefit of his independent judgment in the
operation of the Company in the event that any such attempted acquisition were
made, in light of the disruption resulting from any such attempt; and
WHEREAS, the parties desire to enter into this Agreement as set forth
herein;
NOW, THEREFORE, in consideration of the mutual promises and undertakings
herein contained and for other good and valuable consideration, the receipt and
adequacy of which is acknowledged by each of the parties, Employee and the
Company agree as follows:
1. Term of the Agreement. This Agreement shall continue so long as the
Employee continues to be employed by the Company. Notwithstanding the
foregoing to the contrary, this Agreement shall terminate upon Employee's
reaching his sixty-eighth (68th) birthday or at the earlier date of voluntary
retirement by Employee, except as to rights accrued and obligations arising
prior to such date.
2. "Change in Control Event." Each of the following events shall
constitute a "Change in Control Event" for purposes of this Agreement:
(a) Any person (other than an existing member of the Board of Directors
of the Company) acquires beneficial ownership of Company securities and is
or thereby becomes a beneficial owner of securities entitling such person to
exercise fifty percent (50%) or more of the combined voting power of the
Company's then outstanding stock.
<PAGE> 2
For purposes of this Agreement, "beneficial ownership" shall be determined in
accordance with Regulation 13D under the Securities Exchange Act of 1934, or
any similar successor regulation or rule; and the term "person" shall include
any natural person, corporation, partnership, trust or association, or any
group or combination thereof, whose ownership of Company securities would be
required to be reported under such Regulation 13D, or any similar successor
regulation or rule.
(b) Within any twenty-four (24) month period, individuals who were
Directors at the beginning of such period, together with any other Directors
first elected as directors of the Company pursuant to nominations approved
or ratified by at least two-thirds (2/3) of the Directors in office
immediately prior to such respective elections, cease to constitute a
majority of the Board of Directors of the Company.
(c) The Company's stockholders approve:
(i) any consolidation or merger of the Company in which the Company
is not the continuing or surviving corporation or pursuant to which
shares of Company common stock would be converted into cash,
securities or other property, other than a merger or consolidation of
the Company in which the holders of the Company's common stock
immediately prior to the merger or consolidation have substantially
the same proportionate ownership and voting control of the surviving
corporation immediately after the merger or consolidation; or
(ii) any sale, lease, exchange, liquidation or other transfer (in one
transaction or a series of transactions) of all or substantially all
of the assets of the Company.
Notwithstanding subparagraphs (i) and (ii) above, the term "Change in Control
Event" shall not include a consolidation, merger, or other reorganization if
upon consummation of such transaction all of the outstanding voting stock of
the Company is owned, directly or indirectly, by a holding company, and the
holders of the Company's common stock immediately prior to the transaction have
substantially the same proportionate ownership and voting control of the
holding company.
3. Rights Upon Termination of Employment. If, within twelve (12) months
after the occurrence of a Change in Control Event, the Company terminates
Employee's employment for any reason other than Good Cause as defined in
Paragraph 4, or if Employee voluntarily terminates employment for Good Reason
as defined in Paragraph 5, the Company shall provide Employee with the
following:
(a) Within thirty (30) days of such termination, a lump sum cash
payment in an amount equal to the sum of:
2
<PAGE> 3
(i) three hundred percent (300%) of Employee's annual base salary in
effect upon the date of the Change in Control Event, and
(ii) three hundred percent (300%) of last bonus earned by Employee
pursuant to the Company's Bonus Compensation Program, whether paid in
cash or other consideration, immediately preceding Change in Control
Event.
(b) The continuation of Employee's participation and the participation of
his dependents (to the extent they were participating prior to his
termination of employment) in the Company's health, life, disability and
other employee benefit plans, programs and arrangements (excluding the
Bruno's, Inc. Employees' Profit Sharing Plan) for a period of thirty-six
(36) months after such termination as if he were still employed during such
period; provided, however, if such participation in such plan, program or
arrangement is specifically prohibited by the terms thereof, the Company
shall provide Employee (and his dependents) with benefits substantially
similar to those which he was entitled to receive under such plan, program
or arrangement immediately prior to his termination of employment.
Additionally, at the end of any period of such coverage, Employee shall have
the right to have assigned to him, for the cash surrender value thereof, any
assignable insurance owned by the Company on the life of Employee. For
purposes of this Paragraph 3(b), any employee benefit determined with
reference to Employee's compensation or earnings shall be based on his
annual base salary unless otherwise provided under the terms of the
applicable employee benefit plan, program or arrangement.
(c) Immediately upon such termination (but not later than three months
after such termination), Employee shall be entitled to exercise in full all
options granted to him under the Company's Incentive Stock Option Plan,
subject to the terms thereof, and payments to be made to him under the 1994
Employment and Deferred Compensation Agreement between Employer and
Employee.
4. Termination for Good Cause. Notwithstanding the provisions of Paragraph
5 hereof, the Company retains the right to terminate Employee for "Good Cause,"
in which event he shall not be entitled to receive any payment or benefits
pursuant to this Agreement. "Good Cause" shall mean:
(a) Employee's conviction, by a court of competent jurisdiction, of a
crime adversely reflecting on his honesty, trustworthiness, moral turpitude,
or fitness to carry out the responsibilities of his position with the
Company in other respects; or
(b) a willful breach by him of any material duty or obligations imposed
upon him under the terms of his employment, as those terms existed
immediately
3
<PAGE> 4
prior to any Change in Control Event, and his failure to cure such breach
within thirty (30) days after receiving written notice thereof from the
Company.
5. Definition of Termination by Employee for Good Reason. For purposes of
this Agreement, termination by Employee of his employment for "Good Reason"
shall mean the Employee's voluntary termination of his employment with Employer
for the reason of:
(a) the assignment of duties to Employee which:
(i) are materially different from his duties immediately prior to
the Change in Control Event; or
(ii) result in his having significantly less authority or
responsibility than he had prior to the Change in Control Event; or
(b) Employee's removal from, or any failure to reelect him to, any
position he held immediately prior to the Change in Control Event with
either the Company or any majority-owned subsidiary; or
(c) a reduction of Employee's annual base salary in effect on the date
of the Change in Control Event or as the same may be increased from time to
time thereafter; or
(d) the relocation of the Company's principal executive offices to a
place outside of the greater Birmingham, Alabama area, or the Company's
transferring or assigning Employee to a place of employment other than its
principal executive offices, except for required business travel to an
extent substantially consistent with his business travel obligations
immediately prior to the Change in Control Event; or
(e) the Company's failure to provide Employee with substantially the
same health, life and other employee benefit plans, programs and
arrangements (specifically excluding the Company's stock option plan and
including its incentive bonus plan, as the same may be amended in the
future), and substantially the same perquisites of employment, as provided
to him immediately prior to the Change in Control Event or as the same may
be increased thereafter; or
(f) the Company's failure to provide Employee with substantially the
same support staff as provided to him immediately prior to the Change in
Control Event; or
(g) the Company's failure to obtain from any successor a satisfactory
agreement to assume and perform the terms of this Agreement.
4
<PAGE> 5
6. Notices. Any and all notices required or permitted to be given
hereunder shall be in writing and shall be deemed to have been given when
deposited in the United States mails, certified or registered mail, postage
prepaid and addressed as follows:
To Employee: ____________________________________
____________________________________
____________________________________
To the Company: ____________________________________
____________________________________
Attention: ________________________
Either party may change by notice to the other the address to which notices to
it are to be addressed.
7. Applicable Law, Taxes, Binding Agreement, Severability, Construction.
This Agreement shall be governed by and construed in accordance with the laws
of the State of Alabama.
8. Withholding. Notwithstanding anything to the contrary herein contained,
the Company may withhold from any amounts payable under this Agreement all
federal, state or other taxes or assessments which may be required by
applicable statute or regulation to be withheld.
9. Successors Bound. This Agreement shall be binding upon and inure to the
benefit of any successor of the Employer and any such successor shall be deemed
substituted for the Employer under the terms of this Agreement. As used in
this Agreement, the term "successor" shall include any person, firm,
corporation or other business entity which at any time, whether by merger,
purchase, or otherwise, acquires all or substantially all of the assets of the
business of the Employer.
10. Alabama Law. This Agreement shall be construed according to the laws
of the State of Alabama. Any dispute by the parties hereto concerning this
Agreement shall be settled in accordance with the Rules of the American
Arbitration Association, which determination shall be binding upon the parties
conclusively.
11. Limitations on Amounts to be Received. Notwithstanding anything to
the contrary herein contained, if any amount payable to Employee or for his
benefit pursuant to the terms of this Agreement would not be deductible by the
Company by reason of Section 280G of the Internal Revenue Code, as amended from
time to time, or any regulations promulgated pursuant thereto, then such amount
shall not be paid to the extent that it would cause the aggregate amount
payable by the Company to Employee or for his benefit pursuant to the terms
5
<PAGE> 6
of this Agreement to exceed the amount which may be paid without causing a loss
of deduction under said Section 280G.
12. Execution of Further Documents. In the event Employee receives
payments or benefits pursuant to the terms hereof and the Company's independent
counsel deems it necessary for the Company to receive a release or other
acknowledgement, Employee agrees to execute any such documents, as may be
reasonably required as a condition of his receipt of such payment or benefits.
13. Amendment and Waiver. The Agreement may be amended only in writing,
by the parties hereto, and no condition or provision of the Agreement may be
waived except in writing. Waiver by either party at any time of the other
party's breach of, or failure to comply with, any condition or provision of
this Agreement to be performed by such other party shall not be deemed a waiver
of any other provision or condition at the same time or of any provision or
condition at any prior or subsequent time, unless specifically stated therein.
14. Funding. This Agreement shall not be construed to create or require
the Company to create a trust or to otherwise act to fund the amounts payable
hereunder.
15. Assignment. Except as required by law, the right to receive payments
hereunder shall not be subject to alienation, assignment, garnishment,
attachment, execution or levy of any kind, and any attempt to cause such
payments to be so subject shall not be recognized by the Company.
16. Arbitration. In recognition of the mutual benefits of arbitration,
the parties hereby agree that arbitration as provided for herein shall be the
exclusive remedy for resolving any claim or dispute arising under this
Agreement, and hereby mutually waive any and all other remedies at law or in
equity for determining any such claim or dispute.
(a) Any arbitration under this Agreement, and any related judicial
proceeding, shall be initiated and shall proceed pursuant to the then
prevailing rules of the American Arbitration Association (the
"Association") for labor and employment contracts. To initiate
arbitration hereunder demand shall be given in writing to the Association
and the other party no later than one year after the claim arises. Any
claim for which such demand is not made within one year after the claim
arises shall be barred and discharged absolutely.
(b) Any arbitration under this Agreement shall be before a single
arbitrator, and an award in such arbitration may include only damages
which the arbitrator determines to be due under express provisions of this
Agreement. The arbitrator shall have no authority to award any other
damages, including without limitation, consequential and exemplary
damages. Any award in arbitration shall be subject to enforcement and
appeal pursuant to the Act.
6
<PAGE> 7
17. Personal Agreement. The Employee hereby agrees on behalf of himself,
and of his executors and administrators, heirs, legatees, distributees, and any
other person or persons, claiming any benefits under him by virtue of this
Agreement, that this Agreement and the rights, interests and benefits hereunder
shall not be assigned, transferred, pledged or hypothecated in any way by the
Employee or any executor, administrator, heir, legatee, distributee or other
person claiming under the Employee by virtue of this Agreement and shall not be
subject to execution, attachment, or a similar process. Any attempted
assignment, transfer, pledge, or hypothecation, or other disposition of this
Agreement or of such rights, interests and benefits contrary to the foregoing
provisions, or the levy of any attachment or a similar process thereupon, shall
be null and void and without effect.
IN WITNESS WHEREOF, the parties have hereunto executed this Agreement
on the day set forth hereinabove.
BRUNO'S, INC.
By: /s/ Paul F. Garrison
--------------------
Paul F. Garrison
Its President
ATTEST:
/s/ Glenn J. Griffin
- - -----------------------
Glenn J. Griffin
Its Assistant Secretary (Company)
/s/ Ronald G. Bruno (SEAL)
-------------------
Ronald G. Bruno
(Employee)
7
<PAGE> 1
EXHIBIT 10(n)
EMPLOYMENT CONTINUITY AGREEMENT
This Agreement made as of this 22 day of July, 1994, by and between BRUNO'S,
INC., an Alabama corporation with its principal place of business in
Birmingham, Alabama (the "Company") and PAUL F. GARRISON ("Employee"), of
Birmingham, Alabama.
WHEREAS, Employee is employed by the Company as an Executive Officer; and
WHEREAS, Employee's creativity, ability to work with people, experience,
knowledge and business skills are extremely valuable to the Company and its
stockholders; and
WHEREAS, in the current business climate an attempted acquisition of the
Company is always a possibility; and
WHEREAS, the Company desires to assure itself of the continued
employment of Employee and the benefit of his independent judgment in the
operation of the Company in the event that any such attempted acquisition were
made, in light of the disruption resulting from any such attempt; and
WHEREAS, the parties desire to enter into this Agreement as set forth
herein;
NOW, THEREFORE, in consideration of the mutual promises and undertakings
herein contained and for other good and valuable consideration, the receipt and
adequacy of which is acknowledged by each of the parties, Employee and the
Company agree as follows:
1. Term of the Agreement. This Agreement shall continue so long as the
Employee continues to be employed by the Company. Notwithstanding the
foregoing to the contrary, this Agreement shall terminate upon Employee's
reaching his sixty-eighth (68th) birthday or at the earlier date of voluntary
retirement by Employee, except as to rights accrued and obligations arising
prior to such date.
2. "Change in Control Event." Each of the following events shall
constitute a "Change in Control Event" for purposes of this Agreement:
(a) Any person (other than an existing member of the Board of Directors
of the Company) acquires beneficial ownership of Company securities and is
or thereby becomes a beneficial owner of securities entitling such person
<PAGE> 2
to exercise fifty percent (50%) or more of the combined voting power of
the Company's then outstanding stock.
For purposes of this Agreement, "beneficial ownership" shall be determined in
accordance with Regulation 13D under the Securities Exchange Act of 1934, or
any similar successor regulation or rule; and the term "person" shall include
any natural person, corporation, partnership, trust or association, or any
group or combination thereof, whose ownership of Company securities would be
required to be reported under such Regulation 13D, or any similar successor
regulation or rule.
(b) Within any twenty-four (24) month period, individuals who were
Directors at the beginning of such period, together with any other Directors
first elected as directors of the Company pursuant to nominations approved
or ratified by at least two-thirds (2/3) of the Directors in office
immediately prior to such respective elections, cease to constitute a
majority of the Board of Directors of the Company.
(c) The Company's stockholders approve:
(i) any consolidation or merger of the Company in which the Company
is not the continuing or surviving corporation or pursuant to which shares
of Company common stock would be converted into cash, securities or other
property, other than a merger or consolidation of the Company in which the
holders of the Company's common stock immediately prior to the merger or
consolidation have substantially the same proportionate ownership and
voting control of the surviving corporation immediately after the merger
or consolidation; or
(ii) any sale, lease, exchange, liquidation or other transfer (in one
transaction or a series of transactions) of all or substantially all of
the assets of the Company.
Notwithstanding subparagraphs (i) and (ii) above, the term "Change in Control
Event" shall not include a consolidation, merger, or other reorganization if
upon consummation of such transaction all of the outstanding voting stock of
the Company is owned, directly or indirectly, by a holding company, and the
holders of the Company's common stock immediately prior to the transaction have
substantially the same proportionate ownership and voting control of the
holding company.
3. Rights Upon Termination of Employment. If, within twelve (12) months
after the occurrence of a Change in Control Event, the Company terminates
Employee's employment for any reason other than Good Cause as defined in
Paragraph 4, or if Employee voluntarily terminates employment for Good Reason
as defined in Paragraph 5, the Company shall provide Employee with the
following:
2
<PAGE> 3
(a) Within thirty (30) days of such termination, a lump sum cash payment
in an amount equal to the sum of:
(i) two hundred percent (200%) of Employee's annual base salary in
effect upon the date of the Change in Control Event, and
(ii) two hundred percent (200%) of last bonus earned by Employee
pursuant to the Company's Bonus Compensation Program, whether paid in
cash or other consideration, immediately preceding Change in Control
Event.
(b) The continuation of Employee's participation and the participation
of his dependents (to the extent they were participating prior to his
termination of employment) in the Company's health, life, disability and
other employee benefit plans, programs and arrangements (excluding the
Bruno's, Inc. Employees' Profit Sharing Plan) for a period of thirty-six
(36) months after such termination as if he were still employed during such
period; provided, however, if such participation in such plan, program or
arrangement is specifically prohibited by the terms thereof, the Company
shall provide Employee (and his dependents) with benefits substantially
similar to those which he was entitled to receive under such plan, program
or arrangement immediately prior to his termination of employment.
Additionally, at the end of any period of such coverage, Employee shall have
the right to have assigned to him, for the cash surrender value thereof, any
assignable insurance owned by the Company on the life of Employee. For
purposes of this Paragraph 3(b), any employee benefit determined with
reference to Employee's compensation or earnings shall be based on his
annual base salary unless otherwise provided under the terms of the
applicable employee benefit plan, program or arrangement.
(c) Immediately upon such termination (but not later than three months
after such termination), Employee shall be entitled to exercise in full all
options granted to him under the Company's Incentive Stock Option Plan,
subject to the terms thereof, and payments to be made to him under the 1994
Employment and Deferred Compensation Agreement between Employer and
Employee.
4. Termination for Good Cause. Notwithstanding the provisions of Paragraph
5 hereof, the Company retains the right to terminate Employee for "Good Cause,"
in which event he shall not be entitled to receive any payment or benefits
pursuant to this Agreement. "Good Cause" shall mean:
(a) Employee's conviction, by a court of competent jurisdiction, of a
crime adversely reflecting on his honesty, trustworthiness, moral turpitude,
or fitness to carry out the responsibilities of his position with the
Company in other respects; or
3
<PAGE> 4
(b) a willful breach by him of any material duty or obligations imposed
upon him under the terms of his employment, as those terms existed
immediately prior to any Change in Control Event, and his failure to cure
such breach within thirty (30) days after receiving written notice thereof
from the Company.
5. Definition of Termination by Employee for Good Reason. For purposes of
this Agreement, termination by Employee of his employment for "Good Reason"
shall mean the Employee's voluntary termination of his employment with Employer
for the reason of:
(a) the assignment of duties to Employee which:
(i) are materially different from his duties immediately prior to
the Change in Control Event; or
(ii) result in his having significantly less authority or
responsibility than he had prior to the Change in Control Event; or
(b) Employee's removal from, or any failure to reelect him to, any
position he held immediately prior to the Change in Control Event with
either the Company or any majority-owned subsidiary; or
(c) a reduction of Employee's annual base salary in effect on the date
of the Change in Control Event or as the same may be increased from time to
time thereafter; or
(d) the relocation of the Company's principal executive offices to a
place outside of the greater Birmingham, Alabama area, or the Company's
transferring or assigning Employee to a place of employment other than its
principal executive offices, except for required business travel to an
extent substantially consistent with his business travel obligations
immediately prior to the Change in Control Event; or
(e) the Company's failure to provide Employee with substantially the
same health, life and other employee benefit plans, programs and
arrangements (specifically excluding the Company's stock option plan and
including its incentive bonus plan, as the same may be amended in the
future), and substantially the same perquisites of employment, as provided
to him immediately prior to the Change in Control Event or as the same may
be increased thereafter; or
(f) the Company's failure to provide Employee with substantially the
same support staff as provided to him immediately prior to the Change in
Control Event; or
4
<PAGE> 5
(g) the Company's failure to obtain from any successor a satisfactory
agreement to assume and perform the terms of this Agreement.
6. Notices. Any and all notices required or permitted to be given
hereunder shall be in writing and shall be deemed to have been given when
deposited in the United States mails, certified or registered mail, postage
prepaid and addressed as follows:
To Employee: ____________________________________
____________________________________
____________________________________
To the Company: ____________________________________
____________________________________
Attention: ________________________
Either party may change by notice to the other the address to which notices to
it are to be addressed.
7. Applicable Law, Taxes, Binding Agreement, Severability, Construction.
This Agreement shall be governed by and construed in accordance with the laws
of the State of Alabama.
8. Withholding. Notwithstanding anything to the contrary herein
contained, the Company may withhold from any amounts payable under this
Agreement all federal, state or other taxes or assessments which may be
required by applicable statute or regulation to be withheld.
9. Successors Bound. This Agreement shall be binding upon and inure to
the benefit of any successor of the Employer and any such successor shall be
deemed substituted for the Employer under the terms of this Agreement. As used
in this Agreement, the term "successor" shall include any person, firm,
corporation or other business entity which at any time, whether by merger,
purchase, or otherwise, acquires all or substantially all of the assets of the
business of the Employer.
10. Alabama Law. This Agreement shall be construed according to the
laws of the State of Alabama. Any dispute by the parties hereto concerning
this Agreement shall be settled in accordance with the Rules of the American
Arbitration Association, which determination shall be binding upon the parties
conclusively.
11. Limitations on Amounts to be Received. Notwithstanding anything to
the contrary herein contained, if any amount payable to Employee or for his
benefit pursuant to the terms of this Agreement would not be deductible by the
Company by reason of Section 280G
5
<PAGE> 6
of the Internal Revenue Code, as amended from time to time, or any regulations
promulgated pursuant thereto, then such amount shall not be paid to the extent
that it would cause the aggregate amount payable by the Company to Employee or
for his benefit pursuant to the terms of this Agreement to exceed the amount
which may be paid without causing a loss of deduction under said Section 280G.
12. Execution of Further Documents. In the event Employee receives
payments or benefits pursuant to the terms hereof and the Company's independent
counsel deems it necessary for the Company to receive a release or other
acknowledgement, Employee agrees to execute any such documents, as may be
reasonably required as a condition of his receipt of such payment or benefits.
13. Amendment and Waiver. The Agreement may be amended only in
writing, by the parties hereto, and no condition or provision of the Agreement
may be waived except in writing. Waiver by either party at any time of the
other party's breach of, or failure to comply with, any condition or provision
of this Agreement to be performed by such other party shall not be deemed a
waiver of any other provision or condition at the same time or of any provision
or condition at any prior or subsequent time, unless specifically stated
therein.
14. Funding. This Agreement shall not be construed to create or
require the Company to create a trust or to otherwise act to fund the amounts
payable hereunder.
15. Assignment. Except as required by law, the right to receive
payments hereunder shall not be subject to alienation, assignment, garnishment,
attachment, execution or levy of any kind, and any attempt to cause such
payments to be so subject shall not be recognized by the Company.
16. Arbitration. In recognition of the mutual benefits of arbitration,
the parties hereby agree that arbitration as provided for herein shall be the
exclusive remedy for resolving any claim or dispute arising under this
Agreement, and hereby mutually waive any and all other remedies at law or in
equity for determining any such claim or dispute.
(a) Any arbitration under this Agreement, and any related judicial
proceeding, shall be initiated and shall proceed pursuant to the then
prevailing rules of the American Arbitration Association (the
"Association") for labor and employment contracts. To initiate
arbitration hereunder demand shall be given in writing to the
Association and the other party no later than one year after the claim
arises. Any claim for which such demand is not made within one year
after the claim arises shall be barred and discharged absolutely.
(b) Any arbitration under this Agreement shall be before a single
arbitrator, and an award in such arbitration may include only damages
which the arbitrator determines to be due under express provisions of
this Agreement. The arbitrator shall have no authority to award any
other damages, including without
6
<PAGE> 7
limitation, consequential and exemplary damages. Any award in
arbitration shall be subject to enforcement and appeal pursuant to the
Act.
17. Personal Agreement. The Employee hereby agrees on behalf of
himself, and of his executors and administrators, heirs, legatees,
distributees, and any other person or persons, claiming any benefits under him
by virtue of this Agreement, that this Agreement and the rights, interests and
benefits hereunder shall not be assigned, transferred, pledged or hypothecated
in any way by the Employee or any executor, administrator, heir, legatee,
distributee or other person claiming under the Employee by virtue of this
Agreement and shall not be subject to execution, attachment, or a similar
process. Any attempted assignment, transfer, pledge, or hypothecation, or
other disposition of this Agreement or of such rights, interests and benefits
contrary to the foregoing provisions, or the levy of any attachment or a
similar process thereupon, shall be null and void and without effect.
IN WITNESS WHEREOF, the parties have hereunto executed this Agreement on
the day set forth hereinabove.
BRUNO'S, INC.
By: /s/ Paul F. Garrison
---------------------
Paul F. Garrison
Its President
ATTEST:
/s/ Glenn J. Griffin
- - ------------------------
Glenn J. Griffin
Its Assistant Secretary (Company)
/s/ Paul F. Garrison (SEAL)
--------------------
Paul F. Garrison
(Employee)
7
<PAGE> 1
EXHIBIT 10(o)
EMPLOYMENT CONTINUITY AGREEMENT
This Agreement made as of this 22 day of July, 1994, by and
between BRUNO'S, INC., an Alabama corporation with its principal place of
business in Birmingham, Alabama (the "Company") and GLENN J. GRIFFIN
("Employee"), of Birmingham, Alabama.
WHEREAS, Employee is employed by the Company as an Executive Officer; and
WHEREAS, Employee's creativity, ability to work with people, experience,
knowledge and business skills are extremely valuable to the Company and its
stockholders; and
WHEREAS, in the current business climate an attempted acquisition of the
Company is always a possibility; and
WHEREAS, the Company desires to assure itself of the continued
employment of Employee and the benefit of his independent judgment in the
operation of the Company in the event that any such attempted acquisition were
made, in light of the disruption resulting from any such attempt; and
WHEREAS, the parties desire to enter into this Agreement as set forth
herein;
NOW, THEREFORE, in consideration of the mutual promises and undertakings
herein contained and for other good and valuable consideration, the receipt and
adequacy of which is acknowledged by each of the parties, Employee and the
Company agree as follows:
1. Term of the Agreement. This Agreement shall continue so long as the
Employee continues to be employed by the Company. Notwithstanding the
foregoing to the contrary, this Agreement shall terminate upon Employee's
reaching his sixty-eighth (68th) birthday or at the earlier date of voluntary
retirement by Employee, except as to rights accrued and obligations arising
prior to such date.
2. "Change in Control Event." Each of the following events shall
constitute a "Change in Control Event" for purposes of this Agreement:
(a) Any person (other than an existing member of the Board of Directors
of the Company) acquires beneficial ownership of Company securities and is
or thereby becomes a beneficial owner of securities entitling such person to
exercise fifty percent (50%) or more of the combined voting power of the
Company's then outstanding stock.
<PAGE> 2
For purposes of this Agreement, "beneficial ownership" shall be determined in
accordance with Regulation 13D under the Securities Exchange Act of 1934, or
any similar successor regulation or rule; and the term "person" shall include
any natural person, corporation, partnership, trust or association, or any
group or combination thereof, whose ownership of Company securities would be
required to be reported under such Regulation 13D, or any similar successor
regulation or rule.
(b) Within any twenty-four (24) month period, individuals who were
Directors at the beginning of such period, together with any other Directors
first elected as directors of the Company pursuant to nominations approved
or ratified by at least two-thirds (2/3) of the Directors in office
immediately prior to such respective elections, cease to constitute a
majority of the Board of Directors of the Company.
(c) The Company's stockholders approve:
(i) any consolidation or merger of the Company in which the Company
is not the continuing or surviving corporation or pursuant to which
shares of Company common stock would be converted into cash, securities
or other property, other than a merger or consolidation of the Company
in which the holders of the Company's common stock immediately prior to
the merger or consolidation have substantially the same proportionate
ownership and voting control of the surviving corporation immediately
after the merger or consolidation; or
(ii) any sale, lease, exchange, liquidation or other transfer (in one
transaction or a series of transactions) of all or substantially all of
the assets of the Company.
Notwithstanding subparagraphs (i) and (ii) above, the term "Change in Control
Event" shall not include a consolidation, merger, or other reorganization if
upon consummation of such transaction all of the outstanding voting stock of
the Company is owned, directly or indirectly, by a holding company, and the
holders of the Company's common stock immediately prior to the transaction have
substantially the same proportionate ownership and voting control of the
holding company.
3. Rights Upon Termination of Employment. If, within twelve (12) months
after the occurrence of a Change in Control Event, the Company terminates
Employee's employment for any reason other than Good Cause as defined in
Paragraph 4, or if Employee voluntarily terminates employment for Good Reason
as defined in Paragraph 5, the Company shall provide Employee with the
following:
(a) Within thirty (30) days of such termination, a lump sum cash
payment in an amount equal to the sum of:
2
<PAGE> 3
(i) two hundred percent (200%) of Employee's annual base salary
in effect upon the date of the Change in Control Event, and
(ii) two hundred percent (200%) of last bonus earned by Employee
pursuant to the Company's Bonus Compensation Program, whether paid in
cash or other consideration, immediately preceding Change in Control
Event.
(b) The continuation of Employee's participation and the
participation of his dependents (to the extent they were participating prior
to his termination of employment) in the Company's health, life, disability
and other employee benefit plans, programs and arrangements (excluding the
Bruno's, Inc. Employees' Profit Sharing Plan) for a period of thirty-six
(36) months after such termination as if he were still employed during such
period; provided, however, if such participation in such plan, program or
arrangement is specifically prohibited by the terms thereof, the Company
shall provide Employee (and his dependents) with benefits substantially
similar to those which he was entitled to receive under such plan, program
or arrangement immediately prior to his termination of employment.
Additionally, at the end of any period of such coverage, Employee shall have
the right to have assigned to him, for the cash surrender value thereof, any
assignable insurance owned by the Company on the life of Employee. For
purposes of this Paragraph 3(b), any employee benefit determined with
reference to Employee's compensation or earnings shall be based on his
annual base salary unless otherwise provided under the terms of the
applicable employee benefit plan, program or arrangement.
(c) Immediately upon such termination (but not later than three months
after such termination), Employee shall be entitled to exercise in full all
options granted to him under the Company's Incentive Stock Option Plan,
subject to the terms thereof, and payments to be made to him under the 1994
Employment and Deferred Compensation Agreement between Employer and
Employee.
4. Termination for Good Cause. Notwithstanding the provisions of Paragraph
5 hereof, the Company retains the right to terminate Employee for "Good Cause,"
in which event he shall not be entitled to receive any payment or benefits
pursuant to this Agreement. "Good Cause" shall mean:
(a) Employee's conviction, by a court of competent jurisdiction, of a
crime adversely reflecting on his honesty, trustworthiness, moral turpitude,
or fitness to carry out the responsibilities of his position with the
Company in other respects; or
(b) a willful breach by him of any material duty or obligations imposed
upon him under the terms of his employment, as those terms existed
immediately
3
<PAGE> 4
prior to any Change in Control Event, and his failure to cure such breach
within thirty (30) days after receiving written notice thereof from the
Company.
5. Definition of Termination by Employee for Good Reason. For purposes of
this Agreement, termination by Employee of his employment for "Good Reason"
shall mean the Employee's voluntary termination of his employment with Employer
for the reason of:
(a) the assignment of duties to Employee which:
(i) are materially different from his duties immediately prior to
the Change in Control Event; or
(ii) result in his having significantly less authority or
responsibility than he had prior to the Change in Control Event; or
(b) Employee's removal from, or any failure to reelect him to, any
position he held immediately prior to the Change in Control Event with
either the Company or any majority-owned subsidiary; or
(c) a reduction of Employee's annual base salary in effect on the date
of the Change in Control Event or as the same may be increased from time to
time thereafter; or
(d) the relocation of the Company's principal executive offices to a
place outside of the greater Birmingham, Alabama area, or the Company's
transferring or assigning Employee to a place of employment other than its
principal executive offices, except for required business travel to an
extent substantially consistent with his business travel obligations
immediately prior to the Change in Control Event; or
(e) the Company's failure to provide Employee with substantially the
same health, life and other employee benefit plans, programs and
arrangements (specifically excluding the Company's stock option plan and
including its incentive bonus plan, as the same may be amended in the
future), and substantially the same perquisites of employment, as provided
to him immediately prior to the Change in Control Event or as the same may
be increased thereafter; or
(f) the Company's failure to provide Employee with substantially the
same support staff as provided to him immediately prior to the Change in
Control Event; or
(g) the Company's failure to obtain from any successor a satisfactory
agreement to assume and perform the terms of this Agreement.
4
<PAGE> 5
6. Notices. Any and all notices required or permitted to be given
hereunder shall be in writing and shall be deemed to have been given when
deposited in the United States mails, certified or registered mail, postage
prepaid and addressed as follows:
To Employee: _______________________________
_______________________________
_______________________________
To the Company: _______________________________
_______________________________
Attention: ___________________
Either party may change by notice to the other the address to which notices to
it are to be addressed.
7. Applicable Law, Taxes, Binding Agreement, Severability, Construction.
This Agreement shall be governed by and construed in accordance with the laws
of the State of Alabama.
8. Withholding. Notwithstanding anything to the contrary herein
contained, the Company may withhold from any amounts payable under this
Agreement all federal, state or other taxes or assessments which may be
required by applicable statute or regulation to be withheld.
9. Successors Bound. This Agreement shall be binding upon and inure to
the benefit of any successor of the Employer and any such successor shall be
deemed substituted for the Employer under the terms of this Agreement. As used
in this Agreement, the term "successor" shall include any person, firm,
corporation or other business entity which at any time, whether by merger,
purchase, or otherwise, acquires all or substantially all of the assets of the
business of the Employer.
10. Alabama Law. This Agreement shall be construed according to the laws
of the State of Alabama. Any dispute by the parties hereto concerning this
Agreement shall be settled in accordance with the Rules of the American
Arbitration Association, which determination shall be binding upon the parties
conclusively.
11. Limitations on Amounts to be Received. Notwithstanding anything to
the contrary herein contained, if any amount payable to Employee or for his
benefit pursuant to the terms of this Agreement would not be deductible by the
Company by reason of Section 280G of the Internal Revenue Code, as amended from
time to time, or any regulations promulgated pursuant thereto, then such amount
shall not be paid to the extent that it would cause the aggregate amount
payable by the Company to Employee or for his benefit pursuant to the terms
5
<PAGE> 6
of this Agreement to exceed the amount which may be paid without causing a loss
of deduction under said Section 280G.
12. Execution of Further Documents. In the event Employee receives
payments or benefits pursuant to the terms hereof and the Company's independent
counsel deems it necessary for the Company to receive a release or other
acknowledgement, Employee agrees to execute any such documents, as may be
reasonably required as a condition of his receipt of such payment or benefits.
13. Amendment and Waiver. The Agreement may be amended only in writing,
by the parties hereto, and no condition or provision of the Agreement may be
waived except in writing. Waiver by either party at any time of the other
party's breach of, or failure to comply with, any condition or provision of
this Agreement to be performed by such other party shall not be deemed a waiver
of any other provision or condition at the same time or of any provision or
condition at any prior or subsequent time, unless specifically stated therein.
14. Funding. This Agreement shall not be construed to create or require
the Company to create a trust or to otherwise act to fund the amounts payable
hereunder.
15. Assignment. Except as required by law, the right to receive payments
hereunder shall not be subject to alienation, assignment, garnishment,
attachment, execution or levy of any kind, and any attempt to cause such
payments to be so subject shall not be recognized by the Company.
16. Arbitration. In recognition of the mutual benefits of arbitration,
the parties hereby agree that arbitration as provided for herein shall be the
exclusive remedy for resolving any claim or dispute arising under this
Agreement, and hereby mutually waive any and all other remedies at law or in
equity for determining any such claim or dispute.
(a) Any arbitration under this Agreement, and any related judicial
proceeding, shall be initiated and shall proceed pursuant to the then
prevailing rules of the American Arbitration Association (the "Association")
for labor and employment contracts. To initiate arbitration hereunder
demand shall be given in writing to the Association and the other party no
later than one year after the claim arises. Any claim for which such demand
is not made within one year after the claim arises shall be barred and
discharged absolutely.
(b) Any arbitration under this Agreement shall be before a single
arbitrator, and an award in such arbitration may include only damages which
the arbitrator determines to be due under express provisions of this
Agreement. The arbitrator shall have no authority to award any other
damages, including without limitation, consequential and exemplary damages.
Any award in arbitration shall be subject to enforcement and appeal pursuant
to the Act.
6
<PAGE> 7
17. Personal Agreement. The Employee hereby agrees on behalf of himself,
and of his executors and administrators, heirs, legatees, distributees, and any
other person or persons, claiming any benefits under him by virtue of this
Agreement, that this Agreement and the rights, interests and benefits hereunder
shall not be assigned, transferred, pledged or hypothecated in any way by the
Employee or any executor, administrator, heir, legatee, distributee or other
person claiming under the Employee by virtue of this Agreement and shall not be
subject to execution, attachment, or a similar process. Any attempted
assignment, transfer, pledge, or hypothecation, or other disposition of this
Agreement or of such rights, interests and benefits contrary to the foregoing
provisions, or the levy of any attachment or a similar process thereupon, shall
be null and void and without effect.
IN WITNESS WHEREOF, the parties have hereunto executed this Agreement
on the day set forth hereinabove.
BRUNO'S, INC.
By: /s/ Paul F. Garrison
--------------------
Paul F. Garrison
Its President
ATTEST:
/s/ Glenn J. Griffin
- - -----------------------
Glenn J. Griffin
Its Assistant Secretary (Company)
/s/ Glenn J. Griffin (SEAL)
--------------------
Glenn J. Griffin
(Employee)
7
<PAGE> 1
EXHIBIT 10(p)
EMPLOYMENT CONTINUITY AGREEMENT
This Agreement made as of this 22 day of July, 1994, by and between BRUNO'S,
INC., an Alabama corporation with its principal place of business in
Birmingham, Alabama (the "Company") and KENNETH BRUNO ("Employee"), of
Birmingham, Alabama.
WHEREAS, Employee is employed by the Company as a Director and as an
Executive Officer; and
WHEREAS, Employee's creativity, ability to work with people, experience,
knowledge and business skills are extremely valuable to the Company and its
stockholders; and
WHEREAS, in the current business climate an attempted acquisition of the
Company is always a possibility; and
WHEREAS, the Company desires to assure itself of the continued
employment of Employee and the benefit of his independent judgment in the
operation of the Company in the event that any such attempted acquisition were
made, in light of the disruption resulting from any such attempt; and
WHEREAS, the parties desire to enter into this Agreement as set forth
herein;
NOW, THEREFORE, in consideration of the mutual promises and undertakings
herein contained and for other good and valuable consideration, the receipt and
adequacy of which is acknowledged by each of the parties, Employee and the
Company agree as follows:
1. Term of the Agreement. This Agreement shall continue so long as the
Employee continues to be employed by the Company. Notwithstanding the
foregoing to the contrary, this Agreement shall terminate upon Employee's
reaching his sixty-eighth (68th) birthday or at the earlier date of voluntary
retirement by Employee, except as to rights accrued and obligations arising
prior to such date.
2. "Change in Control Event." Each of the following events shall
constitute a "Change in Control Event" for purposes of this Agreement:
(a) Any person (other than an existing member of the Board of Directors
of the Company) acquires beneficial ownership of Company securities and is
or thereby becomes a beneficial owner of securities entitling such person
<PAGE> 2
to exercise fifty percent (50%) or more of the combined voting power of the
Company's then outstanding stock.
For purposes of this Agreement, "beneficial ownership" shall be determined in
accordance with Regulation 13D under the Securities Exchange Act of 1934, or
any similar successor regulation or rule; and the term "person" shall include
any natural person, corporation, partnership, trust or association, or any
group or combination thereof, whose ownership of Company securities would be
required to be reported under such Regulation 13D, or any similar successor
regulation or rule.
(b) Within any twenty-four (24) month period, individuals who were
Directors at the beginning of such period, together with any other Directors
first elected as directors of the Company pursuant to nominations approved
or ratified by at least two-thirds (2/3) of the Directors in office
immediately prior to such respective elections, cease to constitute a
majority of the Board of Directors of the Company.
(c) The Company's stockholders approve:
(i) any consolidation or merger of the Company in which the
Company is not the continuing or surviving corporation or pursuant to
which shares of Company common stock would be converted into cash,
securities or other property, other than a merger or consolidation of
the Company in which the holders of the Company's common stock
immediately prior to the merger or consolidation have substantially the
same proportionate ownership and voting control of the surviving
corporation immediately after the merger or consolidation; or
(ii) any sale, lease, exchange, liquidation or other transfer (in
one transaction or a series of transactions) of all or substantially all
of the assets of the Company.
Notwithstanding subparagraphs (i) and (ii) above, the term "Change in Control
Event" shall not include a consolidation, merger, or other reorganization if
upon consummation of such transaction all of the outstanding voting stock of
the Company is owned, directly or indirectly, by a holding company, and the
holders of the Company's common stock immediately prior to the transaction have
substantially the same proportionate ownership and voting control of the
holding company.
3. Rights Upon Termination of Employment. If, within twelve (12) months
after the occurrence of a Change in Control Event, the Company terminates
Employee's employment for any reason other than Good Cause as defined in
Paragraph 4, or if Employee voluntarily terminates employment for Good Reason
as defined in Paragraph 5, the Company shall provide Employee with the
following:
2
<PAGE> 3
(a) Within thirty (30) days of such termination, a lump sum cash payment
in an amount equal to the sum of:
(i) two hundred percent (200%) of Employee's annual base salary in
effect upon the date of the Change in Control Event, and
(ii) two hundred percent (200%) of last bonus earned by Employee
pursuant to the Company's Bonus Compensation Program, whether paid in
cash or other consideration, immediately preceding Change in Control
Event.
(b) The continuation of Employee's participation and the participation
of his dependents (to the extent they were participating prior to his
termination of employment) in the Company's health, life, disability and
other employee benefit plans, programs and arrangements (excluding the
Bruno's, Inc. Employees' Profit Sharing Plan) for a period of thirty-six
(36) months after such termination as if he were still employed during such
period; provided, however, if such participation in such plan, program or
arrangement is specifically prohibited by the terms thereof, the Company
shall provide Employee (and his dependents) with benefits substantially
similar to those which he was entitled to receive under such plan, program
or arrangement immediately prior to his termination of employment.
Additionally, at the end of any period of such coverage, Employee shall have
the right to have assigned to him, for the cash surrender value thereof, any
assignable insurance owned by the Company on the life of Employee. For
purposes of this Paragraph 3(b), any employee benefit determined with
reference to Employee's compensation or earnings shall be based on his
annual base salary unless otherwise provided under the terms of the
applicable employee benefit plan, program or arrangement.
(c) Immediately upon such termination (but not later than three months
after such termination), Employee shall be entitled to exercise in full all
options granted to him under the Company's Incentive Stock Option Plan,
subject to the terms thereof, and payments to be made to him under the 1994
Employment and Deferred Compensation Agreement between Employer and
Employee.
4. Termination for Good Cause. Notwithstanding the provisions of Paragraph
5 hereof, the Company retains the right to terminate Employee for "Good Cause,"
in which event he shall not be entitled to receive any payment or benefits
pursuant to this Agreement. "Good Cause" shall mean:
(a) Employee's conviction, by a court of competent jurisdiction, of a
crime adversely reflecting on his honesty, trustworthiness, moral turpitude,
or fitness to carry out the responsibilities of his position with the
Company in other respects; or
3
<PAGE> 4
(b) a willful breach by him of any material duty or obligations imposed
upon him under the terms of his employment, as those terms existed
immediately prior to any Change in Control Event, and his failure to cure
such breach within thirty (30) days after receiving written notice thereof
from the Company.
5. Definition of Termination by Employee for Good Reason. For purposes of
this Agreement, termination by Employee of his employment for "Good Reason"
shall mean the Employee's voluntary termination of his employment with Employer
for the reason of:
(a) the assignment of duties to Employee which:
(i) are materially different from his duties immediately prior
to the Change in Control Event; or
(ii) result in his having significantly less authority or
responsibility than he had prior to the Change in Control Event; or
(b) Employee's removal from, or any failure to reelect him to, any
position he held immediately prior to the Change in Control Event with
either the Company or any majority-owned subsidiary; or
(c) a reduction of Employee's annual base salary in effect on the
date of the Change in Control Event or as the same may be increased from
time to time thereafter; or
(d) the relocation of the Company's principal executive offices to a
place outside of the greater Birmingham, Alabama area, or the Company's
transferring or assigning Employee to a place of employment other than its
principal executive offices, except for required business travel to an
extent substantially consistent with his business travel obligations
immediately prior to the Change in Control Event; or
(e) the Company's failure to provide Employee with substantially the
same health, life and other employee benefit plans, programs and
arrangements (specifically excluding the Company's stock option plan and
including its incentive bonus plan, as the same may be amended in the
future), and substantially the same perquisites of employment, as provided
to him immediately prior to the Change in Control Event or as the same may
be increased thereafter; or
(f) the Company's failure to provide Employee with substantially the
same support staff as provided to him immediately prior to the Change in
Control Event; or
4
<PAGE> 5
(g) the Company's failure to obtain from any successor a satisfactory
agreement to assume and perform the terms of this Agreement.
6. Notices. Any and all notices required or permitted to be given
hereunder shall be in writing and shall be deemed to have been given when
deposited in the United States mails, certified or registered mail, postage
prepaid and addressed as follows:
To Employee: ____________________________________
____________________________________
____________________________________
To the Company: ____________________________________
____________________________________
Attention: ________________________
Either party may change by notice to the other the address to which notices to
it are to be addressed.
7. Applicable Law, Taxes, Binding Agreement, Severability, Construction.
This Agreement shall be governed by and construed in accordance with the laws
of the State of Alabama.
8. Withholding. Notwithstanding anything to the contrary herein contained,
the Company may withhold from any amounts payable under this Agreement all
federal, state or other taxes or assessments which may be required by
applicable statute or regulation to be withheld.
9. Successors Bound. This Agreement shall be binding upon and inure to the
benefit of any successor of the Employer and any such successor shall be deemed
substituted for the Employer under the terms of this Agreement. As used in
this Agreement, the term "successor" shall include any person, firm,
corporation or other business entity which at any time, whether by merger,
purchase, or otherwise, acquires all or substantially all of the assets of the
business of the Employer.
10. Alabama Law. This Agreement shall be construed according to the laws
of the State of Alabama. Any dispute by the parties hereto concerning this
Agreement shall be settled in accordance with the Rules of the American
Arbitration Association, which determination shall be binding upon the parties
conclusively.
11. Limitations on Amounts to be Received. Notwithstanding anything to
the contrary herein contained, if any amount payable to Employee or for his
benefit pursuant to the terms of this Agreement would not be deductible by the
Company by reason of Section 280G
5
<PAGE> 6
of the Internal Revenue Code, as amended from time to time, or any regulations
promulgated pursuant thereto, then such amount shall not be paid to the extent
that it would cause the aggregate amount payable by the Company to Employee or
for his benefit pursuant to the terms of this Agreement to exceed the amount
which may be paid without causing a loss of deduction under said Section 280G.
12. Execution of Further Documents. In the event Employee receives
payments or benefits pursuant to the terms hereof and the Company's independent
counsel deems it necessary for the Company to receive a release or other
acknowledgement, Employee agrees to execute any such documents, as may be
reasonably required as a condition of his receipt of such payment or benefits.
13. Amendment and Waiver. The Agreement may be amended only in writing,
by the parties hereto, and no condition or provision of the Agreement may be
waived except in writing. Waiver by either party at any time of the other
party's breach of, or failure to comply with, any condition or provision of
this Agreement to be performed by such other party shall not be deemed a waiver
of any other provision or condition at the same time or of any provision or
condition at any prior or subsequent time, unless specifically stated therein.
14. Funding. This Agreement shall not be construed to create or require
the Company to create a trust or to otherwise act to fund the amounts payable
hereunder.
15. Assignment. Except as required by law, the right to receive payments
hereunder shall not be subject to alienation, assignment, garnishment,
attachment, execution or levy of any kind, and any attempt to cause such
payments to be so subject shall not be recognized by the Company.
16. Arbitration. In recognition of the mutual benefits of arbitration,
the parties hereby agree that arbitration as provided for herein shall be the
exclusive remedy for resolving any claim or dispute arising under this
Agreement, and hereby mutually waive any and all other remedies at law or in
equity for determining any such claim or dispute.
(a) Any arbitration under this Agreement, and any related judicial
proceeding, shall be initiated and shall proceed pursuant to the then
prevailing rules of the American Arbitration Association (the "Association")
for labor and employment contracts. To initiate arbitration hereunder
demand shall be given in writing to the Association and the other party no
later than one year after the claim arises. Any claim for which such demand
is not made within one year after the claim arises shall be barred and
discharged absolutely.
(b) Any arbitration under this Agreement shall be before a single
arbitrator, and an award in such arbitration may include only damages which
the arbitrator determines to be due under express provisions of this
Agreement. The arbitrator shall have no authority to award any other
damages, including without
6
<PAGE> 7
limitation, consequential and exemplary damages. Any award in arbitration
shall be subject to enforcement and appeal pursuant to the Act.
17. Personal Agreement. The Employee hereby agrees on behalf of himself,
and of his executors and administrators, heirs, legatees, distributees, and any
other person or persons, claiming any benefits under him by virtue of this
Agreement, that this Agreement and the rights, interests and benefits hereunder
shall not be assigned, transferred, pledged or hypothecated in any way by the
Employee or any executor, administrator, heir, legatee, distributee or other
person claiming under the Employee by virtue of this Agreement and shall not be
subject to execution, attachment, or a similar process. Any attempted
assignment, transfer, pledge, or hypothecation, or other disposition of this
Agreement or of such rights, interests and benefits contrary to the foregoing
provisions, or the levy of any attachment or a similar process thereupon, shall
be null and void and without effect.
IN WITNESS WHEREOF, the parties have hereunto executed this Agreement
on the day set forth hereinabove.
BRUNO'S, INC.
By: /s/ Paul F. Garrison
---------------------
Paul F. Garrison
Its President
ATTEST:
/s/ Glenn J. Griffin
- - -----------------------
Glenn J. Griffin
Its Assistant Secretary (Company)
/s/ Kenneth Bruno (SEAL)
-----------------
Kenneth Bruno
(Employee)
7
<PAGE> 1
EXHIBIT 10(q)
EMPLOYMENT CONTINUITY AGREEMENT
This Agreement made as of this 22 day of July, 1994, by and between BRUNO'S,
INC., an Alabama corporation with its principal place of business in
Birmingham, Alabama (the "Company") and R. MICHAEL CONLEY ("Employee"), of
Birmingham, Alabama.
WHEREAS, Employee is employed by the Company as a Director and as an
Executive Officer; and
WHEREAS, Employee's creativity, ability to work with people, experience,
knowledge and business skills are extremely valuable to the Company and its
stockholders; and
WHEREAS, in the current business climate an attempted acquisition of the
Company is always a possibility; and
WHEREAS, the Company desires to assure itself of the continued
employment of Employee and the benefit of his independent judgment in the
operation of the Company in the event that any such attempted acquisition were
made, in light of the disruption resulting from any such attempt; and
WHEREAS, the parties desire to enter into this Agreement as set forth
herein;
NOW, THEREFORE, in consideration of the mutual promises and undertakings
herein contained and for other good and valuable consideration, the receipt and
adequacy of which is acknowledged by each of the parties, Employee and the
Company agree as follows:
1. Term of the Agreement. This Agreement shall continue so long as the
Employee continues to be employed by the Company. Notwithstanding the
foregoing to the contrary, this Agreement shall terminate upon Employee's
reaching his sixty-eighth (68th) birthday or at the earlier date of voluntary
retirement by Employee, except as to rights accrued and obligations arising
prior to such date.
2. "Change in Control Event." Each of the following events shall
constitute a "Change in Control Event" for purposes of this Agreement:
(a) Any person (other than an existing member of the Board of Directors
of the Company) acquires beneficial ownership of Company securities and is
or thereby becomes a beneficial owner of securities entitling such person
<PAGE> 2
to exercise fifty percent (50%) or more of the combined voting power of the
Company's then outstanding stock.
For purposes of this Agreement, "beneficial ownership" shall be determined in
accordance with Regulation 13D under the Securities Exchange Act of 1934, or
any similar successor regulation or rule; and the term "person" shall include
any natural person, corporation, partnership, trust or association, or any
group or combination thereof, whose ownership of Company securities would be
required to be reported under such Regulation 13D, or any similar successor
regulation or rule.
(b) Within any twenty-four (24) month period, individuals who were
Directors at the beginning of such period, together with any other Directors
first elected as directors of the Company pursuant to nominations approved
or ratified by at least two-thirds (2/3) of the Directors in office
immediately prior to such respective elections, cease to constitute a
majority of the Board of Directors of the Company.
(c) The Company's stockholders approve:
(i) any consolidation or merger of the Company in which the
Company is not the continuing or surviving corporation or pursuant to
which shares of Company common stock would be converted into cash,
securities or other property, other than a merger or consolidation of
the Company in which the holders of the Company's common stock
immediately prior to the merger or consolidation have substantially the
same proportionate ownership and voting control of the surviving
corporation immediately after the merger or consolidation; or
(ii) any sale, lease, exchange, liquidation or other transfer (in one
transaction or a series of transactions) of all or substantially all of
the assets of the Company.
Notwithstanding subparagraphs (i) and (ii) above, the term "Change in Control
Event" shall not include a consolidation, merger, or other reorganization if
upon consummation of such transaction all of the outstanding voting stock of
the Company is owned, directly or indirectly, by a holding company, and the
holders of the Company's common stock immediately prior to the transaction have
substantially the same proportionate ownership and voting control of the
holding company.
3. Rights Upon Termination of Employment. If, within twelve (12) months
after the occurrence of a Change in Control Event, the Company terminates
Employee's employment for any reason other than Good Cause as defined in
Paragraph 4, or if Employee voluntarily terminates employment for Good Reason
as defined in Paragraph 5, the Company shall provide Employee with the
following:
2
<PAGE> 3
(a) Within thirty (30) days of such termination, a lump sum cash
payment in an amount equal to the sum of:
(i) two hundred percent (200%) of Employee's annual base salary in
effect upon the date of the Change in Control Event, and
(ii) two hundred percent (200%) of last bonus earned by Employee
pursuant to the Company's Bonus Compensation Program, whether paid in
cash or other consideration, immediately preceding Change in Control
Event.
(b) The continuation of Employee's participation and the participation
of his dependents (to the extent they were participating prior to his
termination of employment) in the Company's health, life, disability and
other employee benefit plans, programs and arrangements (excluding the
Bruno's, Inc. Employees' Profit Sharing Plan) for a period of thirty-six
(36) months after such termination as if he were still employed during such
period; provided, however, if such participation in such plan, program or
arrangement is specifically prohibited by the terms thereof, the Company
shall provide Employee (and his dependents) with benefits substantially
similar to those which he was entitled to receive under such plan, program
or arrangement immediately prior to his termination of employment.
Additionally, at the end of any period of such coverage, Employee shall have
the right to have assigned to him, for the cash surrender value thereof, any
assignable insurance owned by the Company on the life of Employee. For
purposes of this Paragraph 3(b), any employee benefit determined with
reference to Employee's compensation or earnings shall be based on his
annual base salary unless otherwise provided under the terms of the
applicable employee benefit plan, program or arrangement.
(c) Immediately upon such termination (but not later than three months
after such termination), Employee shall be entitled to exercise in full all
options granted to him under the Company's Incentive Stock Option Plan,
subject to the terms thereof, and payments to be made to him under the 1994
Employment and Deferred Compensation Agreement between Employer and
Employee.
4. Termination for Good Cause. Notwithstanding the provisions of Paragraph
5 hereof, the Company retains the right to terminate Employee for "Good Cause,"
in which event he shall not be entitled to receive any payment or benefits
pursuant to this Agreement. "Good Cause" shall mean:
(a) Employee's conviction, by a court of competent jurisdiction, of a
crime adversely reflecting on his honesty, trustworthiness, moral turpitude,
or fitness to carry out the responsibilities of his position with the
Company in other respects; or
3
<PAGE> 4
(b) a willful breach by him of any material duty or obligations imposed
upon him under the terms of his employment, as those terms existed
immediately prior to any Change in Control Event, and his failure to cure
such breach within thirty (30) days after receiving written notice thereof
from the Company.
5. Definition of Termination by Employee for Good Reason. For purposes of
this Agreement, termination by Employee of his employment for "Good Reason"
shall mean the Employee's voluntary termination of his employment with Employer
for the reason of:
(a) the assignment of duties to Employee which:
(i) are materially different from his duties immediately prior to
the Change in Control Event; or
(ii) result in his having significantly less authority or
responsibility than he had prior to the Change in Control Event; or
(b) Employee's removal from, or any failure to reelect him to, any
position he held immediately prior to the Change in Control Event with
either the Company or any majority-owned subsidiary; or
(c) a reduction of Employee's annual base salary in effect on the date
of the Change in Control Event or as the same may be increased from time to
time thereafter; or
(d) the relocation of the Company's principal executive offices to a
place outside of the greater Birmingham, Alabama area, or the Company's
transferring or assigning Employee to a place of employment other than its
principal executive offices, except for required business travel to an
extent substantially consistent with his business travel obligations
immediately prior to the Change in Control Event; or
(e) the Company's failure to provide Employee with substantially the
same health, life and other employee benefit plans, programs and
arrangements (specifically excluding the Company's stock option plan and
including its incentive bonus plan, as the same may be amended in the
future), and substantially the same perquisites of employment, as provided
to him immediately prior to the Change in Control Event or as the same may
be increased thereafter; or
(f) the Company's failure to provide Employee with substantially the
same support staff as provided to him immediately prior to the Change in
Control Event; or
4
<PAGE> 5
(g) the Company's failure to obtain from any successor a satisfactory
agreement to assume and perform the terms of this Agreement.
6. Notices. Any and all notices required or permitted to be given
hereunder shall be in writing and shall be deemed to have been given when
deposited in the United States mails, certified or registered mail, postage
prepaid and addressed as follows:
To Employee: ____________________________________
____________________________________
____________________________________
To the Company: ____________________________________
____________________________________
Attention: ________________________
Either party may change by notice to the other the address to which notices to
it are to be addressed.
7. Applicable Law, Taxes, Binding Agreement, Severability, Construction.
This Agreement shall be governed by and construed in accordance with the laws
of the State of Alabama.
8. Withholding. Notwithstanding anything to the contrary herein contained,
the Company may withhold from any amounts payable under this Agreement all
federal, state or other taxes or assessments which may be required by
applicable statute or regulation to be withheld.
9. Successors Bound. This Agreement shall be binding upon and inure to the
benefit of any successor of the Employer and any such successor shall be deemed
substituted for the Employer under the terms of this Agreement. As used in
this Agreement, the term "successor" shall include any person, firm,
corporation or other business entity which at any time, whether by merger,
purchase, or otherwise, acquires all or substantially all of the assets of the
business of the Employer.
10. Alabama Law. This Agreement shall be construed according to the laws
of the State of Alabama. Any dispute by the parties hereto concerning this
Agreement shall be settled in accordance with the Rules of the American
Arbitration Association, which determination shall be binding upon the parties
conclusively.
11. Limitations on Amounts to be Received. Notwithstanding anything to
the contrary herein contained, if any amount payable to Employee or for his
benefit pursuant to the terms of this Agreement would not be deductible by the
Company by reason of Section 280G
5
<PAGE> 6
of the Internal Revenue Code, as amended from time to time, or any regulations
promulgated pursuant thereto, then such amount shall not be paid to the extent
that it would cause the aggregate amount payable by the Company to Employee or
for his benefit pursuant to the terms of this Agreement to exceed the amount
which may be paid without causing a loss of deduction under said Section 280G.
12. Execution of Further Documents. In the event Employee receives
payments or benefits pursuant to the terms hereof and the Company's independent
counsel deems it necessary for the Company to receive a release or other
acknowledgement, Employee agrees to execute any such documents, as may be
reasonably required as a condition of his receipt of such payment or benefits.
13. Amendment and Waiver. The Agreement may be amended only in writing,
by the parties hereto, and no condition or provision of the Agreement may be
waived except in writing. Waiver by either party at any time of the other
party's breach of, or failure to comply with, any condition or provision of
this Agreement to be performed by such other party shall not be deemed a waiver
of any other provision or condition at the same time or of any provision or
condition at any prior or subsequent time, unless specifically stated therein.
14. Funding. This Agreement shall not be construed to create or require
the Company to create a trust or to otherwise act to fund the amounts payable
hereunder.
15. Assignment. Except as required by law, the right to receive payments
hereunder shall not be subject to alienation, assignment, garnishment,
attachment, execution or levy of any kind, and any attempt to cause such
payments to be so subject shall not be recognized by the Company.
16. Arbitration. In recognition of the mutual benefits of arbitration,
the parties hereby agree that arbitration as provided for herein shall be the
exclusive remedy for resolving any claim or dispute arising under this
Agreement, and hereby mutually waive any and all other remedies at law or in
equity for determining any such claim or dispute.
(a) Any arbitration under this Agreement, and any related judicial
proceeding, shall be initiated and shall proceed pursuant to the then
prevailing rules of the American Arbitration Association (the "Association")
for labor and employment contracts. To initiate arbitration hereunder
demand shall be given in writing to the Association and the other party no
later than one year after the claim arises. Any claim for which such demand
is not made within one year after the claim arises shall be barred and
discharged absolutely.
(b) Any arbitration under this Agreement shall be before a single
arbitrator, and an award in such arbitration may include only damages which
the arbitrator determines to be due under express provisions of this
Agreement. The arbitrator shall have no authority to award any other
damages, including without
6
<PAGE> 7
limitation, consequential and exemplary damages. Any award in arbitration
shall be subject to enforcement and appeal pursuant to the Act.
17. Personal Agreement. The Employee hereby agrees on behalf of himself,
and of his executors and administrators, heirs, legatees, distributees, and any
other person or persons, claiming any benefits under him by virtue of this
Agreement, that this Agreement and the rights, interests and benefits hereunder
shall not be assigned, transferred, pledged or hypothecated in any way by the
Employee or any executor, administrator, heir, legatee, distributee or other
person claiming under the Employee by virtue of this Agreement and shall not be
subject to execution, attachment, or a similar process. Any attempted
assignment, transfer, pledge, or hypothecation, or other disposition of this
Agreement or of such rights, interests and benefits contrary to the foregoing
provisions, or the levy of any attachment or a similar process thereupon, shall
be null and void and without effect.
IN WITNESS WHEREOF, the parties have hereunto executed this Agreement
on the day set forth hereinabove.
BRUNO'S, INC.
By: /s/ Paul F. Garrison
---------------------
Paul F. Garrison
Its President
ATTEST:
/s/ Glenn J. Griffin
- - --------------------
Glenn J. Griffin
Its Assistant Secretary (Company)
/s/ R. Michael Conley (SEAL)
---------------------
R. Michael Conley
(Employee)
7
<PAGE> 1
EXHIBIT 13
BRUNO'S, INC. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
AS OF JULY 2, 1994 AND JULY 3, 1993
TOGETHER WITH
AUDITORS' REPORT
<PAGE> 2
MANAGEMENT'S REPORT
Primary responsibility for the integrity and objectivity of the financial
information included in this annual report rests with management. The
consolidated financial statements in this report have been prepared in
accordance with generally accepted accounting principles and properly include
some amounts that are based on management's best estimates and judgments.
The Company maintains an internal control structure designed to provide
reasonable assurance that transactions are executed in accordance with proper
authorization; that all such transactions are properly recorded and summarized
to produce reliable financial records and reports; that assets are safeguarded;
and that the accountability for assets is maintained. Management believes this
internal control structure, augmented by its internal auditing function,
assures the adequacy and quality of financial reporting.
Arthur Andersen & Co., the Company's independent public accountants, evaluates
our internal control structure to the extent they consider necessary in order
to plan their audit and determine the nature and extent of testing required to
support their opinion on the consolidated financial statements. Their report
contains an independent, informed judgment as to the fair presentation, in all
material respects, of the Company's consolidated financial statements.
The Board of Directors, through the activities of its Audit Committee,
participates in the reporting of financial information by the Company. The
Audit Committee meets regularly with the Company's independent public
accountants to discuss the scope and results of their audit work.
Management believes the consolidated financial statements and related financial
information in this report are accurate in all material respects and that they
were prepared in accordance with appropriate and generally accepted accounting
principles.
<PAGE> 3
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
GENERAL
Bruno's, Inc. (the "Company") operates a chain of 257 supermarkets and
combination food and drug stores. The Company operates on a 52-53 week fiscal
year. The consolidated statements of income for the fiscal years ended July 2,
1994 and June 27, 1992 include 52 weeks of operation while the fiscal year
ended July 3, 1993 includes 53 weeks of operation.
NET SALES
Net sales decreased 1.3% ($37.6 million) from fiscal 1993 to fiscal 1994 while
sales increased 8.1% ($214.5 million) from fiscal 1992 to fiscal 1993. The net
sales decrease from fiscal 1993 to fiscal 1994 was primarily due to the
additional week of sales included in fiscal 1993. Excluding the effects of the
additional week in fiscal 1993, fiscal 1994 sales slightly increased over
fiscal 1993. This increase from fiscal 1993 to fiscal 1994 is attributable to
a net of four stores open a full year in fiscal 1994 versus a partial year in
fiscal 1993, as the total number of stores remained flat at 257 as of July 2,
1994 and July 3, 1993 and same store sales decreased slightly. The net sales
increase in fiscal 1993 over fiscal 1992 was primarily attributable to the
additional week of sales as well as the Company increasing the number of stores
by four (23 new stores offset by 19 closed stores) in fiscal 1993.
GROSS PROFIT
Gross profit as a percentage of net sales increased 1.0% between fiscal 1993
and 1994 and decreased .3% between fiscal 1992 and fiscal 1993. The lower
margins in fiscal 1993 were primarily the result of a more aggressive pricing
strategy implemented by management during the third quarter of that same fiscal
year.
STORE OPERATING, SELLING, AND ADMINISTRATIVE EXPENSES
Store operating, selling, and administrative expenses as a percentage of net
sales increased by 1.0% from fiscal 1993 to fiscal 1994 and by .6% from fiscal
1992 to fiscal 1993. The increase in fiscal 1994 is primarily a result of flat
sales growth, coupled with increased labor added to the stores to enhance
customer service. The increase in fiscal 1993 over fiscal 1992 was primarily
due to increased advertising expenses related to the Company's fiscal 1993
third quarter promotion of its pricing strategy, as well as increased
advertising in competitive markets.
DEPRECIATION AND AMORTIZATION
Depreciation and amortization as a percentage of net sales increased .2% in
fiscal 1994 due to the significant amount of capital expenditures in fiscal
1993 ($131.7 million) experiencing a full year of depreciation in fiscal 1994.
These costs increased slightly in fiscal 1993 as compared to fiscal 1992 due to
an office building addition being placed into service in fiscal 1993.
<PAGE> 4
INTEREST EXPENSE AND INTEREST INCOME
Net interest expense as a percentage of net sales decreased slightly from
fiscal 1993 to fiscal 1994 and increased .2% from fiscal 1992 to fiscal 1993.
The decrease in fiscal 1994 was primarily attributable to income earned on
temporary cash investments held by the Company in fiscal 1994 that were not
held during fiscal 1993 and the utilization of much lower levels of short-term
borrowings in the current fiscal year as compared to fiscal 1993. The .2%
increase in net interest expense from fiscal 1992 to fiscal 1993 was primarily
related to the Company utilizing short-term borrowings and obtaining $100.0
million in new long-term borrowings.
WRITEDOWN OF PROPERTY AND SECURITIES
In fiscal 1992, the Company recorded a charge to earnings of $5.0 million to
reduce certain real estate properties currently not being utilized to their
estimated net realizable values. In addition, the Company recorded a charge to
earnings of $3.4 million to reduce its marketable equity securities portfolio
to market value based upon management's decision to liquidate this portfolio.
DISCONTINUED OPERATIONS
During fiscal 1992, the Company sold its interest in a hypermarket stores joint
venture and discontinued its development of this type store due to continuing
operating losses, and lack of success with this store format. Accordingly,
operating results of the venture for fiscal 1992 (losses of $4.4 million, net
of income tax benefits) have been reclassified and presented as discontinued
operations, and a loss on the disposal of $8.6 million (net of the applicable
income tax benefit) was recorded.
EXTRAORDINARY ITEM
In the first quarter of fiscal 1994, the Company redeemed its $143.0 million
6.5% Convertible Subordinated Debentures at a conversion price above par value.
The redemption was financed with the proceeds of a $200.0 million private
placement loan. The redemption of the Debentures resulted in an extraordinary
loss of $3.3 million, net of the applicable income tax benefit of $2.0 million.
LIQUIDITY AND CAPITAL RESOURCES
Historically, the Company has funded working capital requirements, capital
expenditures, and other cash requirements primarily through cash flows from
operations and short-term borrowings. Operating activities have generated
$86.9 million, $87.8 million, and $86.3 million, respectively, in cash flows in
each of the three fiscal years in the period ended July 2, 1994. Also, the
Company has at its disposal a $75.0 million unsecured line of credit to meet
any short-term cash requirements, under which the Company's weighted average
borrowings during fiscal 1994 and 1993 were $8.4 million and $51.6 million,
respectively.
Cash used in investing activities relates primarily to the Company's capital
expenditures. Capital expenditures for fiscal 1994 were $64.0 million compared
with $131.7 million in fiscal 1993 and $102.1 million in fiscal 1992. The
increase in these expenditures between fiscal 1992 and fiscal 1993 was a result
of the completion of an office building expansion, new store openings, and
purchases of land for future store sites. The decrease in 1994 results from
the
<PAGE> 5
Company opening fewer new stores and focusing instead on expanding and
remodeling existing stores.
The Company estimates capital expenditures for fiscal 1995 to be approximately
$60.0 million and plans to finance these expenditures through internally
generated funds or other available resources. These estimated capital
expenditures are primarily related to the opening of new stores (the Company
projects that it will open 8 to 10 stores in fiscal 1995) and the remodeling of
existing stores. Management continuously evaluates all stores based upon
volume, profitability, location, age, demographics, etc., and makes closure
decisions based upon the evaluations. Currently, no stores are scheduled for
closure.
The Company plans to continue to expand through the opening of new stores and
may acquire existing stores or one or more supermarket chains, if attractive
acquisition opportunities become available. The Company anticipates that funds
necessary for the expansion of its business during the foreseeable future will
be financed through available cash reserves, internally generated funds, and
short-term borrowings. However, the Company may use for such purposes
additional sources of financing, which may include long-term borrowings and the
issuance of additional debt or equity securities.
With respect to financing activities, as stated earlier, the Company has
available a $75.0 million unsecured line of credit to meet short-term cash
requirements. At July 2, 1994 the Company did not have outstanding borrowings
on the line of credit, while $35.0 million of borrowings was outstanding at
July 3, 1993. Uses of cash in financing activities relate to the redemption of
the Company's $143.0 million in Convertible Subordinated Debentures in the
first quarter of fiscal 1994 and the payment of cash dividends (which
aggregated $18.7 million, $17.4 million, and $16.4 million during each of the
three fiscal years in the period ended July 2, 1994, respectively). The
Debentures were redeemed with the proceeds from a $200.0 million private
placement loan.
OTHER
During fiscal year 1993, the Company entered into stock purchase agreements
with the Estates of Angelo J. Bruno and Lee J. Bruno (former executive officers
of the Company) to purchase an aggregate of 3,600,000 shares of the Company's
common stock at a price of $12.50 per share. The agreements allowed the
Estates to increase the number of shares of common stock to be purchased by the
Company up to an aggregate of 400,000 additional shares. Under this agreement,
and other previously existing stock purchase agreements, the Company purchased
3,943,726 shares of common stock at a total cost of $49.6 million, including
acquisition costs. The Company financed the purchase through a bank note
payable.
UNAUDITED QUARTERLY FINANCIAL DATA
In the opinion of management, the disclosures of unaudited quarterly data
contain all adjustments (consisting only of normal recurring adjustments)
necessary for a fair presentation of the consolidated results of operations of
the Company for the interim periods.
As discussed above, during the first quarter of fiscal 1994, the Company
recorded an extraordinary loss of $3.3 million on the redemption of $143.0
million in Convertible Subordinated Debentures.
<PAGE> 6
In addition, as discussed in Note 4 to the consolidated financial statements, a
cumulative adjustment of $2.2 million was required in the first quarter of
fiscal 1994 due to the change in income tax rates mandated by the Omnibus
Budget Reconciliation Act of 1993.
During the third quarter of fiscal 1993, the Company implemented a more
aggressive pricing strategy that included margin reductions on a majority of
products. In addition, advertising expenses to promote this program were
unusually high. These activities resulted in unusually low net income for the
third quarter of fiscal 1993.
<PAGE> 7
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders of
Bruno's, Inc.:
We have audited the accompanying consolidated balance sheets of BRUNO'S, INC.
(an Alabama corporation) AND SUBSIDIARIES as of July 2, 1994 and July 3, 1993,
and the related consolidated statements of income, shareholders' investment and
cash flows for each of the three fiscal years in the period ended July 2, 1994.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Bruno's, Inc. and
subsidiaries as of July 2, 1994 and July 3, 1993 and the results of their
operations and their cash flows for each of the three fiscal years in the
period ended July 2, 1994 in conformity with generally accepted accounting
principles.
ARTHUR ANDERSEN & CO.
Birmingham, Alabama
July 29, 1994
<PAGE> 8
BRUNO'S INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JULY 2, 1994 AND JULY 3, 1993
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
ASSETS 1994 1993
- - ------------------------------------------------------ ---------- ---------
CURRENT ASSETS:
Cash and cash equivalents $ 30,259 $ 20,093
Receivables 34,770 25,303
Inventories 255,047 259,239
Prepaid expenses 9,237 7,897
Deferred income taxes 1,428 1,379
-------- --------
330,741 313,911
-------- --------
PROPERTY AND EQUIPMENT, net 540,139 543,877
-------- --------
NONCURRENT ASSETS:
Intangibles, net 42,170 43,468
Other, net 14,158 15,667
-------- --------
56,328 59,135
-------- --------
$927,208 $916,923
======== ========
LIABILITIES AND SHAREHOLDERS' INVESTMENT 1994 1993
- - ------------------------------------------------------ ---------- ---------
CURRENT LIABILITIES:
Current maturities of long-term debt and capitalized
lease obligations $ 4,092 $ 3,133
Short-term borrowings 0 35,000
Accounts payable 108,712 116,752
Accrued income taxes 0 553
Accrued payroll and related expenses 18,557 18,021
Other accrued expenses 24,988 22,942
-------- --------
156,349 196,401
-------- --------
NONCURRENT LIABILITIES:
Long-term debt 276,015 246,376
Capitalized lease obligations 20,445 22,670
Deferred income taxes 51,136 46,955
Deferred compensation 1,909 1,854
-------- --------
349,505 317,855
-------- --------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' INVESTMENT:
Common stock, $.01 par value, 200,000,000 shares
authorized, 78,090,441 shares issued and
outstanding in 1994 and 78,047,341 shares issued
and outstanding in 1993 781 780
Paid-in capital 41,999 42,072
Retained earnings 378,574 360,022
-------- --------
421,354 402,874
Deferred compensation 0 (207)
-------- --------
421,354 402,667
-------- --------
$927,208 $916,923
======== ========
The accompanying notes are an integral part of these consolidated balance
sheets.
<PAGE> 9
BRUNO'S, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE FISCAL YEAR ENDED JULY 2, 1994, FISCAL YEAR ENDED JULY 3, 1993,
AND FISCAL YEAR ENDED JUNE 27, 1992
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
1994 1993 1992
---------- ---------- ----------
(52 Weeks) (53 Weeks) (52 Weeks)
<S> <C> <C> <C>
NET SALES $2,834,688 $2,872,327 $2,657,846
---------- ---------- ----------
COST AND EXPENSES:
Cost of products sold 2,185,587 2,242,455 2,067,560
Store operating, selling and administrative expenses 512,063 489,950 439,713
Depreciation and amortization 52,343 48,718 44,261
Interest expense 20,527 18,210 14,152
Interest income (4,602) (393) (3,375)
Writedown of property and securities 0 0 8,393
---------- ---------- ----------
2,765,918 2,798,940 2,570,704
---------- ---------- ----------
Income from continuing operations before income
taxes and extraordinary item 68,770 73,387 87,142
PROVISION FOR INCOME TAXES 28,189 26,493 30,776
---------- ---------- ----------
Income from continuing operations before extraordinary
item 40,581 46,894 56,366
---------- ---------- ----------
DISCONTINUED OPERATIONS, NET:
Loss on disposal 0 0 (8,550)
Loss from operations 0 0 (4,400)
---------- ---------- ----------
0 0 (12,950)
---------- ---------- ----------
EXTRAORDINARY ITEM, NET (3,288) 0 0
---------- ---------- ----------
NET INCOME $ 37,293 $ 46,894 $ 43,416
========== ========== ==========
EARNINGS PER COMMON SHARE:
Income from continuing operations before extraordinary
item $ 0.52 $ 0.60 $ 0.69
Discontinued operations, net 0.00 0.00 (0.16)
Extraordinary item, net (0.04) 0.00 0.00
---------- ---------- ----------
Net income $ 0.48 $ 0.60 $ 0.53
========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
<PAGE> 10
BRUNO'S INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' INVESTMENT
FOR THE FISCAL YEAR ENDED JULY 2, 1994, FISCAL YEAR ENDED JULY 3, 1993,
AND FISCAL YEAR ENDED JUNE 27, 1992
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Common Stock
------------------------
Number Paid-In Retained
of Shares Amount Capital Earnings
----------- --------- ------- --------
<S> <C> <C> <C> <C>
BALANCE, June 29, 1991 81,767,995 $818 $90,043 $303,470
Net income 0 0 0 43,416
Cash and stock received from exercise of stock options 113,066 1 715 0
Cash dividends ($.20 per share) 0 0 0 (16,375)
Stock bonus and option plan activity 25,500 0 1,328 0
Writeup of noncurrent marketable equity securities to market 0 0 0 0
Loss on marketable equity securities 0 0 0 0
Cancellation of treasury shares (16,411) 0 (280) 0
----------- ---------- ------- --------
BALANCE, June 27, 1992 81,890,150 819 91,806 330,511
Net income 0 0 0 46,894
Cash received from exercise of stock options 69,917 0 565 0
Repurchase and cancellation of common stock (3,943,726) (39) (49,529) 0
Cash dividends ($.22 per share) 0 0 0 (17,383)
Stock bonus and option plan activity 31,000 0 (770) 0
----------- ---------- ------- --------
BALANCE, July 3, 1993 78,047,341 780 42,072 360,022
Net income 0 0 0 37,293
Cash received from exercise of stock options 18,100 1 119 0
Cash dividends ($.24 per share) 0 0 0 (18,741)
Stock bonus and option plan activity 25,000 0 (192) 0
----------- ---------- ------- --------
BALANCE, July 2, 1994 78,090,441 $781 $41,999 $378,574
=========== ========== ======= ========
<CAPTION>
Unrealized Loss
on Noncurrent Treasury Stock
Marketable -------------------------
Equity Deferred Number
Securities Compensation of Shares Amount
---------- ------------ ------------- ----------
<S> <C> <C> <C> <C>
BALANCE, June 29, 1991 $(4,009) $(135) 0 $ 0
Net income 0 0 0 0
Cash and stock received from exercise of stock options 0 0 16,411 280
Cash dividends ($.20 per share) 0 0 0 0
Stock bonus and option plan activity 0 (558) 0 0
Writeup of noncurrent marketable equity securities to market 616 0 0 0
Loss on marketable equity securities 3,393 0 0 0
Cancellation of treasury shares 0 0 (16,411) (280)
---------- ------------ ------------- ----------
BALANCE, June 27, 1992 0 (693) 0 0
Net income 0 0 0 0
Cash received from exercise of stock options 0 0 0 0
Repurchase and cancellation of common stock 0 0 0 0
Cash dividends ($.22 per share) 0 0 0 0
Stock bonus and option plan activity 0 486 0 0
---------- ------------ ------------- ----------
BALANCE, July 3, 1993 0 (207) 0 0
Net income 0 0 0 0
Cash received from exercise of stock options 0 0 0 0
Cash dividends ($.24 per share) 0 0 0 0
Stock bonus and option plan activity 0 207 0 0
---------- ------------ ------------- ----------
BALANCE, July 2, 1994 $ 0 $ 0 0 $ 0
========== ============ ============= ==========
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
<PAGE> 11
BRUNO'S, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE FISCAL YEAR ENDED JULY 2, 1994, FISCAL YEAR ENDED JULY 3, 1993,
AND FISCAL YEAR ENDED JUNE 27, 1992
(DOLLAR AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 37,293 $ 46,894 $ 43,416
-------- -------- --------
Adjustments to reconcile net income to net cash provided by
operating activities:
Extraordinary item, net 3,288 0 0
Depreciation and amortization 52,343 48,718 44,261
Deferred income taxes 4,132 534 (8,028)
Amortization of deferred compensation 15 (284) 770
Credit to value inventories at LIFO cost (588) (4,748) (4,282)
(Gain) loss on sale of property, net 872 (400) 3,846
Loss on marketable equity securities 0 0 3,393
(Increase) decrease in assets:
Receivables (9,467) 3,346 6,451
Receivable due on sale of discontinued operations 0 9,500 (9,500)
Inventories 4,780 (17,742) (20,686)
Prepaid expenses (1,340) (476) 1,363
Net assets of discontinued operations 0 0 11,619
Other noncurrent assets (521) 3,022 (3,071)
Increase (decrease) in liabilities:
Accounts payable (8,040) 6,250 11,242
Accrued income taxes 1,462 (7,367) 940
Accrued payroll and related expenses 536 1,858 (206)
Other accrued expenses 2,046 (1,743) 4,583
Deferred compensation 55 462 238
-------- -------- --------
Total adjustments 49,573 40,930 42,933
-------- -------- --------
Net cash provided by operating activities 86,866 87,824 86,349
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property 16,079 8,867 8,880
Capital expenditures (63,989) (131,741) (102,050)
-------- -------- --------
Net cash used in investing activities (47,910) (122,874) (93,170)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings (repayments) under line of credit, net (35,000) 5,000 30,000
Proceeds from issuance of long-term debt 200,000 100,000 0
Reductions of long-term debt and capitalized lease obligations (171,627) (2,978) (3,417)
Payments for early extinguishment of debt (3,542) 0 0
Proceeds from exercise of stock options 120 565 436
Dividends paid (18,741) (17,383) (16,375)
Repurchase and cancellation of common stock 0 (49,568) 0
-------- -------- --------
Net cash provided by (used in) financing activities (28,790) 35,636 10,644
-------- -------- --------
NET INCREASE IN CASH AND CASH EQUIVALENTS 10,166 586 3,823
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 20,093 19,507 15,684
-------- -------- --------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 30,259 $ 20,093 $ 19,507
======== ======== ========
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest $ 19,605 $ 18,025 $ 14,207
Income taxes, net of refunds 22,595 33,326 30,683
======== ======== ========
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND
FINANCING ACTIVITIES:
Writeup of noncurrent marketable equity securities $ 0 $ 0 $ 616
Noncash compensation under stock plans (192) (770) 1,328
Exercise of stock options through stock swap 0 0 280
======== ======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
<PAGE> 12
BRUNO'S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
1. ORGANIZATION
Bruno's, Inc. and subsidiaries ("the Company") operates a chain of
supermarkets and combination food and drug stores located in Alabama,
Florida, Tennessee, Mississippi, South Carolina and Georgia.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements of the Company include its
accounts and the accounts of all wholly owned subsidiaries. All
significant intercompany balances and transactions have been
eliminated in consolidation.
INVENTORIES
Substantially all inventories are valued at last-in, first-out
("LIFO") cost, which is not in excess of market. Under the first-in,
first-out ("FIFO") cost method of accounting, inventories would have
been $7,022 and $7,610 higher than reported at July 2, 1994 and July
3, 1993, respectively.
PROPERTY AND EQUIPMENT
Property and equipment are recorded at cost. Depreciation is provided
on a straight-line basis over the estimated service lives of
depreciable assets (10 to 40 years for buildings and 3 to 15 years for
equipment) or, in the case of leasehold improvements, over 10 to 20
years or the life of the applicable lease, if shorter. Property and
equipment included in the financial statements under capital leases
are amortized over the related lease terms.
Maintenance and repairs are charged to expense as incurred;
expenditures for renewals and betterments are capitalized. When
assets are retired or otherwise disposed of, the property accounts are
relieved of costs and accumulated depreciation and any resulting gain
or loss is credited or charged to income.
Leasehold interests represent the excess of current rental values over
the present value of net minimum lease payments on favorable leases
acquired, and are being amortized on a straight-line basis over the
remaining lives of the related leases.
<PAGE> 13
- 2 -
INVESTMENT IN JOINT VENTURE
The Company maintains a 50% interest in a joint venture with a major
life insurance company for certain of its store locations. The
Company's investment in this joint venture ($4,279 and $4,690 at July
2, 1994 and July 3, 1993, respectively) is accounted for on the equity
method and taxable income/loss is allocated directly to the joint
venture partners.
INTANGIBLES
The Company's intangibles are as follows:
- Franchise rights ($9,747 and $10,047 at July 2, 1994
and July 3, 1993, respectively) represent amounts
assigned to a franchise with Piggly Wiggly
Corporation and are being amortized on a
straight-line basis over 40 years (amortization of
$300 for each of the three fiscal years in the period
ended July 2, 1994), and
- Goodwill ($32,423 and $33,421 at July 2, 1994 and
July 3, 1993, respectively) is being amortized on the
straight-line basis over 40 years (amortization of
$998, $999, and $997, respectively, for each of the
three fiscal years in the period ended July 2, 1994).
MARKETABLE EQUITY SECURITIES
Subsequent to June 27, 1992 but before the issuance of the fiscal 1992
financial statements, the Company decided to sell its marketable
equity securities portfolio based on the sustained decline in market
value below cost. Accordingly, an unrealized loss of $3,393,
previously charged to shareholders' investment, was charged to fiscal
1992 income from operations. The actual loss realized upon sale of
the securities in fiscal 1993 was not significantly different from the
estimate recorded in fiscal 1992.
SELF-INSURANCE ACCRUALS
The Company is self-insured with respect to general liability,
workers' compensation and nonunion employee medical claims. Stop-loss
insurance coverage is maintained in amounts determined to be adequate
by management. Amounts charged to expense based on actual and
estimated claims incurred for these self-insured risks were $26,551,
$25,260, and $20,808, respectively, for each of the three fiscal years
in the period ended July 2, 1994. Accruals aggregating $5,568 and
$5,781 are reflected in "Other accrued expenses" in the accompanying
consolidated balance sheets as of July 2, 1994 and July 3, 1993,
respectively, to provide for unsettled claims.
INCOME TAXES
The Company accounts for income taxes using an asset and liability
method which generally requires recognition of deferred tax assets and
liabilities for the expected future tax consequences of events that
have been included in the financial statements or tax returns. Under
this method, deferred tax assets and liabilities are determined based
on the difference between the financial statements and tax bases of
assets and liabilities, using
<PAGE> 14
- 3 -
enacted tax rates in effect for the year in which the differences are
expected to reverse. In addition, the asset and liability method
requires the adjustment of previously deferred income taxes for
changes in tax rates.
EARNINGS PER COMMON SHARE
Earnings per common share were computed based on the weighted average
number of common shares outstanding during each period (78,088,000
shares in fiscal 1994, 78,717,000 shares in fiscal 1993 and 81,874,000
shares in fiscal 1992). Outstanding stock options are common stock
equivalents but were excluded from earnings per common share
computations as their effect was either not material or antidilutive.
STATEMENTS OF CASH FLOWS
For purposes of the statements of cash flows, the Company considers
all short-term, highly liquid investments to be cash equivalents.
RECLASSIFICATIONS
Certain prior year amounts have been reclassified to conform to the
current year presentation.
DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
In preparing disclosures about the fair value of financial
instruments, the Company has assumed that the carrying amount
approximates fair value for cash and cash equivalents, receivables,
short-term borrowings and accounts payable, because of the short
maturities of those instruments. The fair values of long-term debt
instruments and financial derivatives are based upon stated repurchase
prices (if applicable), or the current interest rate environment and
remaining term to maturity.
<PAGE> 15
- 4 -
3. PROPERTY AND EQUIPMENT, NET
Property and equipment, net, consists of the following:
<TABLE>
<CAPTION>
JULY 2, 1994 July 3, 1993
------------ ------------
<S> <C> <C>
Land $ 65,243 $ 67,740
Buildings 229,749 209,383
Equipment 403,722 380,877
Construction in progress 16,404 16,644
-------- --------
715,118 674,644
Less accumulated depreciation 234,657 194,544
-------- --------
480,461 480,100
Leasehold improvements, net 32,711 33,180
Investment in property under capital
leases, net 14,102 16,295
Leasehold interests, net 12,865 14,302
-------- --------
$540,139 $543,877
======== ========
</TABLE>
During fiscal 1992, the Company recorded a charge to earnings of
approximately $5,000 to reduce certain real estate properties not being
utilized to their estimated net realizable value.
4. INCOME TAXES
The provisions for income taxes are as follows:
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
--------------------------------------
JULY 2, July 3, June 27,
1994 1993 1992
------- ------- --------
<S> <C> <C> <C>
Current:
Federal $19,896 $23,273 $28,380
State 2,146 2,686 3,083
------- ------- -------
22,042 25,959 31,463
------- ------- -------
Deferred:
Accelerated depreciation 2,110 1,979 (435)
Effect of change in enacted federal
tax rate 1,874 0 0
Other items, net 148 (1,445) (7,593)
------- ------- -------
4,132 534 (8,028)
------- ------- -------
Income tax benefit on:
Discontinued operations 0 0 7,341
Extraordinary item 2,015 0 0
------- ------- -------
$28,189 $26,493 $30,776
======= ======= =======
</TABLE>
<PAGE> 16
- 5 -
The difference in the federal statutory rate applied to income before
income taxes and the total provision for each of the three fiscal years
in the period ended July 2, 1994 is as follows:
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
---------------------------------------------------------------------
JULY 2, 1994 July 3, 1993 June 27, 1992
----------------- ------------------ --------------------
AMOUNT % Amount % Amount %
------ ------- ------ ------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
Statutory rate $24,070 35% $24,952 34% $29,628 34%
Effect of:
State income taxes, net
of federal tax benefits 1,394 2 1,773 2 2,035 2
Change in enacted tax rate 2,224 3 0 0 0 0
Other, net 501 1 (232) 0 (887) (1)
------- ----- ------- ----- ------- -----
Effective rate $28,189 41% $26,493 36% $30,776 35%
======= ===== ======= ===== ======= =====
</TABLE>
The increase in the effective rate for fiscal 1994 is due to the Omnibus
Budget Reconciliation Act of 1993 which increased the maximum corporate
federal income tax rate to 35% retroactively effective to January 1, 1993.
Temporary differences and carryforwards which give rise to deferred tax
assets and liabilities are as follows:
<TABLE>
<CAPTION>
JULY 2, July 3,
1994 1993
--------- ---------
<S> <C> <C>
Deferred tax assets:
Accruals $ 4,504 $ 4,488
Capital leases 10,580 10,121
Capital loss carryover 897 1,106
Deferred compensation 713 705
Other items 500 2,070
--------- ---------
Total deferred tax asset 17,194 18,490
--------- ---------
Deferred tax liabilities:
Property and equipment (57,292) (53,434)
Joint venture (2,418) (2,407)
Inventories (3,197) (3,075)
Franchise rights (3,643) (3,637)
Other items (352) (1,513)
--------- ---------
Total deferred tax liability (66,902) (64,066)
--------- ---------
Net deferred tax liability $ (49,708) $ (45,576)
========= =========
</TABLE>
<PAGE> 17
- 6 -
5. SHORT-TERM BORROWINGS AND LONG-TERM DEBT
The Company has a variable rate $75,000 unsecured bank line of credit
under which there were no amounts outstanding at July 2, 1994 and
$35,000 outstanding at July 3, 1993. The maximum and average amounts
of borrowings outstanding under this line of credit during fiscal 1994
were $50,000 and $8,403, respectively, and during fiscal 1993 were
$75,000 and $51,603, respectively. The weighted average interest
rates on these borrowings during fiscal 1994 and 1993 were 3.4% and
4.0%, respectively.
The Company's long-term debt is as follows:
<TABLE>
<CAPTION>
JULY 2, July 3,
1994 1993
-------- ---------
<S> <C> <C>
Private Placement Loan $200,000 $ 0
Note Payable--Bank Credit Agreement 75,000 100,000
Convertible Subordinated Debentures 0 142,750
Other borrowings 3,625 5,260
-------- --------
278,625 248,010
Less current maturities 2,610 1,634
-------- --------
$276,015 $246,376
======== ========
</TABLE>
In the first quarter of fiscal 1994 the Company redeemed the $142,750
of 6.5% Convertible Subordinated Debentures at 103.9% of face value in
accordance with the terms of the related indenture. The redemption
was financed with the proceeds of a $200,000 private placement loan
which will amortize over 10 to 15 years at rates ranging from 6.6% to
7.1%. This redemption resulted in a loss of $3,288 (net of the
applicable income tax benefit of $2,015) which is classified as an
extraordinary item in the accompanying fiscal 1994 statement of
income.
The Note Payable--Bank Credit Agreement bears interest at a floating
rate (5.5% at July 2, 1994) and is due in full on August 31, 1995.
The Private Placement Loan and Bank Credit Agreement contain certain
restrictive financial covenants with which the Company is in
compliance at July 2, 1994.
The amount of debt maturing in each of the next five fiscal years,
1995 through 1999, is $2,610, $75,374, $296, $14,404, and $23,377,
respectively.
The Company entered into an interest rate swap agreement which became
effective September 1, 1993. Under this agreement, the Company
receives a fixed rate of interest (5.92%) and pays a variable rate of
interest (based on LIBOR--4.0% weighted average rate for fiscal 1994)
on $80,000 of notional principal for a period of ten years. The
transaction effectively changes a portion of the Company's interest
rate exposure from a fixed-rate to a floating-rate basis.
<PAGE> 18
- 7 -
The Company has entered into lease and guaranty agreements with
various Industrial Development Boards in order to fund construction of
certain warehouse and office additions. Upon issuance, each bond
issue was purchased in its entirety by the Company. Thus, the
outstanding bonds ($59,891 at July 2, 1994 and $64,646 at July 3,
1993) and the related investment by the Company, together with the
related interest expense and interest income, respectively, are
excluded from the accompanying consolidated financial statements.
The estimated fair values of the Company's long-term debt and interest
rate swap at July 2, 1994 were $259,903 and $7,665, respectively.
6. STOCK OPTION AND STOCK BONUS PLANS
The Company grants options for shares of common stock under various
plans to officers, directors, and key employees. Options are granted
at either a price equal to the fair market value of the stock at the
date of grant (noncompensatory stock options) or at a price
significantly under the fair market value of the stock at the date of
grant (compensatory stock options). Upon exercise of the stock
options, the excess of the proceeds over par value is credited to
paid-in capital. For compensatory stock options, compensation expense
is recorded to reflect the difference in the market value and the
option price at the date of grant. Stock options granted become
exercisable one year after the date of grant and expire ten years from
the date of the grant.
<PAGE> 19
- 8 -
At July 2, 1994 3,990,517 shares of common stock are reserved and
available for issuance under the Company's stock option plans.
Information with respect to stock options for each of the three fiscal
years in the period ended July 2, 1994 is summarized as follows
(weighted average exercise price of $8.31 at July 2, 1994):
<TABLE>
<CAPTION>
SHARES OPTION PRICE
SUBJECT RANGE
TO OPTION PER SHARE
--------- ------------
<S> <C> <C>
Shares under options outstanding:
Balance, June 29, 1991 198,700 $3.25 - $8.60
Canceled or expired (15,300) $5.00 - $10.00
Exercised (113,066) $3.25 - $8.60
Options granted 157,300 $8.60 - $10.00
--------
Balance, June 27, 1992 227,634 $3.25 - $10.00
Canceled or expired (3,000) $10.00
Exercised (69,917) $5.00 - $10.00
Options granted 318,600 $8.38 - $10.00
--------
Balance, July 3, 1993 473,317 $3.25 - $10.00
Canceled or expired (31,400) $3.25 - $10.00
Exercised (18,100) $5.00 - $10.00
Options granted 369,800 $7.50 - $8.88
--------
Balance, July 2, 1994 793,617 $5.00 - $10.00
========
</TABLE>
Under the terms of the Company's stock bonus plan, shares of stock are
awarded to officers and key employees which vest upon the completion
of three years of service after the award. Each year, one third of
the shares awarded are issued and transferred to an escrow agent. As
an estimate of compensation under the Plan, deferred compensation and
a related credit to paid-in capital are recorded equal to the current
market value of the awarded stock. The deferred compensation is
reflected as a reduction in shareholders' investment in the
accompanying consolidated balance sheets and is amortized to
compensation expense over the vesting period. At July 2, 1994, 6,500
shares have been awarded to individuals, but not yet issued to the
escrow agent.
7. EMPLOYEE BENEFIT PLANS
All of the Company's union employees are covered by two
union-sponsored, collectively-bargained, multi-employer pension plans.
Contributions to these plans are determined in accordance with the
provisions of labor contracts and generally are based on the number of
hours worked.
The Company maintains a profit sharing retirement plan for nonunion
employees. Matching contributions are made for employee voluntary
contributions up to a specified limit with additional contributions
made at the Company's discretion.
<PAGE> 20
- 9 -
The Company has deferred compensation agreements, as amended, with
certain of its officers whereby the officers or their beneficiaries
will be provided specific amounts of annual retirement benefits for a
period of 15 years following retirement. The total estimated
obligation under these agreements based upon current salaries and
expected retirement dates (approximately $10,472 at July 2, 1994) is
to be paid through fiscal 2035. The amended agreements provide for an
acceleration of benefits in the event of a change in control of the
Company.
The expense applicable to the above plans is as follows:
<TABLE>
<CAPTION>
PROFIT SHARING
RETIREMENT PLAN
------------------------------- DEFERRED
UNION MATCHING DISCRETIONARY COMPENSATION
PLANS CONTRIBUTIONS CONTRIBUTIONS PLAN
----- ------------- ------------- ------------
<S> <C> <C> <C> <C>
Fiscal year:
1994 $4,089 $1,494 $1,750 $ 55
1993 3,685 1,447 0 478
1992 3,545 1,423 1,610 285
</TABLE>
The Company maintains certain incentive compensation plans for store
management, officers, and other key employees which is paid annually
based on achievement of established profit goals. In addition, the
Company maintains employment continuity agreements with certain key
employees which provide for benefits to be paid to these employees in
the event employment with the Company is terminated in connection with
a change in control. Compensation which might be accrued under these
agreements has not been accrued in the consolidated financial
statements as a change in control has not occurred.
The Company does not offer any postemployment benefits or
postretirement benefits other than pensions.
8. LONG-TERM LEASES
The Company has a number of leases in effect for store properties and
delivery equipment. The initial terms of the real property leases
will expire within the next 25 years; however, most of the leases have
options providing for additional lease terms ranging from 5 to 25
years at terms substantially the same as the initial terms. It is
expected that real property leases will be renewed upon expiration.
The leases for delivery equipment are primarily for a duration of five
to ten years and it is expected that most will be replaced by leases
on similar equipment.
In addition to fixed minimum rentals, many of the Company's leases
require contingent rental payments. Contingent rentals for real
property are based on a percentage of sales. Contingent rentals for
delivery equipment are based on the number of miles driven.
<PAGE> 21
- 10 -
Presented below is an analysis of the property under capital leases
and the related lease obligations included in the accompanying
consolidated balance sheets:
<TABLE>
<CAPTION>
JULY 2, July 3,
1994 1993
-------- --------
<S> <C> <C>
Property under capital leases:
Real property $34,428 $35,853
Delivery equipment 2,161 2,250
------- -------
36,589 38,103
Less accumulated amortization 22,487 21,808
------- -------
$14,102 $16,295
======= =======
Capitalized lease obligations (interest at 8% to 18% on real
property and 16% to 23% on delivery equipment):
Current $ 1,482 $ 1,499
Noncurrent 20,445 22,670
------- -------
$21,927 $24,169
======= =======
</TABLE>
A schedule by years of future minimum lease payments required under
capital leases (together with the present value of the lease payments)
and operating leases (net of sublease rentals) having initial or
remaining noncancelable lease terms in excess of one year as of July
2, 1994, is as follows:
<TABLE>
OPERATING CAPITAL
LEASES LEASES
--------- -------
<S> <C> <C>
Fiscal year:
1995 $ 37,606 $ 4,401
1996 36,836 4,366
1997 36,047 4,327
1998 35,095 4,231
1999 33,379 4,190
Subsequent years 281,895 20,016
-------- -------
Total minimum lease payments $460,858 41,531
========
Less estimated executory costs included in total minimum
lease payments 4,598
-------
Net minimum lease payments 36,933
Less estimated interest 15,006
-------
Present value of net future minimum lease payments $21,927
=======
</TABLE>
<PAGE> 22
- 11 -
Contingent rentals for the preceding capital leases and rental expense
for the operating leases are as follows:
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
------------------------------------------------
JULY 2, 1994 July 3, 1993 June 27, 1992
------------ ------------ -------------
<S> <C> <C> <C>
Contingent rentals on capital leases:
Real property $ 338 $ 452 $ 569
======= ======= =======
Rental expense on operating leases:
Real property:
Minimum rentals $34,586 $34,682 $32,314
Contingent rentals 842 890 777
Equipment:
Minimum rentals 5,514 3,912 4,417
Contingent rentals 5,478 6,165 4,612
------- ------- -------
$46,420 $45,649 $42,120
======= ======= =======
</TABLE>
The capitalized lease obligation of store properties leased under
capital leases from a joint venture in which the Company maintains a
50% ownership interest was approximately $13,586 and $14,210 at July
2, 1994 and July 3, 1993, respectively.
9. REPURCHASE OF COMMON STOCK
On August 13, 1992, the Company entered into stock purchase agreements
with the Estates of Angelo J. Bruno and Lee J. Bruno (former executive
officers of the Company) to purchase an aggregate of 3,600,000 shares
of the Company's common stock at a price of $12.50 per share. The
agreements allowed the Estates to increase the number of shares of
common stock to be purchased by the Company up to an aggregate of
400,000 additional shares. Under this agreement, and other previously
existing stock purchase agreements, the Company purchased 3,943,726
shares of common stock at a total cost of $49,568, including
acquisition costs. The Company financed the purchase through a bank
note payable.
10. COMMITMENTS AND CONTINGENCIES
LITIGATION
The Company has received a notice from the Pension Benefit Guaranty
Corporation ("PBGC") contending that inappropriate actuarial
assumptions were used in connection with final distributions of a
previously terminated plan. As such, the PBGC has taken a position
that additional distributions must be made to former participants.
The total amount of damages, if any, and the ultimate outcome of this
matter is unknown at the present time but is not expected to exceed
$2,700; accordingly, no provision for any liability that may result
has been made in the accompanying financial statements. In the
opinion of management, this matter will not have a significant effect
on the Company's financial position or results of operations.
<PAGE> 23
- 12 -
In addition, the Company is a party to various legal and taxing
authority proceedings incidental to its business. In the opinion of
management, the ultimate liability with respect to these actions will
not materially affect the financial position or results of operations
of the Company.
STORE EXPANSION
The Company's store expansion activities are primarily accomplished
through the lease of facilities or the acquisition of sites and
self-construction. Commitments involving facilities under
construction at July 2, 1994 were approximately $7,648.
11. DISCONTINUED OPERATIONS
Effective June 18, 1992, the Company sold its interest in a joint
venture to its joint venture partner and the partnership was
terminated. The purpose of the joint venture was the development and
operation of hypermarket stores and the Company has discontinued its
development of this type of store. Accordingly, operating results of
the venture for fiscal 1992 were reclassified and included in the
statements of income as discontinued operations (net of the applicable
income tax benefit of $2,411), and a loss on the disposal of $8,550
(net of the applicable income tax benefit of $4,930) was recorded in
the fourth quarter of fiscal 1992.
12. SUBSEQUENT EVENT
On July 22, 1994 the Company's Board of Directors approved the
repurchase on the open market of up to $25,000 of the Company's common
stock.
<PAGE> 24
BRUNO'S, INC. AND SUBSIDIARIES
SELECTED FINANCIAL DATA
FOR THE FISCAL YEAR ENDED JULY 2, 1994, FISCAL YEAR ENDED JULY 3, 1993,
FISCAL YEAR ENDED JUNE 27, 1992, FISCAL YEAR ENDED JUNE 29, 1991,
AND FISCAL YEAR ENDED JUNE 30, 1990
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Fiscal Year Ended
------------------------------------------------------------------
July 2, July 3, June 27, June 29, June 30,
1994 1993 1992 1991 1990
(52 Weeks) (53 Weeks) (52 Weeks) (52 Weeks) (52 Weeks)
---------- ----------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
SELECTED INCOME STATEMENT DATA:
Net sales $2,834,688 $2,872,327 $2,657,846 $2,585,934 $2,394,788
Cost and expenses:
Cost of products sold 2,185,587 2,242,455 2,067,560 2,012,042 1,871,946
Store operating, selling and administrative
expenses 512,063 489,950 439,713 410,464 373,325
Depreciation and amortization 52,343 48,718 44,261 40,758 36,366
Interest expense, net 15,925 17,817 10,777 11,005 13,240
Writedown of property and securities 0 0 8,393 0 0
---------- ---------- ---------- ---------- ----------
Income from continuing operations before
income taxes and extraordinary item 68,770 73,387 87,142 111,665 99,911
Provision for income taxes 28,189 26,493 30,776 40,854 37,275
---------- ---------- ---------- ---------- ----------
Income from continuing operations before
extraordinary item 40,581 46,894 56,366 70,811 62,636
---------- ---------- ---------- ---------- ----------
Discontinued operations, net:
Loss on disposal 0 0 (8,550) 0 0
Loss from operations 0 0 (4,400) (4,085) (2,498)
---------- ---------- ---------- ---------- ----------
0 0 (12,950) (4,085) (2,498)
---------- ---------- ---------- ---------- ----------
Extraordinary item, net (3,288) 0 0 0 (2,039)
---------- ---------- ---------- ---------- ----------
Net income $ 37,293 $ 46,894 $ 43,416 $ 66,726 $ 58,099
========== ========== ========== ========== ==========
Earnings per common share:
Income from continuing operations before
extraordinary item $ 0.52 $ 0.60 $ 0.69 $ 0.87 $ 0.77
Discontinued operations, net 0.00 0.00 (0.16) (0.05) (0.03)
Extraordinary item, net (0.04) 0.00 0.00 0.00 (0.03)
---------- ---------- ---------- ---------- ----------
Net income $ 0.48 $ 0.60 $ 0.53 $ 0.82 $ 0.71
========== ========== ========== ========== ==========
Cash dividends per common share $ 0.24 $ 0.22 $ 0.20 $ 0.18 $ 0.14
========== ========== ========== ========== ==========
Weighted average number of common and common
equivalent shares outstanding 78,088,000 78,717,000 81,874,000 81,661,000 81,580,000
========== ========== ========== ========== ==========
SELECTED BALANCE SHEET DATA:
Working capital $ 174,392 $ 117,510 $110,968 $ 125,286 $ 118,179
Property and equipment, net 540,139 543,877 467,824 420,113 378,056
Total assets 927,208 916,923 834,683 765,696 728,149
Long-term debt and capitalized lease obligations 296,460 269,046 172,190 175,750 180,134
Shareholders' investment 421,354 402,667 422,443 390,187 337,136
========== ========== ========== ========== ==========
</TABLE>
<PAGE> 25
BRUNO'S, INC. AND SUBSIDIARIES
UNAUDITED QUARTERLY FINANCIAL DATA
FISCAL YEARS ENDED JULY 2, 1994 AND JULY 3, 1993
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Fiscal Year Ended July 2, 1994 (52 Weeks)
-----------------------------------------------------------------------
First Second Third Fourth
12 Weeks 14 Weeks 14 Weeks 12 Weeks Total
-------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C>
NET SALES $640,911 $768,244 $764,602 $660,931 $2,834,688
GROSS PROFIT 147,831 172,878 173,359 155,033 649,101
NET INCOME BEFORE EXTRAORDINARY
ITEM 9,200(1) 9,321 9,441 12,619 40,581
NET INCOME 5,912(2) 9,321 9,441 12,619 37,293
EARNINGS PER COMMON SHARE:
Net income before extraordinary
item $ 0.12 $ 0.12 $ 0.12 $ 0.16 $ 0.52
Net income 0.08(2) 0.12 0.12 0.16 0.48
</TABLE>
<TABLE>
<CAPTION>
Fiscal Year Ended July 3, 1993 (53 Weeks)
-----------------------------------------------------------------------
First Second Third Fourth
12 Weeks 14 Weeks 14 Weeks 13 Weeks Total
-------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C>
NET SALES $641,724 $746,867 $762,089 $721,647 $2,872,327
GROSS PROFIT 140,581 172,450 157,890 158,951 629,872
NET INCOME 12,687 16,551 4,380(3) 13,276 46,894
EARNINGS PER COMMON SHARE:
Net income $ 0.16 $ 0.21 $ 0.06(3) $ 0.17 $ 0.60
</TABLE>
(1) In the first quarter of the fiscal year ended July 2, 1994 the Company
recorded an additional tax provision of $2,224 to retroactively restate
the current and deferred income tax liabilities to reflect the change in
federal income tax rates from 34.0% to 35.0% in connection with the
Omnibus Budget Reconciliation Act of 1993.
(2) In the first quarter of the fiscal year ended July 2, 1994 the Company
redeemed $143,000 of its Convertible Subordinated Debentures. The early
extinguishment of this debt resulted in an extraordinary loss of $3,300
($.04 per share), net of the applicable tax benefit.
(3) During the third quarter of the fiscal year ended July 3, 1993, the
Company implemented a more aggressive pricing strategy that included margin
reductions on a majority of products. In addition, advertising expenses
to promote this program were unusually high.
<PAGE> 1
EXHIBIT 18
The financial statements in the report do not reflect a change from
last year in any accounting principles or practices or in the method of
applying any such principles or practices.
<PAGE> 1
EXHIBIT 22
SUBSIDIARIES
as of September 7, 1994
Piggly Wiggly Southern, Inc.
A. F. Stores, Inc.
BR Air, Inc.
Food Max of Georgia, Inc.
Food Max of Mississippi, Inc.
Food Max of Tennessee, Inc.
Georgia Sales Company
SSS Enterprises, Inc.
<PAGE> 1
EXHIBIT 23(i)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of
our report dated July 29, 1994 incorporated by reference in this form 10-K,
into the Company's previously filed Registration Statement File No. 2-81642.
ARTHUR ANDERSEN LLP
Birmingham, Alabama
September 26, 1994
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF BRUNO'S INC. FOR THE FISCAL YEAR END JULY 2, 1994,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUL-02-1994
<PERIOD-START> JUL-04-1993
<PERIOD-END> JUL-02-1994
<CASH> 30,259
<SECURITIES> 0
<RECEIVABLES> 34,770
<ALLOWANCES> 0
<INVENTORY> 255,047
<CURRENT-ASSETS> 330,741
<PP&E> 774,796
<DEPRECIATION> 234,657
<TOTAL-ASSETS> 927,208
<CURRENT-LIABILITIES> 156,349
<BONDS> 296,460
<COMMON> 781
0
0
<OTHER-SE> 420,573
<TOTAL-LIABILITY-AND-EQUITY> 927,208
<SALES> 2,834,688
<TOTAL-REVENUES> 2,834,688
<CGS> 2,185,587
<TOTAL-COSTS> 2,185,587
<OTHER-EXPENSES> 52,343
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 20,527
<INCOME-PRETAX> 68,770
<INCOME-TAX> 28,189
<INCOME-CONTINUING> 40,581
<DISCONTINUED> 0
<EXTRAORDINARY> 3,288
<CHANGES> 0
<NET-INCOME> 37,293
<EPS-PRIMARY> .48
<EPS-DILUTED> 0
</TABLE>
