<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------
FORM 10-K/A
AMENDMENT NO. 1
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED FEBRUARY 1, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
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 of organization) Identification No.)
800 LAKESHORE PARKWAY, BIRMINGHAM, ALABAMA 35211
(Address of principal executive office)
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
The Registrant hereby files this Report on Form 10-K/A to amend its Annual
Report on Form 10-K for the fiscal year ended February 1, 1997 (the "1996 Form
10-K") (i) to include the information required by Part III (Items 10, 11, 12
and 13) in lieu of incorporation thereof by reference from the Registrant's
definitive proxy statement for its 1997 Annual Meeting of Shareholders and (ii)
to file an additional exhibit with the 1996 Form 10-K, as set forth in Item 14
hereof.
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<PAGE> 2
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Certain information concerning the executive officers of Bruno's, Inc.
(the "Company") is set forth in Part I of the Company's Annual Report on Form
10-K for the year ended February 1, 1997 and is incorporated herein by
reference.
MEMBERS OF THE BOARD OF DIRECTORS
The Board of Directors of the Company consists of seven members, five of
whom are associated with Kohlberg Kravis Roberts & Co. L. P. ("KKR"). SEE
"OWNERSHIP OF COMPANY STOCK BY CERTAIN HOLDERS." The following is a brief
description of the business experience for at least the past five years of the
current members of the Board of Directors of the Company:
WILLIAM J. BOLTON, age 50, has been Chairman of the Board of Directors and
Chief Executive Officer of the Company since August 1995. He served as
President of Jewel Food Stores from 1991 to April 1995 and Chief Operating
Officer-Markets of American Stores Company from April 1995 to August 1995.
HENRY R. KRAVIS, age 53, has served as a director of the Company since
August 1995. He is a Founding Partner of KKR and a managing member of the
Executive Committee of the limited liability company which serves as the
general partner of KKR. Mr. Kravis serves as a member of the Board of Directors
of AutoZone, Inc., Borden, Inc., Evenflo & Spalding Holdings Corporation,
Flagstar Companies, Inc., Flagstar Corporation, The Gillette Company, IDEX
Corporation, K-III Communications Corp., KinderCare Learning Centers, Inc., KSL
Recreation Group, Inc., Merit Behavioral Care Corporation, Newsquest Capital
plc, Owens-Illinois, Inc., Owens-Illinois Group, Inc., Safeway Inc., Sotheby's
Holdings Inc., Union Texas Petroleum Holdings, Inc., and World Color Press,
Inc.
GEORGE R. ROBERTS, age 53, has been a director of the Company since August
1995. He is a Founding Partner of KKR and a managing member of the Executive
Committee of the limited liability company which serves as the general partner
of KKR. Mr. Roberts serves as a member of the Board of Directors of AutoZone,
Inc., Borden, Inc., Evenflo & Spalding Holdings Corporation, Flagstar
Companies, Inc., Flagstar Corporation, IDEX Corporation, K-III Communications
Corp., KinderCare Learning Centers, Inc., Merit Behavioral Care Corporation,
Newsquest Capital plc, Owens-Illinois, Inc., Owens-Illinois Group, Inc., Red
Lion Properties, Inc., Safeway Inc., Union Texas Petroleum Holdings, Inc.,
Walter Industries, Inc., and World Color Press, Inc.
PAUL E. RAETHER, age 50, has been a director of the Company since August
1995. He is a member of the limited liability company which serves as the
general partner of KKR. Mr. Raether serves as a member of the Board of
Directors of Flagstar Companies, Inc., Flagstar Corporation, IDEX Corporation,
and KSL Recreation Group, Inc.
<PAGE> 3
JAMES H. GREENE, JR., age 46, has been a director of the Company since
August 1995. He is a member of the limited liability company which serves as
the general partner of KKR. Mr. Greene serves as a member of the Board of
Directors of Owens-Illinois, Inc., Owens-Illinois Group, Inc., Safeway Inc.,
and Union Texas Petroleum Holdings, Inc.
RONALD G. BRUNO, age 45, has been a director of the Company since 1983.
He served as Chairman of the Board of the Company from December 1991 to August
1995, Chief Executive Officer of the Company from October 1990 to August 1995
and President of the Company from 1986 to 1994. Mr. Bruno is a member of the
Board of Directors of SouthTrust Bank, N.A., Books-A-Million, Inc., and Russell
Corp.
NILS P. BROUS, age 32, has been a director of the Company since August
1995. He has served as an Executive with KKR since November 1992. Prior to
November 1992, Mr. Brous was an Associate with Goldman, Sachs & Co. He is a
member of the Board of Directors of Canadian General Insurance Group Limited
and KinderCare Learning Centers, Inc.
Directors are elected by the shareholders at each Annual Meeting of
Stockholders and hold office until the next Annual Meeting of Stockholders.
The Company's officers serve at the pleasure of the Board of Directors.
Mr. Bruno has agreed to serve as a member of the Board of Directors of the
Company until August 18, 1998 (subject to the customary right of a director to
resign) pursuant to a Stockholders Agreement executed in connection with the
acquisition of 20,833,333 shares of the Company's Common Stock by affiliates of
KKR on August 18, 1995. SEE "OWNERSHIP OF COMPANY STOCK BY CERTAIN HOLDERS."
Messrs. Kravis and Roberts are first cousins.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers, and persons who own more than
10% of a registered class of the Company's equity securities, to file with the
Securities and Exchange Commission initial reports of ownership and reports of
changes in ownership of the Company's Common Stock and other equity securities
of the Company. Officers, directors and greater than 10% stockholders are
required by the regulations of the Securities and Exchange Commission to
furnish the Company with copies of all reports that they file under Section
16(a). To the Company's knowledge, based solely on a review of the copies of
such reports furnished to the Company and written representations that no other
reports were required, all Section 16(a) filing requirements applicable to the
Company's officers, directors and greater than 10% beneficial owners were
complied with by such persons during the fiscal year ended February 1, 1997,
except that Mr. Bruno failed to file timely Form 4 Reports with respect to
certain changes in his beneficial ownership of the Company's Common Stock
during such fiscal year.
2
<PAGE> 4
ITEM 11. EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
In December 1995, the Company changed its fiscal year from a 52-week or
53-week period ending on the Saturday closest to June 30 to a 52-week or
53-week period ending on the Saturday closest to January 31. In order to
implement this change, the Company had a 30-week fiscal year beginning on July
2, 1995 and ending on January 27, 1996 (the "Transition Period").
The following table sets forth the compensation paid or accrued during the
Transition Period and during the fiscal year ended February 1, 1997 (which is
referred to in the table as "Fiscal 1996") for the Chairman of the Board and
Chief Executive Officer of the Company and for the other individuals who were
serving as executive officers of the Company as of February 1, 1997 (the
"Executive Officers"). None of the Executive Officers was employed by the
Company prior to the Transition Period.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
--------------------------- ----------------------
Awards
------
Other Securities
Name and Annual Underlying All Other
Principal Position Year Salary ($) (1) Bonus ($)(2) Compensation ($)(3) Stock Options (#) Compensation ($) (4)
------------------ ---- -------------- ------------ ------------------- ----------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
William J. Bolton Fiscal 1996 $407,689 $228,200 $ 27,197 250,000 $123,816
Chairman of the Board Transition
and Chief Executive Officer Period $176,606 $392,300 -0- -0- -0-
James J. Hagan (5) Fiscal 1996 $206,251 $ 58,833 $ 79,511 66,667 $ 36,929
Executive Vice President
and Chief Financial Officer
David B. Clark (6) Fiscal 1996 $246,639 $ 76,067 -0- 62,500 $ 64,196
Executive Vice President - Transition
Merchandising Period $ 47,518 $ 55,965 -0- -0- -0-
Walter M. Grant Fiscal 1996 $152,311 $ 43,447 $ 119,882 56,250 $ 56,435
Senior Vice President,
General Counsel
and Secretary
Laura Hayden Fiscal 1996 $109,613 $ 31,269 $ 59,400 46,875 $ 56,443
Senior Vice President -
Human Resources
Michael Heintzman (7) Fiscal 1996 $203,851 $ 57,051 $ 40,800 62,500 $ 77,118
Former Senior Vice Transition
President - Merchandising Period $ 53,690 $ 53,850 -0- -0- -0-
Lisa R. Kranc (8) Fiscal 1996 $178,372 $ 49,920 $ 16,199 46,875 $ 90,071
Former Senior Vice Transition
President - Marketing Period $ 16,828 $ 6,729 -0- -0- -0-
</TABLE>
(1) The amounts in this column reflect compensation for services provided
during a portion of the Transition Period for Mr. Bolton, Mr. Clark, Mr.
Heintzman and Ms. Kranc
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<PAGE> 5
and compensation for services provided during a portion of Fiscal 1996 for Mr.
Hagan, Mr. Grant, and Ms. Hayden. The Executive Officers began employment with
the Company on the following dates: August 21, 1995 for Mr. Bolton, October 22,
1995 for Mr. Heintzman, November 13, 1995 for Mr. Clark, January 8, 1996 for Ms.
Kranc, May 6, 1996 for Mr. Hagan, June 17, 1996 for Mr. Grant, and July 8, 1996
for Ms. Hayden.
(2) The amounts listed in this column include signing bonuses paid by the
Company during the Transition Period to each of Mr. Bolton, Mr. Clark and Mr.
Heintzman. See "EMPLOYMENT CONTRACTS WITH EXECUTIVE OFFICERS."
(3) The amounts in this column include (i) the dollar value of the
difference between the price paid by Mr. Hagan, Mr. Grant and Ms. Hayden for
shares of the Company's Common Stock purchased from the Company during Fiscal
1996 and the fair market value of such shares on the date of purchase, (ii)
amounts paid by the Company to reimburse Mr. Hagan, Mr. Grant and Ms. Hayden
for taxes on the difference between the price paid by them for shares of the
Company's Common Stock and the fair market value of such shares on the date of
purchase, and (iii) amounts paid by the Company to reimburse the Executive
Officers for taxes on the relocation expenses or allowances reported in the
column entitled "All Other Compensation." The amounts in this column do not
include the value of other perquisites and personal benefits provided by the
Company to the Executive Officers. The value of the perquisites and benefits
provided to each Executive Officer during Fiscal 1996 and during the Transition
Period did not exceed the lesser of $50,000 or 10% of such Executive Officer's
salary plus annual bonus.
(4) The amounts in this column include (i) relocation expenses or
allowances paid by the Company in Fiscal 1996 on behalf of each Executive
Officer and (ii) the dollar value of insurance premiums paid by the Company for
term life insurance policies providing death benefits to the beneficiaries of
the Executive Officers.
(5) Mr. Hagan was elected to the position of Executive Vice President and
Chief Financial Officer of the Company on January 29, 1997. Prior to January
29, 1997, Mr. Hagan served as Senior Vice President and Chief Financial Officer
of the Company.
(6) Mr. Clark was elected to the position of Executive Vice President -
Merchandising of the Company on January 29, 1997. Prior to January 29, 1997,
Mr. Clark served as the Company's Senior Vice President - Operations.
(7) Mr. Heintzman resigned from his position as the Company's Senior Vice
President - Merchandising effective as of February 1, 1997. The Company is
currently paying severance benefits to Mr. Heintzman. See "EMPLOYMENT
AGREEMENTS WITH EXECUTIVE OFFICERS."
(8) Ms. Kranc resigned from her position as the Company's Senior Vice
President - Marketing effective as of March 31, 1997. The Company is currently
paying severance benefits to Ms. Kranc. See "EMPLOYMENT AGREEMENTS WITH
EXECUTIVE OFFICERS."
4
<PAGE> 6
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
During the fiscal year ended February 1, 1997, the Company granted stock
options to the Executive Officers under the 1996 Stock Purchase and Option Plan
for Key Employees of Bruno's, Inc. and Subsidiaries (the "Option Plan"). No
stock appreciation rights were granted to the Executive Officers during the last
fiscal year. Each Executive Officer was required to purchase shares of the
Company's Common Stock from the Company in order to be eligible to receive stock
options under the Option Plan. SEE "EMPLOYMENT AGREEMENTS WITH EXECUTIVE
OFFICERS" AND "CERTAIN RELATIONSHIPS BETWEEN THE COMPANY AND OFFICERS AND
DIRECTORS."
The following table contains information regarding the stock options
granted by the Company to the Executive Officers during the last fiscal year:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES
OF STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
- ----------------------------------------------------------------------------- -------------------------------------------
% OF TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED TO EXERCISE
UNDERLYING EMPLOYEES OR BASE
OPTIONS IN FISCAL PRICE EXPIRATION
NAME GRANTED (#) (1) YEAR ($/SH) DATE 0% ($) (2) 5% ($) (2) 10% ($) (2)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
William J. Bolton 250,000 28.7% $12.00 2/15/06 -0- $1,072,237 $3,484,356
James J. Hagan 66,667 7.6% $12.00 9/30/06 $116,667 $ 693,157 $1,577,605
David B. Clark 62,500 7.2% $12.00 3/13/06 -0- $ 255,333 $ 850,825
Walter M. Grant 56,250 6.4% $12.00 9/30/06 $ 98,438 $ 584,848 $1,331,098
Laura Hayden 46,875 5.4% $12.00 9/30/06 $ 82,031 $ 487,373 $1,109,248
Michael F. Heintzman (3) 62,500 7.2% $12.00 2/15/06 -0- $ 268,059 $ 871,089
Lisa R. Kranc (4) 46,875 5.4% $12.00 2/15/06 -0- $ 201,044 $ 653,317
</TABLE>
(1) All of the stock options granted to the Executive Officers are
non-qualified options and have a term of ten years from the date of grant.
One-half of the options granted to each Executive Officer become exercisable
based on the Executive Officer's length of service with the Company (the "Time
Options"), and the remaining one-half of the options become exercisable based
on the Company's financial performance (the "Performance Options"). The Time
Options granted to each Executive Officer become exercisable in equal
installments of 20% per year over a five-year period. The Performance Options
become exercisable with respect to 20% of the underlying shares on each August
18 following the completion of a fiscal year of the Company in which the
Company meets the annual and cumulative performance targets specified by the
Board of Directors of the Company. If the performance targets specified by the
Board of Directors are not met for a given year but the Company meets both its
annual and cumulative performance targets in a subsequent year, then the
Performance
5
<PAGE> 7
Options will become exercisable with respect to all of the shares that would
have been exercisable if the performance targets had been met as scheduled. All
Performance Options will become exercisable after seven years from the date of
grant, regardless of whether the Company's performance targets have been met.
(2) The dollar gains shown in these columns result from calculations
using assumed annual growth rates of 0%, 5%, and 10% in the value of the
Company's Common Stock measured from the market value at the date of grant
through the expiration date of the ten-year life of the stock options granted to
the Executive Officers. These assumed rates of growth were selected by the
Securities and Exchange Commission for illustration purposes only and are not
intended to forecast future stock prices, which will depend upon market
conditions and the Company's future performance and prospects. The dollar gains
shown in these columns reflect a future value based upon growth at the
prescribed rates. The column labeled 0% shows the value at the date of grant of
stock options whose exercise price was below the market price of the Company's
Common Stock at the date of grant.
(3) The options granted to Mr. Heintzman were cancelled and terminated in
connection with his resignation as Senior Vice President - Merchandising of the
Company effective as of February 1, 1997. The Company made a payment to Mr.
Heintzman in the amount of $3,000 in connection with the termination of his
stock options.
(4) The options granted to Ms. Kranc were cancelled and terminated in
connection with her resignation as Senior Vice President - Marketing of the
Company effective as of March 31, 1997. The Company made a payment to Ms.
Kranc in the amount of $2,250 in connection with the termination of her stock
options.
OPTION EXERCISES AND HOLDINGS
No options were exercised by the Executive Officers during the last fiscal
year. The following table contains information with respect to the unexercised
options to purchase shares of the Company's Common Stock held by the Executive
Officers as of February 1, 1997:
6
<PAGE> 8
OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL
YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING IN-THE-MONEY
VALUE REALIZED ($) UNEXERCISED OPTIONS OPTIONS AT FISCAL
SHARES (MARKET PRICE AT AT FISCAL YEAR END(#) YEAR END($) (1)
ACQUIRED EXERCISE LESS -------------------------- --------------------------
NAME ON EXERCISE (#) EXERCISE PRICE) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- --------------- ------------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
William J. Bolton -0- -0- 25,000 225,000 $100,000 $900,000
James J. Hagan -0- -0- -0- 66,667 -0- $266,668
David B. Clark -0- -0- 6,250 56,250 $ 25,000 $225,000
Walter M. Grant -0- -0- -0- 56,250 -0- $225,000
Laura Hayden -0- -0- -0- 46,875 -0- $187,500
Michael F. Heintzman (2) -0- -0- 6,250 56,250 $ 25,000 $225,000
Lisa R. Kranc (3) -0- -0- 4,687 42,188 $ 18,748 $168,752
</TABLE>
(1) The numbers in these columns represent the difference between the fair
market value of the shares of the Company's Common Stock on February 1, 1997
and the exercise price for the unexercised options. The fair market value of
the Company's Common Stock on February 1, 1997 was $16.00 per share based on
trading in the over-the-counter market. SEE ITEM 5. "MARKET FOR REGISTRANT'S
COMMON EQUITY AND RELATED STOCKHOLDER MATTERS." An option is "in-the-money" if
the fair market value of the Company's Common Stock exceeds the exercise price.
(2) The options granted to Mr. Heintzman were cancelled and terminated in
connection with his resignation as Senior Vice President - Merchandising of the
Company effective as of February 1, 1997. The Company made a payment to Mr.
Heintzman in the amount of $3,000 in connection with the termination of his
stock options.
(3) The options granted to Ms. Kranc were cancelled and terminated in
connection with her resignation as Senior Vice President - Marketing of the
Company effective as of March 31, 1997. The Company made a payment to Ms.
Kranc in the amount of $2,250 in connection with the termination of her stock
options.
RETIREMENT SAVINGS PLAN
The Company maintains a profit sharing and retirement savings plan
pursuant to Section 401(k) of the Internal Revenue Code of 1986, as amended.
To be eligible to participate in the plan, an employee must be at least 21
years old, must have at least one year of service with the Company, and must
not be eligible to participate in a union-sponsored or co-sponsored qualified
retirement plan.
7
<PAGE> 9
Subject to certain limitations, participants in the plan are permitted
to make voluntary contributions to their accounts in the plan through payroll
deductions. The Company makes matching contributions with respect to the
voluntary contributions made by plan participants. Prior to April 1, 1997, the
Company made matching contributions on a dollar-for-dollar basis with respect
to a participant's contributions on the first two percent of his or her
compensation. The plan was amended effective April 1, 1997 to provide that the
Company will make matching contributions in the future in an amount equal to 50%
of a participant's contributions on the first five percent of his or her
compensation.
The plan permits the Company to make discretionary profit sharing
contributions to the accounts of eligible participants in an amount determined
annually by the Board of Directors of the Company. The Company did not make
discretionary contributions to the plan during the fiscal years ended July 2,
1994 and July 1, 1995, during the Transition Period, or during the fiscal year
ended February 1, 1997.
All voluntary contributions made by plan participants and all matching
contributions made by the Company are fully vested at all times. Any
discretionary contributions made by the Company are vested after a plan
participant has completed five years of service with the Company or upon the
participant's death, disability or normal retirement. A participant is
entitled to receive a distribution of his vested account in the plan 90 days
after the participant's termination of employment with the Company, including a
termination of employment as a result of retirement, disability or death.
Payments are made in the form of a lump sum or in installments paid over a
period of 15 years.
COMPENSATION OF DIRECTORS
Members of the Board of Directors who are not employees of the Company
receive an annual retainer from the Company in the amount of $30,000.
Directors do not receive separate fees for attending meetings of the Board of
Directors or for serving on committees of the Board of Directors. Mr. Bolton,
who is an employee of the Company, does not receive any additional compensation
for serving on the Board of Directors.
On April 30, 1997, the Board of Directors adopted the Bruno's, Inc.
Directors' Deferred Compensation Plan (the "Deferred Compensation Plan"). The
Deferred Compensation Plan permits non-employee directors to defer all or any
part of the fees that they receive for serving on the Board of Directors.
Amounts deferred will be credited, at the election of the director, to an
unfunded cash account (the "Cash Account") or to an account under which the
director will receive compensation in the form of shares of the Company's
Common Stock (the "Stock Account"). Amounts credited to the Cash Account will
accrue interest based on the Company's average borrowing rate from time to
time. Amounts credited to the Stock Account will be converted into the number
of shares of the Company's Common Stock which the amounts would have purchased
based on the fair market value of a share of the Company's Common Stock on the
date the amounts otherwise would have been paid. When an individual ceases to
be a director of the Company, all amounts credited under the Deferred
Compensation Plan are paid in one lump sum or in installments based on the
election
8
<PAGE> 10
made by the director. Amounts credited to a director's Stock Account will be
paid, in the Company's sole discretion, in the form of shares of the Company's
Common Stock or in cash, with the amount of cash to be determined by multiplying
the number of shares in the Stock Account by the then fair market value of a
share of the Company's Common Stock.
EMPLOYMENT AGREEMENTS WITH EXECUTIVE OFFICERS
The Company has entered into Employment Agreements with each of the
Executive Officers. The Company also has entered into an Employment Agreement
with John Butler, who did not serve as an Executive Officer until his election
to the position of Senior Vice President - Operations of the Company on March
20, 1997. For purposes of this discussion, all references to Executive
Officers shall be deemed to include Mr. Butler.
The Employment Agreements provide that each Executive Officer is entitled
to receive a base salary, which may be increased in the reasonable discretion
of the Company, and an annual bonus with a target amount equal to 50% of the
Executive Officer's base salary and a maximum amount equal to 100% of the
Executive Officer's base salary. The initial base salaries specified in the
Employment Agreements are $400,000 for Mr. Bolton, $275,000 for Mr. Hagan,
$225,000 for Mr. Clark, $240,000 for Mr. Grant, $190,000 for Ms. Hayden,
$200,000 for Mr. Heintzman, $175,000 for Ms. Kranc, and $210,000 for Mr.
Butler. Mr. Clark's base salary was increased to $266,669 in connection with
his election to the position of Executive Vice President - Merchandising of the
Company on January 29, 1997.
The Employment Agreements provide that each of the Executive Officers
would be given the opportunity to purchase a specified number of shares of the
Company's Common Stock at a price of $12.00 per share and would be granted
options to purchase additional shares of the Company's Common Stock at an
exercise price of $12.00 per share. Pursuant to the Employment Agreements, the
Company sold shares of the Company's Common Stock to the Executive Officers as
follows: 83,333 shares to Mr. Bolton, 25,000 shares to each of Mr. Hagan and
Mr. Grant, 20,833 shares to each of Mr. Clark, Mr. Heintzman, and Mr. Butler,
and 15,625 shares to each of Ms. Hayden and Ms. Kranc. The Company also
granted to the Executive Officers the stock options described above in the
table entitled "OPTION GRANTS IN LAST FISCAL YEAR."
The Employment Agreements also provided for the Company to pay relocation
expenses or allowances for the Executive Officers and to pay signing bonuses to
certain of the Executive Officers. The relocation payments and signing bonuses
are reported above in the table entitled "SUMMARY COMPENSATION TABLE."
The term of the Employment Agreement for Mr. Bolton will continue until
the earlier of August 31, 1998 or the termination of Mr. Bolton's employment
pursuant to his Employment Agreement. The Company has the right to terminate
Mr. Bolton's employment at any time and for any reason. If Mr. Bolton's
employment is terminated by the Company without cause or by Mr. Bolton for
"good reason," then Mr. Bolton will be entitled to receive a termination amount
payable in 18 monthly installments equal to the greater of (i) an amount
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<PAGE> 11
equal to Mr. Bolton's base salary for 18 months at its then current monthly rate
plus 1.5 times the amount of Mr. Bolton's target bonus for the year in which the
termination occurs or (ii) the amount of the base salary plus target bonus that
Mr. Bolton would have received for the remaining term of his Employment
Agreement. Mr. Bolton also will be entitled to receive payment for accrued but
unused vacation days and to continued coverage for 18 months under any employee
medical, disability and life insurance plans in accordance with the terms of
such plans. Mr. Bolton may terminate his employment for "good reason" in the
event of (i) a material breach by the Company of any provision of his Employment
Agreement, including a material reduction by the Company in Mr. Bolton's duties,
authority, support or responsibilities, (ii) a decision by the Company requiring
Mr. Bolton to perform his duties and responsibilities for the Company at a
location other than Birmingham, Alabama, or (iii) a reduction by the Company in
Mr. Bolton's base salary, other than a reduction that is part of a general
salary reduction program affecting at least 90% of the officers of the Company
and not exceeding 20% of Mr. Bolton's base salary.
The term of the Employment Agreement for each Executive Officer (other
than Mr. Bolton) is three years, except that the Employment Agreement for Mr.
Hagan will continue until his employment is terminated either voluntarily or
involuntarily. The Company has the right to terminate each Executive Officer's
employment at any time and for any reason. If an Executive Officer's
employment is terminated by the Company without cause or if the Executive
Officer's employment is terminated by the Executive for "good reason," then the
Executive Officer (other than Mr. Bolton) is entitled to receive a severance
payment equal to his or her base salary for one year. An Executive Officer
(other than Mr. Bolton) may terminate his or her employment for "good reason"
in the event of (i) a material breach by the Company of any provision of the
Employment Agreement, including a demotion by the Company in the Executive
Officer's position or the assignment to the Executive Officer of duties or
responsibilities which are materially inconsistent with the duties or
responsibilities contemplated by the Employment Agreement or (ii) a reduction
by the Company in the Executive Officer's base salary, other than a reduction
that is part of a general salary reduction program affecting senior executives
of the Company and that is not, on average, greater than the salary reduction
(as a percentage of base salary) of other senior executives of the Company.
Mr. Heintzman resigned from his position as Senior Vice President -
Merchandising of the Company effective as of February 1, 1997. The Company has
agreed that Mr. Heintzman will remain on the Company's payroll and will
continue to receive the same base salary and benefits that he was receiving
prior to February 1, 1997 until the first to occur of (i) February 1, 1998 or
(ii) his re-employment with another Company. After the date of his
re-employment with another Company, Mr. Heintzman will no longer be entitled to
receive any benefits from the Company but he will continue to receive the
severance payments to which he is entitled under his Employment Agreement
through February 1, 1998. In connection with Mr. Heintzman's resignation, the
Company repurchased 20,833 shares of the Company's Common Stock from Mr.
Heintzman at a price of $12.24 per share and made a payment to Mr. Heintzman of
$3,000 in connection with the cancellation and termination of the stock options
previously granted to him.
10
<PAGE> 12
Ms. Kranc resigned from her position as Senior Vice President - Marketing
of the Company effective as of March 31, 1997. The Company has agreed that Ms.
Kranc will remain on the Company's payroll and will continue to receive the
same base salary and benefits that she was receiving prior to March 31, 1997
until the first to occur of (i) March 31, 1998 or (ii) her re-employment with
another Company. After the date of her re-employment with another Company,
Ms. Kranc will no longer be entitled to receive any benefits from the Company
but she will continue to receive the severance payments to which she is
entitled under her Employment Agreement through March 31, 1998. In connection
with Ms. Kranc's resignation, the Company repurchased 15,625 shares of the
Company's Common Stock from Ms. Kranc at a price of $12.24 per share and made a
payment to Ms. Kranc of $2,250 in connection with the cancellation and
termination of the stock options previously granted to her.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT.
OWNERSHIP OF COMPANY STOCK BY CERTAIN HOLDERS
On August 18, 1995, Crimson Acquisition Corp. was merged into and with the
Company (the "Merger"). Since the date of the Merger, Crimson Associates, L.P.
and KKR Partners, II, L.P. (the "Partnerships") have owned 20,833,333 shares of
the Company's Common Stock. The shares owned by the Partnerships represent
approximately 82.2% of the outstanding shares of Common Stock as of May 15,
1997. The Partnerships also own warrants under which they have the right to
purchase an additional 10,000,000 shares of Common Stock at an exercise price
of $12.00 per share, subject to adjustment (the "Warrants"). The Partnerships
were organized by KKR.
The following table sets forth, as of the close of business on May 15,
1997, information as to those stockholders (other than executive officers and
directors of the Company) known to the Company to be the beneficial owners of
more than 5% of the outstanding shares of the Company's Common Stock:
<TABLE>
<CAPTION>
COMMON STOCK PERCENTAGE OF
BENEFICIALLY OWNED COMMON STOCK
NAME AND ADDRESS ON MAY 15, 1997 OUTSTANDING
- ---------------- ------------------ -------------
<S> <C> <C>
KKR Associates, L.P. (1) 30,833,333 (2) 87.3% (3)
9 West 57th Street
New York, NY 10019
</TABLE>
(1) The shares of Common Stock shown as owned by KKR Associates are owned
of record by the Partnerships. KKR Associates is the sole general partner of
the Partnerships and possesses the sole voting and investment power of the
Partnerships. Messrs. Kravis, Roberts, Raether and Greene (all of whom are
members of the Board of Directors of the Company) are general partners of KKR
Associates. Messrs. Kravis and Roberts are also the members of the
11
<PAGE> 13
Executive Committee of KKR Associates. The other general partners of KKR
Associates are Robert I. MacDonnell, Michael W. Michelson, Michael T. Tokarz,
Perry Golkin, Clifton S. Robbins, Scott M. Stuart and Edward A. Gilhuly. Mr.
Brous, who is a member of the Board of Directors of the Company, is a limited
partner of KKR Associates.
(2) This amount includes 10,000,000 shares of Common Stock subject to
purchase within the next 60 days pursuant to exercise of the Warrants.
(3) For purposes of computing the percentage of outstanding shares held by
KKR Associates, the shares which KKR Associates has the right to acquire upon
exercise of the Warrant are deemed to be outstanding, but the shares that the
Executive Officers and directors of the Company have the right to acquire
within the next 60 days pursuant to the exercise of stock options are not
deemed to be outstanding.
OWNERSHIP OF COMPANY STOCK BY DIRECTORS AND OFFICERS
The members of the Company's Board of Directors and all directors and
executive officers of the Company as a group have beneficial ownership of the
number of shares of the Company's Common Stock indicated in the following table
and its footnotes. Unless otherwise indicated in the footnotes, each such
individual has sole voting and investment power with respect to the shares set
forth in the table.
<TABLE>
<CAPTION>
COMMON STOCK PERCENTAGE OF
BENEFICIALLY OWNED ON COMMON STOCK
NAME MAY 15, 1997 OUTSTANDING (1)
- ---- --------------------- ---------------
<S> <C> <C>
William J. Bolton............................ 133,333(2) *
Henry R. Kravis.............................. 30,833,333(3) 87.3%
George R. Roberts............................ 30,833,333(3) 87.3%
Paul E. Raether.............................. 30,833,333(3) 87.3%
James H. Greene, Jr.......................... 30,833,333(3) 87.3%
Ronald G. Bruno.............................. 73,794(4) *
Nils P. Brous................................ -0- *
David B. Clark............................... 33,333(2) *
James J. Hagan............................... 31,666(2) *
Walter M. Grant.............................. 30,625(2) *
Laura Hayden................................. 20,312(2) *
John Butler.................................. 20,833(5) *
All Executive Officers and Directors
as a group (12 persons)...................... 31,177,359(6) 88.0%
</TABLE>
- ---------------
*Holdings do not exceed 1% of the total outstanding shares of Common
Stock.
(1) For the purposes of this table, a person or group of persons is deemed
to have "beneficial ownership" of any shares which such person has the right to
acquire within the
12
<PAGE> 14
next 60 days. For purposes of computing the percentage of outstanding shares
held by each person or group of persons within the next 60 days, any shares
which such person or group of persons has the right to acquire within the next
60 days are deemed to be outstanding but are not deemed to be outstanding for
the purpose of computing the percentage ownership of any other person.
(2) These amounts include shares subject to purchase within the next 60
days pursuant to the exercise of stock options as follows: Mr. Bolton, 50,000
shares; Mr. Clark, 12,500 shares; Mr. Hagan, 6,666 shares; Mr. Grant, 5,625
shares; and Ms. Hayden, 4,687 shares.
(3) This amount includes 20,833,333 shares owned of record by the
Partnerships. Messrs. Kravis, Roberts, Raether and Greene are general partners
of KKR Associates, which is the sole general partner of each of the
Partnerships. Under regulations adopted by the Securities and Exchange
Commission, Messrs. Kravis, Roberts, Raether and Greene, along with the other
general partners of KKR Associates, may be deemed to share beneficial ownership
of the shares beneficially owned by KKR Associates, but they disclaim any such
beneficial ownership. This amount also includes 10,000,000 shares of Common
Stock subject to purchase within the next 60 days pursuant to exercise of the
Warrants.
(4) This amount includes 37,227 shares owned directly by Mr. Bruno, 283
shares owned by Mr. Bruno jointly with his wife, 176 shares owned by Mr.
Bruno's wife, 1,325 shares held by Mr. Bruno as a Trustee for his minor son,
18,139 shares held by Mr. Bruno as co-trustee for various family members, and
16,774 shares held by Mr. Bruno as executor for an estate.
(5) Mr. Butler was elected to the position of Senior Vice President -
Operations of the Company on March 20, 1997. On April 21, 1997, Mr. Butler
purchased 20,833 shares of Common Stock from the Company at a price of $12.00
per share.
(6) The number of shares shown for directors and executive officers as a
group includes an aggregate of 10,079,478 shares which are subject to purchase
by members of the group within the next 60 days pursuant to the exercise of
stock options and pursuant to the exercise of the Warrants.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
CERTAIN RELATIONSHIPS BETWEEN THE COMPANY AND OFFICERS AND DIRECTORS
During the fiscal year ended February 1, 1997, the Company sold shares of
its Common Stock to the Executive Officers pursuant to the Employment
Agreements with the Executive Officers. In addition, on April 21, 1997, the
Company sold shares of its Common Stock to John Butler, who was elected to the
position of Senior Vice President - Operations of the Company on March 20,
1997. SEE "EMPLOYMENT AGREEMENTS WITH EXECUTIVE
13
<PAGE> 15
OFFICERS." The Company sold 83,333 shares to Mr. Bolton, 25,000 shares to each
of Mr. Hagan and Mr. Grant, 20,833 shares to each of Mr. Clark, Mr. Heintzman,
and Mr. Butler, and 15,625 shares to each of Ms. Hayden and Ms. Kranc. Each
Executive Officer paid a price of $12.00 per share for the shares purchased by
such Executive Officer. In connection with the purchase of such shares, each
Executive Officer entered into a Management Stockholder's Agreement with the
Company (the "Stockholder's Agreements"). The Stockholder's Agreements impose
restrictions on the transfer of the shares of Common Stock purchased by the
Executive Officers. With certain exceptions, the shares purchased by the
Executive Officers cannot be transferred prior to the fifth anniversary
of the purchase date of such shares. In addition, the Company has the option
to repurchase the shares held by any Executive Officer whose employment with
the Company is terminated. The Company has repurchased the shares of its
Common Stock sold to Mr. Heintzman and Ms. Kranc. SEE "EMPLOYMENT AGREEMENTS
WITH EXECUTIVE OFFICERS."
The Partnerships hold an aggregate of 20,833,333 shares of the Company's
Common Stock as well as the Warrants. These shares of Common Stock and the
Warrants were acquired pursuant to the Merger. The Warrants are exercisable at
a price of $12.00 per share, subject to adjustment. The general partner of the
Partnerships is KKR Associates, a New York limited partnership. KKR Associates
has sole voting and investment power with respect to the shares of the
Company's Common Stock held by the Partnerships. Messrs. Kravis, Roberts,
Raether, and Greene are general partners of KKR Associates. Messrs. Kravis and
Roberts are also members of the Executive Committee of KKR Associates. The
other general partners of KKR Associates are Robert I. MacDonnell, Michael W.
Michelson, Michael T. Tokarz, Perry Golkin, Clifton S. Robbins, Scott M. Stuart
and Edward A. Gilhuly. Mr. Brous is a limited partner of KKR Associates.
The Partnerships have the right, under certain circumstances and subject
to certain conditions, to require the Company to register under the Securities
Act of 1933, as amended, the shares of Common Stock and the Warrants held by
them. The Partnerships have both demand and "piggyback" registration rights.
Under the agreements providing for registration rights, the Company will pay
all expenses in connection with any such registration. The Partnerships have
informed the Company that they have no present intention of exercising their
registration rights.
KKR, which is an affiliate of KKR Associates, may receive investment
banking fees for services rendered to the Company in connection with certain
transactions. During the fiscal year ended February 1, 1997, KKR received a
fee of $800,000 from the Company for assisting the Company in the acquisition
of Seessel Holdings, Inc. In addition, KKR renders management, consulting and
financial services to the Company for an annual fee of $1,000,000 plus
expenses. Messrs. Kravis, Roberts, Raether, and Greene are members of the
limited liability company which serves as the general partner of KKR, and Mr.
Brous is an executive of KKR.
14
<PAGE> 16
INDEBTEDNESS OF MANAGEMENT
The Company made loans to certain of the Executive Officers in connection
with their purchase of shares of the Company's Common Stock. Each loan bears
interest at the applicable federal rate as determined under the Internal
Revenue Code of 1986, as amended, at the time the loan was made. The
outstanding principal amounts under these loans as of May 15, 1997 are shown
below:
<TABLE>
<CAPTION>
AMOUNT OF
NAME AND TITLE INDEBTEDNESS APPLICABLE
OF EXECUTIVE OFFICER TO COMPANY INTEREST RATE
- -------------------- ------------ -------------
<S> <C> <C>
William J. Bolton $443,253 5.65%
Chairman of the Board and
Chief Executive Officer
David B. Clark $125,000 5.65%
Executive Vice President - Merchandising
Laura Hayden $ 93,750 6.53%
Senior Vice President - Human Resources
John Butler (1) $125,000 6.39%
Senior Vice President - Operations
</TABLE>
(1) Mr. Butler was elected to the position of Senior Vice President -
Operations of the Company on March 20, 1997.
Each loan is secured by the shares of the Company's Common Stock held by
the Executive Officer to whom the loan was made. Interest is due on June 30
and December 31 of each year. The principal amount of the loan made to each
Executive Officer is due upon the earliest to occur of (i) one year following
the termination of the Executive Officer's employment with the Company without
cause or for "good reason," (ii) immediately upon the termination of the
Executive Officer's employment with the Company for cause or without "good
reason," (iii) the disposition by the Executive Officer of all or any part of
the shares of the Company's Common Stock purchased by the Executive Officer
from the Company with the proceeds of the loan, or (iv) seven years from the
date on which the loan was made.
15
<PAGE> 17
ITEM 14. EXHIBITS.
The following exhibit is filed as part of this Report on Form 10-K/A:
<TABLE>
<S> <C>
Designation of
Exhibit in this Report Description of Exhibit
- ----------------------- ----------------------
10.45 Directors' Deferred Compensation Plan
</TABLE>
16
<PAGE> 18
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.
(Registrant)
By \s\ William J. Bolton
-------------------------
William J. Bolton,
Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)
Dated: May 30, 1997
17
<PAGE> 19
BRUNO'S, INC.
Report on Form 10-K/A
Amendment No. 1
(For Fiscal Year Ended February 1, 1997)
INDEX OF EXHIBITS
Exhibit Number Description of Exhibits
- -------------- -----------------------
10.45 Directors' Deferred Compensation Plan
18
<PAGE> 1
EXHIBIT 10.45
BRUNO'S, INC.
DIRECTORS' DEFERRED COMPENSATION PLAN
Table of Contents
<TABLE>
<S> <C>
ARTICLE I Definitions.................................... 1
ARTICLE II Election to Defer.............................. 2
ARTICLE III Deferred Compensation Accounts................. 2
ARTICLE IV Payment of Deferred Compensation............... 4
ARTICLE V Administration................................. 4
ARTICLE VI Amendment of Plan.............................. 5
</TABLE>
<PAGE> 2
BRUNO'S, INC.
DIRECTORS' DEFERRED COMPENSATION PLAN
ARTICLE I
DEFINITIONS
1.1 "Board" shall mean the Board of Directors of Bruno's, Inc.
1.2 "Cash Account" shall mean the account created by the Company pursuant to
Article III of this Plan in accordance with an election by a Director to
receive deferred cash compensation under Article II hereof.
1.3 "Common Stock" shall mean the Common Stock of the Company.
1.4 "Company" means Bruno's, Inc.
1.5 "Director" shall mean a member of the Board of Directors of the Company
who is not an employee of the Company or any of its subsidiaries.
1.6 "Fees" shall mean amounts earned for serving as a member of the Board,
including any committees of the Board.
1.7 "He", "Him" or "His" shall apply equally to male and female members of
the Board.
1.8 "Plan" shall mean this Directors' Deferred Compensation Plan as it may be
amended from time to time.
1.9 "Stock Account" shall mean the account created by the Company pursuant to
Article III of this Plan in accordance with an election by a Director to
receive stock compensation under Article II hereof.
1.10 "Year" shall mean a calendar year.
1
<PAGE> 3
ARTICLE II
ELECTION TO DEFER
2.1 Within 30 days after the adoption of this Plan by the Board, a Director
may elect to defer payment of all or a specified part of all Fees earned
by the Director following such election for the Year in which this Plan is
adopted and succeeding Years. Any Director who does not make such an
election may elect, on or before December 31 of any Year, to defer payment
of all or a specified part of all Fees earned by the Director during the
Year following such election and succeeding Years. Any person who becomes
a Director during any Year, and who was not a Director of the Company on
the preceding December 31, may elect, before the Director's term begins,
to defer payment of all or a specified part of all Fees earned by such
Director during the remainder of such Year and for succeeding Years. Any
Fees deferred pursuant to this paragraph shall be paid to the Director at
the time or times and in the manner specified in Article IV hereof.
2.2 An election to participate in this Plan and the manner of payment shall
be designated by submitting a letter to the Secretary of the Company in
the form attached hereto as Appendix A.
2.3 An election submitted by a Director pursuant to paragraph 2.2 above shall
continue from Year to Year unless the Director terminates it by written
request delivered to the Secretary of the Company prior to the
commencement of the Year for which the termination is first effective.
ARTICLE III
DEFERRED COMPENSATION ACCOUNTS
3.1 The Company shall maintain separate memorandum accounts for the Fees
deferred by each Director.
3.2 On the date Fees become payable, the Company shall credit to the Cash
Account of each Director the deferred portion of any Fees due the Director
as to which an election to receive cash has been made. Fees deferred in
the form of cash (and interest thereon) shall be held in the general funds
of the Company.
3.3 On the first day of each quarter, the Company shall credit the Cash
Account of each Director with interest calculated on the basis of the
balance in such Cash
2
<PAGE> 4
Account on the first day of each month of the preceding quarter at the
Company's average borrowing rate as in effect from time to time.
3.4 The Company shall credit, on the date Fees become payable, the Stock
Account of each Director with the number of shares of Common Stock which
is equal to the deferred portion of any Fees due the Director as to which
an election to receive Common Stock has been made, divided by the Stock
Value on the date such fees would otherwise have been paid. "Stock Value"
shall mean the mean between "high bid" and the "low bid" prices of the
Company's Common based on trading in the over-the-counter market on the
date in question, or, if the principal market for the Common Stock is an
exchange, the term "Stock Value" shall mean the last sales price for the
Common Stock on the date in question as reported by such exchange. If
such price or prices are not available on the date in question, then the
next preceding practicable date for which such prices are available shall
be used.
3.5 The Company shall credit the Stock Account of each Director who has
elected to receive deferred compensation in the form of Common Stock with
the number of shares of Common Stock equal to any cash dividends (or the
fair market value of dividends paid in property other than dividends
payable in Common Stock) payable on the number of shares of Common Stock
represented in each Director's Stock Account divided by the Stock Value on
the dividend payment date. Dividends payable in Common Stock will be
credited to each Director's Stock Account in the form of the right to
receive Common Stock. If adjustments are made to the outstanding shares
of Common Stock as a result of split-ups, recapitalizations, mergers,
consolidations and the like, an appropriate adjustment also will be made
in the number of shares of Common Stock credited to each Director's Stock
Account.
3.6 Common Stock shall be computed to three decimal places.
3.7 The right to receive Common Stock at a later date shall not entitle any
person to rights of a stockholder with respect to such Common Stock unless
and until shares of Common Stock have been issued to such person pursuant
to Article IV hereof.
3.8 The Company shall not be required to acquire, reserve, segregate, or
otherwise set aside shares of its Common Stock for the payment of its
obligations under this Plan, but shall make available as and when required
a sufficient number of shares of its Common Stock to meet the needs of
this Plan.
3.9 Nothing contained herein shall be deemed to create a trust of any kind or
any fiduciary relationship. To the extent that any person acquires a
right to receive payments from the Company under this Plan, such right
shall be no greater than the right of any unsecured general creditor of
the Company.
3
<PAGE> 5
ARTICLE IV
PAYMENT OF DEFERRED COMPENSATION
4.1 Except as provided below, amounts contained in a Director's Cash Account
and/or Stock Account shall be distributed as provided in the election made
by the Director pursuant to paragraph 2.2 of Article II hereof.
Distributions shall begin with the first day of the Year following the
Director's retirement or separation from the Board. Amounts credited to a
Director's Cash Account shall be paid in cash. Amounts credited to a
Director's Stock Account shall be paid, in the Company's sole discretion,
in the form of Common Stock or cash (determined by multiplying the number
of full shares in the Director's Stock Account by the then Stock Value).
A cash payment shall be made with any final installment for any fractions
of a share of Common Stock remaining in the Director's Stock Account.
Such fractional share will be valued at the Stock Value on the date of
settlement. Any shares of Common Stock issued to a Director will contain
those restrictive legends limiting their tansferablility as the Company's
counsel shall advise.
4.2 Each Director shall have the right to designate a beneficiary who is to
succeed to his right to receive payments hereunder in the event of his
death. Any designated beneficiary shall receive payment in the same
manner as the Director if he had lived. In case of a failure of
designation or the death of a designated beneficiary without a designated
successor, the balance of the amounts contained in the Director's Cash
Account and/or Stock Account shall be payable in accordance with paragraph
4.1 of Article IV hereof to the Director's or former Director's estate in
full on the first day of the Year following the Year in which he dies. No
designation of beneficiary or change in beneficiary shall be valid unless
in writing signed by the Director and filed with the Secretary of the
Company.
ARTICLE V
ADMINISTRATION
5.1 The Company shall administer the Plan at its expense. All decisions
made by the Company with respect to issues hereunder shall be final and
binding on all parties.
5.2 Except to the extent required by law, the right of any Director or any
beneficiary to any benefit or to any payment hereunder shall not be
subject in any manner to attachment or other legal process for the debts
of such Director or beneficiary, and any such benefit or payment shall not
be subject to alienation, sale, transfer, assignment or encumbrance.
4
<PAGE> 6
ARTICLE VI
AMENDMENT OF PLAN
6.1 The Plan may be amended, suspended or terminated in whole or in part from
time to time by the Board, except that no amendment, suspension, or
termination shall apply to any amounts previously credited to the Cash
Account or Stock Account of any Director or beneficiary of a deceased
Director.
5
<PAGE> 7
APPENDIX A
Date______________
Walter M. Grant
Corporate Secretary
Bruno's, Inc.
800 Lakeshore Parkway
Birmingham, AL 35211
Dear Mr. __________:
Pursuant to the Directors' Deferred Compensation Plan of Bruno's, Inc.
(the "Plan"), I hereby elect to defer receipt of all or a portion of my
Director's fees commencing ______________ and for succeeding calendar years in
accordance with the percentages indicated below.
I elect to have my Director's fees (and committee fees, if any) credited
as follows (fill in appropriate percentages for options a, b and c, below):
(a) _____% of the aggregate Director's fees shall be
credited to my Cash Account as defined in the Plan;
(b) _____% of the aggregate Director's fees shall be
credited to my Stock Account as defined in the
Plan;
(c) _____% of the aggregate Director's fees shall not
be deferred but shall be paid to me directly as
they accrue.
Further, I elect to receive the payments pursuant to the Plan (check
method desired below):
_________ in one lump sum
_________ in ________ equal annual installments
Further, I understand that my Cash Account and Stock Account shall become
payable on the first day of January or as soon thereafter as is practicable
following my retirement or separation from the Board.
In the event of my death prior to receipt of all or any balance of such
fees and interest or dividends thereon so accumulated, I designate
__________________________ as my beneficiary to receive the funds so
accumulated.
Very truly yours,
6
