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Executive Employment Agreement

 

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Title:

Executive Employment Agreement

Entities:

Kroger Co.; Michael S. Heschel

Date:

2002

Size:

Preview shows 6KB of 31KB total

Price:

$36

ID:

#253218

 

 

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                         EXECUTIVE EMPLOYMENT AGREEMENT


This Executive Employment Agreement (the "Agreement") is made as of the
7th day of June, 2002 (the "Effective Date") between THE KROGER CO., an Ohio
corporation ("Employer"), and MICHAEL S. HESCHEL ("Executive").

RECITALS

A. Executive is currently serving as Executive Vice President of
Employer, and Employer desires to secure the continued employment of Executive
in accordance with this Agreement.

B. Executive is willing to continue to remain in the employ of Employer,
and any successor to Employer, on the terms and conditions set forth in this
Agreement.

C. The parties entered into a letter agreement dated as of June 27, 1991
(the "Pre-Hire Letter") under which Employer agreed to provide 15 years of
credited service under Employer's pension plan provided that Executive remain in
the employ of Employer for at least seven years, and Executive's benefits under
Employer's pension plan were to be offset by benefits payable to Executive under
pension plans of his previous employers. A copy of the Pre-Hire Letter is
attached as Exhibit A to this Agreement.

D. The parties intend that this Agreement will replace and supersede any
and all prior employment agreements between Employer and Executive, except the
Pre-Hire Letter as modified by this Agreement.

In consideration of the foregoing premises, the mutual covenants and
agreements set forth herein, and other good and valuable consideration, the
sufficiency and receipt of which is hereby acknowledged by the parties, the
parties agree as follows:

1. Employment. By this Agreement, Employer and Executive set forth the
terms of Employer's employment of Executive on and after the Effective Date. Any
prior agreements or understandings with respect to Executive's employment by
Employer are cancelled as of the Effective Date.

2. Term of Agreement. The term of this Agreement shall commence on the
Effective Date and end at 11:59 p.m. on September 27, 2004. Notwithstanding the
foregoing, the term of this Agreement is subject to termination as provided in
Section 8.

3. Duties:

A. Executive will serve as Executive Vice President of Employer or in
such other equivalent capacity as may be designated by the Board of Directors of
Employer, and he will have such responsibilities, duties and authority as are
customary for someone of that position.

{PAGE}

B. Executive shall furnish such managerial, executive, financial,
technical, and other skills, advice, and assistance in operating Employer and
its Affiliates as Employer may reasonably request. For purposes of this
Agreement, "Affiliate" means each corporation which is a member of a controlled
group of corporations (within the meaning of section 1563(a) of the Internal
Revenue Code of 1986, as amended (the "Code")) which includes Employer.

C. Executive shall also perform such duties as are reasonably assigned to
Executive by the Board of Directors of Employer or by such officer of the
Employer to whom Executive may now or hereafter be assigned to report.

D. Executive shall devote Executive's entire time, attention, and
energies to the business of Employer and its Affiliates. The words "entire time,
attention, and energies" are intended to mean that Executive shall devote
Executive's full effort during reasonable working hours to the business of
Employer and its Affiliates. Executive shall travel to such places as are
necessary in the performance of Executive's duties.

4. Compensation.

A. Subject to Section 4.C. below, Executive shall receive a base salary
(the "Base Salary") of at least $565,000 per year, payable in equal installments
over 13 pay periods, or such other pay periods as Employer may establish for its
management and executive employees, for each year during the term of this
Agreement, subject to proration for any partial year. Such Base Salary, and all
other amounts payable under this Agreement, shall be subject to withholding as
required by law.

B. Subject to Section 4.C. below, in addition to the Base Salary,
Executive shall be entitled to receive an annual bonus (the "Bonus") (if earned)
for each calendar year for which services are performed under this Agreement.
Any Bonus for a calendar year shall be payable after the conclusion of the
calendar year in accordance with Employer's regular bonus payment policies. Each
year, Executive shall be given a Bonus target, by Employer's Compensation
Committee, of not less than $540,000, subject to terms applicable to the annual
bonus arrangements of management and executive employees generally.

C. On at least an annual basis, Executive shall be considered for Base
Salary and/or Bonus target increases. During periods of adverse business
conditions that, in the judgment of the Compensation Committee of the Board of
Directors (the "Compensation Committee"), require reductions in the salaries or
bonuses of other elected senior officers of Employer, the Compensation Committee
may reduce the amount of Executive's Base Salary or Bonus, or both, by the same
average percentage reduction applied to salaries or bonuses of such other
elected officers.

5. Expenses. All reasonable and necessary expenses incurred by Executive
in the course of the performance of Executive's duties to Employer shall be
reimbursable in accordance with Employer's then current travel and expense

 

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